Construction Managers in the 21st Century
Mariza Katavić
Faculty of Civil Engineering, University of Zagreb, Zagreb, Croatia (email: )
Siniša Matić
Faculty of Civil Engineering, University of Zagreb, Zagreb, Croatia (email: )
Abstract
Managers run companies and projects with the purpose of achieving maximum business results through the direct control of labour performance and the flow of considerable financial resources. Thus educating civil engineers to manage companies and projects successfully is an extremely important task for the development of not only construction industry but country’s economy as well. Management for engineers is a form of additional education, because it provides knowledge and skills that enable engineers to master business processes more easily, and to adapt to globalisation processes more quickly and painlessly. Analysing management curricula from best universities and schools and comparing the “knowledge offer“ with professionals “knowledge needs“ in companies, using questionnaires and field research tools, we have produced an MBA in Construction program at the University of Zagreb. The content, the programme and some dilemmas are presented in this paper.
Keywords: civil engineering, education, MBA.
1. Introduction
MBA started its life as an “elite” business qualification for potential leaders and senior managers. The title “Master of Business Administration” stems from times when senior management practice was concerned with administration. It started out as an American, then Anglo-American, qualification and in the 1960s it was adopted in Europe. MBA programmes and curricula have developed along “capitalist” market principles and represent a Western interpretation of management and leadership.
All MBA courses, according to Kempner (as cited in Kretovics [1]), have the same objectives: “to develop managers who will run efficient, profitable enterprises in a competitive world for the creation of wealth in society”. Boyatzis et al. [2] see the objective of graduate management education as preparing people to be outstanding managers and leaders.
Originally, MBA was offered only by the “prestigious” business schools, and accreditation with the AACSB, AMBA or EQUIS were taken as necessary stepping-stones on the way to validating and offering the degree. The demand for that kind of education was significantly greater than the market offer.
In the meantime the market has changed as more and more providers offer the MBA title, and many of them do not even seek accreditation. The last fifteen years have seen a massive expansion of the Master of Business Administration (MBA) provision around the world, with virtually every university business school having one, and some having more than one. The supply of places largely exceeds demand as the market is flooded with a range of MBA programmes offering different modes of delivery and different specialisations.
Knowing all this, one may wonder if there is any sense in starting another MBA at the University that, in spite of its history of university education since 1669, is not a “prestigious” business school from the UK or the USA. To paraphrase Kathawala et al. [3] “should we have a dilemma? Are we really doing students a disservice by even offering them an MBA? Is MBA a global qualification? Does one size fit all?”.
But for us there were no dilemmas at all. The aims of MBA programmes are very clear - to prepare their graduates for managerial roles, help them gain a better understanding of the industrial and business world and its needs, enrich their skills and provide them with competences relevant to their careers. Thus, in the so called transition countries moving from centralised/ socialist/communist economies towards free market/capitalist/western economies, this kind of knowledge is of paramount importance and very much in demand from managers to be of all kinds.
2. MBA? Yes or no?
Today MBA is allegedly a global qualification, taught all around the world and also delivered by e-learning, so it is globally accessible. MBA courses and their methods of delivery now differ enormously. There are one-year and two-year degrees, full-time and part-time degrees, campus-based versus distance learning MBAs, “consortium MBAs” with foundation companies, single company programmes and others, including action learning approaches [4].
Birchall and Smith [5] view the MBA market as having considerable potential for a diverse range of business school offerings. Should MBA be offered with specialisations, for example, to address certain niche markets (e.g. an MBA in Health Sector Management, or an MBA in Marketing), or should it remain focused on a generalised, all-round curriculum supposedly applicable to everyone? At the moment, none of the answers to these questions are clear as conflicting views are held both within and between institutions, and for and against the MBAs
For instance, Mintzberg [6] believes MBA studies are teaching the wrong people the wrong things in the wrong way, arguing that they are “specialized training in the functions of business, not general education in the practice of management”. According to Mintzberg, the value of “MBA” in the market is diminishing as the title is only as good as the “worst MBA” that is being employed.
Mintzberg has also argued that MBAs are designed in restrictive “silos”. Subjects, such as finance, IT, management science, and organisation behaviour exist more or less independently of each other. Although there may be some acknowledgement of the need to integrate, the strategy module that might do this has become a silo of its own. It is acknowledged that some cross-cutting topics are considered, for example new product development or collaborative team working, but these tend to be considered within silos (marketing and organisational behaviour respectively). The outcome of silo teaching and data-driven analysis is students who are, for Mintzberg, ill-prepared for management [7].
Reactions to Mintzberg's critique have been mixed. According to Beech [7], whilst some have accepted the assessment of MBAs, that they are overly analytical (for example, Feldman [9]) this view is not universally accepted. Armstrong [9] has argued that Mintzberg's perception is based on a US-centric sample and that European (and particularly UK) MBAs are less guilty of this imbalance. Armstrong, arguing from an academic perspective, and Purcell [10], arguing from a practitioner perspective, both contend that Mintzberg is over-generalising. They hold that there is a European tradition of education, and MBAs in particular, that is different. In this tradition there is greater emphasis on integration.
As cited in Beech [7], although Mintzberg wishes to see a decline in MBAs, or at least in the more traditional ones, his wish does not appear to be coming true. MBAs are expanding, and in contrast to Mintzberg's claims, are proclaiming their individuality and distinctiveness. Purcell [10] states that the European MBA market has grown by almost 40 percent over the last ten years. Examining the UK MBA market, Armstrong [9] states that among part-time students there has been a 31 percent rise during the last decade, a 23 percent rise in distance learning and a 57 percent rise in full time student numbers over the same period. There is also anecdotal evidence of significant student mobility. For example, Burnson [11] reports a “significant rise” in MBA students from Europe going to study in the USA. Ters [12] reports a significant increase (“several hundred students”) in the number of Russian students studying MBAs at Western business Schools. There has also been an “MBA boom” in China [13] with 10,000 students enrolled on MBAs in 2001 (contrasting with 100 enrolled students in 1991!).
Specialisation in MBA is today probably the most highly respected qualification in business in new – former Eastern European countries, as it is perceived as a form of additional high education in management.
To understand such an attitude one has to know that former political and economic systems where based on centralised economy, meaning that all major business decisions were politically and not economically grounded. Thus the need for “western style” business education is so huge and MBAs are expanding.
3. MBA in Construction? Who needs it?
When it comes to the construction industry, the MBA programmes offering “general managerial training” have to be modified, as they are not entirely appropriate for the needs of construction managers.
Construction differs fundamentally from all other industries, because in a “normal” industry the product changes its place and the production factors (people and machinery) are static. In construction it is the opposite – the product (the site, the building under construction) is static and does not change its place. When the “production process” is finished “the product” stays where it was made, while the production factors (people and machinery) move on to the next location – to the “next product”.
Managers run companies and projects with the purpose of achieving maximum business results through the direct control of labour performance and the flow of considerable financial resources.
The overall purpose of management is to help the organisation achieve its objectives. For the company this means achieving profitability and liquidity, thus guaranteeing survival. A good manager can save a bad company, whereas an incompetent manager can ruin a good company.
For years, civil engineers have been successfully heading building and construction companies as well as different large-scale projects (dams, nuclear plants, ports, etc). They have proved their technical knowledge, skills and expertise working in different economic and political environments in Croatia as well as around the world. However, they had problems in managing companies and projects as they had no formal knowledge or training in management.
Following the present trends in modern market economies, more and more people enrol in postgraduate courses. Although nowadays most postgraduate courses offer programmes specialised for specific fields, the demand for multidisciplinary and interdisciplinary programmes is progressively increasing.
H. Fayol [14] speaking generally about the knowledge necessary for managerial work, as early as 1949, established the correlation between technical and other general (economic, sociological, managerial and other) knowledge for various job positions in the management hierarchy.
Table 1. Correlation between technical and other knowledge
Work place / Technical knowledge needed / Other knowledge needed1. Worker / 85 % / 15%
2. Skilled worker / 60 % / 40 %
3. Technical manager / 30 % / 70 %
4. General manager / 10 % / 90 %
The percentage of “general knowledge” grows as one climbs up the managerial ladder. Every manager well knows that the higher his/her position in the managerial structure is, the less he/she has “to do” with solving technical/professional problems and the more time and energy he/she spends in solving “all the other” problems in the company.
In a survey [15] that included engineer graduates from the Faculty of Civil Engineering at the University of Zagreb, between 1955 and 1985, specific managerial features and “the most important” knowledge and skills for a construction manager were identified. The result of the respondents’ evaluation was a rank list of the ten most important skills and knowledge for the construction manager, the first being „command of technical knowledge and professional skills”. They firmly expressed the view that a person must in the first place be a good engineer to be a good manager. They placed the ability to control expenses last of the ten most necessary kinds of knowledge.
In 2001, field research [16] about the essential knowledge and skills that the successful manager in the construction industry should possess was undertaken again. Respondents ranked knowledge in management science (analysis, planning, organisation, motivation, control) topmost. Project management (planning methods, resource management, risk analysis etc.) was considered the next most important knowledge by 91% respondents, and economics came third (accounting, marketing, finances, international economic relations etc.).
International “MBA in Construction” given at the University of Zagreb (for details see www.grad.hr/mba) is a programme that focuses on construction with the purpose of providing present and future construction managers with knowledge in various scientific and professional fields necessary for understanding and mastering complex management processes. It is entirely comparable with recent European trends, which was confirmed when the EU approved the program granting 150,000.00 euro, enabling its start in February 2003.
Educating civil engineers to manage successfully, as proposed in our International “MBA in Construction” programme, is probably a crucial and extremely important task not only for Croatia’s economic development, but for the region as well.
4. The programme
In his recent critique of MBAs, Mintzberg (as cited in Beech [7]) argues that there are four aspects in which an MBA programme can be international: the students; the staff; the location and locus of control; and the context, philosophy and culture. He goes on to say that on the basis of using these aspects of internationalism as criteria, he knows of no international MBA programmes
Although we are aware that MBA in Construction delivered by the University of Zagreb and its partners is not meeting these requirements entirely, it was a kind of a challenge for us to evaluate our program according to Mintzberg. Here are the “results”.
The students – as we have already said, the programme was started with the support of the EU TEMPUS academic support program so the “receivers-students” in the first and second generations were students from Croatia. In two generations 44 students enrolled. The average student's age at enrolment was 32, and the average duration of their previous work experience was 5 years and 4 months. Enrolment requirements included the GMAT test, which course participants had to pass. The beginning of the next enrolment is planed for the autumn 2007 and it will be promoted within the region of Central and Eastern Europe, thus it will be international.
The staff- the International MBA in Construction programme started as a TEMPUS project of Zagreb University (Faculty of Civil Engineering and Faculty of Economics), in cooperation with partner institutions from the EU - Great Britain, Germany and Slovenia. Teachers from Dundee University, Reading University, Salford University, Technische Universität München, and the University of Ljubljana taught together with their colleagues from the University of Zagreb, thus we had an international teaching staff with very different philosophies and cultural backgrounds.
The location and locus of control - lectures were in the first generation delivered partly in Zagreb and partly in the Centre for Advanced Academic Studies in Dubrovnik, University of Zagreb. In the second generation, lectures were delivered only in CAAS in Dubrovnik. As mentioned above, this MBA in Construction programme started in February 2003 as CD_JEP TEMPUS and was thus controlled by EU-TEMPUS bodies and the main contractor, Dundee University in the UK.