REVIEW TEST 1

Question 1

Key Principles of Bureaucracy

Answer 1

1. Division of Labour
2. Hierachy of Authority
3. Formal Rules and Procedures
4. Impersonality
5. Career Systems

Question 2

Negatives of Bureaucracy

Answer 2

• high degree of forward planning
• some cases unique and fall outside the rules
• impersonal, no compassion
• no control over lobs = less job satisfaction

Question 3

Positives of Bureaucracy

Answer 3

• formal rules ensure honesty
• for standard work it enables quick throughput
• no whims

Question 4

Key Principles of Scientific Management

Answer 4

1. Replace working by “rule of thumb” and use scientific method to study work and determine most efficient way to perform specific tasks
2. Match workers to jobs based on capability and performance
3. Monitor worker performance
4. Management clearly separate from workers

Question 5

Negatives of Scientific Management

Answer 5

• relatively, workers are less well off
• specialised tasks mean repetitive work
• not applicable to complex jobs
• loss of skilled work
• no creative influence by workers = lower job satisfaction

Question 6

Positives of Scientific Management

Answer 6

• higher wages (at first) = production increase
• lower costs in production = lower prices for consumers
• use of unskilled workers

Question 7

Negatives of Human Relations Movement

Answer 7

• managers need to be socially, as well as technically skilled
• relationship between considerate leadership and production is doubtful
• no leadership
• based on the idea of a positive human nature

Question 8

Positives of Human Relations Movement

Answer 8

• job satisfaction
• possibility to be creative
• control over job

Question 9

Negatives of Cultural Approaches

Answer 9

• individuals can ‘forget’ their own values
• requires able managers to start group feeling
• requires able managers to lead groups

Question 10

Positives of Cultural Approaches

Answer 10

• very strong motivation is achievable

- people generally want to belong to a group

Question 11

Advantages of Project Manager Agent

Answer 11

• increased representation for owner
• independent evaluation
• increased constructability
• increased value engineering

Question 12

Disadvantages of Project Manager Agent

Answer 12

• PM assumes no risk - owner holds contracts
• PM agency does not guarantee cost
• PM licencing not available
• high owner/PM involvement

Question 13

Advantages of Design-Build

Answer 13

• sole source of responsibility
• reduction of project duration
• high constructability
• claims reduction
• non-adverserial relationship
• react rapidly to scope changes

Question 14

Disadvantages of Design-Build

Answer 14

• fewer checks and balances
• reduced owner involvement
• difficulty of selection
• large staff
• additional risk
• scope changes difficult to track

Question 15

Advantages of Design - Bid - Build

Answer 15

• historically accepted
• price fixed before construction
• owner involvement low
• contractor taes risk for construction

Question 16

Disadvantages of Design - Bid - Build

Answer 16

• long delivery time
• no constructability advice during design
• can be adverserial relationship
• leads to change orders
• low bid does not always = lowest final cost
• low margins
• high risk for unforseen circumstances

Question 17

Blanchards Situational Leadership

Answer 17

1. Directing - Beginner
2. Coaching - Learner
   3 Supporting - Contributer
3. Delegating - Achiever

Question 18

Mazlow’s Hierachy of Needs

Answer 18

1. Self Actualisation
2. Esteem
3. Social
4. Safety
5. Physiological

Question 19

ERG Theory

Answer 19

Individual drive from:

• Existence Needs
• Relatedness
• Growth Needs

Question 20

Changing percieved inequity

Answer 20

• change money
• change input
• leave…
• change comparison to others
• explain reason for difference

Question 21

Porters 5 Forces Model

Answer 21

Potential Entrants
Buyers
Substitutes
Suppliers
Industry Competitors

Question 22

Six Major forces of barrier to entry

Answer 22

1. Economies of scale
2. Product Differentiation
3. Capital Requirements
4. Cost disadvantages independent of size
5. Access to distribution channels
6. Government Policy

Question 23

Supplier group powerful if

Answer 23

• dominated by a few companies
• product unique or differentiated
• not obliged to contend with other products
• poses a credible threat of integrating forward into industry’s business
• industry is not an important customer of the supplier

Question 24

Buyer group powerful if

Answer 24

• it is concentrated, or purchases large volumes
• purchases standard or undifferentiated products
• product purchased is a significant component of its product
• earns low profits (great incentive to lower purchasing costs)
• industry’s product unimportant to quality of buyers product
• industrys product does not save the buyer money
• buyers pose a credible threat of integrating backwards

Question 25

Consumers more price sensitive if they are purchasing products that are

Answer 25

• undifferentiated
• expensive relative to their incomes
• of a sort where quality is not important

Question 26

Three rules of contract

Answer 26

• read the contract
• do what the contract tells you to do
• do not do what the contract tells you not to do

Question 27

Elements of a Contract

Answer 27

• offer
• acceptance
• intention to be bound
• capacity
• reality of consent
• legality

Question 28

Reality of Consent

Answer 28

• Mistake
• Misrepresentation
• Duress

Question 29

Responsive tenders

Answer 29

all terms in the solicitation are met satisfactorily

• forms filled out correctly
• authorised signatories
• submitted as directed on time ad at correct location

Question 30

Responsible tenders

Answer 30

meet requirements to submit offer

Question 31

How to manipulate to win a tender

Answer 31

• cannot affect perceived quality - instead focus on Tangible Cost Adjustment
• what do you have that you can do cheaply, that no other combination can do without great expense

Question 32

PBMC

Answer 32

price based maintenance contracting

Question 33

Advantages of PBMC

Answer 33

• reduction in costs
• improved level of service
• risk transfer to contractor
• innovation
• integrated services
• enhanced asset management
• achieving economies of scale
• partnering potential

Question 34

Disadvantages of PBMC

Answer 34

• costly tendering
• longer tendering period
• uncertainty with long-term contracting relationships
• loss of agency flexibility
• reduction in competition

Question 35

ECI

Answer 35

Early Contractor Involvement

Question 36

Advantages of ECI

Answer 36

• tendering process less intensive and costly
• earlier procurement of materials
• team approach, experience harnassed early
• shortened delivery time
• increased opportunity for innovation
• better integration of construction methods
• fewer variations during construction

Question 37

Disadvantages of ECI

Answer 37

• additional costs through ‘optioneering’ by contractor and designer ideas
• need for involvement of independent cost estimators