Strategic Design of the Homebuilding Developer Company

Masoumeh Nafar ,
System Designer, Research, Architecture and Construction Shar Company, Iran,
Masoomeh_nafar@yahoo.com

Abstract
Regardless of formation of many organizations in Iran, there are a few documents about the
design of some specialist organizations. One of the reason maybe is, the architecture of these
organization have not designed purposefully and systematically and with a specific methodology.
Systematical design of an organization, what is happen rarely, prevent of some crisis, which are
happen due to the normal organization life cycle changes. These changes sometimes impose the vast
expenses on the organization and even sometimes don’t let the organization to improve.
In this paper, a case study of the systematical design of a developer company (Shaar Co.) in the
homebuilding industry in Iran is represented. Five phases, researching, designing, establishment,
implementation and exploitation proposed as a methodology. Research and design of this project was
in hand of the strategy management consultant of engineering companies and in the other phases, the
team includes the top managers and the system designer specialists accompanied her. In this this
design, PMO, as the work process management, harmonizes the all functional departments with the
company’s projects.
Key words: organization design; projectized organization; PMO

Introduction
We have very few well organized projectized company in Iran, specially in construction
industry in the field of home building. Actually many consultant engineering companies in the field of
home building designing are just some poor organized offices. Beside that , many building contractors
have their self jobs without any formal organization. This paper addresses the systematical design of a
homebuilding developer company, Shaar Co., which organizes the whole rings of the construction
chain in the five phases as follow:

Phase 1: Researching
At the start of Shaar company foundation, the numerous meetings are hold by the investors (top
managers) and the company’s strategic management consultant about various aspects of the work.
The main discussion is about organization existence’s reasons. These reasons in addition to some
special investment objectives, represent a fundamental solution for many current problems in the
construction industry in the field of home building in Iran. All production elements of the construction
industry and their roles and problems are investigated carefully. The problems could be bunch into
three categories:
The primary problems are intra-project problems such as using no construction standards; Poor
coordinated drawings that integrate architectural, civil, structural, mechanical and electrical drawings
into one set of drawings; Poor functional drawings and so having problems in process of building;

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Poor recording data of the time duration and cost of activities and so no possibility to estimate the
time and the cost of the projects and schedule them; No measurement factors for activities and
therefore no possibility to measure, and control them, and totally no management system which cause
to increase the cost of projects and decrease the speed and the quality of them.
Some other problems are Inter-projects problems such as conflict between projects. Companies
have no information of their resource status as mentioned above. Therefore, new projects often are
initiated in the organization, irrespective of the resources available to perform the projects, so the real
start time of the projects is far from contract agreements and clients are often complainant. They force
to the companies and companies force the project managers. The projects have some common
resources and project managers conflict for these common resources.
The other problems are extra-project problems. These problems are due to the production
elements relations. There are no exact work limits between designer consultants, builder contractors
and clients, so they have some problems of doing or not doing some irresolute activities by which.
The other elements are subcontractors and suppliers. They sometimes are not stipulated to do their
work on time and with respected quality, so no possibility to plan their work exactly.
In the researching phase of the architecture design of the Shaar CO., also are considered
strategic subjects like market conditions, competitors, now and future pavilion of the company in the
industry, company’s value chain, company’s services description, core competency, market
objectives, and competition advantages. At the end, the primary document of the mission, vision,
values, policies and strategies of the organization are provided to bring to light the remaining road.

Phase 2: Designing
After a deep understanding of the organization dimensions of Shaar company, the organization
architecture is designed as a system. The five subsystems [1] are defined to form the organization as a
complete system, which takes its inputs from the environment, produces product through the change
processes and gives it as its outputs to the environment. These subsystems are defined in Shaar Co. as
following:
Subsystem 1, Boundary Spanning: This subsystem is responsible to carry on business with
environment. The investment, commercial and procurement, sales and marketing and after sales
service units address the boundary Spanning subsystem.
Subsystem 2, producing: This subsystem produce organization’s outputs. Engineering and
Construction units are defined as the producing subsystem.
Subsystem 3, Supporting: This subsystem coordinates all the organization activities. PMO,
Systems & Processes, Internal Management, Human Resource, ICT, Contract Affairs, Finance and
Accounting units hold this subsystem.
Subsystem 4, Compatibility to Environment: This subsystem is responsible for organization
changes. R&D and Strategy Research and Planning serve this subsystem.
Subsystem 5, Management: This subsystem coordinates and leads other subsystems.
Governance board and COE organize this subsystem.
The research and strategic planning unit defines the organization’s opportunities and threats
within environment. Governance board reviews the organization’s strategic goals and the strategic
plan that is translated into projects. PMO provides simple, effective standards and coordination
among all functional units in terms of work plans to help the Governance Board seeks the progress
toward achieving the strategic objectives. Investment department by using market research
information received from the marketing unit choose one or more projects to initiate into the

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company. Governance Board prioritizes the project portfolio respect of the resources capacity and the
cost/benefit reports received from PMO. Project control unit that works under the supervision of
PMO, prepare projects status report for project managers and PMO. PMO as the main work
management process, requests the information of resources such as humans, budget, materials,
equipments and research information from the related units and gives all the resource information to
the engineering and construction departments. PMO also do portfolio management to allocate all the
resource to the projects. Project managers receive the information of resource pool from PMO to plan
the projects. In this way PMO as an information source not a controller, develop project level
strategy for project delivery acceleration opportunities [2]. Finance unit define a measurement system
to monitor any activity in the company with a common view, so it helps organization in projects
priorities and distinction value-added activities through the cash flows.
System and process unit design all work processes and documents and uniform all the
documents and subsystems as a one system. It designs the data flow diagram to facilitate the
communication within the company. It designs the evaluation systems for employees, contractors,
suppliers, projects, project managers and so on to help the other functional units set programs for
improvement. ICT prepare the way to communicate data through the Internet and intranet networks.
Company defines the real exact services description in any domain such as investment,
engineering, building, and so on and contract affair unit provide the different work contract templates
according to the different services.

Phase 3: Establishment
At this phase, the necessary actions for the establishment of the company are done as follow:
Personal improvement: Top manager (Investors) , the two well-experienced engineers, start to
improve their skills such as English language, Computer skills, general management and project
management skills.
Registration: The document for the registration of company such as the name of company,
location, board members and their roles, constitution and the other documents are prepared and the
company named “Research, Architecture and construction Shaar Co.” is registered.
The location preparation: Related to the number of departments, work areas, the number of
staff and totally the size of the organization for two years (predicted), and the organization’s
communication needs, the rental office renovate according to the plan drawing.
Communication networks: The two professional expert contractors design the computer and
telephone networks and all the wiring and cabling of the building is done according to the designs.
The new telephone lines and ADSL services for connection to the internet provide the company.
Equipping and furnishing: The company is equipped and furnished with computers, office
machines and office furniture regarding to the prepared plan.
Organization rules and instructions: Administration rules, code of ethics, communication rules,
cleansing and serving rules as the primary rules of the organization is defined. In addition, 5S system
and its checklist is design to explain to the new staff. These instructions help the organization to form
its culture.
Employment: The recruitment process is done and candidates who pass the personality and
specialty interviews, choose as the company’s employees.

Phase 4: Implementation

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 In this phase, the governance board determines the organization strategic directory included the
vision, mission, goals, strategies, values and the policies in direction of the strategic management
consultant.
The system designer team is defined to design all the processes based on the all activities and
task of the work. For the first step, all the work processes are listed and the key businesses processes
are chosen for mapping. As the engineering and construction processes are the basic rings of the
construction value chain regarding to the company’s objectives, the system designer team with
helping of the some specialists consist of the top managers and some other engineers, design these
processes. For any process, the name of process, the process owner, the output of the process, the
customers of the output, the customer requirements, the inputs and their suppliers are defined. These
processes divided to the sub processes, for example the architecture, structure, mechanical and
electrical are the sub processes of the engineering process. These processes are related together and
some activities of any of these sub process take their inputs from other activities of another sub
process. As the final output of the engineering process is the drawing maps (deliverable product)
included architecture, structural, Mechanical and electrical drawings, the sub processes along together
to define the main process and produce the final output. Any coordination need between specialists is
defined as an activity named coordination meeting to prevent of any discordant individual product and
reworking in the construction phase. Some points as the inspection point serve to find errors before
they reach to the customer of later step. Any inspection point became measurable by the quality
control checklists. For any quality control checklist, the control instruction is defined for getting the
standards.
For the next step, project management system defined to serve all project management phases
included origination, initiation, planning, implementation, control and close out. The origination
process address all activities which done before project contract. After a definition of a project, the
project initiate in the company through the project charter that provided by sponsor (one and only one
of the top managers). Project charter communicates to the project manager through PMO. Project
manger is responsible to plan the project with helping of PMO. The implementing, control and close
out steps of the project management defined related to the main work process. For example, any
coordination meeting between different specialists of engineering process defined as an activity of
project management process. Therefore, project management is defined as an individual sub process
but not a generic process and independent of other work business processes. The control project unit
receives all time sheets and prepare project status reports.
After all process mapping finished, the processes relation network describes the relationships
between the processes. Management subsystem reviews the organization chart according to this
network.
In the field of human resource management, the socialization process is done through the
courses included self-management, relation management and team working that held during 5 months
by the strategic management consultant who is the human resource consultant too. These primary
courses are necessary for the formation organization culture specially for such projectcized
organization. Beside this, the designed processes are trained to staff so any one knows his/her role in
the organization as a part of a system. ICT unit designs the internal information and communication
system to gather the necessary information from the internal and external resources and serve all level
of organization with related information through the intranet system, Share Point, with different
accessible levels.

Phase 5: Exploitation

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 In this phase, the governance board reviews the strategies, tactics and policies of the
organization. It would be a periodical process during the life cycle of organization.
The investment unit defines the real projects into the company. Business works are done
according to the designed processes. Through the real projects, all processes monitor and the process
executives send feedback to the system & process unit. From these feedbacks, the processes improve
by some techniques such as elimination of non valued-added steps, adding some new valued-added
steps, moving forward some inspection points and developing the standards [3]. Project management
system serves organization to measure, control and manage the projects. All the projects status
reports received to PMO to analysis the time, quality and cost of the projects, evaluate all resources
and help the governance board to detect the bottlenecks of the organization and take decision to solve
the current problems and issues. The organization follows its role in the industry development through
ICT unit by registering in some specialist associations and organization, active participation to some
seminars, workshops and conferences, communication with scientific centers and so on.

Conclusion
We think the systematical design of the organizational structure of Shaar. Co., could help to
resolve many problems in the construction industry as mentioned above in the research phases.
The project management system would solve the intra-project problems. Implementing steps of
project management are defined related to the main work processes, so projects could managed
correctly conforming to real work. Using this system, gives the project managers this opportunity to
measure, control and consequently manage the projects. The role of portfolio management of PMO
will solve the inter-projects problems. This intelligent center would allocate resources to the projects
and project managers find PMO as a facilitator in their projects, and the contracts affair units and
evaluation systems will solve the extra-projects problems.
PMO helps the organization monitor its project and make right decisions for initiate new
projects, pause or cancel some projects or change priority of the projects based on the strategic
objectives. Organization would be really open-eyed and alert to any change, new opportunity and any
threat of environment. As the totally result, the Governance Board pursues their strategy objectives
and achieves their goals through this designed value chain easier and sooner.
Lesson learned :
We understand that some of the problems of the organization are due to the people’s culture.
Indeed, we try to guide the culture of our people, and therefore our organization toward the standard
level by designing of the primary courses, the primary internal instruction and systems.
The best result is that the same as any process, when we spent more time to design and
implementation of organization, the exploitation would be easier and the organization reaches its
goals faster. Exactly same as doing a project, If origination, initiation and specially planning of
projects were done well, the implementation, control and closing of project would do easier, faster
and with better quality. Thinking before doing is the best lesson that we experience in this project.

References:
[1] Richard L.Daft, “Organization Theory and Design”, Sixth Edition, South-Western College
Publishing. (1998)
[2] Gerald I. Kendall, Steven C. Rollins, “Advanced Project Portfolio Management and the
PMO—Multiplying ROI at Warp Speed”, J. Ross Publishing, Inc. (2003)

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[3] Galloway D., “Mapping Work Processes”, ASQ Quality Press. (1994)