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CORRUPTION-FREE
CONSTRUCTION INDUSTRY
INSTRUCT
PROJECT MANAGEMENT
CONFERENCE
BANGALORE, INDIA
MARCH 2013
INTRODUCTION
ITS GREAT TO BE AN ENGINEER BECAUSE
THE PROJECTS WE
PLAN
DESIGN
CONSTRUCT
OPERATE, AND
MAINTAIN
MAKE THE WORLD A BETTER PLACE FOR
PEOPLE
BASIC PREMISE
MANAGEMENT IS NOT ENGINEERING
ENGINEERING PRODUCES PRODUCTS
(PROJECTS)
MANAGEMENT IS A PROCESS
ON- GOING, NEVER ENDING
MANAGEMENT
TODAY WE WILL CONSIDER
WHAT IS MANAGEMENT?
CORRUPTION IN CONSTRUCTION
WHAT DOES A MANAGER DO?
HOW TO MANAGE IN A CORRUPTIONFREE CONSTRUCTION INDUSTRY
WHAT IS MANAGEMENT?
MANAGEMENT IS
THE DESIGN OR CREATION AND
MAINTENANCE OF AN INTERNAL
ENVIRONMENT IN AN ENTERPRISE WHERE
INDIVIDUALS, WORKING TOGETHER IN
GROUPS, CAN PERFORM EFFICIENTLY AND
EFFECTIVELY TOWARD THE ATTAINMENT
OF GROUP GOALS
WHAT IS MANAGEMENT?
MANAGEMENT IS
GETTING THINGS DONE THROUGH OTHER
PEOPLE
PROJECT MANAGEMENT
IDENTIFYING AND INFLUENCING WHAT
YOUR TEAM MUST DO TO DELIVER THE
PROJECT AT THE REQUIRED QUALITY
WITHIN THE BUDGET, SCHEDULE,
EQUIPMENT & PERSONNEL CONSTRAINTS
PROJECT MANAGEMENT IS A MISNOMER
THE PROJECT MANAGER (PM) MANAGES
THE PEOPLE WORKING ON THE PROJECT,
NOT THE PROJECT
BEGIN BY MANAGING
YOURSELF
REFRESH YOURSELF REGULARLY
KEEP YOUR TOOLS SHARPENED
3 IMPORTANT CONCEPTS
THAT AFFECT YOUR ABILITY
TO
MANAGE
3.DELEGATION
ASSIGN TASKS TO A PERSON
DELEGATE AUTHORITY NEEDED T0
THE TASKS TO THAT PERSON
ACCOMPLISH
THE
3 IMPORTANT CONCEPTS
THAT AFFECT YOUR ABILITY
TO MANAGE
1. AUTHORITY
2. RESPONSIBILITY
3. DELEGATION
DELEGATION IS NOT ABDICATION!!!!
CORRUPTION IN CONSTRUCTION
CORRUPTION IN CONSTRUCTION
CORRUPTION KILLS!
POORER QUALITY STRUCTURES AND
EQUIPMENT PUT PEOPLE AT RISK
NEEDED PROJECTS GO UNBUILT
PEOPLE DIE DUE TO LACK OF POTABLE
WATER AND HEALTH CARE
CORRUPTION IN CONSTRUCTION
CORRUPTION UNDERMINES
SUSTAINABLE DEVELOPMENT
PROJECT QUALITY DECREASES
REQUIRED MAINTENANCE INCREASES
PROJECT USEFUL LIFE IS SHORTENED
UNNECESSARY USE OF RESOURCES
PEOPLE ARE NOT SERVED WELL
CORRUPTION IN CONSTRUCTION
CORRUPTION IN CONSTRUCTION
FORECASTS
2015 - 80% OF INFRASTRUCTURE $ SPENT
IN DEVELOPING COUNTRIES
2020 2/3 OF MAJOR CITIES IN THE
WORLD WILL BE IN DEVELOPING
COUNTRIES
WHAT DOES THIS MEAN FOR YOU?
CORRUPTION IN CONSTRUCTION
INSUFFICIENT NUMBER OF LOCAL ENGINEERS AND
CONSTRUCTORS TO DO THAT QUANTITY OF WORK
MEANS:
MORE GLOBAL PRACTICES THAN EVER BEFORE IN
HISTORY
MORE TEAMING ARRANGEMENTS WITH NEW PARTNERS
NEW RELATIONSHIPS MEAN LEARNING NEW WAYS OF
DOING BUSINESS GOOD OR BAD!
THE DEVELOPING COUNTRIES RATE LOWEST IN
OPENNESS AND TRANSPARENCY IN DECISION MAKING
THE POTENTIAL FOR CORRUPTION IS HIGH !
WHAT IS CORRUPTION
THE IMPAIRMENT OF INTEGRITY, VIRTUE OR
MORAL PRINCIPLE
AN INDUCEMENT TO DO WRONG BY
IMPROPER OR UNLAWFUL MEANS
2 PEOPLE MAKING 1 BAD DECISION
FORMS OF CORRUPTION
KICKBACKS / BRIBERY
FRONT COMPANIES
BID RIGGING / COLLUSION
CONFLICTS OF INTEREST
NON-COMPLIANCE WITH SPECS
CORRUPTION IN CONSTRUCTION
CORRUPTION IS A MANAGEMENT
PROBLEM!!!
SPENDING (US$B)
CPI (SCORE/RANK)
69.6
2.8/69 (90)
75.4
2.7/71
85.2
2.7/71
100.1
2.8/83
147.3
2.8/90
175.5
2.9/88
208.2
3.3/70
248.5
3.5/72
293.8
3.4/85
316.8
3.4/84 (180)
CONTROLLING
PLANNING
PARAMOUNT IMPORTANCE
SELECTING FROM AMONG ALTERNATIVES FOR
FUTURE ACTIONS
PROCESS IS VITAL
PLANNING
4 CHARACTERISTICS OF GOOD PLANS
CONTRIBUTE TO OBJECTIVES
OVERARCHING DOCUMENTS
PLANNING
TYPES OF PLANS
GRAND STRATEGIES
COMPETETIVE STRATEGIES
OBJECTIVES
POLICIES
PROCEDURES
RULES
PROGRAMS
BUDGETS
PLANNING
PROJECT PLANS
WORK BREAKDOWN STRUCTURE
BUDGET - MONEY
SCHEDULE TIME / INTERRELATIONSHIPS
ORGANIZATION SKILLS NEEDED
STAFFING PEOPLE WITH THE NEEDED
SKILLS
RISK MANAGEMENT REGISTER
PLANNING
PROJECT PLANS (cont.)
QUALITY CONTROL FOR EACH TASK
ANTI-CORRUPTION FOR PROJECT
CASH FLOW MONEY
COMMUNICATION INTERNAL /
EXTERNAL
AMENDMENTS AND ADJUSTMENTS
WHY, HOW, WHEN
LESSONS LEARNED
PLANNING
PLANNING STEPS
SET OBJECTIVES
ESTABLISH PREMISES
DETERMINE ALTERNATIVES
EVALUATE ALTERNATIVES / SELECT
FORMULATE DERIVATIVE PLANS
ORGANIZING
GROUPING OF ACTIVITIES NEEDED TO REACH
OBJECTIVES
WHAT SKILLS ARE NEEDED TO SUCCESSFULLY
COMPLETE THE PROJECT?
ORGANIZING
TYING THE GROUPS TOGETHER
HORIZONTALLY AND VERTICALLY THROUGH
AUTHORITY RELATIONSHIPS AND
INFORMATION TECHNOLOGY SYSTEMS
ORGANIZING
SPAN OF CONTROL
SPAN IS THE NUMBER OF
SUBORDINATES A
MANAGER CAN SUPERVISE
SPAN DETERMINANTS
NUMBER OF CONTACTS
COMPLEXITY OF CONTACTS
DIFFERENTIATION OF CONTACTS
TIME RATIO
STAFFING
POPULATING THE GROUPS THE PEOPLE YOU
MANAGE
RECRUITMENT
SELECTION
TRAINING TECHNICAL, SAFETY, ANTICORRUPTION
PROMOTION
DISCIPLINE
DIRECTING
GUIDING AND SUPERVISING SUBORDINATES
OBJECTIVES
HARMONY
UNITY OF COMMAND
PRODUCTIVITY
DIRECTING
HUMAN FACTORS
INDIVIDUAL IS PRIMARY CONCERN
INDIVIDUAL WILL WORK TO SATISFY
DEMANDS IF THE BENEFITS TO HIM/HER
EXCEED THE COSTS
INDIVIDUAL CAN BE LED (INFLUENCED)
INDIVIDUAL WANTS A SOCIAL ENVIRONMENT
THERE IS NO AVERAGE PERSON
INDIVIDUAL RISES TO THE CHALLENGE OF
HIS/HER FULL CAPABILITIES
DIRECTING
RELATIONS WITH SUBORDINATES
MANAGER IS IN THE SAME GROUP AS
HIS/HER SUBORDINATES
MUST UNDERSTAND SUPERVISOR /
SUPERVISED RELATIONSHIP
MUST REALIZE HIS/HER INFLUENCE
ON THE MORALE & BEHAVIOR OF
SUBORDINATES - POSITIVE OR NEGATIVE
DIRECTING
2 KEY ASPECTS OF DIRECT
1. MOTIVATION
PROVIDING REASONS TO ACT(MASLOW)
PHYSIOLOGICAL
SAFETY
EGO LOVE/AFFECTION
ESTEEM GOOD OPINION OF OTHERS AND
OF SELF
SELF ACTUALIZATION
LOWEST UNSATISFIED NEED IS THE
MOTIVATOR
DIRECTING
POSITIVE MOTIVATION REINFORCE NEEDS
OF SUBORDINATES (HERZBERG)
CHALLENGING WORK
RECOGNITION
OPPORTUNITY FOR ADVANCEMANT
DIRECTING
2. COMMUNICATION
THE VEHICLE FOR MOTIVATION
NEEDED FOR:
DECISION MAKING PROCESS
HUMAN FACTORS / MOTIVATION
IMAGE
DIRECTING
4 PRINCIPLES FOR EFFECTIVE COMMUNICATION
CLARITY
ATTENTION
DIRECTING
BARRIERS TO EFFECTIVE COMMUNICATION
DIRECTING
BARRIERS TO EFFECTIVE COMMUNICATION
(cont.)
INSUFFICIENT ADJUSTMENT PERIOD
DISTRUST OF COMMUNICATOR
PREMATURE EVALUATION
FEAR
FAILURE TO COMMUNICATE
CONTROLLING
MEASURING IN A TIMELY MANNER
AND
CORRECTING PERFORMANCE OF
SUBORDINATES
TO ASSURE THAT OBJECTIVES AND PLANS
WILL BE MET
CONTROLLING
3 STEPS
SET STANDARDS
MEASURE PERFORMANCE
CORRECT DEVIATIONS FROM PLAN
CHANGE WHAT YOURE DOING
CHANGE HOW YOURE DOING IT, OR
CHANGE THE PLAN
TIMELINESS IS VITAL!
CONTROLLING
CONTROLLING
10 REQUIREMENTS FOR EFFECTIVE
CONTROL SYSTEMS (cont.)
ARE FLEXIBLE
REFLECT THE ORGANIZATION STRUCTURE
ARE ECONOMICAL
ARE UNDERSTANDABLE BY ALL
INDICATE CORRECTIVE ACTION
CONTROLLING
CONTROL TOOLS
COMMON SENSE
INFORMATION TECHNOLOGY
CPM SCHEDULES
COST REPORTS
POTENTIAL PITFALLS
ITEMS YOU MAY BE UNAWARE OF THAT
COULD CAUSE YOU
BIG PROBLEMS
POTENTIAL PITFALLS
BRITISH STANDARDS INSTITUTE - BS 10500
SPECIFICATION FOR AN ANTI-BRIBERY
MANAGEMENT SYSTEM
ADOPTED 1/1/12
BSI STANDARDS OFTEN BECOME ISO
STANDARDS
THIS SHOULD BE PART OF YOUR
ANTI- CORRUPTION PLAN
POTENTIAL PITFALLS
BSI 10500 CONTENTS (Chapter & Page)
FOREWORD - 3
1 SCOPE - 4
2 TERMS AND DEFINITIONS - 5
3 PLANNING - 6
4 ADOPTING AN ANTI-BRIBERY POLICY AND
IMPLEMENTING THE ANTI BRIBERY
MANAGEMENT
SYSTEM (ABMS) - 7
5 MONITORING AND REVIEWING THE ABMS - 13
6 CONTINUAL IMPROVEMENT OF THE ABMS - 14
POTENTIAL PITFALLS
U.S. FOREIGN CORRUPT PRACTICES ACT (FCPA)
MANY THINK IT APPLIES ONLY TO U.S.FIRMS
NOT SO IT APPLIES TO ALL FIRMS WHO
HAVE ANY BUSINESS ACTIVITY IN THE U.S.
PROSECUTIONS HAVE INCREASED RECENTLY
VIOLATIONS HAVE BEEN COSTLY
POTENTIAL PITFALLS
10 LARGEST FINES
SIEMENS GERMANY - $800 M -2008
KBR/HALLIBURTON US $579M 2009
BAE SYSTEMS BRITAIN - $400M - 2010
SNAMPROGETTI/ENI HOLLAND/ITALY - $365M 2010
TECHNIP FRANCE - $338M 2010
JGC JAPAN - $219M 2011
DAIMLER GERMANY - $185M 2010
ALCATEL-LUCENT FRANCE - $137M 2010
MAGYAR TELEKOM/DEUTSCHE TELEKOM
HUNGARY/GERMANY $95M 2011
PANALPINA SWITZERLAND - $82M - 2010
POTENTIAL PITFALLS
CORRUPTION
DONT ALLOW CORRUPPTION TO PUT YOU
OR YOUR EMPLOYER IN JEOPARDY
HAVE STRONG ANTI-CORRUPTION PLANS
COMMUNICATE WITH YOUR STAFF ABOUT
THE DANGER
MOTIVATE THE STAFF TO ACT
RESPONSIBLY
HAVE CONTROLS THAT SHOW
UNACCEPTABLE BEHAVIOR BY ANYONE IN
TIMELY MANNER
FORMS OF CORRUPTION
KICKBACKS / BRIBERY
FRONT COMPANIES
BID RIGGING / COLLUSION
CONFLICTS OF INTEREST
NON-COMPLIANCE WITH SPECS
POTENTIAL PITFALLS
MISPLACED ALLEGIANCE
PMS ALLEGIANCE IS TO THE PROJECT AND
ITS TRUE OWNERS THE CITIZENS OF AN
AREA OR THE SHAREHOLDERS OF A FIRM
YOUR CLIENT MAY NOT BE A TRUE OWNER,
BUT DESERVES YOUR PROFESSIONAL
JUDGMENT AS TO WHAT IS BEST FOR THE
PROJECT AND ITS
OWNERS
WHAT IS BEST FOR THE PROJECT MAY
NOT BE WHAT IS BEST FOR YOUR CLIENT
POTENTIAL PITFALLS
MISPLACED ALLEGIANCE (cont.)
AS ENGINEERS, WE HOLD PARAMOUNT THE HEALTH,
SAFETY AND WELFARE OF THE PUBLIC
THAT IS THE CORRECT THING TO DO
FAILURE TO DO SO CAN CAUSE SEVERE
PROFESSIONAL DISGRACE
DONT LET THIS HAPPEN TO YOU OR
TO YOUR EMPLOYER
CONCLUSION
BE PROACTIVE - IGNORING CORRUPTION IS
THE SAME AS CONDONING IT
JOIN THE 4-PART PROGRAM
EDUCATE ALL ON YOUR PROJECT TEAMS
ON TRUE COST OF CORRUPTION
SHINE A BRIGHT SPOTLIGHT ON CORRUPT
ACTIVITIES WHEREVER YOU SEE THEM
MAKE IT SOCIALLY UNACCEPTABLE TO BE
INVOLVED IN CORRUPTION
EDUCATE THE NEXT GENERATION
(SUMMER INTERNS) ON THE TRUE COST
OF CORRUPTION
CONCLUSION
MANAGING IN A
CORRUPTION-FREE
CONSTRUCTION INDUSTRY
THANK YOU