CE142-Construction Methods & Project Management

ORGANIZING AND
LEADING THE
CONSTRUCTION PROJECT

 The best organizational structure

suitable to a new business
organization really depends on the
short and long term vision of the
entrepreneur and one that suits its
immediate goals.
-Dr. N. A. Orcullo Jr.

Introduction
Before projects can be effectively led they
need to be effectively organized.
Although leadership and management are
certainly interrelated, the field of management
science focuses on the scientific study of
decision making.

Organizational Chart
The result of the allocation of authority
and responsibility is the establishment
of an organizational chart.
Basic forms of Organizational Chart:
- Generalist
- Departmental
- Matrix

LEGAL FORMS OF
ORGANIZATION

LEGAL FORMS OF ORGANIZATION

1.0 SOLE PROPRIETORSHIP
Proprietorships are single-person ownerships
This person owns, operates, and makes alL
major decisions for the company. There may be
many employees, but the only responsible
person is the one proprietor. This is by far the
simplest form of ownership. It can be started
with no formal documents and ended with no
formal documents It is whatever the person
wants it to be.

Advantages of Sole Proprietorship

1.
2.
3.
4.
5.

Ease of starting and ending the business

Being your own boss
Pride of ownership
Retention of profit
No special taxes

Disadvantages of Sole
Proprietorship
1.
2.
3.
4.
5.

Unlimited liability
Limited financial resources
Difficulty in management
Overwhelming time commitment
Few fringe benefits

Organizing a Sole
Proprietorship
Register the business name with the DTI
Pay the municipal licenses to the local
government
Apply for VAT or non- VAT number
Register with the BIR the books of account
(simplified bookkeeping records or journals
and ledger) and the business forms to be
used (sales invoices, cash sales invoices,
official receipts, etc)

2.0PARTNERSHIP
An association of two or more persons who
bind themselves to contribute money, property or
industry to a common fund with the intention of
dividing the profits among themselves.

Procedure in
Organizing A
Partnership

Register the business name with the DTI

Have the partnership agreement (articles of copartnership) notarized.
Obtain a tax account number for the partnership from
the BIR.
Have the partnership agreement (articles of (copartnership) notarized and then registered with the
SEC.
Obtain the municipal licenses from the local
government.
Obtain the value added tax account number (VAT) or
non-VAT, as the case may be.
Register books of accounts (journals and general
ledger) and business forms to be used (sales invoice,
official receipts, cash sales invoice, etc) with the BIR.

3.0 CORPORATION
A corporation is an artificial being
created by operation of law having the right
of succession and the powers, attributes
and properties expressly authorized by law
or incident to its existence.

Advantages of Corporation
1.
2.
3.
4.
5.
6.
7.

More money for investment

Limited liability
Size
Perpetual life
Ease of ownership change
Ease of drawing talented employees
Separation of ownership from management

Disadvantages of Corporations
1.
2.
3.
4.
5.
6.
7.

Initial cost
Paperwork
Two tax returns
Size
Difficulty of termination
Double taxation
Possible conflict with board of directors

LEADERSHIP