project_management_year_1_20230227145010 Flashcards
(500 cards)
1
Q
Prof Duccio Turin definition of Construction
A
Need to consider its :Output - What type of buildingProcess - The people involvedCharacteristic
2
Q
Brief 3
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Determines requirements ClientsUsers
3
Q
Land 3
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LawyersChartered SurveyorsLand Use
4
Q
Design 3
A
Consultants - Arch, Eng, QSStatutory Consent - Local AuthorityStandards - Proff Institutions
5
Q
Procurement 3
A
Purchasing goods/servicesContractual Arrangements Tendering Process
6
Q
Construction 3
A
Components, Plant, Labour, CapitalSub/contractorsStandards/Building control/Safety
7
Q
Occupation 4
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EquipmentFixtures/FittingsITFurniture
8
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Maintenance 1
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Facility Management
9
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Building Cycle
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Where the circle leads back to Land| Brief, Design, Land, Procurement, Construction, Occupation, Maintenance
10
Q
Characteristics of Construction
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Buildings Expensive Building process is large and complexFragmented Industry
11
Q
How did the BuiEnv develop
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Urbanisation, Building type, Standards/control, Management
12
Q
Early Civilisation (3)
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Relied on natural resources: Reeds, Trees, LeavesNeeded for Shelter and portableSkills within the family
13
Q
Roman Impact (3)
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753 BC to 27 BC and 64 AD to 1453 ADSophisticated structures/infrastructure/townsBuild Mats, stone, concrete, bricks, tiles, decorationBuilt largely by the Military
14
Q
Dark Ages
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Rural Farming focus around monasteries| Black Death 4m to 2.4m lack of tradesmen cost increase
15
Q
17th, 18th, 19th Century
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Wool Industry, Industrial buildings, Towns, large estatesIncreased Building Demand/complexityFormation of Bodies
16
Q
Industrial Revolution
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Wool/steam engine - Factories, mining, transportUrban housing for rural-urban migration workersPublic sector buildings, gov/edu/healthDisease/hygiene problems led to gov planning/control
17
Q
Number of listed buildings
A
500,000 England and Wales
18
Q
Evolution of Management of Projects
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Created split design/construction, fragmented design/main contractor has responsibility of delivery. Discontented results created the project manager
19
Q
Medieval Period (4)
A
600-150012 trade guilds where tradesmen followed workDesign followed trade practicesLarge Projects led by master tradesman or mason
20
Q
Gothic Style (2)
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Pointed Arch, Rib Vaulting (ceiling), Flying Butress| Enabled Slender, Higher, Complex structures
21
Q
Renaissance Period (4)
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1500-1600Grand Tour, introduced to other European designsBuildings influenced by craftsIntroduction of architect and contracting unit
22
Q
Classical Period (4)
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1600-1800Architect established, designed and contracted to buildEmergence of ContractorsChristopher Wren and Inigo Jones
23
Q
Victorian Period
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1800-1900Introduced Engineer Institutionalisation of constructionSeperation fo design and build
24
Q
20th Century (5)
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Commercialisation of clients and buisnessUnique buildings not necessarily follow styleFunctionalism of designDemand for complex buildings Increased Fragmentation
25
3 Factors evolving planning
IndustrialisationUrbanisation and population growthOvercrowding and Disease
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Town Planning
-Diff Disciplines: Public Health, Building control, Housing Management, Town/Country Planning Asso 1899 Sir Ebenezer HowardLetchworth/Welwyn
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Drivers of Construction Demand (Macro) (3)
Economic GrowthPolitical/Economic PolicyPopulation Growth
28
Drivers of Construction Demand (Micro)
Business activity/investmentResponse to society demandsMaintaining the building/building stock
29
Client
An individual or organisation that commissions the construction of a building
30
Factors effecting the Con. Industry
Nature of the demandDiversity of types of project Low barriers to entry/exit for firmsManner of industry evolution
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Manner of industry evolution
Seperation of design and construction and manner of work carried out.
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Broad Definition of Construction
Manufacturers of building products, (equipment/ components), various professional services by architects, surveyors, engineers and property managers’
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Narrow Definition of Construction
Estimating the activity of firms that construct and maintain buildings and infrastructure – that is, just those businesses that undertake on-site activities
34
Overview - Nature of Con. Industry (8)
```Highly fragmented, involving many organisations/ parties,highly complex, high uncertainly, high levels of risk, proceeds in sequential stages, expensive,dangerous```
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Characteristics of Projects (6)
```Uniqueness - Location and issiesClearly defined objectives - Time cost QualityFixed timescaleTeam of people - TeamworkNo practice or rehearsal Change```
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Impact of Large Projects
Creates employmentImpact environmentCen/Loc Gov - Envi, Planning, Quality/workman standards
37
Product Life Cycle (PLC) (9)
Inception, Feasibility, Strategy, Pre Construction, Construction, Commissioning, Occupation, In-use, start
38
Consideration for each PLC Stage
ScopeParticipants and their rolesKey activities and output
39
Scope Management
Defining what work is required and then making sure all of that work – and only that work – is done.
40
Input to Construction Process (7) Management
Need, Land, Labour, Materials, Plant, Information, Captial
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Output of Construction Process (5) Management
Finished Building, Investment, Employment, Profit, Carbon Emissions
42
Fragmentation
Lots of parties involved although mostly for short periods of time in the process
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Health and Safety
1 of the highest fall/fatality per 1000| Workers 2x likely, disabling injury than other industries
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Health and Safety Statistics
5% of total employment31% of total fatalities 10% of major/substantial injuriesLast 25 years 3,000 people have died
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Overview - Management of Con. Industry
Over last 100 years the design & construction split and lack of manager has caused conflict and an adversarial culture. Introduction of PM a response to this problem.
46
Widening Procurement Options
```Package Deal/TurnkeyManagement Contracting Design and build/design and developConstruction ManagementContractor Fee not fixed Price, able influence design```
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CIOB PM Defintion Abbreviated
Overall planning, control and co-ordination of a project from inception to completion aimed at meeting a client's requirements, ensuring completion on time, within cost and to required quality standards
48
Basic PM Functions (4)
Scope ManagementTime Management Quality ManagementCost Management
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Integrative PM Functions (4)
Risk ManagementHR ManagementCommunications ManagementContract/Procurement Management
50
What is PM About (4)
Achieving ObjectivesManaging GroupsKnowledge of Technical ProcessAnalysis and Control
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Qualities/Skills PM Need (4)
Develop/maintain team spiritOrganise and LeadRight qualities of temperamentMaturity of judgement
52
Project Management Techniques (5)
```Project ScopePlanning and schedulingFinancial ManagementStakeholder ManagementRisk Management```
53
3 Measures of Project Success
Project Functionality - Performance of final productPM Effectiveness - Delivery in accordance to objectives Participants Commercial Performance - Whether PT gained financially from their contribution.
54
Categories of Land Owners
```Traditional - Church crown aristocracyIndustrial - firmFinancial - institutionDevelopers - for profitHouseholders - home ownersConservation Charity - national parks```
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Value of Property Effected by (8)
```Size/QualityLocationAgeLocal DemandAvailability of similar PropertyLocal TransportLocal amenities Value of similar properties```
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Development Appraisal
Compares Total Revenue with Total Cost of schemeHow much land/construction costCost of borrowingProject rental income/investment yield
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Development Appraisal Variables (7)
```Land PriceBuilding CostProject CostRental IncomeInterest Yields Investment Yields Time - Length uncertainty```
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Optimum Property Investor Position
A prime propertyGood quality productLong pre-let w/ blue-chip (does well in downturn) tenantA fully repairing & insuring lease arrangementRegular upward rent reviews
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Current Major Issues in Con.
30% of projects still exceed their cost budget by 20% and 75% miss target completion by 10-15%.Significant moves to change industry, w/ more single source arrangements + collaborative working.
60
Emerson Report (criticism of industry)
Emerson Report (1962) concerned with relationships in the building process – lack of liaison, separation of education of professionals,
61
Banwell Reports (criticism of industry)
Banwell Reports (1964 & 1967) concerned with project organisation
62
Higgins & Jessop Report (criticism of industry)
Higgins & Jessop Report (1965) identified the need to co-ordinate design & construction First to suggest the overall co-ordination role
63
Drivers for Change in Con.
```Quality driven agendaCommitment to peopleCommitted leadershipFocus on customerProduct team integration```
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Improving the project process
Product development Product implementationProduction of componentsPartnering the supply chain
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Tagets for improvement
```Capital Cost - -10%Construction Time - -10%Defects - -20%Accidents - -20%Productivity - +10%Turnover/Profit - +10%```
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Egan Report
```199830% of construction is reworked,Labour is only 40-60% efficient,10% of materials are wasted,Accidents can account for 3-6% of total project costs```
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Change to Collaborative Culture
```Integrated teamsNo blame cultureSharing ‘pain & gain’PartneringFrameworks.```
68
Project Management changes
Introduction of client-facing manager of overall process| Use of a PMgr now mandatory on public sector projects
69
Construction 2025
UK should be in 2025- 33% in both initial cost and the whole life cost- 50% inception-completion time new build/refurb asset- 50% in greenhouse gas emissions inbuilt environment- 50% trade gap all exports/imports for product/materials
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Drivers of Con 2025 delivery
Improved image of the industryIncreased capability in the workforceA clear view of future work opportunitiesImprovement in client capability & procurementA strong & resilient supply chainEffective research & innovation
71
Types of Castles
Shell Keep - Round/Curtain WallHall Keep - Large multi storeyHigh Curtain wall - Defence structure
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Evolution of PM
Master tradesman PM More commercialisation, control cost client QSArchitect taking over design1800 split of architect and contractorDesign and construction kept drifting apartFormation of professional bodies
73
Tudor
```1485-1560Non religious show off wealthSteep RoofFireplacesSmall Windows```
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Elizabethan / Jacobean
```1560-1620Large mansions for aristocracy Grand TourJetting / Dutch GablesMore sophistication of housing```
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Planning Policy
Process of policy making, control and implementation.Public health - Indust rev hygeine/diseaseHouse Man - C'cil Housing, prevent mass cheap housingBuilding COntrol - Important over time
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Inception
```Initial Stage Statement of objectivesEnvironmental MandateApproval of feasibility Appointment of PM```
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Feasibility
Establishing/reviewing options to achieve objectivesUnderstand client demands/appraising optionsFinancial viabilityClient decision to proceed to strategy
78
Strategy
PM takes clients preferred optionsAssembling the teamEstablish infrastructure for managing/controlling projectFacility Management/Procurement strategy
79
Pre - Construction
Implement plans of strategy stageExecution of design process, obtaining legal consentClient approval with construction works
80
Construction
Facilities construction defined by design| Process involves greatest n.o of people/orgs/expenditure
81
Commissioning
Confirms building services systems are installedCommission strategy/schedule Training of client staff
82
Completion
Formal transfer of completed facilities Single or phased over timeEnsure client has knowledge/capability to operateFinal inspections
83
Evo Man Project : Middle Ages
ClientMaster Mason organises trade guildsMeasurer equate work to pay
84
Evo Man Project : 16th
Introduction of Architect| Functional specialists
85
Evo Man Project : 18th
Introduction of Engineers, QS, Main contractorSubcontractorsQS - 2 Measurer Client+Contractor
86
Evo Man Project : 20th
Introduction of PM, design teams
87
Estimate Value of Property
Similar propertyComparative contractors - cost of constructionResidual method - future estimateInvestment - opportunity cost
88
High Net to Growth Ratio
Maximising floorspace to let out| Minimise circulation space
89
Latham Report
Need for better teamwork and co-operation
90
Hardwoods 6
```Long-lastingAngiosperms (seed vessel)Longer to grow Most hardwood species are tropical Need to be managed sustainablyDeciduous trees```
91
Softwood 4
Gymnosperm (naked see)60-120 years relatively shorter growth1/3 of worlds wood / 80% of UK From Conifers
92
How many types of Timber
30,000
93
Wood Properties 3
Low thermal conductivity - good heat storageHigh strength - 2/3 of all houses timber frameLow weight
94
Anisotropic
Different properties when measured in different ways| Wood stronger across the grain
95
Wood Conversion
Cut logs into sections| Finished by planing or sanding
96
Tree Workings
Trunk gives structural strengthBark prevents mechanical damage Radical rays move food into sapwood for storage
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Potential Wood Damage
Fungi - Metabolising organic material (Wet/dry rot)InsectsFire Damage
98
Fire Retardants
Reduce flaming of surfaceSlows it downImpregnation with leach-resistant chemicalsSurface coatings.
99
Preserving Timber
Fungicides/Insecticides| Impregnation modification - Chemicals to fill gaps
100
Properties of Steel (6)
```High Strength Good Ductility High StiffnessSuitable for prefabricationHighly recyclableWorked by sawing, drilling, flame cutting, welding bolting```
101
Steel
Alloy of Iron and Carbon0.4% carbon 2x strength1% carbon 3x strengthMore carbon incr tensile (hard) not strength more brittle.
102
Iron
```Element Heated to 900AllotropicHematite/MagnetiteExtracted with coal and limestone```
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Cast Iron
Remelting Pig Iron w/ steel and cast iron scrap| Finished product has a high carbon content
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Pig Iron
Used to make Cast and Wrought Iron| 4-5% Carbon
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Wrought Iron
Pig Iron heated with Iron oxide in a furnace| Carbon/impurities react with oxygen to form slag
106
Cast Iron Properties
```3-4% CarbonBetter than Wrought Corrosion resistant BrittleSuitable for castingNot suitable for Hot working```
107
Wrought Iron Properties
```Low 0.15% High 0.5-1.5%Good Resistance die to oxide layerReasonable tensile strength, Malleable and toughCan be forged, complex workCannot be cast, tempered or welded```
108
Uses of Steel
Hot or cold rolled sectionsOff site quality controlRapid assembly
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Iron/Steel Corrosion
Destructive attacks by external elementsWater vapour (rust)/electrolysis/oxygenAbrasion of protective coatings expose metalTemperature change expan/cont may fracture coatingsHumidity > 70% will initiate rusting but occurs > 50%Pollutants help hold moisture on the surface of the metal
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Protective Coating
Painting - rust and mill scale must first be removedVitreous enamel - molten enamel form corro-resis coating Plastic coatings - coating PVC, acrylicSteel needs a zinc pretreatmentZinc is used to galvanise steel
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Zinc Coating
Spraying or dipping in molten zincBarrier to the environmentBetter surface for welding/paintingDurability depends on thickness
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Steel Reinforcement in Concrete
Take the tensile stresses away from concreteCarry proportion of the compressive stressesControl fire
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Fire Protection Steel
Steel incombustible, strength reduced by high tempsLoad bearing strength reducesStructural integrity lost at 550Intumescent paint, expand 25-30 times, 2 hour protection
114
Concrete composition
Cement, Sand, Aggregate
115
Slump Test
Determines workability on site| Indication of correct consistency
116
Concrete Accelerators
Increases reaction between water and cement, set faster| Calcium Chloride
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Concrete Retarders
Decreases rate of settingReduces 28 day strengthPhosphates/hydroxycarboxylic acids
118
Water-resisting admixtures
Hydrophobic| Stearates or Oleates
119
Air-entraining Admixtures
Improve workabilityReduce risk of segregationIncrease frost resistance Decrease compressive strength
120
Foaming Concrete
Low density
121
Concrete Failure
```Chemical attack Frost - Freeze ThawAbrasionFireMovement – heat & moisture, creepCracking/spalling from corrosion of steel reinforcement```
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Concrete Chemical Attack
Leaching Sulphate AttackAlkali-Silica ReactionCarbonation
123
External Sulphate Attack
```Water containing penetrates concreteSeawater - Sea defencesAcid RainExtensive crackingExpansionLoss of bond between cement paste and aggregateLoss of strength```
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Internal Sulphate Attack
Sulphate included in concrete when mixedSulphate rich aggregatesScreening and testing should prevent this
125
DEF
Delayed formation of the mineral ettringiteHigh early temps prevents normal formation of ettringite.Expansion and cracking
126
ASR
Alkali-Silica ReactionReact high alkaline cement + reactive silica in aggregateGel produces takes on water and leads to crackingOver time
127
HAC
High Alumina Cement Calcium aluminates rather than silicatesRapid strength developmentHowever mineralogical conversion reduced strengthIncreased vulnerability to chemical attack.
128
Steel Carbonation
Increases susceptibility to chloride attacks
129
Concrete Creep/Shrinkage
Long term deformation under sustained loads| Shrinkage depends on aggregate size
130
Concrete Repair
Epoxy resin
131
How Glass is made
High melting/viscosity reduced by adding sodium oxideReduces it from 1700Reduces energy and cost of manufacture
132
Float Glass
```Thinner 6mm or 0.4mm/25mmMolten glass poured on molten tin Floats on tin, evenly spreadThickness controlled by pour speedAnnealing (control cooling) exit as 'fire' polished productVirtually parallel surfacesCan be tinted```
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How Float Glass is made
```Raw Material FeedMelting FurnaceFloat BathCooling LehrContinuous ribbon of glassCross CuttersLarge plate lift-of devicesSmall plate lift-of devices```
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5 Main Glass Groups
```Soda-Lime Glass - Bulbs/ContainersQuartz Glass - High meltingBorosilicate glass - Chem resistantLead glass - Low Melting radiation shieldingAlumino-silicate glass - Glass fibre```
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Glass Properties
```Light transmission • Refractive indexThermal properties StrengthHardness - abrasion resistanceDurability - weatheringFire resistance```
136
Gas Filled Glass
Argon gas| Lasts 15-20 years
137
Recycled Glass
Landfill tax doubled in 2009Fibreglass insulationRemeltingFine Aggregate
138
4 Material Considerations
SuitabilityDurabilityReliabilitySustainability
139
Triple Bottom Line
SocialEconomicEnvironmental
140
Construction Stat
50% of all materials globally used in construction| UK 200m tons of waste in 2012
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Building Cycle
```Extract Raw MaterialsPrimary/Secondary ManufactureConstructionBuilding UseEnd of lifeDemolish```
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Waste Hierarchy
```LandfillRecover energyRecycle/CompostRe-useReduce```
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4 R's + D
```ReduceRe-useRecycleRecovery - (energy)Disposal```
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OSP
Off Site ConstrucitonManufacture away from place of installationStandardisation/Pre-AssemblyOccur all year round increase productivityRapid on site construction/improve time predictabilityQuality control
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Non-Volumetric Construction
Assembled within a factory| Don't enclose usable space, flat/two- dimensional
146
Volumetric Construction
Pre-assembled Pods (Kitchen/bathroom)| 3 Dimensional space
147
Closed/Open Systems
Closed - Combine w/ components from same manufacturOpen - More Flexibility, can combine with othersNeed to be standard Sizes
148
Why Prefabrication
Quickly made water tight, early installation of servicesSome modular systems have services incorporatedFactory better quality control and in theory zero defects
149
Factory Fabrication
```Quickly address skill shortagesGreater build cost accuracy Reduce on-site time/injuryWaste minimisedLess damage to components/no on site storageEnable integration of BIM with more ease```
150
Prefabrication Problems
Factory specific on-site foundations specific
151
Walter Segal Method| Huf Haus
Timber primary design and modularStandardised - no waste, cut/alter material, reduce costReduce wet trades, concrete plastering and bricklaying5 trained men in 6 days
152
EIA's| BREEAM
Environmental Impact AssessmentMet environmental standardsSocial/economic impact considered
153
Portland Cement
1824 - Joseph AspdinHeated mixture of clay & chalk gave hydraulic cementMix burnt limestone + clay more calcined until CO2 goneMaterial ground into fine cement powder
154
Portland Cement Properties
Excellent strengthStronger than Roman cement5x stronger than hydraulic lime
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Portland Cement Development
Rotary KilnsAddition of gypsum control settingUse of ball mills to grind clinker and raw materials
156
Hydraulic Lime| Non Hydraulic Lime
Limestone with reactive clay, hydration similar properties Portland cementHigher Clay stronger and less permeable 18-25%No clay non hydraulic
157
5 Types of Cement
```Portland Cement Portland-composite CementBlast furnace CementPozzolanic CementComposite Cement```
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Sustainability in Concrete
Reduce amountLow embodied C - Heat eff, diff fuels, Clinker substitution Use of recycled materialsCarbon capture and storage
159
ThermosettingThermoplasticsElastomers
Synthetic polymers can be:Thermosetting - harden on heat and do not re-meltThermoplastics - soften and melt on heatingElastomers - Rubber retain original shape
160
4 Mineral Constitutions of Cement
Alite BeliteAluminate Ferrite
161
Cement Clinker
Clinker a nodular materialsLarge rotating drum containing steel ballsGypsum ground in to control setting properties
162
Clinker Process
- Clinker cools, liquid crystal = aluminate, ferrite low belite- Fast cool good - lots hydraulic react silicates + small, intergrown, aluminate and ferrite crystals.- Slow cool less hydraulic react silicates + coarse crystals of aluminate and ferrite - over-large aluminate crystals can lead to errattic seeng of cement.- Very slow cool, alite decomposes to belite + free lime.
163
Thermoplastic Example
PTFE| ETFE
164
Thermosetting Example
Phenolic ResinsAmino AcidsPolyester Resins
165
Epoxy Resin
```ThermosetAdhesiveGood electrical insulator Hard / brittle unless reinforcedResists chemicals well```
166
Polyester Resin
```ThermosetStiff / hard / brittle unless laminatedGood electrical insulator Resists chemicals well Casting and encapsulation Bonding of other materials```
167
PTFE
```ThermoplasticResistant to chemical attackLight in weightNot brittleInexpensiveAdaptableCause minimal tissue reaction```
168
ETFE
```ThermoplasticHigh corrosion resistanceStrength over a wide temperature rangeHigh melting temperature, Excellent chemical / electrical / high-energy radiation resis```
169
Elastomeric
Undergo large deformations / high elasticityLarge chain molecules twisted/coiled random mannerRubber
170
Additives
Added to improve desired propertiesPlasticisers - increase flexibilityFillers - Reduce cost, improve fire resistance, chalk/sandPigments - Dyes/pigments added Stabilisers - Reduce degradation by absorbing UV lightFlame retardantsHeat Stabilisers - work same under increased heat
171
Admixture
```Modify setting/hardening properties of cementAcceleratorsAir-entraining - lightweight blocksRetardingWater reducing - plasticisers```
172
Clay and Clinker
From clay reactants in the kiln of Lime, Silica, Alumina and iron produce the four mineral
173
Glass additions
Soda - reduce melting temp of silicaFlurospa and soldium sulphate - reduce bubblesCalcium/magnesium - stronger glass
174
Paint component
Pigment - colourBinder - bind to surfaceSolvent - control properties of paint for applicationExtender - go further
175
Plastic Sustainability
Un recyclable plastics| Reduce different types, easier to recycle
176
Unfired Brick
```Air driedReduces shrinkage Improves strengthLow embodied energyEasier to recycleNo moisture resistance more sustainable```
177
Stone
Igneous - GraniteMetamorphic - Marble (limestone)/slate (clay)Sedimentary - Limestone/clay
178
Brick Creating
```Press, wire cut, mouldedDriedKiln3 different temperatures100 water, 400 burning carbon matter, 900 sintering```
179
Power Culture (Handy)
Peoples activities are strongly influenced by a dominant figurePower is held by the few and from the centre
180
Role Culture (Handy)
Influenced by clear and detailed job descriptions in a well defined structurePower derives from a person position
181
Task Culture (Handy)
Teams are used to solve the problemPower derives from expertise Matrix so no single source of power
182
Person Culture (Handy)
Activities are influenced by the wishes of the individuals who are part of the organisation
183
Integration (Martin) Perspective
Culture values should be shared across the organisation, a unified culture
184
Differentiation (Martin) Perspective
Conflicting demands from individuals| Cultural pluralism
185
Fragmentation (Martin) Perspective
Constant changing of events, organisation as complex and unpredictable
186
Cultural Pluralism
When smaller groups within a larger society maintain their unique cultural identities
187
HRM
Strategies for managing people in order to achieve business objectives.
188
Soft HRM
An approach to HRM based on treating employees as the most important resource in a business.
189
Porters 5 Forces
Intensity of RivalryBargaining Suppliers/Sellers Threat of substitutes/new entrants
190
Hard HRM
An approach to HRM based on treating employees as a resource that needs to be managed.
191
Project Culture
A set of beliefs, attitudes and behaviours that exist independently of the individuals in the project.
192
Culture (GR Mills)
Abstract, long-term and socially determinedOften associated with psychological traits and beliefsNot emergent, dynamic and incentive-driven interactions
193
Group Decision Making Positive (4)
- Complete information/knowledge- Increased diversity of views and higher creativity- Wider acceptance/adoption of a solution- Group decisions accurate than decisions of individuals,
194
Group Decision Making Negative (5)
- Time consuming because solutions take longer- Individuals are quicker- Conformity pressures in groups- Group discussions may dominated by one/few members- Ambiguous responsibility
195
Barriers to Team Motivation (6)
Unclear objectives/directionInsufficient resourcesPower struggles/conflicts not confronted/resolved Poor job securityShifting goals/priorities (wrong prioritisation)Barriers tackled directly by dealing with cause or indirectly
196
Belbins 9 Team Roles Idea
Groups need the right mix / balance of people (skills and behaviour) to be effective.May build productive working relationshipsPeople, action and problem solving oritentated
197
Intrinsic Motivation
Performing well in order to gain an internal reward, coming from INside the individual
198
Extrinsic Motivation
Performing well in order to earn a reward
199
Hygiene Factors (5)
```Factors causing job satisfactionSalary and benefitsWorking conditionsCompany policyJob securitySupervision and autonomy```
200
Theory X
Managers take a pessimistic assume they're unmotivated and dislike work. Team members need to be prompted, rewarded or punished constantly to complete their tasks.
201
Theory Y
Optimistic view and use a decentralized, participative style. Encourages more collaboration and trust-based relationship between managers and their team members.Greater responsibility and try to develop employee skills
202
Expectancy Theory (Vroom)
Increased effort leads to increased performance i.e. if I work harder then this will be better.
203
Expectancy Theory (Vroom) 3 Points
Valence (bothered about outcome)Instrumentality (the outcome will affect something)Expectancy (expectation how good outcome will be)
204
Expectancy Theory (Vroom) Process (4)
Individual effortIndividual PerformanceOrganisational RewardPersonal Goals
205
Herzberg 2 Factor Theory
Hygiene factors and Motivators -
206
Herzberg Dis/Satisfaction Idea
Sources of dissatis.. when removed, don't produce satisfaction, but rather no dissatisfaction.Satis... from factors like job challenge/personal growth/etc
207
Maslow Hierarchy of Needs (5)
```Psychological - Warmth/shelterSafety - Security/no fearSocial - InteractionsAsteem - Regard/appreciationSelf actualisation```
208
Values (4)| MP GPaB
Guiding principles and beliefs / Motivations / Priorities| Personal/moral frames that influence behaviours/beliefs
209
Attitude (4)EJ OPEABC I R
Evaluation or judgment concerning objects/people/eventsForm affective/behavioural/cognitive intention responseResult of direct experience/observation learning from env.Satisfaction or dissatisfaction
210
Behaviour (4)| AAV
Actions that accord with valuesWays of conducting ourselves (good and bad)Balanced between personal/collective ways to act (e.g. Trustworthy, successful, polite behaviour)
211
Personal Benefit of Values (4)
Provide consistency and self-awarenessHelp relationships with othersInform conflict or difference resolutionPromote compassionate communication
212
Business Benefit of Values (4)
Informed strategy formationThe basis for bottom up vision and missionsStrengthen identityBuild between collaborators & wider stakeholders
213
Values Based Management
All levels find ways to encourage organisation’s values.Allow for bottom up growth encouraging individuals Encourages addressing unavoidable dilemmas, all agree
214
Bottom Up Growth
Training, supporting, advising and mentoring individuals from all areas of the organisation.
215
Values Based Recruitment (3)
Deliberately employing people that align with current organisational values.Individuals implicitly attracted to places w/ similar valuesMore committed to strategic goals
216
Values and Performance
Strong values can drive high/low performance| Depends on ability to align with its market/adapt strategy practices
217
How Organisations Continue
Must gain/maintain a minimum level of approval from society to function. Necessary to recruit, obtain resources and find markets
218
Values Definition
Values are a series of Personal/moral frames that influence behaviours/beliefs, but also need to be motivating concepts that people care passionately about
219
Organisational Structure Definition (Mintzberg, 1979)
The sum total of the ways in which it divides its labour into distinct tasks and then achieves co-ordination among them
220
Vertical Specialisation
The extent to which responsibilities at different levels are defined
221
Horizontal Specialisation
The degree to which tasks are divided among separate people or departments
222
Responsibility
A person’s duty to meet the expectations others have of him/her in his/her role
223
Delegation
Occurs when one person gives another the authority to undertake specific activities or decisions
224
Span of Control
The number of subordinates reporting directly to the person above them in a hierarchy
225
Tall Structure
Narrow spans of supervision
226
Flat Structure
Wide spans of supervision
227
Empowerment
Giving employees greater control over their working lives, by determining how, what, when they complete a task
228
Job Enlargement
The process of increasing the number of tasks and responsibilities an employee has.
229
Job Enrichment
An increase in the level of responsibility that an employee has in order to increase motivation.
230
Matrix Structure
A form of organisation in which the staff are organised into teams that include all necessary specialists.
231
Maslow Concept
All humans have the same needs of which need to be met in order to move onto a new important need.
232
Motivation Definition
Forces acting on (extrinsic) or within (intrinsic) an individual to cause them to behave in a particular way.
233
Functional Structure
Grouping activities and employees according to their professional or functional specialisms
234
Divisional Structure
Divisional around the individual products
235
Network Structure
Organisations remain independant but join together for certain products or services
236
Huemann et al HRM
New project need for a new HR strategy| Need for assigning personnel for projects, dispersement from projects, and linking project assignments to careers
237
HRM Cycle
Normal - Selection, employment, release| Project - Selection, Employment, assignment, employment on project release from project, back to employment
238
Three HRM Objectives
Attract effective workforce - Recruitment/HRM PlanningDevelop effective workforce - Training/AppraisalMaintain effective workforce - Salary/benefit/relations
239
Mechanical HRM
Planning, Organising, Controlling, Monitoring, Reviewing| Control, systems, accepts status quo
240
Dynamic HRM
Leading, Liaising, Delegating, Coaching, Motivating| Innovation, challenges status quo
241
Employer gives to workforce HRM
Opportunity| Safe working environment
242
Employee gives to employer HRM (3)
Loyalty/commitmentWilling to develop skillsIdeas and opinions
243
Limit/damage engagement HRM (5)
```Job insecurity and fearRepetitive jobs with short cycle timesJobs causing high stress–little autonomy/InflexibilityUnfairness in pay and rewardsLittle career progression```
244
Human Resource Planning
A framework and approach that evolves and aligns human resource management and strategy to support long-term business goals. Matching resources to need
245
Operations Management Definition Stack et al.
Operations management is the activity of managing the resources that produce and deliver products and services
246
Ops Man Supply chain management
The operations managers needs to procure supplies to integrate and deliver client requirements on time
247
Ops Man Inventory management
To develop a sound inventory management system to retrieve the raw materials as and when required
248
Ops Man Quality management
Need to be in touch with the quality assurance personnel so that the quality of the deliverables fulfil the agreed quality criteria / compliance standards
249
Operation Managers Objectives (4)
Budget - OM depart budget/overheads, salaries, income and other benefits / costs, PM has project budgetsSchedule - OM day busines/schedule, PM project deliveryStaff Management -OM recruit/assign people to projectsSkill Development - OM skills/career development
250
Process Management
Aim to continually improve processes, driving change and use business process to align with expectation
251
Supply Chain Management
The process of getting materials/services from| the supplier, to the contractor and then to the client
252
Goods/services cost for projects
External businesses goods/services in construction industry account for 80% of total project cost
253
Systems SCM is made of
Engineering, marketing, manufacturing, Logistics, and management
254
5 Principles of SCM
```Know the customerAdopt Lean Philosophy Information infrastructureIntegrate business processesUnite decision support systems```
255
SCM Benefits (3)
Focus core skills, outsource to partners in supply chainEstablish relationships w/ firms in supply chain Customer satisfaction enhance economic value. Through improved asset utilisation, cost/profit margins.
256
Barriers for SCM (5)
```Lack of integration/Fragmentation/trustConflict contractu relati.. between client/contractor/supplierNature of projectCulture at the workplaceInappropriate organisation structure,```
257
Resolve Barriers of SCM (2)
Sub-contractors/suppliers should integrate into coms and reporting structures within their organisational structuresCloser relationships to personnel working on projects.
258
Performance Management
Setting and achieving organisational goals that produce desirable business results where efforts must align with overall goals/strategy understood by everyone
259
Performance Management Cycle (3)
Planning/Defining - Responsibilities/Skills/BehaviourOngoing Feedback/Facilitation/EncouragementReview - Continuous improvement
260
Power and Control Simons 1995 - Belief System
How value / excellence is created through strong relations| Core Values
261
Power and Control Simons 1995 - Boundary System
Defines minimum standards and makes clear what negative activities are off-limits/unacceptableRisks to be Avoided
262
Power and Control Simons 1995 - Interactive
Sharing information, ideas and encourage creativity and sense new patterns of changeStrategic Uncertainties
263
Power and Control Simons 1995 - Diagnostic Control
Monitor performance / output progress towards targets| Critical Performance Variables
264
Key Performance Indicators
HRM - Retention rate, overtime, trainingProduction - Efficiency rates, costsMarketing and Sales - Growth, brand value
265
Personal Development Plan
Creating an action plan based on awareness, values, reflection, goal-setting and for personal development
266
Organisational Behaviour 3 Part
Individuals in organisations micro/personality systemWork Groups (meso-level / cultural system)How organisations behave (macro-level / social system)
267
Organisational Behaviour Definition (OB)
Human behaviour in orgs, the interface between human behaviour-orgs, and orgs itself
268
What OB Covers (6)
```Organisational values and behaviourMotivationRelationshipsCommunicationsOrganisational behaviourAttitudes/PersonalityCounterproductive work behaviour (Dark side of work)```
269
OB Iceberg
Visible organisational interactions| Stress, emotions, feelings, loyalties ect.
270
SMART
```SpecificMeasurable AttainableRelevant Timely```
271
Tort
A civil wrong which causes harm to another
272
5 Types of Tort
```NegligenceNuisanceDefamationTrespassRule in Rylands v Fletcher```
273
Tortfeasor
A person who commits the tort
274
Civil Standard of Proof
Balance of probabilities
275
Mandatory Injunction
Undo or remedy any damages
276
Prohibitory Injunction
Discontinue a wrongful act
277
Ratio Decidendi
Rule of law which future decisions are based
278
Obiter Dicta
A judge's opinion not essential to the decision therefore not legally binding as a precedent.
279
Precedent
Similar cases should be decided in a similar way
280
Stare Decisis
The doctrine of binding precedent
281
Per Incurium
Careless decision
282
Damages
Compensatory DamagesAggravated DamagesPunitive Damages
283
Interlocutory Injunction
Temporary injunction - Prevents defendant from doing something or to remedy any damage prior to a full hearing - Normally for Pollutors
284
Tort of Negligence claimant must show
Duty of CareBreach of DutySuffering of Damage
285
Duty of Care
Caparo TestProximity needs to be establishedForeseeable DamageFair, just and reasonable to impose a duty
286
Breach of Duty
Show that behaviour has fallen below expectations
287
Suffering of Damage
Consequence has led to damage
288
Donoghue vs Stevenson
1932 AC 562 Lord AtkinConcept of duty of care was establishedIntroduces concept of proximity (Neighbour principle)
289
Caparo v Dickman
1990Created the 3 part testNegligence development from Donoghue
290
Ward v Tesco Stores Ltd
1976Res Ipsa Loquitur - Thing speaks for itselfEstablish a prima facie case of negligenceDefendant needs to prove they were not negligent
291
Barnett v Chelsea & Kensington Hospital
1969But For defendant actions they wouldnt suffered lossHospital not liable, would act have occurred
292
Causation
Claimant needs to show had the breach not occurred there would be no damage Breach-Damage connection (but for)
293
```Bradford v Robinson RentalsOverseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd```
[1967] Application / [1961] BasedRemoteness Frostbite not unforeseeable of extremely cold weather
294
Limitation period for Negligence
6 Years
295
Volenti non fit injuria and Defence
No injury can be done to a willing personThere has been agreement to assume the riskFull knowledge to the nature and extent of the riskA voluntary decision by the claimant to assume the risk
296
Negligence Definition
Failure on the part of the defendant to take care as the law requires to ensure that no harm comes to the plaintiff
297
Professional Negligence| Bolam v Friern Hospital Management Committee
Standard of care expected someone carries out a jobJudge McNair in 1957Bolam Test
298
Expert Evidence
Fellow members of the defendants profession
299
No Experience| Nettleship v Weston
1971| Standard of care of learner driver same as experienced
300
Vicarious Liability
Imposing strict liability of employers on the actions of their employees
301
Storey vs Aston
1869Caused accident due to negligenceFrolic of his own established - no liability
302
Salmond Test
A tort is committed in employment if :Wrongful act authorised by the master Wrongful and unauthorised act authorised by the master.
303
Occupier
A person who has sufficient control of the premises/ land.
304
Occupiers Liability
A specialised branch of negligence, and allows a claimant to sue an occupier of land or premises for damage or personal injury which occurs on the premises.
305
Health and Safety at Work Act 1974
Section 4| Those in charge have to take reasonable care of visitors
306
Commissioner for Railways v McDermott
1967 Occupier to have control over safety There is proximity between occupier, duty of care arises
307
Occupiers Liability Act
1957Created common duty of care, liability similar to negligentCommon law exists, alongside statutory common DOC
308
Premises Defintion
A fixed or movable structure including any vessel, vehicle or aircraft
309
Fisher v CHT Ltd
1966Joint Liability, <1 Occupier, depends who failed their duty Contractor joint w/ club, plasterer electric shockEach defendant owed duty of care
310
To be Occupier Liable
Degree of control over premisesControl allows assessment of state and safety Appreciation of failing to take care may result in injuryControl need not be exclusive or apply to whole premises
311
Unfair Contract Terms Act
1977Occupier cannot exclude or limit liabilityRestriction must satisfy requirement of reasonableness
312
Trespassers
Not visitors under 1957 Oc Li Act1984 Occupier liable if known danger on landChildren careful of features of allurementActionable without damage
313
Trespass Liability
How serious was the dangerHow specific was the warning How the warning was givenIf warning was heeded then he would be reasonably safe
314
3 types of Nuisance and Remedies
Public, Private, Statutory| Injunction, Damages Abatement
315
Public Nuisance
A-G v PYA Quarries 1957Nuisance that will impact on more than just an individualIndividual claimants need to show they've suffered more(Harper v Haden & Son 1933)
316
Private Nuisance
Reed v Lyons & Co Ltd 1945Interference of another use of enjoyment or right over land or damageNoise (transient?), smell, dust, encroachment
317
Noise Nuisance
Control of Pollution Act 1974| Halsey v Esso Petrol 1961 - noise measured in decibels
318
Granting Injunction Test
```American Cyanamid v Ethicon Ltd 1975Is there a serious issueWould damages be appropriate Balance of convenience lay Other special factors```
319
Nuisance Locality
Roskell v Whitmorth 1871| Character of neighbourhood
320
Statutory Nuisance
Defined by statute in 79-82 EPAct 1990| Not stopped/abated = criminal offence
321
Rylands vs Fletcher
1868Things that have been brought onto land and escaped Reservoir water escaping, flooding mining tunnels Contractor failed to block shafts / duty to prevent escape
322
Ruling of Rylands vs Fletcher
Rule imposes strict liability - if escaped then liable| They had a duty to prevent escape
323
Refined Rylands vs Fletcher
Cambridge Water vs Eastern Counties Leather plc 1994| The damage must be foreseeable
324
Allocative Efficiency
Consumer valuation is equal to the economic cost. Occurs when Price=Marginal Cost. P>MC more should be produced. P
325
Productive Efficiency
Combination of capital and labour in the most effective way, minimising their ATC. Producing at an output that coincides with the lowest point of a firm
326
EOS Definition
The benefits to a firm of operating at an increased scale of production leading to reductions in average total cost.
327
X-Efficiency
The need to be able to control the costs of the firm.
328
Internal EofS
Economies of scale that arise within the firm as a result of growth, resulting in lower long run average costs. Moves AC down.
329
External EofS
Economies of scale that arise from the growth of an industry and benefits firms within the industry, resulting in lower long run average costs. Moves AC down
330
LDMR
As each unit of a variable factor is increased to a fixed factor, output increases at first, then it will decrease and become negative, due to the restraints of that factor.
331
Marginal Product
The change in total product from employing one more variable factor.
332
MRP
Change in a firms revenue from employing one more worker.
333
Pecuniary Factors
Wage rate and the opportunity of bonus's and working overtime.
334
Lorenz Curve / Gini coefficient Definition
Illustrates the extent of income and wealth inequality in a society. Gini used to make international comparisons.
335
Lorenz Curve Explain
Percentage of income Y axisPercentage of population X axisShows how far from being perfectly equal, not straight lower groups don't earn as much. Governments can use progressive taxation and amount of benefits paid.
336
Circular Flow Definition
The flow of goods/services and income between producers/firms and households/consumers.
337
Leakages (Expenditure):
The outflow from the circular flow of income. Imports, taxation, savings.
338
Injections (Income):
When people spend money on goods/services money is put into the economy. Government spending, Exports, Investment. Expenditure of people into the economy.
339
Expenditure Method
C + I + G + ( X - M )
340
Cyclical Unemployment
Demand deficient - Less demand for firms products, labour isn't required. Loss in growth of economy.
341
Structural Unemployment
Immobility of labour Occupational - Loss of skills from the changing of industryGeographical - Don't move to find work
342
Aggregate Demand
Total spending on domestic output at a given time.
343
Automatic Stabilisers
Forms of government spending and taxation that dampen down the affects of fluctuations without government policy changes.
344
Cost Push Inflation
Increases in the average price levels as a result of increases in the cost of production.
345
Demand Pull Inflation
Increases in the average price level resulting from excessive increases in aggregate demand.
346
Economic Growth
The growth in the value of output in the economy.
347
Expansionary Monetary Policy
Changes in the money supply (increase), rate of interest (cut) and exchange rate (lower) which are designed to stimulate aggregate demand.
348
Fiscal Drag
The reduction in disposable income that occurs when tax bands are not in line with inflation.
349
Fiscal Policy
A governments policy in regards to taxation, public spending. It can be loose/expansionary or tight/deflationary.
350
GDP
The total value of goods and services produced by a country based in an economy.
351
Multiplier
An increase in the levels of injections in the circular flow of which increases aggregate demand.1 / (1 – mpc(1 - t))
352
Production Possibility curve
The allocation of resources between two products in production, given current resources and state of technology.
353
Consumer Surplus
The difference between the price a consumer is willing and able to pay and the price that is required to make the purchase.
354
PED
The responsiveness of quantity demanded given a change in price. % change in quantity / % change in price.
355
Normal Good
Goods for which an increase in income leads to an increase in demand.
356
Inferior Good
Goods for which an increase in income leads to a decrease in demand.
357
YED
The responsiveness of demand given a change in income. % change in quantity / % change in income.
358
XED
The repsonsiveness of quantity demanded of one good given a change in price of another. % change in demand for good 1 / % change in price of good 2.
359
Producer Surplus
The difference in price a producer receives for a good / service and the actual price they are willing to accept for the good/service.
360
Economic Problem
The need to make choices regarding the allocation of limited and finite resources amongst infinite and competing wants.
361
Giffen Good
Higher price increases demand, increase in demand is due to the income effect of the higher price outweighing the substitution effect. Can't buy other goods.
362
Veblen Good
Demand rises as price rises, attribute it with quality
363
Complementary Goods
Goods for there is joint demand.
364
Substitute Good
Competing goods.
365
Income Effect
Price change effects consumer income. If price rises, it cuts disposable income and lower demand.
366
Substitution Effect
An increase in the price encourages consumers to buy alternative goods. Measures how much the higher price encourages use of other goods, assuming same income
367
Philips Curve
Relationship between inflation and unemployment| Classical reject, Keynesian support
368
Okuns Law
As unemployment increases production decreases
369
Classical Economics
Long run aggregate supply curve is inelasticReal GDP effected supply side, investment/productivityIncrease AD only cause inflation
370
Laffer Curve
Determines optimal tax rate, until a point people willing to to pay a certain rate, after people seek to reduce tax liability or not work because money will go to governmen
371
Reserve Ratio
The amount banks keep in liquid reserve i.e cash| 1/RRR
372
Debt
Lending from banks or bond buyers
373
Equity
Selling shares/stake| Publicly / Privately
374
Retained Profit
Previous years profit not distributed to share holders as dividends
375
Trade Credit
Pay suppliers later than they get paid
376
Invoice Discounting
Selling trade debt for a fee
377
Free Cash Flow
Operating Cash Flow - Capital Expenditure| Cash gener from revenues - acquir/maintain fixed assets
378
Operating Expenditure
Ongoing cost to running a business
379
Simulation
Estimation of probabilities of different possible outcomes
380
Break-Even Analysis
Analysis of level of sales at which the project breaks even
381
Exogenous| Endogenous
Internal Cause| External Cause
382
Option Pricing
A contract giving purchaser right to buy asset in future at specified strike price.Protect material price changes Option seller must have asset to hand
383
Intrinsic Value
Difference between strike price and underlying asset
384
Iron Triangle of PM
Time, Cost, Scope and Quality
385
Sensitivity Analysis
Analysis of effect of changes in one variable
386
Scenario Analysis
Project Analysis given particular combination of assumptions
387
CAPM Model
```Cost of EquityKe = Rf + B(Rm - Rf)Rf - Risk FreeB - Risk EstimateRm - Risk MarketCAPM > 1 - Firms move more than marker more risk```
388
ROSF
(Net Profit after interest payment) / (Shareholder Funds)Single Year rate of return on each unit of share capitalNarrow assessment of profitability
389
Capital Employed
Total Assets - Current Liabilities (Debt + Equity)
390
ROTA
2 Part Du Pont PBIT / TA = (PBIT / T) x (T / TA) Relationship of OP margin + its asset turnover ratio
391
ROCE
3 Part Du PontPBIT / TA = (PBIT / T) x (T / TA) x (TA / K)Efficiency of which its capital is employed Higher % the better
392
ROE
5 Part Du Pont PAIT / E = (PBIT / T) x (T / TA) x (TA / K) x (PAIT / PBIT) x (K / E)
393
Capital Worth
Total Assets - Total Liabilties
394
Developers into 2 types
Speculative - Develop and Sell/Rent| Owner-user - Develop and use as part of the business
395
Net Present Value
Comparing cost of project with future value of revenue discount rate applied so it can be compared with alternative investments
396
Developer J-Curve
Initial High Risk -ve cost costs (trough high risk period)Trade Credit / off plan sales reduce risk and cash inflowCash revenues increase as costs get smaller
397
End of a project
Divestment in Fixed Costs - Plant/equipment moved/sold| Divestment in Working Capital - inventory sold accounts receivable collected
398
3 Components of Cash Flow
-ve cashflow from investment in fixed assets-ve cashflow from investment in working capital+ve cashflow from operations (revenue)
399
Payback Definition
Time taken to recover initial investment| Packback period < specified cut off period
400
Delay Causes in PFI Projects
42% - PM issue / subcontractor under finance/resourcing15% Jarvis PLc (railway) financial difficulties6% - Planning permission issue / dispute between parties
401
Uncertainty vs Risk
Uncertainty cannot be quantified, unknown riskRisk is measurable and can be quantifiedActuaries collect data
402
Exchange Rate Risk Mitigation
Forward Contracts - Lock agreed exchange rate OptionPrice Variance Clauses - Client agrees to take some exposure, as full hedge is expensiveHedging - Buy asset that will do opposite if euro crashes
403
Asymmetric Information
Where one party has more info than another
404
Securitisation / NINJA
Allowed mortgage obligations to be pooled together to create financial products that could be resold via capital markets No Income No Jobs or Assets
405
Dutch Books
A set of odds and bets which guarantees a profit regardless of the outcome of the gamble
406
Moral Hazard
One party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the costs
407
PFI
Type of Public Private Partnership Private firms paid more to complete gov contracts FIXEDIntegrated Public Procurement 700 projects signed 2013 Mar 9.6bn ann gov liabiliti 13/14
408
PF2
Increased equity 15% from 10%No soft facilities managementOnly really used for schools and road project investments
409
Profit Margin
PBIT / Turnover
410
Interest Tax Burden
PAIT / PBIT
411
ROCE
PBIT / Capital Employed
412
Gearing
Total Assets / Capital Employed| Ratio of companies debt to value of ordinary shares
413
Asset Turnover
Turnover / Total Assets
414
Ponzi Scheme
Operator generates funds for old investors w/ new onesHigh risk FCF < INterest + principle paymentConstant Short run refinancing, increasing pot insolvency
415
ADCSR
Ratio determining how many times your turnover is over your debt repayment
416
Hedge
A risk management technique to reduce losses/gain/riskLeast risky FCF > principle + interest paymentFCF < Annual Debt Cover Service RatioLiquid asset kicker - margin of safety superfluous to ops
417
Speculative
Medium RiskFCF > Interest paymentsTrading in an asset, risk losing everything or substantial gainRisk insolvency if variable interest rates incre above limitPay interest on loan/refinance in future to pay principal
418
Flows of Funds into a company
```Sales RevenueGross Trading Profit - Current CoProdu/Interest PaymentTaxable Profit - TaxationNet Profit - DividendsRetained Earnings```
419
Internal Cash Flow
New Equity, New Creditors, New LT debt Finance| New Investment expenditure, Repayment of loans, increase financial assets
420
Capital Intensity
Requiring of large amounts of resources in order operate
421
Residual Claimant
After all costs of production have been paid the money left is to the residual claimants
422
Securitisation Advantages
```Can be low risk ideal for pension fundsRegular and consistent cash flowAAA credit ratingsAssets removed from the business onto SPVPass on the risk```
423
Special Purpose Vehicle
A subsidiary company with asset/liability structure and legal status to fulfil narrow.specific/temporary objectives. Isolate from firm to reduce risk..
424
CDO
Collaterised Debt Obligation| Debt, range of returns some more/less risky
425
Banking Crisis
More people invest in CDO's and demand increases Banks try to increase supply by offering more mortgagesPeople who can afford them already have themBanks offer to people that cannot afford them NINJADefaulting turns CDO's into houses and they put them on the marketHigh supply reduces price and housing price collapses
426
Securitisation Disadvantages
More complicated way of funding than bank loansPeople default and have asset rather than income Can cause global financial crisis
427
Market Risk
Risk affecting whole market Cannot be diversified Systematic Risk
428
Idiosyncratic Risk
Risk specific to a firm or industry| Can be diversified
429
Advantages of Equity
Less risk, no monthly loan repaymentsDont take funds out of businessCredit problems only option
430
Disadvantages of Equity
Investors return could be higher than interest payments Loss of controlPotential conflict
431
Advantages of Debt
Control, once debt is repaid tie is severedLoan interest is tax deductible, dividends notPredictability of cash flow, agreed in advance
432
Disadvantages of Debt
Qualification, need to have high credit ratingFixed payments bad for unpredictable cash flowCollateral risk
433
Land Banking
Large areas of land waiting to be developed on
434
Government Bonds
Debt security issued by government to fund spendingBacked by the credit of government so risk freePredictable income, greater guarantee and risk free
435
NPV
Overall value of inward cash flows in excess of outward cash flows in present value termsAccept investment if NPV is positive
436
Adv/Disadv of NPV
Recognises time Value of moneyTakes into account entire inflows and returns Projects may have unequal lives, returns or costs
437
Finance
Pays at the beginning
438
Funding
Pays at the endGov funding: tax payer funds eventually (education/health)User funding/private revenues: individual user via charging (toll, road, utilities)
439
Private Finance
Banks and equity investors wanting a return| Financed by the gov borrowing money from private investors to pay for specific projects.
440
Public Government Finance
Lend against future tax revenues.Public infrastructure, can be financed by the government earning future revenue from tax, which then is used to pay for specific projects.
441
Why is debt desirable
- Interest on debt is cheap thus reduces liability so shareholders get more for their return.- Replaces the need to issue new shares & dilute ownership (debt still enables ownership of company)
442
Prioritisation on liquidation of assets
1. Administrator's fees2. Fixed charge holders (senior debt)3. Preferential creditors (e.g. employees)4. Floating charge holders.5. Unsecured creditors (e.g. trade creditors and unsecured debt)6. Subordinated debt holders7. Preference shareholders8. Ordinary shareholders
443
Time Value for Money
100 now, Greater purchasing power, future cash is less certain borrower may default Borrowers need more profit cos of delay receipt
444
Myers 1984
Pecking order - used retained earnings first
445
Shareholder Returns
Share price appreciation - increase in market value| Dividends - share in net profit
446
Forward / Backward Looking
Based on previous historical transactions| Expected future profitability
447
What do Projects Face
Inflation: impact real future valuesDemand: impact on revenuesDesign: can specification be achieved.Construction risk: on time & budget.Availability: contractual levels of output.Legislative: legal changes affect operations.Policy: will general policy change(refinancing gain share)Maintenance risk: can we predict OPEX.Planning risk: can projects meet planning.Technology: can we rely on innovation (reducing costs)
448
Developer| Contractor
May not receive payment until project is finished & sold.Receive staged/interim progress payments from client.
449
IRR
Discount rate that makes NPV = 0| At what discount rate will you break even
450
Liquid Asset Kicker
Uncommitted capital used to cover deficits between debt service & net FCF
451
Cash flow margin| Capital value margin
Assumed certainty of net cash flows.| Assumed appreciation of asset
452
What is more risky
Bigger is more risky, greater variance in the mean| Smaller but higher less risky as less variance
453
CAPEX
Money spent acquiring/maintaining fixed assetsMore expensive than future OPEXNot subject to discountin expensive present value terms
454
Whole Life Cost
Total cost of ownership over a lifetimeCost of build + operationsCAPEX + OPEXHigher CAPEX today for lower OPEX tomorrow
455
Performance Bond
Provide surity/insurance against construction risk| Assess contractor risk failure and price on: Job complexity, schedule, contractor expertise, past performance etc
456
Relevance of Du Pont
Separate influences of profitabilityCompanies overall financial health/stabilityClues on business strategy
457
Gilts
Lending against future tax revenues
458
RRR
Required Reserve Ratio| Amount of money they need to to prevent insolvency
459
Expansionary Monetary Policy
Increase aggregate demand / increase growthCutting interest rates or increasing money supplyMore borrowing - more spending - AD1 incr AD2 LRASLower unemployment
460
Why EMP Doesn't Works
Consumer confidence low, dont want to spendCredit crunch banks may not have funds to loanGlobal - fall in expo negates effects of incr comsumption
461
Low Interest Rates
Reduce cost of spending so more likely toReduce incentive to save so spend money insteadLower repayments more disposable incomeReduce value of pound - SPICED
462
Interest Rate and Pound
Lower incentive for foreign investmentsLess hot money flowsLower demand so pound falls
463
Contractors Gearing
Lower Gearing 0-20%Higher equity vs debt Pay more tax, less interest, equity is not tax deductible Return attributed to shareholders is highROSF is low and Earnings per share is low
464
Developers Gearing
```Higher Gearing 60-80%Higher debt vs equityPay more interest, less tax Return to shareholders is lowerLess equity so return per share/ROSF is higher```
465
Why are Government Bonds risk free
Can easily increase taxes and generate revenue to pay off their debt, more easily than a firm
466
How to determine the correct discount rate
Need to use WACC, weighted debt and equity| Compares proportion is funded by debt / equity
467
ROCE vs ROSF
ROCE measures profitabili/effici of capital employed(Higher ROCE means greater returns)ROSF is a profitability measurement of the firm(Higher greater return in dividends for shareholders)
468
Debt investor more risk adverse?
They're guaranteed to get something in returnInterest payment or asset Equity, ordinary shareholder lowest repayment Debt Seniority Equity won't make you bankrupt
469
Accounting Cost vs Opportunity Cost
Rev - Explicit costs (raw mat/utilities/cost of production)| Value of next best alternative forgone when decision is made includes implicit costs
470
High vs Low Capital Intensity
Costs come from investment in machines, equipmentContractors with lots of plant Software developers with few machines
471
Similar ROCE to ROSF
When gearing is 0| There is no tax
472
Assumptions about future project cash flows can be relied upon?
No certainty for cash flow, needs to be adjusted for riskDiscount rate an estimationActually uses a discount rate to get present valueEasy to compare/contrast projects
473
Two types of firms- Risk profiles in terms of attracting equity investors, - Key indicators equity investors use to assess investment potential
Talk about systematic risk If all plots on capm line then all unique risk Spotify has high systematic riskThames water low systematic risk
474
Firms more debt than ROCE
-K=TA-CL=D+E-Incr debt incr liabilities not have enough assets to pay debt, insolvency -Increase risk of administration and finally bankruptcy -Debt can finance growths likely to increase total assets -Incr TA incre K which also has the effect of incre ROCE
475
Benefits of Investing in each firm
Stock Y riskier, great area around 0% high risk 0/- returnStock Y great area over X higher chance of high returnStock Y greater variance more riskyStock X return less but mean is higher
476
CAPM Diagram
Y - Expected return X - Standard deviation (risk)CAPM > 1 - Firms move more than marker more riskRf intersects diversification curve BIncreasing expected returns without increasing stnd dev
477
Scatter Graphs Firm A / B
```Positive Beta above 1 like 1.6Lower Beta between 0-1 like 0.5Beta 1 - S&P 500Beta > 1 - NASDAQBeta < 1 - Utilities```
478
Benefits Today Costs Tomorrow
Discount rate used to give accurate measurement| If discount rate is wrong makes it useless
479
Narrow Definition of Construction
Firms that deliver projects
480
Broad Definition of Projects
Includes wider supply chain that provides material resources
481
Construction 2025
-33% costs+50% delivery time-50% emissions+50% net exports
482
Global Energy since 1973/2015
1973 - Oil 46| 2015 - Oil 30%
483
UK Nuclear Power Plants
53% of UK Power by renewables15 reactors, half retired by 202524% of UK power
484
How to improve/targets energy| UK Climate Change Act
Improve energy efficiency, reduce demand, more low carbon options, renewable sources2008 - Reduce greenhouse gasses by 80% from 1990 by 2050
485
Weightman Review
Following Fukushima 38 lessonsLayout/design of plantFlooding risk/emergency response arrangementsSafety reviews
486
Energy Hierarchy
```ReduceImprove energy efficiency 0 carbon sourcesNear 0 carbon sourcesUse non renewables as cleanly as p[possible```
487
Impact Equation
Ehlrich + Holden| Population x affluence x technology
488
Sustainable development definition
Development which meets the need of the present without compromising the ability of future generations to meet their own needs
489
Pitt Review
Summer 2007 flood 13 dead 55000 properties floodedMet office work with environment agencyRobust building/Planning to protect communities5.5m properties at risk
490
Urbanisation of the UK
2050 65% of people will live in urban areas
491
Reasons for flooding
Areas built overImpermeable surfaces like tarmacNeed for more drainage
492
Types of flooding
Rivers/natural watercourses (fluvial)Sea - low landRainfall - Land / sewers / reservoirs / canals
493
Flood plain types
Functional flood plain - where water would flowWithin natural plain but protected by banksFlood zones 1, 2, 3a, 3b
494
SUDS
Sustain Urb Drain Syst cope with run off/create habitats Filter strips - takes water from impervious areasSwales - ditchesInfiltration Basin - depressions storing water Purvious surfaces - Allow water through brick driveways
495
Ocean Acidification
Absorbing CO2 50% of anthropogenic C02| Affects ocean food chain
496
Anthropogenic Pollution
Originating in human activityRice fields, natural gas, landfill, agricultureMethane 21x potent than CO2, landfill main source
497
E.F Schumacher Quote
Wrote Small is beautiful| It is inherent in the methodology of economics to ignore mans dependence on the natural world
498
Japanese/British Pre-fab
Produce 150,000 homes a year| Leadenhall 340m 85% pre-fab Laing O'Rouke
499
Products impacting the environment
80% of the products we produce impact the environment
500
BAPsSAPsHAPs
Biodiversity Action PlanSpecies Action PlanHabitat Action Plan
