Fig. 3 The types of constructions the company performs
Source:
- Management team
The management team has an important role in the good functioning of the company. Each manager is responsible for his departments’ employees and activities. In the same time, all the managers must work together in organizing the companies’ activities according to their needs and objectives.
The current management team was formed in 2005 and it encloses only fully prepared staff with a lot of work experience and knowledge. They work together as a team with efficiency and effectiveness through achieving the company’s goal, which is to satisfy its customers. Using the company’s tangible and intangible resources, the company seeks to minimize its costs and maximize its results. The most valuable resource of the company is the intellectual capital coming from a professional group of people.
SC SCIM SA Constanta has the following managerial structure:
Fig. 4 The management organizational chart
2.6 Human resources
Our organization has qualified human resources, trained, authorized and certificated by the necessary organizations and working environment which give the company the capability to provide services of high quality in terms of efficiency and effectiveness.
The company has 110 employees with various levels of training:
- 30 engineers, accountants and managers;
- skilled workers: carpenters, steel-benders, bricklayers, plumbers, mechanics, electricians and drivers;
- unskilled workers.
The employees are subordinated to the managers but, in the same time, they work as a team, without having any major conflicts. Organization management has made and is making significant efforts to ensure proper working conditions and incentives for maintaining and raising the professional and technical level of the employees.
The physical work the employees do in order to build the scheduled objects is very important while it has to be done in a proper manner for satisfying the customers. That is why the company tries to choose the best workers in the branch and also tries to give them a further training. The organization prepares the young employees by giving them useful information about the activity they perform and the goals they have to achieve. Also, the site engineers instruct the skilled workers, by learning them to pay attention to details and be serious and professionals.
In the same time, the enterprise presents to all the employees, especially to the site workers, the health and safety conditions they have to respect for avoiding any accidents. The environmental conditions are also important for a clean and safe activity.
2.7 Financial indicators for 2010
Fig. 5 The financial situation of the company at the end of 2010
Source: www.bvb.ro
As it can be seen from Fig. 5, at the end of the year 2010 the organization had a gain of 220,742 RON. The debt ratio computed as total debts over total assets is 0.59 which shows some uncertainty at the organization level but being a figure close to 0.5 is a favorable thing. The capital gearing computed as the ratio between the long term liabilities and the sum of long term liabilities and owners’ equity is 0.3 which shows a stable saturation. Analyzing these computations, it can be argued that the company’s financial position is in a good state.
- MARKET ANALYSIS
- The industry
Romania’s construction industry was the strongest hit in Central Europe by the global downturn in 2009, having contracted by 15.1% after the steep growth figures of 33.6% and 26% in 2007 and 2008 respectively. This happened mainly because of the outflow of foreign capital and the lack of funding for ongoing construction projects and new developments. The steepest reduction last year, of more than one-third in comparison with the preceding year, was seen in residential construction, whereas there was a 3% reduction in civil engineering.
The number of construction companies fell by 9.1% in 2010. In the past two years there have been many bankruptcies, particularly of small companies, because of the lack of projects and delays in payments for construction work carried out. The number of employees in the industry fell by 8.5% last year in comparison with 2009, to 317,200. However, there was a slight increase in average monthly wages in construction in 2010, to RON 1,580/month.
In 2011, the construction industry has continued to decline. According to INS, between January and April 2011 there was a 4.7% reduction in comparison with the corresponding period of 2010. A 2.2% increase was observed in non-residential construction between January and April 2011, but there were reductions of 20.8% and 1.8%, respectively, in residential construction and civil engineering. The non-residential subgroup has, therefore, been the first to recover, and it also accounts for the bulk of the overall market – more than 50%. Civil engineering is expected to follow, once infrastructure development projects are finally resumed, and residential is expected to be the last to return to growth. The number of residential building permits is still falling.
Construction companies are looking forward to the announcement of new public tenders and the launch of large projects. Substantial amounts of EU funding are available for the development of the country’s infrastructure but it will take time for the Romanian government to gain the necessary expertise to use the money effectively. In the medium-to-long term, Romania remains one of the most promising construction markets in Europe. In anticipation of growing demand in the future, producers of building materials, of cement in particular, have recently been investing heavily in production capacity upgrade projects. Growth should return to the overall construction market in 2012, which will be an election year in Romania and transport infrastructure projects, motorway construction in particular are, therefore, expected to receive additional funding.
- Clients
The leading methods and the insurance of the services’ quality are based on the company’s management politics regarding the customers’ requirements and expectations. This aims to obtaining and preserving the company’s good reputation in the internal market and its continuos expansion and development. All the relationships between the enterprise and the clients are maintained through a prompt response at the customers’ demands. Also, the contractual clauses are always respected and the quality requirements and specifications are met.
By having an experienced and high qualified staff adequate to ensure the company’s services properly, the organization has constantly enlarged its availability to execute more complex projects, according to the clients’ demands and legal regulations. Depending on the market demand, the clients’ expectations and necessities, the management team analyses the organizational actions which need to be performed in order for the company to be efficient and it adapts, whenever necessary, the internal politics.
The company’s market segment is constituted of natural and legal persons, governmental and nongovernmental agencies and state authorities. The company participates at different auctions for competing with the major construction companies with the purpose of winning significant projects financed by European and PHARE funds or the clients’ own money. It also settles contracts through negotiation and face to face meetings with natural persons.
Some of the most significant clients of SC SCIM SA Constanta are SC RAJA SA Constanta, SC ROMINSERV SRL, SC SETRACO HOLDING SA, SC PROIECT FIRST SRL.
- Suppliers
Leading providers of products are evaluated and selected based on historical relationships with the company, certificates in quality management, environment, health and safety, as appropriate, issued by accredited bodies, recommendation or approvals of their products by customers. Supply of products/materials is made only from accepted suppliers, included in “Accepted providers list” of the organization prepared by the supply –storage compartment and approved by the General Manager. A supplier is included in “Accepted suppliers list” based on evaluation of the capability to provide products complying with requirements specified in the request for bid or order, legal requirements and the applicable regulations. If nonconformities are found in products supplied, the suppliers in question are reevaluated and, based on results of reevaluation and the treatment of conformity of products, are held or excluded from the list.
Almost all the suppliers, especially the ones who deliver construction materials, are located in Constanta for facilitating a fast delivery. Also, the communication between the company and the suppliers is easier this way while they can meet face to face and discuss all the transactions’ details. The main suppliers for materials are SC COMAT SA, SC ROROM BIG SRL, SC AQUA INVEST SRL, SC AQUA HOLDING SRL. They insure the delivery of metallic pieces like nails, structural steel and wires which are used for structures.
The suppliers for concrete are SC BETOANE SI AGREGATE SRL and SC COMCM SA which ensure a fast delivery with no delays. The company which ensures the delivery of fuel is SC ROMAR OIL SRL. SC DARIA AUTO SRL delivers spare parts for the machineries and trucks owned by the company. There is also a company which lends the scaffolds for the buildings named SC DOKA ROMANIA SRL.
Making business with the major suppliers in town, SC SCIM SA favours the growth of the city’s economy and the development of the construction materials industry.
- Competitors
The direct main competitors for the company are SC AMBIENT CONSTRUCT SRL, SC IMVEST SA, SC CONVAS CONSTRUCT SRL and SC ABC VAL SRL which are local companies with the same level of development as SC SCIM SA Constanta. The company competes with these enterprises in winning the main projects in the city.
Because Constanta is a big city where the demand for constructions is high, the company also competes with organizations founded in other cities in Romania which perform activities in Constanta for a determined period of time, for certain projects. Some of these companies are SC TRACON SRL Braila, SC DELTACONS SA Tulcea and SC COMINCO SA Bucharest.
- SWOT ANALYSIS
Strengths:
- The company has a lot of experience in the construction domain which allows it to participate at important auctions at which the mandatory requirement is a complete portfolio of projects. By winning these auctions, the company can grow and develop.
- The organization’s team is very good in what it has to do, it is well-prepared, organized and professional. There are a lot of skilled employees who manage to do a great job and have the best results. This helps the company have a good reputation among customers and other companies.
- The employees successfully respect the projects’ due dates. They also ensure the quality of their work by handling the project with attention and responsibility. They work according to the current normative and legislation.
- It has a complete services package while it ensures the construction of the project as well as the installations and assembling. This represents an advantage while they do not depend on other companies’ services.
- The enterprise has a professional management team who respects the initial budget of the project and manages the resources according to the plan.
Weaknesses:
- The company does not have a marketing division who can make professional market studies for finding out the clients’ preferences. This means that the company cannot target and focus directly on a certain market segment.
- Some of the company’s machineries and pieces of equipment are overcome by the technological progress. This means that they cannot comply with the technical specification required to participate at the auctions. Also, by using the old equipment, the employees spend more time on accomplishing a task and use more material on building.
- The enterprise does not have an advertising department, which determines loss of potential customers due to the fact that they are not well-known among the people. This determines a drop in the customers’ confidence in the company.
- Another weakness is the reduced number of site engineers for supervising the work in progress. There are a small number of engineers who are overwhelmed by the amount of work they have to do and by the sites they have to oversee.
Opportunities:
- The continuous growth and development of the city represents a great opportunity for the company to win more auctions and projects. The legal persons are interested in building a lot of halls, headquarters or factories. Also, there are a lot of natural persons who want to live in new houses or rebuild their old ones.
- The district where the company is founded, Constanta, has a high economy which attracts a lot of investors. This consists in numerous opportunities for the company to get more projects.
- Because Constanta is a sea side city, there are a lot of Romanian and foreign tourists who come there and want to build holiday residences for living in the summer.
- More people open new businesses or grow their existing business by obtaining European funds for SMEs. This requires more buildings for headquarters or other facilities.
- People look for more places to spend their free time which grows the demand for shopping centers, cinemas, beauty salons, fitness centers and pubs. These represent more projects which can be wined by the company.
Threats:
- Companies from other districts can win the bid for local projects so that SC SCIM SA will not have any more customers.
- Another threat is the demographic one; statistics show that the population decreases. This can determine a drop in the demand for constructions of black of flats and houses.
- Although obtaining European funds can be a positive outcome for the entrepreneurs as well as for the company, this can also be a negative aspect while more construction enterprises can appear and win the clients on their side.
- The technology has developed a lot in the last years, determining a drop in the fixed assets’ value. In the future, there will be a drastic requirement for modern equipment so that the performance can be high. This will force the company spend much money on buying new equipment and machinery.
- The lack of competent personnel prefigured in the future. Currently, there are a lot of old people who are still capable of doing their job in a proper manner. Nowadays, young people are not interested anymore in working in construction or if they do, they are not working responsible. This phenomenon will even worsen in the future.
- MANAGEMENT FUNCTIONS
- Planning
Planning is the basic function of management. It deals with setting a future course of action and deciding in advance the most appropriate course of actions for achievement of pre-determined goals. SC SCIM SA Constanta has established the next permanent strategic objectives for the period to come:
- The constant increase in the performances for the products and services offered by the company.
- The constant increase the company’s turnover.
- Forming a successful partnership with the clients and suppliers.
- Establishing a work environment favorable to the company’s development based on responsibility, trust and respect among the employees, as well as the partners and co-workers.
- Cooperation with the other interested parties, like clients, suppliers, the civil society and authorities for protecting the environment and for functioning according to the safety and health conditions in labor.
At the annual management analysis reunion of the organization, there are established certain objectives on medium term:
Fig. 6 The company’s objectives for the year 2010
- Organizing
Organizing is the process of bringing together physical, financial and human resources and developing productive relationships amongst them for achievement of organizational goals. For a continuous improvement of the company’s activity and for providing services in accordance with the customer requirements and thus increasing their satisfaction, obtaining environmental performance and health and safety planning, management evaluates and provides necessary resources.
The allocated physical and financial resources are represented by the infrastructure (e.g. offices, warehouses, production tools, machineries and means of transportation) needed to provide services, organizational specialized skills (authorization/certification/certifications), technology and know-how, equipment, monitoring and measurement.
The vehicles and equipment used are appropriate for the performed operations, they are checked, maintained and repaired by the company’s own specialists or by specialized units for making sure that they keep the necessary running and using performances and are able to conduct operations at the required quality. If the organization does not have the means, equipment and specialists needed in a certain area, operation or activity, it signs collaboration contracts with specialized organizations or persons for renting the needed tools and equipment or providing the operations or activities.
Through the General Manager, the organization ensures the resources needed for a proper working environment for all activities in terms of lightning, hygiene, safety and labour safety according to the provisions of the legislation in force. For the offices, there are provided conditions and equipment needed (space, office equipment, computer network, software) to achieve in optimal conditions all the company’s services.
Providing human resources is also part of the organizing activity. The management team evaluates and selects the staff based on professional training, skills and experience in the position or job that will be used, according to specific needs. Before the new employees begin their job, the work coordinators of technical execution or certified site managers train workers by presenting them the content of technical standards, specific environmental, health and safety and quality assurance standards specific to the activities which they will perform. If the organization does not have the necessary specialist in a certain area, operation or activity, it signs contracts for collaboration with specialists who perform this kind of activities.
Within the organization it is established a staff training process, which covers the following areas:
- Technical-professional;
- Health and safety of work, emergency situations;
- Quality and environmental management.
In case the current regulations or new technologies require special trainings, the leading team determines the degree of necessity for these and guides the employees to the specialized organizations for learning.
Management uses modern, incentive methods for raising the employees’ awareness concerning the relevance and importance of their activities, the customer requirements and the legal provisions concerning products and services. There is technical monitoring and measurement work equipment needed to monitor the environmental impact and eliminate or diminish risks. If, for performing these certain tests, the company has no monitoring and measurement equipment or trained personnel, they can turn to service laboratories accredited/authorized to perform them.
- Leading
Leading means assisting the staff in achieving the company's goals and also in accomplishing their personal or career goals which can be powered by motivation, communication, department dynamics and department leadership. The responsibilities of the leading, organizing, controlling and execution staff at the organizational levels in the company are presented in the documentation of the integrated management system manual as well as in the system and operational procedures, work instructions and job description.
- The General Manager has the following attributions:
- He approves the integrated management system manual, the auction documents and the contracts;
- He assures the physical and human resources for a proper evolution of the activities inside the organization;
- The General Manager runs the integrated management system and establishes the organizations’ politics concerning the integrated management, the objectives, targets and quality performances.
- He approves the organizational chart;
- The General Manager agrees with the training and testing programs for the company’s staff;
- He leads the management analysis, the contracts and customers’ orders analysis and he approves the decisions concerning the clients and the proposed measurements for improvement;
- He also establishes the responsibilities and the authority of the leading positions he controls concerning technical and organizational problems;
- He decides the constituents of the reception and inventorying commission;
- The General Manager also represents the company in relation with the customers, suppliers and authorities.
- The Technical Department Manager has to perform the following activities:
- He coordinates the activity of tendering and contracting;
- He establishes the execution or services contracts of the projects and sends them to the General Manager for approving;
- He checks if the price offer respects the project, the task, the specification and the beneficiary requirements;
- He draws up and exploits the execution charts and the quality plans which describe the technological execution processes;
- He receives and analyses the customers’ complaints, he presents them to the General Manager and performs the determined measures;
- He signs the acceptance report when the project finishes;
- The Production Department Manager is responsible with accomplishing the following tasks:
- He leads the production activity, technical assistance services, document draw up, work in progress;
- He assures the contact with clients and suppliers in the limit of his competences;
- He identifies and assures the necessary resources and the execution personnel with corresponding qualifications;
- He assures a proper course of the internal audit on his area of action;
- He verifies the efficiency of the corrective actions and takes the necessary measures for preventing a recurrence;
- He proposes investments in necessary equipment;
- He checks the list of the accepted suppliers made up by the Deposit and Supplying department.
- He performs registrations of the quality which certify the project compliance.
- The Chief Accountant Officer:
- He organizes, leads and controls the proper development of the financial and accounting activity of the company in accordance with the current legal provisions;
- He organizes and coordinates the accounting of capital operations, fixed assets, inventories, third parties, treasury, short term and long term liabilities, revenues and results, expenses and management accounting according to the current legislation;
- He is responsible with the patrimony evaluation, made at least once per year as long as the company exists and in any circumstances provided by law or required by the General Manager;
- He organizes and participates in the preparation work for the financial and accounting year closing;
- He is responsible for drafting the trial balance at the terms established by the current regulations;
- He creates the financial and accounting analysis according to the balance sheet and presents it to the managing board and in the General Meeting of Shareholders.
- Controlling
The controlling function implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformity with the standards. An efficient system of controlling helps to predict deviations before they actually occur.
Because the clients’ satisfaction is the most important aspect taken into account by the company, the management team offers a great significance to the contentment level among the clients, concerning if the company’s services are in accordance with the ones specified in the project. This is measured with the help of some questionnaires, filled out by the customers, regarding the evaluation of satisfaction among the clients. Another direct way used by the company for measuring the customer fulfillment is by the recordings made in the acceptance reports at the end of the project, the recommendations and grades given for the employees work and the classification of the enterprise in the branch.
Depending on the project’s phase, the controlling team performs certain monitoring and measurement activities in accordance with the execution documentation and standards identified in the reports within the quality plan. Also, the company measures the performance of the employees by observing their degree of implication in the project and their attention to details. Depending on these indicators, the company offers them certain financial and career related benefits or penalizes them.
- CONCLUSION
The company SC SCIM SA Constanta is bringing benefits to the local society by constructing buildings and facilities necessary for the people to live a decent life. They contribute to the city’s development and growth by erecting new modern locations and by restoring some of the city’s iconic buildings. Also, they facilitate the communication among people by constructing new roads and bridges.
In my opinion, the enterprise has a strong management team who successfully coordinates the company’s activities. They manage to achieve their goals and apply the management functions in a proper manner, necessary for a good reputation and development. They developed a powerful team spirit and they all work together in harmony. In the same time, each manager knows which are his exact responsibilities and performs them without any hesitation.
BIBLIOGRAPHY
- SC SCIM SA Constanta - Annual Report - 31.12.2010;
- SC SCIM SA Constanta - Management Report – 31.12.2010;
- SC SCIM SA Constanta - Job description;
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