Theories and Reality of the Project Management - Assignment Example

PROJECTM Task One: Project document Duration/cost estimate Task dependencies Milestones Overall recommendation Ola!— funds from private investors 6months/NA Management leadership Investor confidence levels Seek private investment Ola!—cost/benefit analysis 2 weeks/NA Accurate data Completion of analysis Proceed with analysis Ola!—business operation opening 1 week Advertising Promotion Public awareness Turnout points Marketing Traditional marketing Ola!—sustainable business model 3 years Customer loyalty Location Yearly revenue Profits Balance sheet analysis Ola! Year 1 Year 2 Year 3 Year 4 Year 5 Gross (margin) profit £41,275 57,235 72,150 85,535 95,025 Total operation expenses 43,087.80 47,531.78 49,108.75 48,780.65 50,032.20 Net Profit/Loss 5,696.80 13,287.22 27,625.25 38,338.35 £48,176.72 Task Two: Essay The theory and practice of planning a project with special reference to the Ola! Project Introduction The current investigation looks at the expansion of Ola!, a Spanish clothing retailer seeking expansion into UK markets, specifically that of Uxbridge. Through the processes of effective project management, teamwork as well as finance is the key to effective motivation for workers in forming and achieving team goals in the expanding organization. “As organizations strive to uncover more and more innovative ways to motivate their employees many overlook the important and easily implemented area of job design” (Job, 2010). Budgeting is also important: “One of the biggest advantages of a well-crafted, closely monitored budget is the perspective it offers. Rather than merely stumbling from one paycheck to the next, a budget lets you establish cash flow parameters that can smooth out problems even before they crop up (Job, 2010). Ola! plans to open on a paradigm of providing superior retail clothing purchase and feedback experience for its customers. The founder and cofounder of the organization are both completing training in entrepreneurial training programs and seminars, so as to further facilitate future growth of the business from an operational standpoint of excellence and competency. Project management process First of all, the company seeking to expand internationally must make an evaluation of the market that is being entered. Without doing this, the company would be on shaky ground in the new venture immediately; evaluating the entry market allows a company to make informed decisions about its international strategy, and even whether or not international expansion is wise at all. For example, a company that has established market dominance domestically in a certain field may want to begin an international program in a specific country, but on researching market opportunities there, they may discover that this country is prohibitive to growth because of a state-structured economy that does not look well on direct foreign investment. This will not be an obstacle for Ole! in the UK. The main obstacle that project managers at Ole! are going to have to overcome is competition. In the UK, clothing retail is a very crowded market. “Porter argues that while many companies have been preoccupied with improving operational effectiveness--primarily through restructuring and reengineering--thats not enough in an increasingly competitive world. Each company must carve out a distinctive way of competing” (Schmalnese, 1985)). Effective project management therefore begins by providing a step-by-step synopsis of competition in relation to Ole!. It must be remembered at this point, of course, that the planner has not yet launched the company, and it is only in the phase of consideration by the venture capital firm that the case is presented. Therefore, the application of these forces is as much an act of imagination as any coherent and detailed business plan on the part of the owner would have been. “Every seasoned investor knows that detailed financial projections for a new company are an act of imagination. Nevertheless, most business plans pour far too much ink on the numbers, and far too little on the information that really matters… a great business plan is one that focuses on a series of questions… related to the people, the opportunity, the context, and the possibilities for both risk and reward” (Scott, 2003). In terms of management strategies, Ole! still seems to have a centralized command structure. This is a common form of business organization in many settings, including the setting of the current investigation. Businesses can also organize by product and customer. In a product method, the business can have different product lines led by different managers. In a customer-oriented method, a business can have different types of customers whose needs differ. This is an increasingly salient option in a market in which customer attenuation has become a watch-word, and customer attenuation is another facet of business that tends to unify rather than divide. For Ole!, it is the centralized geographical model that reigns in the UK, with teams separated. The establishment of core competency is a prerequisite of strategic management decisions, and this is an important part of Ole!’s current business-level project management strategy. Contributing factors Leadership is also important to consider in both clothing retail planning and business strategizing. Defining effective leadership, there is also the problem of defining universal traits in relation to an organizational environment that is built primarily on the differentiation of individuals. That is, the research regarding leadership strategies may show that there is no one clear set of characteristics that defines people-oriented (as opposed to heroic) leadership, because there is so much variance in individuals. “There are no universal traits that predict leadership in all situations. Rather, traits appear to predict leadership in selective situations. Traits predict behavior more in weak situations than in strong situations” (Hellriegel et al., 2005). The operations of Ole! must thus look at leadership in dynamic and positional ways in accordance with different situations and environments, concentrating on giving examples of organizational leadership from the existing literature of dynamic business planning environments, to show how leadership can be classified along lines of utility. “The primary focus is on decision making. Investigation identifies direct actions that manager can take… alternatives are based on economic criteria. Alternative actions are presented in terms of measurable criteria, such as shipping costs, sales revenues and profits” (Hellriegel et al., 2005). Costs and benefits also affect supply chain planners at Ole!, although the repercussions of their decisions are much more serious. Instead of measuring sales revenues and profits and costs, they are measuring the costs of portions and interacting with the customer. Theory and reality For operations, the theory behind Ole! should reflect an Open Systems model during their expansion into the UK. In terms of communication and motivation, the open systems model is most applicable to the organizations mentioned above. This model created many new opportunities for looking at organizations and the relationships that are formed out of a sense of circumstance and happening rather than out of a sense of rational planning. The result is a more open and malleable system that accounts for vagaries in the organization and obstacles that may not be as easily accounted for from other model viewpoints. “The open system perspective stresses the importance of cultural-cognitive elements in the construction of organizations… Nothing is more portable than ideas… Organizations are congeries of interdependent flows and activities linking shifting coalitions of participants embedded in wider material-resource and institutional environments” (Scott, 2003, p. 29). This is not as much structured as it is open to new opportunities through new ideas. Therefore, the open systems perspective stresses the positive power of ideas for an organization like Ole!. To begin operations, the business will need monies to secure the location and complete necessary renovations. Appropriate insurance must be purchased, as well as equipment, transportation, and a limited amount of office furniture. “Every seasoned investor knows that detailed financial projections for a new company are an act of imagination. Nevertheless, most business plans pour far too much ink on the numbers, and far too little on the information that really matters… a great business plan is one that focuses on a series of questions… related to the people, the opportunity, the context, and the possibilities for both risk and reward” (Job, 2010). Conclusion Ole! has adequate capital to start operations, and has a chance of success at expanding into the UK, despite a competitive and dynamic market. “Capital for the project is limited to £220,000 and the costs for all projected activities in the establishment of the new Ola! store must be cognisant of this. Provision must be made for all materials and equipment required by the project and to meet all labour costs and the hiring and scheduling of specialists such as a health and safety expert, IT expert, etc.” (Case, 2010). Market saturation is another issue that proper entry research can turn up: no company wants to suddenly find that it has gone from a saturated domestic market to a saturated foreign one. Therefore, companies must research carefully before making the move to expand internationally. Research is available first-hand, or through primary sources, but this is often cost-prohibitive, so many companies prefer to outsource research or use established databases to retrieve the information that they need regarding statistical trends and opportunities. REFERENCE Hellriegel and Slocum (2005). Management. New York: Pearson. Schmalensee, R. (1985 June). Do markets differ much? The Economic Review, 75(3), 341-351. Scott, W. (2003). Organizations. Upper Saddle River, NJ: Prentice-Hall. Job planning: management (2010). Strategic Management. London: Oxford. Case: Ola! (2010). Read More