Managing Risks, Managing Costs, and Managing Human Resources - Essay Example

?Running Head: Project Management Project Management [Institute’s Project Management Introduction It was during the 1950s that modern project management, with specific tools and techniques, started evolving within the public and the private sector with early adoption witnessed in the Apollo Space Programs of the United States. Caddis (1959) outlined the various problems associated with project management such as lack of organisational support, conflict management, authority, and responsibility (pp. 91). For the next two decades, many of these problems were solved to evolve the field of project management. It has been defined as “the achievement of project objectives through people and involving the organisation, planning and control of resources assigned to the project” (Harrison & Lock, 2004, p. 6). However, one can trace the ideology or roots of project management to the earliest human civilisations. The Great Wall of China, the Taj Mahal, the Hanging Gardens of Babylon, the Roman Colosseum, and others are few examples from ancient civilisations where these early project managers, mostly, officials of the kingdom and the monarchy, handled projects according to the practices of that time (Loosemore, 2003, p. 352). Today, project management has emerged as an indispensable aspect of modern business management due to changing work environment and dynamics of the modern day business era. In this competitive business world of the 21st century, individuals within an organisation are expected to perform their formal job responsibilities, as well as many projects that go hand in hand with their position and duties (Walker, 2007, p. 183). Thus, there was a need for innovation within the business world, which resulted in a matrix organisational structure, one that is still being used in various leading businesses around the world. The principle of this structure is to create harmony between demands of project managers and line managers (Frigenti & Comninos, 2002, p. 25). Much of the literature regarding project management discusses three main constraints faced by project managers; time, cost and quality, which are often referred to as the “iron triangle” principle. The role of the project manager is to create a balance between these three factors in any project. This paper attempts to discuss the application of these constraints on the project of construction of Hindhead Tunnel that began in the first month of 2007 and ended in the summer of 2011. Furthermore, the paper will briefly discuss aspects of managing risks, managing costs and managing human resources, which are the three main factors that contribute to success of the projects out of the nine elements contained in the project management body of knowledge (Lewis, 2010, p. 169). Discussion Considering the importance and scope of this project, it was imperative for the project managers to ensure that they make the right trade-off between the constraints of cost, quality, and time. Quite understandably, if the project managers had focused all of their attention on reducing costs and meeting the deadlines, they would have compromised much of the quality or performance factors, something that is not acceptable when it comes to constructing a high profile tunnel, which would be used by millions of people every month (Meredith & Mantel, 2008, p. 49). In the same manner, too much focus on reducing costs and meeting the quality standards would have eventually led to the situation where the project would have failed to meet deadlines since it would need more time to use the resources effectively and efficiently. Lastly, the project managers could have lost sight of their budget if they had start placing too much importance on meeting deadlines and maintaining the quality (Walker, 2007, p. 183). They would have to hire more experienced and skilled workers at higher pays to motivate them to work harder, quicker and better, something that would compound the costs associated with the project (Wysocki, 2011, p. 74). Thus, as these factors are interdependent, an emphasis on any one can reduce the importance and focus on the other(s), which could lead to a total failure of the project. As far as the deadline and time constraint of this project is concerned, the Hindhead tunnel was able to meet the deadline. In fact, the officials were able to open the tunnel for walkers and the general public a couple of months before the expected date (Arnold & Hoyland, 2011). Official figures indicate that the cost of construction of the tunnel was almost ?371 million. Although the government officials have been pleased with the same, there is no way to compare these costs with any other similar project constructed in the recent time. Furthermore, there has been no official report for public which could confirm the budgeted amount for this project. Nevertheless, Hindhead Tunnel remains the second most expensive road within the UK in terms of cost per metre, which is 0.155 million pounds per metre (BBC News, 2010). Initial reports and studies have indicated that the tunnel meets all the safety regulations and requirements and it can easily accommodate the traffic that will pass through the tunnel each day. However, only time will tell about the quality and performance element of the project and it would be premature to draw any conclusions about the same (Meredith & Mantel, 2008, p. 49). According to figures, just over 4300 people worked on the project and it was the prime concern of supervisors and project managers to ensure that these people work with the utmost dedication and commitment towards the project. Managing human resource for a particular project is troublesome because of the fact that the workers or employees are well aware of the fact that, sooner or later, the project will end since by its definition, projects are supposed to be limited in time (Wysocki, 2011, p. 74). Therefore, when workers know that this project will not lead to full time long term employment, they are less likely to feel motivated. One key technique to increase employee motivation and satisfaction is to provide more desirable financial rewards to employees (Loosemore, 2003, p. 152). To the benefit of the project, it was being constructed at the time of the recession when the unemployment was soaring and the real estate was going down, thus decreasing bargaining power of the workers associated with the construction. This was a blessing in disguise for the project managers, which allowed them to decrease costs associated with labour (BBC News, 2010). Except for the concert, races, and events that took place in the late 2010 and early 2011 before the opening of the tunnel, the project was not able to generate any significant inflows. Then again, the project was a public sector project funded by the taxpayers, thus, decreasing the tendency and capacity of immediate and prudent accountability (Senaratne & Sexton, 2011, pp. 36). Furthermore, managing the risk effectively and efficiently with construction projects was also an essential task. The approach used by Hindhead Tunnel project managers was to create a risk exposure table or matrix that could multiply probability of occurrence of risk and the possible loss that it could inflict. Examples of risks could be a natural disaster, budget constraints from the government, labour strike, security issues, and others (Lewis, 2010, p. 169). One can easily explain and relate this project to the classic six stage model of project management which can also be highlighted as one of the biggest strengths of the project. The project began with defining the scope and planning for each and every aspect of the project. The next stages are of team building, control, communication and review. Since the project remains in tight public and government scrutiny, the project remain well controlled and communicated. There is not much evidence about the third stage of team building, leading and motivation but once can assume that if the project remained with the budgetary limits and met the deadline then it must have had some strength and hard work in terms of its human resource management and employee motivation. Conclusion There are no doubts in the fact that maintaining harmony between the constraints of time, quality and costs is amongst the biggest challenges of project managers. When it comes to construction projects, it becomes even more crucial to manage the human resource, risks, and costs associated with the project since they have a direct impact on overall success of the project. It appears that the project managers were able to keep the labour costs down due to the high unemployment during the recession and were also able to meet the deadline. It is troublesome to comment about the quality or performance of the tunnel since only time will tell about same, but the initial reports do suggest that the tunnel meets all the safety requirements and prerequisites. References Arnold, P. & Hoyland, P. 2011. “Constructing the Hindhead Tunnel.” Ingenia Online. Issue 48, Retrieved on August 24, 2012: http://www.ingenia.org.uk/ingenia/articles.aspx?Index=730 BBC News. 2010. Walkers to examine Hindhead's ?371m tunnel. Retrieved on July 24, 2012: http://www.bbc.co.uk/news/uk-england-surrey-11156208 Caddis, P. O. 1959. The project manager. Harvard Business Review, May-June, pp.89-97. Frigenti, E., & Comninos, D. 2002. The practice of project management: a guide to the business-focused approach. Kogan Page Publishers. Lewis, J. P. 2010. Fundamentals of Project Management. AMACOM Div American Mgmt Assn. Loosemore, M. 2003. Human Resource Management in Construction Projects: Strategic and Operational. Taylor & Francis. Meredith, J. R., & Mantel, S. J. 2008. Project management: a managerial approach. John Wiley. Senaratne, S., & Sexton, M. 2011. Managing Change in Construction Projects: A Knowledge-Based Approach. John Wiley & Sons. Walker, A. 2007. Project Management in Construction. John Wiley & Sons. Wysocki, R. K. 2011. Effective Project Management: Traditional, Agile, Extreme. John Wiley & Sons. Read More