Importance of a Professional Project Management - Essay Example

?Q1. Critically evaluate the lessons to be learned from this first stage of the project and identify the key areas that Inter-Optics plc needs to consider before they consider embarking on stage two. Joint venture is one of the tools for international expansion as it allows the company access to corresponding resources and also to the capabilities of the two firms, which provides certain benefits such as achieving the economies of scale, brining new technologies and service faster into the markets by being more efficient and reliable (Beamish & Lupton, 2009). The connections established with the local businesses through the International Joint Ventures also provide the opportunity to navigate the environments in which the business will be operating (Kwon, 2008). The joint venture between Inter-Optics plc and Singh Optical Industries (SOI) was established as a means for the international expansion of Inter-Optics plc in India. However the first stage of the project brought certain problems in the competition and thus before beginning of the second phase of the project it is important to address these for successful execution of the project. The lessons learned include: 1. Project Management The management of a project requires discrete attention to the managers i.e. the actions at an individual level. Spekman, Theodore, Lynn, & Thomas, (1998) claim that “little is known about the managerial requirements of the different life cycle stages through which alliances pass” and too little attention is given to the alliance manager as a central figure in determining the success/failure of an alliance”. Similarly, heavy reliance on the firm level analysis and the relationships between the parent companies often leaves out of consideration the actions of the individuals that are embedded in these relationships (Granovetter, 1985). Considering the above argument the project management team established comprised mainly of the senior resources from both the companies however the overall in-charge of the project was from Inter-Optics plc where the Chief Engineer was reporting to the project manager. Since, the project was initiated the initial stages of the project were very slow and there turned out to be a lot of differences when working on site. The project manager was merely involved in the whole process and the decisions and solutions were taken by the on-site engineers in agreement with the local contractor. The overall project management essentials were not practiced and the project was late 7-8 weeks. In such situations it is the responsibility of the project manager to oversee all the activities in the so that everything goes well as planned and if problems may arise as it did in this case, a resolution is immediately implemented. In order to do so the eight essential steps for project management should be adopted for its successful execution these include (Westland, 2010): i. Team Assembly - In project management the proper assembling of a team is quite crucial as it is a collaboration of different minds working together and they work together to come up with cohesive ideas and mutual strategies that are required for successful execution of the project. Although the teams were formulated for the project however it lacked collaboration and cohesiveness as the selection of the team members was not appropriately planned. ii. Project Initiation – The project initiation phase requires a complete understanding and identification of the project definition, objective and approaches to be used in the project. This project lacked planning and scope as when it was initiated the foreman did not have any direction, there was no understanding of the country and hence problems arose. iii. Project Planning - This phase of the project management is quite crucial and often serves as the backbone of any project. A complete and thorough planning serves as a means to prevent the chances of setbacks and problems along the course of the project. The project between Inter-Optics and SOI lacked planning as the project manager, did not establish any management-level planning to have an over-view of the resources, subcontracts and the costs and it is due to this reason the project was slightly over budget, there was a difficulty in human resources management. iv. Project Execution – In this phase of the project, the manager tends to delegate tasks to the teams in order to achieve efficiency and desired results. A proper tracking and monitoring of tasks is required in order to solve the challenges and to help in the decision-making process. Communication with the team is the essence of this step as it determines the degree of dependency among team members. However, the project manager from Inter-Optics plc was not at all involved in the day-to-day activities and hence there were supervisory problems, the tasks delegation was not properly done and the decision-making was single sourced which led to more problems in the execution of the project. v. Project Monitoring and Controlling – Project monitoring and controlling is an essential part of the overall management of a project as it helps in achieving the desired quality and efficiency. This project also required constant monitoring and tracking so that all the resources could be kept aligned to the overall objective. Project manager has a lot of responsibility in the successful execution of a project from team alignment to project monitoring and controlling, since the project manager from Inter-Optics plc lacked in these essential phases, it led to the problems and challenges in project’s first phase execution. 2. Contractor Selection One of the crucial decisions in any joint venture for the owners and the project managers is the selection of a suitable contractor for the construction project. Hatush & Skimore (1997) identified five main areas that should be used in the assessment of a contractor that could help in the overall selection process. These five factors include: project packaging, invitation, pr-qualification, short listing and bid evaluation. All these factors are crucial in the contractor selection. Hatush & Skimore, (1997) defined the pre-qualification phase as the one to investigate and assess the capabilities of the contractors. The contractor chosen for the joint venture was Lindberg Systems B.V that had a reputation for the highest quality standards within the industry. However the Bid evaluation phase takes into consideration two aspects i.e. it considers bid amount as well as the capabilities of the contractor. Russell & Skibniewski, (1988) defined that bid evaluation is a decision-making process that gives insight to the necessary decision criteria to be used in order to assess the contractor’s capabilities. Hence, it requires the knowledge and experience of the project manager in using the appropriate selection criteria to ensure the contractor being selected for the project is the most suitable one with regard to the financial and technical aspects concerning the project (Hatush & Skimore, 1997). It was noticed in the tender evaluation process that Lindberg systems had no project experience outside Europe and hence the contractor capabilities were compromised. 3. Decision Making Structure An establishment of a good mutual relationship in international joint ventures is based upon understanding, the maintenance of constant communication and exchange of information and also on the leadership commitment. The decision making structure also has a profound impact on the success of the project as a lack of understanding and cooperation can lead to risky decisions for the project, therefore all the decisions and changes must be openly communicated to all the stakeholders and for that such employees should be nominated that can foster such communication between both the parties and report to headquarter (Penker). In the project the only reporting source was the Inter-Optics plc’s chief engineer and the decisions were being made by the onsite engineers which resulted in costly arrangements of labor force. Q2. Outline a Project Approach for stage two that will address the problems encountered in stage one and build on the lessons learned. Joint venture projects are complex and difficult to execute successfully as there are a lot of factors that create hindrance in its successful execution (Triantis, 1999). As discussed above the major factors that pose challenges to the project include: Lack of strategy and clear objectives Lack of understanding of project process Incomplete project assessment Implementation problems Poor relationships In view of the problems encountered in the first stage of the project, the approach used in the second phase would include the process that would ensure the problems of first phase don’t recur. This would include: 1. Project Team Division of responsibilities The function of the core project teams starts with developing the project work plan ensuring the project goes through the each step of the process. As the core team serves as the communicator of the progress of the project, it should ensure a smooth transfer of responsibilities and continuity of purpose at each stage of the project process (Triantis, 1999). When assigning responsibilities to the core team, the parent firms consider the technical and business acumen and availability as opposed to the cross-cultural setting that can actually create conflicts. Therefore when formulating the core team it is essential to consider characteristics of the managers for the Joint ventures as it will affect the functioning (Li, Xin, Tsui, & Hambrick, 1999). It is also helpful for the successful execution of the project to appoint the core team managers who have international exposure that might be obtained through education or professional experiences and also their open-mindedness, tolerance and cooperative tendencies (Kelley & Stahelski, 1970) should also be considered in team management. The core team should be rearranged by selecting those managers that are familiar with the country and have international exposure moreover responsibilities need to be re-defined so that all the decisions made are with mutual consent and agreement of all the partners. The reporting should be two-ways from the chief-engineers of both the companies. Also as, the engineers faced problems at the construction site due to their lack of exposure to the country and poor adaptive ability, the selection of the contractor should have been based on the capability of the contractor to work on an international level. 2. Leadership Initiative and Commitment Project managers can greatly influence the functioning of a joint venture. This requires that the project managers should articulate a clear vision and set of core values that are essential for the project execution thus serving as a “transformational leader” (Bass, 1997). Since, the involvement and commitment of the project manager from Inter-Optic plc has been very limited throughout the execution of the first phase it will be needed to appoint a manager that has the skills and abilities to take up the leadership responsibility and also ensures commitment to the project. 3. Project objectives It is clear from the first phase of the case that for the successful implementation for a project, clear goals and objectives need to be developed, so that all partners, contractors work for a single objective and have a clear direction. The risks and conflicts can also be reduced by clarifying the objectives. 4. Decision-Making The commitment to a consensus based decision making is crucial to the success of the joint venture project. As most of the decisions were solely made by the engineers of Inter-Optic plc and hence the project was over its budget and also due to lack of planning in the contractor evaluation the services of the local contractor were required. As the project implementation demand decisions to be made within a specified time frame, it needs to be understood that who is responsible for making what kind of decisions (Fischer). For fostering successful decision-making the following steps should be undertaken (Project leadership Success: Responsibilities, Behaviors and Competencies that produce positive results, 2010): i. Understanding the problem ii. Understanding the limits that the intended decisions will likely to accomplish the intended objectives iii. Conversion of decisions into actions by selecting the appropriate actions iv. Gaining feedback to measure the result of the action undertaken. This would help in the proper adoption of decisions that will have positive impact on the second phase execution of the project. 5. Communication Strategy Communication strategies that are effective and efficient are crucial for the success of a project. Especially in case of joint ventures that require collaborative between partners of differing backgrounds, skills and operating environments, the communication strategies adoption is vital for delivering the best outcomes (Resources for project teams: Communication strategies , 2009). For the successful execution of phase two of the project it is important to establish the communication strategy which would begin with (Essentials of a communication strategy, 2009): i. Review of the past communication problems ii. Clarifying the objectives of the project and communicating to all involved in the project iii. Define the channel of communication for reporting all the problems and decisions iv. Feedback 6. Project Monitoring and Controlling Project monitoring and controlling serves as an important phase in the overall execution of the project as it helps in the identification of the potential problems in a timely manner and also provides the opportunity to take corrective actions when necessary in order to control the execution of the project. The key benefit of this is that the performance of the project is monitored during all phases and is done regularly in order to identify any deviations from the project management plan. The monitoring and controlling of the project includes (Lewis, 2000): Measuring all the ongoing activities of the project Monitoring the project variables against the plan Identification of the corrective actions to address key issues In the second phase of the execution of the project it is essential to keep in view all these factors so that the problems that were experienced in the first phase are not repeated and the project successfully completes within the prescribed time and resources. Q3. Recommend some basic terms and conditions that Inter-Optics plc might incorporate into their tendering process and contracts to mitigate some of the problems they encountered. One of the crucial decisions in any joint venture for the owners and the project managers is the selection of a suitable contractor for the construction project. Hatush & Skimore (1997) identified five main areas that should be used in the assessment of a contractor that could help in the overall selection process. These five factors include: project packaging, invitation, pr-qualification, short listing and bid evaluation. All these factors are crucial in the contractor selection. Inter-Optics plc should adopt a Qualification-Based Selection (QBS) (QBS, 2009)of contractors for the construction projects. As QBS is a method of contractor selection whereby the final criteria for selection are qualifications and demonstrated competence. It does not include price and cost as selection criteria but it might be considered as a factor during the contract negotiation phase. The selection of the contractor through QBS process would entail a “win-win” situation for all the parties involved as it helps in overcoming the status quo and embracing a different culture. The selection criteria under QBS would allow Inter-Optics to assess the contractor on various factors such as: Demonstrated Competence Qualifications Experience and past performance International exposure Capacity to perform the work Financial strength and bonding capability Management Plan, subcontractor relationships and technical capabilities Inter-Optics needs to incorporate the Bid evaluation procedure based on the three –factors: 1. Technical Evaluation - assessing and evaluating the technical merits of the contractor. This would include the technical capacity of the company. 2. Financial Evaluation – entails the cost of assignment given in the contract 3. Other Evaluations – considering other factors in contractor evaluations such as: record of past performance, integrity, rapport, international work exposure etc. The process would entail (FIGURE 1) FIGURE 1 The QBS Process Source: (QBS, 2010) The step 7 in the process would help more in the selection of appropriate contractor as it will provide the opportunity to compare the creativity approaches of the firm to the design process and also in understanding the requirements of the project. It would also help in cross-evaluating the firms to the evaluation criteria in step 5 thus considering and selecting the best possible contractor for the project. Works Cited Bass, B. (1997). Does the transactional-transformational leadership paradigm transcend organizational and national Boundaries? American Psychologist, 52(2) , 130-139. Beamish, P. W., & Lupton, N. C. (2009). Managing joint ventures. Academy of management perspectives , 75-94. Essentials of a communication strategy. 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The project manager's desk reference: : a comprehensive guide to project planning, scheduling, evaluation, and systems. Mc-Graw Hill Professionals. Li, J., Xin, K. R., Tsui, A., & Hambrick, D. C. (1999). Building Effective International Joint Venture Leadership Teams in China. Journal of World Business,34(1) , 52-68. Penker, J. (n.d.). SUCCESSFUL MANAGEMENT of International Joint ventures. Project leadership Success: Responsibilities, Behaviors and Competencies that produce positive results. (2010, March 23). Retrieved from Project management learning Tree: http://project-management.learningtree.com/tag/decision-making/ Q. W. (2009, August). Qualification based Selection of Contractors. The Assocation general Contractors of America . QBS. (2010). A Process for the Selection of Design Professionals by Public Owners. Professional Technical Advisory Board . Resources for project teams: Communication strategies . (2009, February). Austrailian Learninga nd Teaching council , pp. 1-10. Russell, J. S., & Skibniewski, M. J. (1988). Decision Criteria in Contractor Pre-qualification. Journal of Management in Engineering, ASCE, 4(2) , 148-164. Spekman, R. E., Theodore, M. F., Lynn, A. I., & Thomas, C. M. (1998). Alliance management: A view from the past and a look to the future. Journal of Management Studies 35:6 , 747-772. Triantis, J. E. (1999). Creating successful acquisition and joint venture projects:a process and team approach. Greenwood Publishing Group. Westland, J. (2010, March 23). 8 Essential Project Management Steps A Project Manager Must Follow. Retrieved from Project Managemnt: http://open-tube.com/8-project-management-steps-manager-needs-to-follow Read More