A British Leisure Company Benimhanna - Assignment Example

Case 2 Benimhanna is a British leisure company specialising in the provision and operation of private health and fitness clubs. They opened their first club in 1994, and they have subsequently opened a further 24 clubs within Scotland and England. These clubs all incorporate: a 25 x 12 metre swimming pool, a fitness facility, a health suite (including 5 tanning beds, and a sauna and steam room), 3 aerobic/dance studios, two meeting rooms, and a small cafeteria/bar lounge area. Benimhanna are to open a new club which will incorporate new facilities and services. The new club will be larger than Benimhannas’ existing clubs. This is due to the additions of a small 100 seat cinema, and an extensive beauty spa. The beauty spa will have a vast range of treatments and services available including: spray tanning, massage, and non surgical “face lifts”. As project manager appointed by Benimhanna at the feasibility stage, you are required to prepare a report (2,000 words) outlining the activities required to successfully manage this major project of building the new private health and fitness club, and ensuring that it is completed on time, and within budget. The analysis should include the skills and competencies required by the Project Manager, along with the project management process. Use examples of the concerns, stages, processes, leadership, administration and control problems associated with managing the lifecycle of this major project. Report 1.1 Benimhanna – Company Overview Benimhanna is a firm operating within the British leisure industry. The firm focuses on the provision of health and fitness services. Since the first establishment of the company in 1994, its development has been rapid reaching today approximately the 24 clubs across Britain. The entire firm’s clubs follow the same standards and are structured in accordance with specific guidelines and plans. The firm is currently planning to establish a new club, bigger from existing ones which will have all features that can be normally met in the firm’s clubs (i.e. a 25 x 12 metre swimming pool, a fitness facility, a health suite (including 5 tanning beds, and a sauna and steam room), 3 aerobic/dance studios, two meeting rooms, and a small cafeteria/bar lounge area, see case study) while in addition it will also include ‘a small 100 seat cinema, and an extensive beauty spa’ (case study). At a next level, the services offered by the beauty spa incorporated in the new club will be more than the ones provided through the firm’s current clubs across the country. The above plan is expected to have a significant cost; which of course is expected to be ‘repaid’ shortly after the entrance of this club in the market. In this context, all parameters related with the planning, construction, monitoring and completion of the project should be examined taking into account the fact that the firm is financially strong but in no way this plan should proceed if its construction and operation will cause a financial loss (at least this issue has been highlighted by the firm’s owners). 1.2 Development of current facilities and services – new private health and fitness club 1.2.1 General description of the project The new club will be constructed in London within the ‘territory’ of Barnet Council. The procedure for the relevant permission is almost completed and it seems that there is no issue of dispute with local authorities regarding the design and the operation of the club. The only issue highlighted by the Council’s representatives to the firm’s operational manager (handling this issue) is the fact that the construction and the operation of the club should not cause any damage to the environment and for this reason it should be preferable for all the procedure and the material used to be carefully reviewed in advance. However, no such issue (of environmental pollution) seems to exist in accordance with current plans of construction and maintenance. It should be noticed that the procedure for the realization of the project has already begun – with the submission of the relevant dossier in the local Council – however it is necessary that the firm will appoint the soonest possible a project manager that will handle and monitoring all issues related with the realization of this project. Until now the relevant procedure is exclusively monitored and handled by the firm’s operations manager; however its participation in this project has caused to the firm a series of problems as there is no appropriate monitoring of the firm’s performance (in all its clubs) which for the moment is controlled only by the local managers. 1.2.2 Stages and process of the project In order for the specific project to be successfully implemented, it is necessary to be carefully reviewed in all its details. We could refer at this point to the view of Rand (1999, 97) who supported that ‘businesses fail because management does not have effective control of the business as management is too far removed from revenue-producing processes’. In the case of the particular project, the operational manager who is handling the whole procedure should closely monitor all its stages ensuring that all standards and time and cost limit are going to be met. The project will be completed gradually in the following order: a) completion of the procedure related with the permission – granting of the permission by the Council, b) appointment of a project manager who will cooperate with the firm’s operational manager towards the completion of the project; c) careful review of costs and time framework of the project, d) construction period: realization of the project and e) examination and evaluation of the condition of the club constructed (as of its safety and its sustainability). 1.2.3 Leadership and administration issues – skills of project manager As stated above the project will be completed by the project manager who will cooperate with the firm’s operational manager. In this case, it should be noticed that the project manager appointed for the specific project would have certain skills and competencies. Regarding this issue, it is noticed by O’Neill (2002, 15) that the following issues should be examined when evaluating the role of a leader in a specific task: ‘a) what were the critical success factors in previous successful change efforts? b) what caused other efforts to fail? Are you prepared to take on the obstacles? c) who can veto? Can anyone say yes? d) what is the organizations risk profile? e) what has created a window of opportunity? How long might it last? f) what is the up side for stakeholders? g) what Have We Learned?’ On the other hand, it is noticed by Sandwith (1993, 44) that ‘the leader would encourage and develop subordinates, manage individual performance, and build an effective work team establishing through his or her example and actions a climate of trust’. Apart from the above qualities the project manager appointed for the particular project would have experience in this sector and a proven work record on similar projects. Moreover, he should be able to meet deadlines and respond quickly to the needs of a particular situation (i.e. if a problem occurs that has to be resolved the soonest possible). Of course, it would be expected that the project manager involved in the specific project would have the necessary knowledge in order to understand the issues related with all stages of this project. A well developed communication ability would be also a significant advantage of the project manager who would have to intervene on a daily basis on all aspects of the project under development. In general terms, the project manager appointed for the specific project should be carefully chosen (through a well structured procedure) ensuring that he will respond to the needs of the project until its completion and that he is not engaged to other projects of similar importance (or even minor ones) that could keep him away when the project is under completion. In other words, a well educated and experienced project manager that he could work on this project on a continuous basis would be the right choice for the specific task. 1.2.4 Monitoring of the project – time and cost issues When designing and applying a particular project, a series of issues are expected to be addressed in accordance with the targets set by the organization and its strength to respond financially to any possible expansion of the project because of the intervention of unexpected situations. In order for a firm to be appropriately prepared for any obstacle that should appear during the completion of a project, it is necessary to have a detailed plan referring to the entire procedure including all costs expected as well as an estimation of the time required for the completion of the relevant project. The problems appeared during the operation of a firm were identified and examined by Gomez et al. (2002, Ch.15) who noticed that ‘the following ‘stages’ of the firm’s operation management should be examined: inputs (materials, energy, information, management, technology, facilities and labor), transformation (or conversion process) and disposition (marketing and sales)’. Generally, it should be mentioned that the estimation of time and cost related with this project should be based on the following principles/ standards: a) the cost should be the lowest possible but without having an impact on the quality of the materials used and the work done; b) appropriate research on the market regarding the material and the workers that will be used for the completion of this project should be made. In case that workers will belong to the project manager’s team they have to report directly to him for any problem that should appear during the realization of the plan; c) the overall budget of the project would not be higher from the one set by the firm’s managerial accountant allowing only an increase of 10% from the amount initially set as a maximum; d) the project should be finished within a relatively short period (taking into account the time required for the construction of the other firm’s clubs) always having in mind that the specific club will be larger from the firm’s other clubs – for this reason a differentiation to the cost and the time required is normal to be expected. It should be mentioned here that any project related with a construction of a specific building is expected to have additional costs – as the prices of materials in the market change constantly while even if the cost of material is pre-arranged with the project manager additional tasks usually required as the construction of the building is in progress (minor changes in current plans, differentiations from initial plan because of the change of the firm’s needs or the potential resistance of locals towards the development of a specific construction plan. Because of the above reasons, it would be necessary for the firm to have alternative plans of financing the project in case that the initial cost will be much higher from the one that was initially estimated. 1.3. Conclusion The realization of the particular project should be carefully reviewed as of all its aspects. Apart from the construction part of the project, the role of the site (club) constructed would be examined in accordance with the firm’s current performance and the impact that this club is expected to have on the improvement of the firm’s profitability. In this context, it is noticed by Santos et al. (2000, 2) that ‘according to its characteristics, objectives and the resources available (human, physical, financial etc.), each company prioritizes some competitive criteria’. In other words, the particular project should be considered as a ‘tool’ for the development of firm’s activities and for this reason appropriate measures should be taken by the project manager in order for the whole project to remain within specific limits (referring to the time and cost involved in the relevant procedure). Apart from the above issue, the effectiveness of the entire organization should be also carefully reviewed making sure that the impact of the club that will be constructed on the organizational performance will be positive (i.e. that there will be no issues of time and cost limits higher than the expected ones or that the profits generated will ‘pay back’ the amount invested in the relevant project). Regarding this issue, it is supported by Robertson et al. (1995, 547) that ‘because private sector organizations are driven primarily by market or consumer preferences, organizational effectiveness is more readily measured in terms of efficiency and profitability’. In accordance with the above the firm’s initiative to proceed to the above project should be considered as an appropriate solution if taking into account the current position of the firm in the market (strong presence of its brand) and its ability to respond to any additional costs until the completion of the project. However, it would be necessary for the specific project to be carefully reviewed in advance as of all its aspects (especially as of its cost and the time required for the amount invested to be ‘paid-back’); if the project begins any cancellation would cause damage to the firm depended on the stage at which the cancellation of the project will be decided. References Gomez-Mejia, L., Balkin, D. (2002). Management, 1e. The McGraw-Hill Companies O’Neill, R. J. (2002). Governments Change-Management Challenge: Key Questions to Which Government Leaders Should Find Answers as They Embark on Systemwide Reform. The Public Manager, 31(1): 15 Rand, T. (1999). Why Businesses Fail: an Organizational Perspective. Emergence, 1(4): 97 Robertson, P. J., Seneviratne, S. J. (1995). Outcomes of Planned Organizational Change in the Public Sector: A Meta-Analytic Comparison to the Private Sector. Public Administration Review, 55(6): 547-558 Sandwith, P. (1993) A Hierarchy of Management Training Requirements: The Competency Domain Model. Public Personnel Management, 22(1), p. 43-58 Santos, A., Silva, D., Barros, J. (2000). A study about application and refinement of a production strategy formulation model in a building company, available at http://strobos.cee.vt.edu/IGLC11/PDF%20Files/50.pdf Read More