Lecture 01: Introduction to project management

Example 1 Construction projects

Construction projects are often in the news - sometimes because of problems owing to
cost overruns or schedule slippages. Although many factors are cited (labor union problems,
materials shortages, weather, inflation), the real cause is frequently poor management and lack of
control. Often, the manager of a construction project is either the architect or the contractor.
This works on small, less complex jobs, but on big construction jobs it is a bad arrangement
because architects and contractors each represent the interests of separate “functional areas.”
A better arrangement is when the developer or the owner appoints a independent
construction project manager. The project manager is the owner’s agent during the entire design
and construction process. The role is similar to that of the ancient master builders whose
responsibility covered virtually all aspects of design and construction. Notice in Figure 1 the
central position of the project manager in the project organization, a position that enables her to
monitor and coordinate all design and building tasks in accordance with the owner’s or
developer’s goals. The project manager’s role is to ensure that the architect’s designs are within
the developer’s cost allowances and building requirements, and that the contractor’s work is
executed according to contract specifications and at a fair price. The project manager is involved
throughout the project life cycle: she oversees preliminary architectural design, does the
subcontracting, and controls site work according to design specifications, time, cost, and worker
safety.

Figure 1 Construction project management

Questions:
1. Why might the construction project fail?
Although many factors are cited (labor union problems, materials shortages, weather,
inflation), the real cause is frequently poor management and lack of control

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2. What is the role of project manager in this construction project?
The project manager is the owner’s agent during the entire design and construction
process. The role is similar to that of the ancient master builders whose responsibility covered
virtually all aspects of design and construction.

Example 1: Construction projects

Construction projects are often in the news- sometimes because of problems owing to cost overruns.
There are a lot of causes that make the construction project fail. The first cause is frequently poor
management and lack of control. This is because often the manager of a construction project is either
architect or the the contractor. This work on small, less complex jobs, but on big construction jobs it is a
bad arrangement because architects and contractors each represent the interest of separate functional
areas. In the company, they have many roles that might be important to employees and help the
organization have a better arrangement. The project manager is the owner’s agent during the entire
design and construction process. This is because the project manager in the project organization, a
position that enables her to monitor and coordinate all design and building tasks following the owner’s
design are within the developer’s cost allowances and building requirements. The project manager is
involved throughout the project life cycle because they oversee preliminary architectural design, and the
controls site work according to design specifications, time, cost, and worker safety.

Example 2: Renovating the Statue of Liberty

Ninety-five years after the Statue of Liberty was presented to the American people, its surface
and interior structure had become so badly corroded that it was judged structurally unsound. To
oversee restoration of the statue and other buildings on nearby Ellis Island, the US Department of
Interior established a foundation. Very little of the work qualified as “ standard. ” Renovation of
the statue involved highly specialized skills, such as erection of scaffolding, construction of a
new torch, building of windows for the crown, and replacement of the interior framework-
expertise that tends to be found in smaller firms. As a result, the work was accomplished by a
legion of over 50 small businesses; many workers were immigrants or descendants of
immigrants whom the statue had welcomed to America. There were myriad notable features
about the job. The scaffolding surrounding the statue never touched it at any point. Constructed
of hundreds of thousands of pieces of aluminum, it qualified for the Guinness Book of World
Records as the largest free-standing scaffolding ever built. To renovate the statue’s interior,
1,699 five-foot bars were painstakingly fashioned from 35,000 pounds of stainless steel, then
individually installed. Around the crown 25 windows were replaced. Each was handcrafted and
had to be treated as a project unto itself. To fashion an entirely new torch, French artisans
practiced an ancient copper shaping technique. The project was truly a marriage of art and
engineering. The 30-month, $31 million renovation effort involved thousands of tasks performed
by hundreds of people. Most of the tasks were nonroutine and interrelated, and all had to be

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completed within a tight budget and schedule-certainly a situation that called for project
management.
Requirement: Determine 5 criteria of this project:
 Unfamiliarity: To oversee restoration of the statue and other buildings on nearby Ellis
Island, the US Department of Interior established a foundation.
 Magnitude of the Effort: The 30-month, $31 million renovation effort involved thousands
of tasks performed by hundreds of people.
 Changing Environment: many workers were immigrants or descendants of immigrants
 Interrelatedness: French artisans practiced an ancient copper shaping technique, the work
was accomplished by a legion of over 50 small businesses.
 Reputation of the Organization: Qualified for the Guinness Book of World Records as the
largest free-standing scaffolding ever built
Example 3 Relocation of Goman Publishing Company
Many companies regardless of size (headquarters for a multi-billion dollar corporation or
a storefront family restaurant) at some point face the decision to relocate. Relocation requires
planning and coordination of numerous tasks involving many individuals, departments, and
outside contractors. It is an important event that if done properly can be an exciting and
profitable experience, but if done poorly can lead to financial loss or ruin. It also is representative
of innumerable situations wherein a company must do something it does not ordinarily do.
Consider Goman Publishing, a company experiencing rapid growth and soon to exceed
the capacity of its current facility. The initial task in relocating the company was to decide
between two options: buying land and constructing a new building, or leasing or buying an
existing structure. After deciding to build, the next task was to select a site. The main selection
criteria were purchase expense, distance from current location, prestige and size of the new
location, and access to major highways. Next was the relocation planning, which had two major
phases: design and construction of the new facility, and the physical move, each involving
numerous considerations. For example, Goman wanted to retain its current employees, and so as
to maximize the new facility’s appeal it chose to build an indoor employee parking area and a
large, well-appointed cafeteria. Among the many move-related considerations were furniture
procurement, special handling of computer equipment, hiring movers, distributing information to
employees and clients about the move, and maintaining corporate security. Further, the
relocation would have to be scheduled to minimize downtime and interruption of operations.
To oversee the project and ensure that construction and the physical move went
according to plan, Goman appointed a project manager and support staff. The project manager
worked with architects and building contractors during the design and construction phases, and
later with moving contractors and representatives from functional departments who kept him
abreast of problems and progress. Despite the scope and unfamiliarity of the project, Goman was
able to complete the construction and physical move according to schedule and within budget.

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Questions:
1. What is problem that the company need to solve?
The Relocation of the company
2. How many alternatives to select? Which are they?
2 alternatives to select: buying land and constructing a new building, or leasing or buying
an existing structure.
3. Imagine you are a company owner in this example, then you outline the steps to solve your
problem.
After I definitely the problem I will analyze company police and procedures then discuss
with team members involved in order to gather more information. To oversee the project and
ensure that construction and the physical move went according to plan, I will appoint a project
manager and support staff, I will work with architects and building contractors during the design
and construction phases, and later with moving contractors and representatives from functional
departments who kept him abreast of problems and progress.
Case study
R&D Project Management: LogiCircuit Corporation

Mr. Wilcox is manager of the Solid State Engineering Department (SSE) of LogiCircuit
Corporation, the firm’s R&D support group that handles problems and requests for projects from
all areas of the corporation. One of his responsibilities is to decide which requests are urgent, in
which case he can bypass the usual cost/benefit analysis and start work immediately. Such was
the case with a request from a manufacturing division about severe quality problems it was
experiencing in the production of printed circuit boards. The division had requested that a circuit
tester be developed to examine the quality of thousands of components in each board, and it was
clear a solution was needed quickly.
As with every project, Mr. Wilcox began by estimating the project’s total cost. Two
engineers “roughed out” a list of components and prepared estimates of how long it would take
to do the development work. Mr. Wilcox then prepared cost estimates based upon the component
parts list using standard, off-the-shelf prices along with the cost of an outside contractor to
provide expertise that SSE did not possess. As in most projects, the greatest single expense was
for direct labor hours. Mr. Wilcox estimated that the project would take 5 months.
Once SSE and the requesting division agreed to the problem definition, project cost, and
duration, Mr. Wilcox sent requests for assistance to outside contractors. In high-technology
industries, portions of projects that require expertise too costly to maintain in-house are
outsourced. In this project, Harmon-Darwood Corp. was contracted to provide developmental
assistance.

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 Mr. Wilcox organized a project team with members from SSE, HarmonDarwood, and the
manufacturing division. As project manager, he would oversee and coordinate the efforts of SSE
with Harmon-Darwood and manufacturing. The project plan called for building six testing units.
Once the final design had been completed and the initial unit assembled and tested, the
remaining five units would be assembled.
Thanks to close cooperation between the team members, development proceeded
smoothly and the testers were soon ready for installation at the plant. Harmon-Darwood trained
the operating personnel on the use of the testers and Mr. Wilcox personally spent 2 weeks at the
plant supervising the units’ installation. Afterwards, SSE monitored the operation of the units for
malfunctions and mistakes. Once it had been agreed that the units were working according to
plan, the project was formally terminated and project personnel transferred to other assignments.
This project is similar to many R&D projects because the company had no prior
examples upon which to base estimates of project time and costs. Every R&D project is unique
and, therefore, has to be estimated, planned, and organized from scratch. This project was
accomplished close to its estimated budget and target completion date, although in general it is
not unusual for R& D projects to far exceed cost and time estimates.
Questions:
1. In the project you are studying, what is problem the company need to solve?
Quality problems encountered during the production of printed circuit boards
2. What are what characteristics of the company make the use of project management
appropriate or inappropriate? Consider the project goals, tasks, necessary expertise, project size,
complexity, risk, and other criteria in answering this question.
Estimating the project’s total cost, engineers “roughed out” a list of components and prepared
estimates of how long it would take to do the development work.
3. How does the project you are studying fit the definition of a project?

For new and experienced project managers alike, it is hard to know how to approach the project.
Many project managers are strict disciplinarians when it comes to which project management
methodology they apply when managing a project. Some organizations have their project management
office establish the policies that standardize all projects, while other organizations allow the project team
to choose and tailor the most appropriate approach for their individual project. Some project managers
choose a specific project management methodology and demand compliance from beginning to end,
regardless of the project's size or complexity. Others choose a less rigorous approach and hope for the
best.
4. What kind of project management is used such as program, product, matrix, pure, or other?
Explain. Is it called “ project management” or something else?

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 Functional organizational structure is to be managed in the current organization
hierarchical structure, once the project begins operation, the various components of the project
are taken by the functional units, each unit is responsible for its charged component. If the the
project established, a functional area play a dominant role, functional areas on completion of the
project, senior managers will be responsible for project coordination.

5. What kind of role does the project manager have-an expeditor, coordinator, pure project, or
matrix manager? Explain. What is his or her title?
Mr. Wilcox is a Project Coordinator he would oversee and coordinate the efforts of SSE

with Harmon-Darwood and manufacturing. Project coordinators have the power to make a few
decisions and they report to a higher-level manager.