Summary of findings This case is about a reputed rubber component manufacturing company that has a conservative and risk-averse culture. But they accepted a project from their client, Peters Company without making a deep research as they don’t want to lose their relationship. This project was more than what the company can chew. Corwin was not able to get the results as expected on this project. This was due to lack of time and expertise in personnel in making the “go or no go” decision for this project.
Also there were no proper project management functions visible in the whole process right from selection of the project, which proves the lack of strategic decision making process in the upper hierarchy of the organization. Some other problems identified were accepting the project for a fixed price and letting the customer representative intrude the direct personnel working in the project. The best recommendation is to have a company-wide policy implementation for selection of projects and having skillful and experienced people determine the cost and make budgets.
The company must stick to follow the project management functionalities however worse the situation is and should follow their rules in the own territory. Having the recommendations implied the success factor can be measured by customer satisfaction in that project. Background information Corwin Corporation (CC) has an international reputation for manufacturing lo-cost and high-quality rubber component. They follow risk-averse culture and don’t believe in entering new markets by introducing new product.
As a marketing-driven company they seek to invade new markets with their existing products rather than investing on a new product and take chances. CC had good relationship with Peters Company as they were doing the specialty-product assignment for them. On December 7, 1982, Peters Company offered CC a fixed-price contract of $250,000 as they dint have enough of personnel to carry on the project. Out of the blue, CC accepted the proposal without doing proper research with experienced personnel.
This was the first mistake made by the VP of Marketing to have accepted the project without following the protocol for making critical decisions. Thinking the project to be attractive, CC started working on the project. But sooner the thought turned out to be contrasting as the tests were a big failure. The results did not meet the client’s expectation. The project disturbed the work-life of the employees due to lack of experience of the project leader who was lenient about the in-house representative being intrusive in others job.
At the end of third month of the project, the overall cost turned out to be higher than what was originally proposed. The failure of the initial results grabbed the attention of higher level executives who took care of the situation. New policies and test were implemented to complete the project. But Peters Company decided to cancel the contract due to insufficient results produced by CC. Also they mentioned that, CC’s executives did not pay attention to their project. These lead to loss of thousands of dollar and a valuable for customer for Corwin. Problem Statement
In this case, four main problems were very prominent, namely: selection process of project, involvement of executives in the project, lack of communication style with stakeholders and making arrangements like buying raw materials for the project before signing the contract. Hamburger has stated in one of his article about failure of projects due to lack of steps followed in the initial stages of project management. He quoted indicators of project failures as “an oversimplified, unrealistic project plan; a non-supportive management, and an uncooperative functional organization is like working with no plan at all” (Hamburger, 1992)
Analysis of alternatives There are few alternatives which CC would have adopted to prevent the loss. The first best alternative would be to stick to their organization’s policy. Joni Seeber in her article about project selection criteria mentioned “Quitting and quitting fast is often the best project selection practice” (Seeber, 2011). Corwin should have had the senior management involved in the decision making process as a part of their organization’s policy which might have led to dejecting Peters’ proposal. The second best alternative is to concentrate on the details of the project.
Corwin should have not accepted a fixed-price contract as they were unfamiliar with that practice. In a fixed-price contract the risk factors are higher for vendors when they don’t have a precise project blueprint. A company generally accepts a fixed price contract only when it is absolutely certain of its outcomes, no relative risks are involved and the clauses of the contract are explicitly presented, thus having no room for surprises later. The third alternative is to have had an experienced and skillful person to be nominated as the project manager.
If this was done, detailed research would have been made on the products used for the product with complete specifications. It would have not given the chance to change the test matrix often. The mistake not only brought financial loss to Corwin but also made them lose their valuable customer and the goodwill. Also, an experienced project manager would have established project life cycle phases, developed a project management methodology based on effective planning techniques to minimize the scope for changes in the plan (Kerzner, 2011). The fourth alternative is to have the senior management process involved in the project.
Not involved in the selection process, executive panel failed to help Dan in the project’s operation too. If they were interfered at the beginning than bailing Dan out of the project after experiencing major issues, it might have saved some time and money. The fifth alternative is to have a structured communication channel. Dan should have involved the line mangers earlier in the process than expecting only to support the project. If the line managers were given the chance to communicate, they would have been able to provide information that would have influenced the proposal.
Also, Dan failed to hold good relationship with PC’s in-house representative, Pat. If Dan had delivered effective leadership skills and not given autonomy to Pat, he would have not been intrusive in others job at CC. CC should have considered to have considered the nature of the project and given less power to clients and keep some policies to have room to flex their arms later in the project. Also, West should have not invested money in the raw materials before knowing the result of the tests performed.
This would have saved cost on the budget. Detailed Recommendations Many recommendations can be made based on the different alternatives suggested. The first recommendation would be to make a company-wide re-emphasis of policies on selection of projects in the presence of all three VP. The decision making process must involve all the stakeholders of the project and should not be made when there is time constraint. The decision made must be based on the result on a detailed research about the probabilities of success and SWOT analysis.
A policy should be made to have the budget plans made by experienced and skilled personnel as it helps to predict the project cost accurately. Learning from this experience, CC should not sign contracts without scrutinizing. A project which has uncertain outcomes should never be accepted on a fixed price basis as that increase the chances of incurring out-of-pocket costs for the company. (Grzesiak, 2009). While signing for fixed price contracts, company should make disclaimers to build a safe net in case of emergencies.
Also, they should assign skillful project managers who have had experience handling similar situation. Building a channel for communication will encourage line managers to get involved in the project and have their say. A person should be assigned to trace the performance of the product life cycle and collect timely feedback and suggestion to improve it before someone intrudes the cycle. When situation arises where the organization’s culture is disturbed, immediate action should be taken to rebuild confidence in employees and foster an improved corporate culture.
Customers are the main factor for project survival. Though they have the freedom to express their opinion on the outcome of the project, project managers should have their final say to make decisions. Implementation and Evaluation CC did not want to investigate much on formulating new policies as they hold a conservative way of doing it. The only implementation they should make is to not repeat the mistake of accepting projects under time constraints to save their customer.
The selection process is of primary concern to be executed out of the recommendations made. The secondary implementation would be to give importance to the details and disclaimers in the proposal. After signing the contract every member of the project must be gathered to make the blueprint of the project functions. Timely updates, meeting and suggestions should be made to improve the product life cycle. Project manager should make good relationship with customers and make sure they don’t raise any questions about the project outcome.
Besides the normal schedule, backup plan must be made to face emergency situation. Rules must be implemented for customer representatives to restrain specific project life cycle information from knowing. Evaluation of the implementation can be measured through customer satisfaction. By having weekly updates made to Peters Company representative, he will not intervene in the project life cycle. Having the customers to make feedback based on the information provided, it will help the line managers to carry out the task as designed in the project blueprint.
