Revitalizing Construction Project Management

Introduction

The management of the construction industry is one of the areas that have received more attention today in the business of construction. The success of the project depends on how the project is managed and hence project managers should use the best strategies for enhancing effectiveness and efficiency. Despite much emphasis on good governance, several projects have failed to achieve success in productivity. In the perfect situation though, all construction projects would succeed (Rezvani, 2018). They would be completed within the assigned timeframe and budget, a case which is not common in a real-world situation. This paper is based on a construction contractor company (the company) that engages in building and construction for clients. A deeper evaluation of the company’s operations reveals poor project management practices that must be changed if the company aims to maintain customer loyalty. The paper identifies these poor project management practices as follows:

Poor Leadership

Leadership refers to a manager’s ability to transform and change the company based on the prevailing market forces and dynamics (Abdul-Rahman et al, 2006). It is important in sustaining a positive performance of the construction industry. Leadership also embodies the ability of a manager to influence the internal workforce and communicate the project vision, core values, and mission to the project team. It calls for the project manager to know how to engage and coordinate with their team (Zuo et al, 2018).

Poor leadership is one of the factors that contribute to the non-performance of projects. It impedes the achievement of the project’s objectives and subsequently inhibits the firm from achieving its goals, missions, and visions. Thus, project managers in the construction industry must exhibit both management and leadership qualities by providing direction and influencing employees to follow that the mission and vision of the project.

There is a multiplicity of effective leadership traits, some of which were not displayed with the company’s project managemers. For instance, While observing the project, it was clear that some workers in the project had been complaining about low pay since the beggining of the project. According to Gurmu & Aibinu (2018), this shows non-sensitivity to workers contribution and undoubtedly demotivates them. Yet, as Roy et al (2018) point out, team motivation is one of the essential strategies for achieving effective project outcomes through workplace engagement. Yet, Berube & Gauthier (2017) argue that a good leader in any project undertaking must be able to motivate their team and that failure to motivate the team creates a breeding ground for elements such as lack of job engagement which influence non-performance the team.

There are several things that the company’s project managers could do to motivate their project team. For instance, the leader can ensure that the team’s efforts are noticed and let them know that their contribution to the project success matters (Yu et al, 2018). This can be done by rewarding good performance thorough acknowledgments or better pay. It means doing the kind of things that make employees feel valued to be part of the team.

A keen evaluation of the project also revealed a lack of effective communication as an element of good project leadership. For example, there was a delay in delivering information about a change in the delivery time of interior fittings. This affected the fixtures and fittings team because they had hired certain equipment for fitting purposes; only to find that the delivery of fitting materials had been delayed by a week. Yet, according to Zuo et al (2018), successful projects require leaders that are able to communicate project expectations and changes in the expectations so that teams can make effective decisions based on this information. It requires the ability of the leader to communicate with people at every level of the organization and with every project stakeholder regardless of the role they play in the project (Kim and Huynh, 2008). Hence, the manager could have communicated a delay in the supplies early enough so that the equipment could not be hired.

Lack of attention to risk

Even an effectively planned project can encounter risk. Thus, failure to give any attention to risk is a risk in itself. Giving poor attention to risk means failure to accept that there are some uncertain events that may affect a smooth running and a successful completion of the project (Yu et al, 2018). Therefore, it is the responsibility of the project manager to identify any technical, logistical, or environmental risks that can hinder the project’s successful completion. However, a keen evaluation of the company’s project revealed poor attention to certain logistical and technical risks. For instance, there was a consistent delay of materials delivery (e.g. fittings and fixtures) into the site and therefore some scheduled tasks were not undertaken due to uncertain availability of materials. According to Akintoye and Hardcastle (2008), there are two possible implications of this uncertainty. First, the project would not be completed in its expected timeframe, and secondly, the customer would not be satisfied due to project delay.

It would be better if the project manager oversaw that the materials supplier could delay with supply, thus be prepared with a contingency supplier who would be committed to supplying the fittings and fixtures within a short notice. Zuo et al (2018) emphasize contingency planning in project management by stating that it involves taking effective steps in response to an identified risk. It helps managers stay ahead of any possible risks and put in place alternatives to prevent the effects of risk on the project’s success.

It was rather absurd to realize that the company did to take an insurance policy for the project. Yet, Zuo et al (2018) point out that one of the most effective ways of dealing with project risks is to pay someone else to bare it. Thus, by failing to take construction insurance, the project manager exposed the entire project to risk in two major ways. First, accidents could occur at any time and therefore the company could bare the medical costs of any employee involved in accidents. Secondly, the client could sue the company for not being satisfied with the project, and therefore the company would bare all the costs associated with remodeling and fixing.

However, the company would not bare any of these costs if it had construction insurance. Therefore, according to Banaitiene and Banaitis (2012), construction insurance is a major element of project risk consideration in the construction industry because it helps cover for any personal accident (in personal accident insurance) or any risk (i.e. contractor all risk insurance) that could occur during the construction project.

Outdated Financial Management

Poor financial management strategies are one cause of project failure. During the project implementation, procedures for record keeping and financial management become an important instrument to the manager and other project teams in the construction process. It involves accurate and timely recording to all the financial transactions and monitoring of the financial progress of the project from time to time till project completion (Yu et al, 2018). Contrariwise, according to Zuo et al (2018), poor or ineffective financial management practices entails poor budgeting, ineffective observation of project financial accounting, and lack of contingency financial plan for the project.

There are several elements of outdated financial management that were observable in the company’s construction project. For instance, the company was not able to sustain an entire week’s budget of the project, and therefore most of the time the project had to stall for a few days within the week. According to Yu et al (2018), construction projects require intensive financial resources and therefore effective budgeting would ensure it runs within the time frame without stalling. Thus, there are two major observations when construction a project stalls. First, it implies that the project’s initial budgeting allocated insufficient funds. Secondly, the project may have been running at an over-expense, a phenomenon that occurs when the scope of the work changes without making any necessary adjustments on the project budget. If the former case was true (i.e. insufficient budget allocations) then it means that the project encountered problems such as the inability to keep up with encumbrances and salaries, poor monitoring of expense, or inability to observe the allowable expenses on a weekly or monthly basis (Yu et al, 2018).

Having noticed that, it would have been helpful if the project manager considered project re-budgeting, which is simply a revision of the project's budget to cover up for the over-expenses. However, an important factor to consider is that not all project re-budgets are permissible by most project financiers, and therefore it may be helpful to contact financiers that specialize in project contingency financing (Rezvani, 2018).

Poor cash flow management affects the runing of the project. Cash flow management refers to the process used to monitor, analyze and adjust project cash flow (Ward, 2008). Cash flow management is an important tool in the success of the project because it ensures that cash is always available when needed by tracking all costs associated with the project.

However, the company’s project managers failed to employ effective cost-tracking systems as an element of cash-flow management, thereby running the project into financial shortfalls. According to Ward (2008), cash-flow tracking is as simple a checking on a periodic basis the number of expenditures incurred and whether these expenditures tally with the expected expenditure pre-determined by the budget.

However, Yu et al (2018), contend that cash-flow tracking is not an easy task because it also involves adjusting the budgets. All in all, it would have been better if the project manager reviewed and monitored administrative and general expenses during the project. Ideally, this would be possible by applying a budgeting system to forecast, approve and compare the budget with the actual expenses incurred. This would ensure a successful and timely completion of the project.

Lack of proper internal control procedures was also observed to be a possible cause of project’s failure. As a manager of a commercial construction company, it is important to ensure that the organization has appropriate internal control systems that help to minimize risks associated with the operation, regulatory compliance, and financial reporting (Rezvani, 2018). On the contrary, use of outdated financial management characterized by lack of computerized financial accounting systems made it difficult for the project managers to track and mitigate financial risks in the areas of financial management/ accuracy of management, safeguarding of construction assets and fraud.

Sustainability/ Corporate Social Responsibility

Corporate social responsibility (CSR) refers to a corporate strategy that contributes to sustainable development by delivering environmental, social and economic benefits for all business/project stakeholders (Dahlsrud 2008). It means that apart from profit maximization, the company also aims to make positive contributions to both internal and external stakeholders of the company through its projects.

For any project to be successful, it must consider the welfare of its stakeholders. The board and the management of the company should ensure the welfare of its customers, employees, suppliers, creditor, investor and the government (Kelly and Graham 2014). In fact, Yu et al (2018) argue that observing sustainability not only ensures that the project process creates value for the stakeholders but also promotes cost saving and cheaper operation.

However, despite a consistent appeal to the company to incorporate sustainability measures in its construction projects, none of these appeals were headed to. For instance, the entire project was based on inefficient energy use as evidenced by lack of energy performance certifications at the start of the project. According to Yu et al (2018), lack of these certifications means that the project managers are not committed to implementing energy efficient processes such as combined heat and power system which could save the project from exorbitant energy expenses.

Another major element of poor adherence to sustainability in the company’s construction site was poor construction waste management. The company lacked an effective waste management plan and this posed a problem from two angles. First, because the building and construction industry relies heavily on extracted materials, ineffective management contributes to a significant portion of waste streams within the environment (Kelly and Graham 2014). Secondly, poor waste management has negative cost effects and may seriously affect the project’s profit margins due to the labor costs associated with draining the costs.

Thus, it would have been better if the company incorporated sustainability measures by drawing a site waste management plan that includes waste receptacles to promote easy waste management within the site. The project could also develop a waste management hierarchy which entails, prevention, reusing, recovery and disposal of waste (Kelly and Graham 2014).

In conclusion, this essay provides an insight into the various causes of project failure in the construction industry. The paper has highlighted that. Based on effective leadership skills, project managers can make proper decisions regarding financial management, sustainability, and risk management to ensure project success and ultimately customer satisfaction.

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References

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