Case Study Of A Restaurant In Borehamwood - Project Management

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................4
TASK 1.................................................................................................................................................4
1.1 Describing the background and principles of project management............................................4
1.2 Appraising the viability of the investment in the hotel and swimming pool and develop a
success and failure criteria................................................................................................................6
1.3 Principles behind project management systems and procedures................................................7
d. Key elements involved in terminating projects and conducting post-project appraisals..............8
TASK 2.................................................................................................................................................9
2.1 Identification of the most appropriate organizational structure, roles and responsibilities of
participants of the project.................................................................................................................9
2.2 Explaining how the structure identified above would help in control and co-ordinate the
project.............................................................................................................................................10
2.3 Assessing the leadership style and qualities required to manage the above project
successfully.....................................................................................................................................11
2.4 Planning and specifying human resources requirements for the proposed project..................12
TASK 3...............................................................................................................................................13
3.1 Preparing a detailed project plan for the proposed project.......................................................13
3.2 Applying the appropriate project scheduling tools to plan the project activities so as to
minimise the time and costs of the project.....................................................................................14
3.3 Analysing the methods used to measure project performance..................................................15
3.4 Explaining the change control procedure for evaluating project at its completion..................15
CONCLUSION..................................................................................................................................15
REFERENCES...................................................................................................................................17
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LIST OF FIGURES
Figure 1 Project Management Timeline...............................................................................................5
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INTRODUCTION
The past several decades have been stated by rapid growth in the use of project management
as a means by which organizations achieve their objectives. Building a new skyscraper, designing a
commercial ad campaign, launching a rocket etc are some examples of this concept. The present
research is based on project management and to understand this, a case study is taking into the
consideration. As per the given case scenario, Alan, Joy, Shab and Sudjat are four partners who are
running a restaurant in Borehamwood, near London from last 5 years. Organization has made 2
million profits in previous year and on the basis of this, the capital base of partners have become 3
million. According to long term strategy, it has planned by the owners of restaurant to build a 6
storey hotel which will contain a swimming pool in Borehamwood. This will serve both community
and business customers from overseas locations. In this regards, the 4 managers have already talked
with the bank manager for grant a loan of £1.5 million pounds on 10% interest rate. Before starting
the project, Joy has disused it about a management consultant who is specialising in hotels.
According to him, it will not worth full for the company if they will hold it after the development.
So, management consultant has advice the owners to make money by selling the new 6 start hotel
and reinvest the amount in new opportunities.
TASK 1
1.1 Describing the background and principles of project management
Background
At the time of Second World War, the concept of project management has developed. In the
late of 50’s and early of 60’s, project management was applied by civil sector for various
developments. This was the time frame where diverse tools and techniques related to project
management like CPM, PERT etc. Along with this development, integrated computer systems have
evolved (Harpham, 2003). These were able to deliver the quality work under the set time, costs and
other limitations. On the other hand, in 1980-1994, a revolutionary development in the Information
management has taken place with the introduction of Personal Computer (PC) and other network
facilities. These were highly efficient in managing and controlling of complex project schedules
(Kerzner, 2013). From 1995 to present, development related to the internet has changed business
practices. The result of this is many of the project management related software have directly
connected with internet and it has provided interactive, fast and customized mode to manage simple
to complex projects in easier manner.
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Figure 1 Project Management Timeline
(Source: Harpham, 2003)
Principles of Project Management:
Vision and mission: For a successful execution of a project, vision and mission of plan
should be clear for all members of project team. It assists in clarify the expected results and
develops strategies to attain them. Moreover, it gives a proper path to be followed for achieving
results.
Business objectives: Here, some objectives related to project develops by responsible
project team members. It is significantly gives the contribution in the direction of success of the
plan (Burke, 2013). The SMART and concrete objectives help in achieving desired results with
better efficiency.
Standards of engagement: This is means setting of standards related to how will become a
part of the project team. There are several parameters and protocols designing to clarify objectives
of the project (Kshama, 2012). These parameters act as a factor according to which quality of work
can be enhanced.
Intervention and execution: With the help of various methods and techniques, gaps in the
expected and actual deliverables determine. This assists in minimize or resolving the issues that
may affect the final outcomes of the plan (Burke, 2013). This step helps in making corrective
actions as well to reduce the chances of errors.
Organizational alignment: By ongoing communication concept such as meetings, mails
etc, different and important information easily communicates with the team members. This ensures
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the success of the project by engaging the teams.
Measurement and accountability: This is the important principles of project management
in which various methods use to measure the success of the plan on different criteria and aspects. It
reflects over the areas where improvement must be needs to attain the objectives of project
(Schwalbe, 2015).
1.2 Appraising the viability of the investment in the hotel and swimming pool and develop a success
and failure criteria
As per the given case study, it has found that Alan, Joy, Shab and Sudjat have run a
restaurant in Borehamwood, London from last five years ago. They have made 2 million profits
from the business in previous year. Now, the managers have planned to open a 6 star hotel and it
will contain a swimming pool. The initial investment for hotel has £4m and swimming pool has
£1.5m. In this context, it has become important to appraise the viability of the investment in the
hotel and swimming pool to decide success and failure criteria of the plan.
Hotel
Years Cash flow in
£m
PV factor at
10%
Present value
(in £m)
1 600 0.9091 545460
2 600 0.8264 495840
3 600 0.7513 450780
4 600 0.6830 409800
5 950 0.6209 589855
Total 2491735
Initial investment 4
NPV -1508265
Swimming pool
Years Cash flow in
£m
PV factor at
10%
Present value
(in £m)
1 300 0.9091 272730
2 300 0.8264 247920
3 300 0.7513 225390
4 300 0.6830 204900
5 1300 0.6209 807170
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Total 1758110
Initial investment 1.5
NPV +258110
Payback period for Hotel
Year Cash inflow in £m
1 600
2 600
3 600
4 600
5 950
Total 3350
Analysis No Money Back after five years
Payback period for Hotel
Year Cash inflow in £m
1 300
2 300
3 300
4 300
5 1300
Total 2,500
300 x 12 = 36
1300
36
13 =2.7
Analysis Money back after 4 years and 2.7 months
Success and failure criteria
From the above both of the tables of NPV for hotel and swimming pool, it has tried to
determine the viability of the investment in both of the project. NPV value of hotel has showed after
the 5 years, new present value of the investment at 10% interest rate has become negative. It has
demonstrated that restaurant will not recover the invested amount after 5 years. While in the case of
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