Reasons for the Failure of Carillion: A Project Management Analysis

This report analyzes the reasons for the failure of Carillion, a British multinational facilities construction and management services company, using project management theories and examples. It discusses issues such as cash flow problems and lack of manpower, and provides recommendations for improvement.

Project Management Leadership and Skills:
Planning and Control

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Analysing reasons for the failure of business..............................................................................1
Use of theory and examples.........................................................................................................1
Recommendations and Conclusion..................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Companies focus on gaining maximum profit which is possible when they perform their
set of roles in an effective manner (Kerzner, 2013). It is important to make sure that all the
requirements or set of roles that have to be played by them are performed efficiently. Present
report is focused on failure that took place by Carillion as per given in the provided case. It is a
British multinational facilities construction and management services company with having
headquartering in the UK. There are many set of issues that were faced due to which firm was
not able to attain their set goals and objectives. This report covers the main aspects that went
wrong. Further, it makes use of theories related with the nature of project and organizational
structure.
Analysing reasons for the failure of business
There were different types of issues faced by Carillion due to which the total market
share fell up to 70%. These are given as below:
Cash flow problem: In order to perform any type of activity, it is required to make use of
finance so that all the activities will get completed in an effective manner. The firm need to who
will be the sources through which finance can be raised (Burke, 2013). When there is availability
of finance, then proper planning is required to be made so that firm will be able to understand the
requirement of cost which would be incurred for each activity.
Lack of manpower: To conduct all activities properly, it requires to have proper support
from the side of employees so that they will be able to make sure that all activities will be
performed effectively and efficiently. Employees have certain set of skills and capabilities, it
requires management to understand them and divide the work accordingly. There is speculated
time period that was set by the management in which all activities are needed to be completed.
However, it was identified that cited firm faced issue in relation with shortage of materials or
stock.
Use of theory and examples
There are many types of theories that can be applied by business so as to make sure that
they are able to complete the given task. In this context, it consists of project management theory
in which it includes three different type of aspects that needs to be properly planned by the
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management (Larson and Gray, 2013). In this context, it is important that all these aspects are
properly followed. These are:
Measurement: This is determined to be the condition in which all the analysis is made in
which the firm need to make proper analysis of the things that they have. In order to perform any
task to be completed, it is required to understand the things that are required so as to know where
the firm stands and what all are the strength and will be task be complete.
Evaluation: As per the materials that are available, it is important for the business to
develop plan (Walker, 2015). For example, when the firm knows that the total financial support
that they have is low, then planning should be made in such a way that they will be able to
complete them effectively and efficiently.
Corrections: As per the material and manpower available, management needs to
implement the plan so that they can complete them in an effective manner. When they are able to
make sure that all the aspects are covered in which the barriers that can also occur should also be
evaluated so that they are able to manage risk.
Further, it consists of project life cycle in which all the aspects that are formed need to be
properly analysed for each step so that they will be able to understand the requirement and
proper steps taken to attain desired goals and objectives. There are four different type of steps
that are included in project life cycle. These are conceptualization phrase, planning phrase,
execution phrase and termination phrase. As per the first phrase, it is important to determine the
main problem that is caused, then it requires to take up appropriate steps with the help of which
the issue can be solved. Then it needs to make goals and objectives to be set so that they are able
to develop path on which it can be achieved (Verzuh, 2015). For second phrase, it include proper
planning to be made so that all the people who are involved in the project gets to know about the
main cause and the support that is required. In third phrase, all the aspects should be properly
measured and evaluated so that risk can be identified. Lastly steps are termination phrase in
which the main cause for which project was formed was completed in effective manner.
This way, it can be stated that if Carillion have considered these theories, then many risk
that they faced could have been eliminated. However, the plans that were made by them were not
effective enough to attain their goals and objectives.
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RECOMMENDATIONS AND CONCLUSION
There are certain set of recommendations that should be followed by cited firm so that
they would be able to eliminate all the problems being faced by them. In this context, it is
important to have key people with leadership. When there are people who are able to guide and
direct employees and finance required, they will be able to eliminate the issue to a high extent.
Further, activities need to be planned in such a way that within the financial support that
available, it can be completed.
From this report, it can be concluded that management needs to set their goals and
objectives so that all people who are involved will be able to understand the support that they
have to provide. Further, it is also important that all the employees have clarity in the type of
roles that have to be played by them so that they put on their full efforts.
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REFERENCES
Burke, R., 2013. Project management: planning and control techniques. New Jersey, USA.
Kerzner, H., 2013. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Larson, E. W. and Gray, C., 2013. Project Management: The Managerial Process with MS
Project. McGraw-Hill.
Verzuh, E., 2015. The fast forward MBA in project amanagement. John Wiley & Sons.
Walker, A., 2015. Project management in construction. John Wiley & Sons.
Understanding operations. 2013. [Online]. Available through: <
http://www.open.edu/openlearn/money-management/management/leadership-and-
management/understanding-operations-management/content-section-1>.
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