Strategic Project Management for Luxury Home Creations

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The report highlights the strategic project management methods that are required for Luxury Home creations to improve the failure of the project in their future. In the present report, it has been found that organisation may fail in a start-up project owing to the lack of proper communication skills, lack of motivation amongst project members and lack of proper project planning.
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Running Head: STRATEGIC PROJECT MANAGEMENT
STRATEGIC PROJECT MANAGEMENT
Students ID:
Name of the University
Authors Note:
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Executive summary
The report highlights the strategic project management methods that are required for
Luxury Home creations to improve the failure of the project in their future. In the present
report, it has been found that organisation may fail in a start-up project owing to the lack of
proper communication skills, lack of motivation amongst project members and lack of proper
project planning. Apart from these factors, it is the challenging components of the external
environment, which may influence the project progress leading to failure in cost as well as
resources. In order to address this issue, the report presents a set of activities that help to
implement the project management activities and organise them in a required way.
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Table of Contents
Introduction................................................................................................................................4
Mission...................................................................................................................................4
Vision.....................................................................................................................................5
Value.......................................................................................................................................5
Goals.......................................................................................................................................5
Business strategy........................................................................................................................6
SWOT analysis of Luxury Home creations............................................................................6
Business development strategy...............................................................................................7
Porter’s five forces of Luxury Home creations......................................................................9
Threats from new entrants..................................................................................................9
Bargaining power of the suppliers....................................................................................10
Bargaining power of the customers..................................................................................11
Threats of getting substituted............................................................................................11
Competitive Rivalry..........................................................................................................12
Implementation of strategy......................................................................................................13
Linear model strategy...........................................................................................................13
Interpretive strategy..............................................................................................................13
Adaptive method..................................................................................................................13
Strategies for managing the Project related to Home décor and luxury service......................14
Setting up of objectives and value........................................................................................14
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Market research....................................................................................................................14
Feedbacks and interaction....................................................................................................14
Quality planning...................................................................................................................15
Fundamentals of executive management of the project...........................................................15
Initiating...............................................................................................................................15
Planning and designing.........................................................................................................16
Execution..............................................................................................................................16
Monitoring and managing....................................................................................................16
Closing..................................................................................................................................17
Failure factors of the project....................................................................................................17
Recommendations....................................................................................................................19
Conclusion................................................................................................................................20
Reference list............................................................................................................................22
Appendix..................................................................................................................................25
Appendix 1: A framework of project Manager duties and roles..........................................25
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Introduction
Luxury Home Creation is a small start-up construction organisation that will be
located in Sydney, Australia. The company is to establish luxury designs and costumed
mansions designs across wide dimensions of styles from contemporary structures to classic
layout. The main aim of the company will be to deliver the finest service for building
experiences with the consumers. They will be working hand in hand with the designer,
interior designer as well as with a skilled construction team for developing a unique home
experience. However, the plan is to shift its target market from the residential customers to
larger commercial consumers for enhancing future business. The project management plan
will therefore lay down the goals and values to create successful planning with a limited
share of the market to achieve success in the competitive market.
Luxury Home creations will be offering service related to the creation of luxury home
designs and mansions by implementing business differentiation strategy. The organisation
will be designed in such a way that will allow the organisation to carry out whatever that is
required to complete a project. Some of the services of the will be refurnished internal home
decorations and designs. In addition, their services will include luxury home service and
designs for the mansions in Australia.
Mission
Their mission of the organisation is to offer standard quality services through the
preparation of the home designs, estimation of cost, alteration of designs, repairing and
changing in Luxurious home decors as per the requirements made by the consumers. The
company will be maintaining a high quality of service in terms of commercial construction in
Australia.
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These actions are underpinned by the financial strength and their ability to work
alongside their partners of investment. Through the application of this approach in a
disciplined way, they have managed to develop a leading international group that is popularly
known in the market.
Vision
The organisation’s vision is to develop places that leave a positive mark with an
emphasis on health and safety for the customers, innovation as well as sustainability. The
strategy of Fosse commercial Limited’s vision is to deliver effective services and to create the
best places by leveraging their integrated model of business in major gateway cities.
In addition to this, through the recognition of innovative and contemporary financial
solving of the issue, the organisation will be working closely with the international investors
and shareholders of the market. In this context, the innovation, technological effectiveness
and brand identification in the established market have been the foremost competitive benefit
to the structure of the Fosse commercial limited.
Value
The value of the company is to apply knowledge of skills utilising a formal set of
equipment’s, methods provided with wide dimensions of the project activities for meeting the
requirements of the project. In this aspect, project management requires a specialised set of
knowledge and expertise; this will be accomplished through a set of processes, like initiating,
planning to execute, managing and to close the project that will be carried out by the
managers and project team members.
Goals
To secure at least three years of small-scale commercial project contracts
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Increase the customer base through extension into other demographic location in
Australia for retaining an adequate level of profit
Increase the expenditure of project by 10%
Figure 1: Process of Project management
(Source: Too and Weaver 2014)
Business strategy
SWOT analysis of Luxury Home creations
Strengths
The company is a start-up
Weakness
Luxury Home creations are highly
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organisation with multiple activities
of construction service.
The company has a broad network of
suppliers across Australia.
Aims to build Strong relationships
with their customer
competitive in the Australian market
The company has limited exposure
to international location
The company has operational
activities in limited locations
(Walker et al. 2015).
Threats
Domination of the competitors in the
market that might result in the
decrease in the organisational share
of the market (Antunes and
Gonzalez 2015).
Competitive price may lead to fall
down of the profit for ensuring the
share in the market
Unpredictable issues in the project
occurring due to the recessions
Opportunities
Luxury Home creations have
opportunities to extend their services
in other countries (Ens et al. 2015).
They can offer new construction
service
They have the opportunity to
collaborate with their competitions
Business development strategy
The company operates with an intention to provide service to the customers with the
highest standard of the products at a reasonable price by emphasising on consumer relations.
Large channels of independent suppliers that will extensively assist them in creating value by
providing luxurious service to the customer as per their requirement, which in return will also
support them to sustain the competitive advantage (Gou 2016). Therefore, with the use of
competitive strategy and the use of independent partners the organisation will be able to serve
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their customer with luxurious construction service at an affordable price. This, in turn, will
also help the start-up company, in strengthening it is dealing with the networks and will help
to manage the organisation’s competitive advantage for a sustainable period. Moreover, along
with the assistance, the organisation needs to keep changing is business project strategies for
their own establishment and to compete in effectively with the contenders (Cao et al. 2015).
In this context, they are required to regularly update the strategies, as well as approaches for
the different markets as well as they, are required to provide timely training to their dealers.
Therefore, this business strategy will allow them to easily create a value for their service and
will help Luxury home creation in sustaining their competitive differentiation in the market.
Measurement principles to evaluate the strategic effectiveness of the strategies
In order to manage the measurement principles, the company will be making use of
various measurement principles for verifying the strategic efficiency of the project related
operation. One of the major evaluation guidelines that will be used is the evaluation of the
strategies and approaches on a regular basis. As stated by Higgins et al. (2015), for analysing
the existing strategies and approaches, the company will be making use of the various
strategic equipment’s like PESTEL analysis for evaluating the external and internal
environment will be analysed using SWOT analysis tools. These tools will allow them to
analyse their own competencies and weaknesses existing in their organisation, and porter’s
five-force will be used to evaluate the market, competitive rivalry and suppliers.
The organisation's approach towards providing service to their customer with
standards quality products through their individual partnership network is appropriate for
them to serve premium quality products (Ceric et al. 2016). In addition, these strategies will
allow the company to keep establishing their strategies and process of manufacturing with the
use of innovative technology needed for constructing luxury homes and mansions. At the
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present situation, Luxury home creation is planning to provide small project home designing
services, and sell some machinery and equipment's related to interior designs for luxury
homes and mansions to the customers in Australia. The company’s effective guidelines to
evaluate its strategic effectiveness as well as to use its effective business methods will be
directing the company towards transforming itself into a successful producer of the home
décor and small construction-related services for luxury homes (Wilson and Zamberlan
2015). This is because the success of the product and service is dependent on the
organisation’s strategic planning of the entire project it takes, that will provide them and
framework to achieve success and will help them to serve the consumer as per their changing
requirement and valuable products.
Porter’s five forces of Luxury Home creations
Threats from new entrants
New emerging market in construction industry comes with innovative methods of
performing things and that may create pressure on the Luxury Home creations by low price
on operations, lower cost, and by offering the new proposition of value to the consumers.
Luxury Home creations need to manage all these issues and need to develop an effective
process to protect its competitive advantage. However, in case of luxury home décor and
mansion designs, there might be a strong threat from the new entrants in the commercial
industries while high levels of challenges to the entry in the construction and interior
designing service. Therefore, a for the small start-up company within Australia it might be
difficult for them to manage in the highly competitive market.
The organisation needs to innovate their products and services by bringing new
customer new reason to buy Luxury Home creations services. As stated by Chih and Zwikael
(2015), they need to build the scale of economies so that it helps them to reduce the fixed cost
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for each unit. Moreover, they need to establish capacities and are required to spend expenses
on research and development. However, emerging new entrants are less likely to enter the
ever-changing industry wherein the dominating players including Luxury Home creations
keep maintaining their standards on a regular basis. The company needs to reduce their
opportunities for extraordinary profits for the emerging organisation. By doing so, they can
discourage the emerging players in the organisation.
Bargaining power of the suppliers
All organisations in the small-scale construction industry tend to purchase their raw
goods from multiple numbers of suppliers. Therefore, distributors standing in the
empowering position can as well lower down the profit margin of the Luxury Home
Creations. However, a start-up producing industry requires raw materials, including the cost
of labour, materials and other necessary supplies related to luxury home service. This
requirement may result in the high buyer and supplier relationship in the industry and for the
organisation who delivers raw material for creating room decorations products. Therefore,
powerful supplier within the market has the capability to exert the impact on the producing
industries who are selling the raw material at a comparatively higher price to obtain the
profits from the industry. The overall impact of high bargaining power of the suppliers is that
they reduce the net profit of Real Estate. The power of the suppliers for the start-up company
in Australia may be high. This is because people have to change demand for home-related
services.
In order to address these issues, Luxury Home creations need to develop an efficient
supply chain with the multiple numbers of suppliers. The company is required to experiment
with product designs by using different types of materials so that in case the price goes up for
one of the raw materials then the organisation will be able to shift to other (Badewin 2016).
Moreover, the company needs to develop dedicated suppliers whose business is dependent on
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the company. However, one of the methods that Lands lease group will be able to learn from
Wal Mart and Nike is the way, which this organisation established third-party producers that
have significantly less power of bargaining in comparison to Walmart and other organisation.
Bargaining power of the customers
Customers are often demanding in case of construction services. They often want to
buy the best offer that available by paying lowest as much as possible, this type of issues may
put pressures on the profitability of the Luxury Home creations in their future period. The
small and dominant customer base may increase the bargaining power of the consumer and
increased capability to enhance discount offers. The power of the buyers within the industry
may be comparatively low due to the high gap present in the demand-supply chain.
According to Head and Alford (2015), in order to manage these issues and Luxury
Home creation needs to develop a larger customer base that will be helpful for them to limit
the bargaining power of the consumers. In addition to this will also provide them with an
opportunity for the organisation to streamline the sales and process of production. Therefore,
by rapidly innovate the products; customers will be able to get discounts and offers
established by Luxury Home creation.
Moreover, for attractive customers, the dealers of the company needs to provide the
best offers to the target customers, festive and social occasional such as new year's eve and
another festive eve in Australia. These activities will help them to enhance their sale and the
project. However, the consumer may become tempted with many other services offered by
the rival and emerging companies and they began looking for innovative home décor
services. Consumers are as well too much sensitive to price; they may not be preferring avail
new service with a high price. Therefore, it is necessary for the company to implement a
differentiating strategy by taking up a standard project that may influence the customers.
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Threats of getting substituted
It is when a new product on the market meets the requirement of the customer in a
variety of ways. It is a point in time when the profit of the industry suffers. For instance,
service related to Dropbox and Google Drive may be substituted due to storage hardware
operations. According to Hornstein (2015), the threats of being substituted by a product may
be high when it delivers a proposition of value that is unique from the existing offers of the
market. To address these issues, the company needs to act service oriented other than
providing product-oriented service. They are required to understand the core needs of the
customer other than the purchasing behaviour of the customer. Moreover, they are required to
increase the cost of switching for the customers.
Competitive Rivalry
It is when the rivalry between the existing player's increases that may drive down the
process and may decrease the overall profit of the organisation. However, Luxury Home
creations operate within a competitive construction industry. Therefore, the competition does
take a toll on the entire long-term profit of the organisation. For addressing this problem, the
company needs to develop a sustainable strategy of differentiation to compete with the
existing market (Mok et al. 2015). Moreover, they need to create collaboration with the
competitors for enhancing their size of the market other than competing with the small sized
market.
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Figure 2: Controlling the failure of the project
(Source: Mok et al. 2015)
Implementation of strategy
The company in order to achieve a differentiating business strategy in the market can
implement the following models of strategy:
Linear model strategy
Linear model strategy implies planning, and integrated process of decision-making
and implementations of action that needed to take for accomplishing the feasible objectives
of the organisational project. In this strategic action, the organisations need to keep
modifying their products and services in accordance with the changing needs of the
consumer. According to van Kuijk et al. (2015), Strategic decision-making and formulation
of the strategy are the main factors related to the linear model that is being highlighted in the
strategy.
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Interpretive strategy
According to (Brunswicker and Vanhaverbeke 2015), this strategy illustrates the
establishment of strategy irrespective to the changing and current interest of the corporate
culture; strategies within the interpretative model are established to set up the references to
help the stakeholders in understanding the business scenario and environment of the industry.
Based on this strategy the stakeholder of the Luxury home creation will be able to provide
constructive results for the organisation. To be specific, the interpretive strategy focuses more
on the activities of promotion that will allow them to influence the purchasing decision
making of the consumers other than implementing attractive features to the products.
Adaptive method
This specific model of the strategy involves with the alignment of the resources and
competencies with the project risk and opportunities through continuous evaluation of
external as well as internal conditions of business (Heintz and Aranda-Mena 2016). In this
strategy, the company will be conducting an analysis of the environment for making need full
changes for its continuous operation within the adaptive strategy.
Strategies for managing the Project related to Home décor and luxury
service
Setting up of objectives and value
The project management team within the organisation needs to develop and manage a
collection of processes and rules with a clarity in the structure of the project along with
specific objectives and business objectives. As stated by Heravi et al. (2015), it is the
PESTLE analysis that will help the organisation to have a better perception of all the factors
of the external market. The political factors that influence the projects are mostly the factors
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of the nation laid down by the government regulation as well as the change in policies that
impact on the organisational project.
Market research
In the case of a domestic society, that company project may face unfavourable
policies related to restricted policies of trade while declining with long-term goals. In this
context, vom Brocke and Lippe (2015) states that government agencies are required to assist
the sustainability policies and make sure that when the government formulate this polices
them are in favour of the specific project. However, one of the major difficulties that the
organisation may face is the lack of financial controls in the handling of the project. In this
context, it is required for the organisation to empower the team with knowledge as well as
skills for managing the aspects of accounting of the project activities.
Feedbacks and interaction
The teams are required to interact with each other on a regular basis for the sharing
the appropriate information with the proper people in a timely way. According to Martens
and Carvalho (2017), this is because effective communication is necessary for attaining the
progress of any project within the organisation. Any issues that take place in the project needs
to be tracked in a prompt way, understood and needs to fix immediately if possible. Along
with this the managers of the organisation is required to supervise the achievement of the
project performance against the planning of the project and needs to put emphasis on the
phase of development with the regular and measurable progress of the project. In this context,
it is required for the organisation to create and maintain the teams by motivating them and by
rewarding the achievements of the people as well as by recognising their contributions
towards the project.
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Quality planning
Team members of the project are required to integrate quality assurance within the
lifecycles of the project for continuously producing quality results for the project. The
accomplishment of the problems and future planning needs to be shared with all the members
of the project (Campbell and Reyes-Picknell 2015). Project activities need to be reported
frequently to the hierarchy of the management.
Fundamentals of executive management of the project
Initiating
The method if initiating a project helps to demonstrate the character and scope of the
project. Therefore, if the phase is not performed in an effective what the project may not
achieve success in business. Moreover, the project members are needed to realise the
environment of the business ensuring that all the needed controls have imported into the
project. (Todorović et al. 2015).
In this context, in the part of the project is needed to be reported to the exclusive and
suitable steps are required to be taken to fix the issues.
As stated by Brulin and Svensson (2016) the stage of initiation needs to be included
of evaluation of business requirements, revising of the existing operation. Moreover, financial
analysis of the cost and advantages are required including the budget and evaluation of the
stakeholders and support employees for the project.
Planning and designing
After the initiation of the project, the project is required to be decided at all the
suitable level. The main intention is to decide over the duration of time and required cost in
an adequate way to set up the work that is required to effectively control the risk at the period
of executing the project (Girard and Girard 2015).
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In addition to these processes like the planning of communication and scope of
management, determine the way of purchasing the project is needed to be fixed for managing
the project.
Execution
Execution consists of processes that are required to complete the work in
accomplishing the requirement of the project. However, Falkner and Hiebl (2015) the
execution of the project involves the coordination of employees and materials by
incorporating the motions of the project with the planning of the later. In this, the product is
as well needed to be manufactured as outputs from the performance processes.
Monitoring and managing
Monitoring and managing of the project consist of the processes that are performed to
observe the project plan of execution to recognise the significant problems in a timely
manner. According to Smith (2014), the key advantage of the monitoring is that it helps to
observe the performance and measures on a regular basis and allows the employees to take
corrective action to control the project.
Closing
Closing consists of the formal acceptance of the project and completing it.
Administrative process ate included in the project consisting of archiving of files and
documents.
Failure factors of the project
Project alliancing within a construction company is growing with the utilisation of
connection-based acquisition in Australia through issues like a partnership, joint ventures,
enterprise and alliancing. In this context, the projects managed by Luxury Home creations
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may have issues resulting due to the poor morale, lack of motivation, lack of effective human
relation and delayed issues in solving the problem.
On the contrary, from the quantitative point of view, there may be problems occurring
due to change in scope, ineffective procedure of planning, ineffective process of scheduling
along with a poor system of cost control. These issues may lead to the fall down of not only
profit but also the failure of the project.
Lack of effective communication channels
As stated by Love et al. (2015), communication within the different departmental
system was very time consuming that resulted in a huge turnaround for the responding
towards the question. This instance has furthers developed the efficient of the project teams.
In addition to this, the team's members of the project could not be expected to have an
upgraded, consistent image of the objectives that are needed to be done in the project.
Lack of proper vision and objective
Clear communication is the major key to success in any project. However, Luxury
Home creations organisation was lacking the culture that motivated clarity in communication
(Laursen and Svejvig 2016). There was insufficient communication between team members
even across the clients that resulted in frustration and conflicts between the project team
members.
Lack of motivation
The employees within the organisation were not motivated to act honestly and
responsibly. They were pressurised with different kinds of roles that forced them to act
negligently in realising the duties, for instance, the team of sales estimated that delay in the
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delivery of the product would not be a major issue with the customer (Duffield and Whitty
2015). Therefore, they do not communicate with the client in advance.
Lack of proper planning
Apart from these, lack of effective interactive network in between the consumer
represents that the managers of the project needed to go through the framework of the
production area followed by the areas of sales (Daniel et al. 2014). In the case of these,
project the similar path would have been reversed for getting the answers from the customer.
This could have been due to the lengthy procedure, with multiple loopholes in the
communicating that degraded the project.
Internal environmental evaluation
Process: The foremost process of the organisation is human resource management
and the implementation of technology (Walker et al. 2015). Therefore, it is necessary for the
organisation to implement HRM policies to increase in their international market. Moreover,
the organisation is required to adopt an innovative system of technology in the operations of
the business.
System: The Company has an effective system of administration. It has a different
division for managing the activities of the project. The head of the administration that is
accountable for supervising and managing the work (Mazur et al. 2014) manage each of the
division. Therefore, it is evident that the management system of the organisation is effective
in the growth of the business.
Employees: The organisational subordinates have been playing a crucial part in the
internal sustainability of the environment. Therefore, considering the risk of the project, the
employees have always been working in accordance with the strategies that are needed for
improving the performance and productivity of the operations.
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Management: An Organisational system of management in the Luxury Home
creations needs to recognise the benefits of unified working methods (Antunes and Gonzalez
2015). Therefore, the senior managers and strategic developers of the Luxury Home creations
organisation have developed the sustainable corporate culture for offering the most suitable
solution by reviewing the issues and concerns associated with the project workforce.
Recommendations
Considering the estimated failure of the project, Luxury Home creations needs to
implement proper project management process for reaching the objectives and to obtain the
competitive advantage. In their initial period, they are required to realise the characteristics
and scope of the project in order to understand the requirement of the existing project (refer
to appendix 1). In this context, the project management needs to have knowledge in certain
areas:
Integration of project management: this will help the manager to ensure that the
project is planned
Management of scope: changes in the scope of the project are crucial factors that
lead to the failure of the project. Therefore, it is necessary for the organisation to
develop a statement about the scope that will define the range and limitation of the
project, by classifying the task into adjustable components.
Management of time: for the projects that are accountable for developing a specific
schedule is required to be met within a specific set of time.
Management of cost: It is involved in the estimation of the cost associated with
resources, inclusive of people, and tools that are necessary for a supportive decision.
Management of quality: One of the foremost reason for which the project may fail is
that the tendency to ignore the quality to meet the deadline. Therefore, in order to
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address these, the project is needed to have quality management to assure planning to
meet the requirements and deadline of the project,
Managing Human resource: Handling human resource is necessary for the project.
This will help in recognising the requirement of the people to perform the tasks while
illustrating their roles and duties in the workplace and by managing the relationship.
Conclusion
Therefore, it is evident from the study, that Luxury Home creations can be highly
advantaged from the incorporation of fundamentals of strategic project management methods
in all its departments and employees. The organisation may face problems while managing
their project as this is the start-up organisation. There could be several problems faced by the
organisation while taking up initial projects and in managing communication. Therefore, the
management team of the organisation has shown some interest in strategically analysing the
improvement of the process at the company. The upcoming project of the organisation may
result in several changes in the project and operating system of the Luxury Home Creations.
Therefore, implementing these precautionary steps will help the organisation with more
modernized organisational processes such as well-planned structures, yielding of improved
operations as well as quality in the reduced tome.
Implementation of the project required effective utilisation of technical equipment,
software and settings along with the use of effective project handling tools that will allow the
organisation to enable the project properly. Therefore, the project will be the success if the
organisation manages all the recommendation in a proper way.
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Appendix
Appendix 1: A framework of project Manager duties and roles
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