Strategic Management of Projects: A Case Study of Ahmadiah Contracting

This report provides a detailed analysis of project management practices at Ahmadiah Contracting and Trading Company, a Kuwait-based construction firm. It explores the company's operational and dynamic capabilities, including its use of P3M3 for project portfolio management. The report identifies key challenges contributing to project underperformance, such as work system inefficiencies, project complexities driven by technological demands and government interference, and scope changes resulting from planning fallacies and optimism bias. The study examines the causes of delays and budget overruns, and it provides recommendations for improvement, emphasizing the need for strong operational capabilities, skilled project managers, and effective financial management. The report concludes by highlighting the importance of continuous staff training and investment in technology to maintain a competitive edge.

Introduction
Project management is a cycle that needs proper initiation and planning. It involves a series of
steps like executing and controlling before closure of the whole project. Project management is
mostly controlled by specific objectives and goals of an organization. However, it must be noted
that major challenge of project management is the time constraints. Not all projects are
completed as scheduled and hence project managers need to come up with ways of adjusting
their programs in order to fit to the challenges and constraints of the project (Fichman, 2005).
The best way to overcome such challenges is to be able to be flexible in terms of the decisions
they make. There is also need for the staff to be able to set their objectives, evaluate, and
reevaluate the project priorities frequently in order to ensure that everything goes as planned.
The staff would need to stay highly motivated and willing to see the project completed. That
would also require exercising team building skills and conflict resolution strategies (Debora,
2007). That is because in any organization especially an organization that is under pressure to
complete a project must meet challenges and other conflicts that would need to be resolved
timely if the project is to be completed on time.
The research focuses on Ahmadiah Contracting and Trading Company that is based in Kuwait.
The company has been involved in rapid expansions and transformation of the country for the
last 55 years. The company has been involved in modern planning techniques and has come up
with modern infrastructure in Kuwait thanks to the oil boom. The company has also taken
advantage in the growth of the modern metropolitan State of Kuwait and engaged in construction
of banks, shopping malls, office complexes, hotels, and resorts. Some of the most impressive
works done by the company include the construction of the Marina Wall and its water Front,

Strategic Management of Projects
Bayan Palace, Kuwait Airways Headquarters, Amiri Diwan, Kuwait Finance House amongst
many others. The portfolio of the company involves building and construction both in private
and public partnership projects oil and gas amongst many other. Irrespective of the success in
construction of some of the major infrastructure in Kuwait State the company is constantly faced
with the constraints of time. Not all projects are completed on time despite the fact that required
budget and time allocation are provided correctly. The paper therefore aims at studying some of
the constraints and challenges that affect the company.
Operational and Dynamic Capabilities of Construction Firms
The firm is involved in the overall pre-construction services, planning, controlling and
coordination of the whole project with the sole aim of providing the client with functional and
financial viable products. The company cooperates with both local and overseas companies to
design and select proper sites for the implementation of projects. The company engages in step
by step analysis of the project starting from the preliminary planning and engineering, cost
analysis and closure stages of the project (Mcavoy, 2009).
Fig 1 Indicates the P3M3 for Ahmadiah Contracting and Trading Company
2

Strategic Management of Projects
Source https://publications.axelos.com/
Project management at the company is at level 5 an indication that the company is continuously
making improvements with technology and portfolio management as a means of optimizing and
predicting performance over time. The company scored level 4 on management control, benefits
management, Risk management, stakeholder management, Finance Management, and Resource
management. The interpretation from the P3M3 indicates that organization retain specific
management metrics on its whole portfolio of programs as means of predicting future
performance.
The company meets all the necessary stakeholders on time during the preliminary stages so that a
budget is made on time. The following figure illustrates some of the core functions the company
deals with at the pro-procurement stages.
Fig 2 Project Management Dimensions at ACTC
Procurement forms the next stage in which the company ensures that the construction materials
are delivered on time within the agreeable and budgeted costs. The company ensures that quality
materials are made available both locally and internationally with the aim of ensuring quality
3

Strategic Management of Projects
products are used for the construction program. The company uses integrity and transparency as
some of their dedicated principles of operations to ensure efficiency. Safety and environmental
standards are also some of the key principles the company uses to conduct its operations. The
following table shows the steps for carrying out the operational dynamic capabilities in the
management of projects at Ahmadiah Contracting and Trading Company.
Commercial Project Definition and Execution Dynamic Capabilities
Initiation Mobilizing all the stakeholders and
informing them about all the necessary
requirements for the project.
Achievement of new markets
and a chance to enhance
sustainable development
Planning Setting up all the departments and
agreeing on the objectives and mission
of the project. It also involves meeting
with all the stakeholders and informing
them about working conditions, time
material storage, site access and
quality control. The budget is also
rolled at this time.
Development of new
operations capability.
Execution Involves taking everything to the site
of action. Involves the scope of the
project
Manage portfolios of the
projects starting from the
human resource and
developing skill and talent
Control Identification of threats and Taking examples from other
4

Strategic Management of Projects
opportunities projects
Close out Proper documentation &
archive
Table 1 Operational and Dynamic Capabilities of Construction Firms
Causes of Project Underperformance
Four main reasons have been identified as the reason behind poor performance in completion of
the projects at Ahmadiah.
Work Systems and Processes
Most of the people have been found to be working in organizations where they full do not
comprehend the work processes. There are two type of organization process. One of them is
where hardcore execution is worshipped while the other one is where organization processes are
worshipped (Lyneis, 2007). Failure to comprehend the work functions and processes will
certainly lead to delay of the projects. For example, building a new railways system for a country
for the first time is likely to be affected with bias and other cultural factors. For that reason, the
coordination of work processes always fail hence leading to shortfalls. That is because there will
be a lot of confusion something that will result to conflicts and delays. It has been found that
better forecasting methods and better incentives can be used to avoid delays in completions of
projects. Moreover, government influences and problems cannot be solved through technical
means and hence the need for better forecasting methods (Vickerman R, 2007).
Project Complexities
5

Strategic Management of Projects
The demand for modern technology and increasing competitions in Kuwait has led to many
contractors looking for complex projects. In most cases engineers are forced to change their
plans as they try to fit into the customers’ needs and desires (Hendrickson, 2008). In most cases
the government and political interference have been found to change the scope and plan of most
projects (Royer, 2003). Government policies and interests of some of the major projects lead to a
lot of delays. That has been a major challenge for Ahmadiah Company since most of the projects
undertaken are fully owned government projects. In addition, the duration of time taken to hand
over such projects to private companies like Ahmadiah involves a lot of bureaucracy something
that has led to the delay of most government funded projects. Analysts also argue that the root
cause of changes in project complexities is also brought about by psychological errors where
profits are overestimated and time and work is underestimated (Paul C. Dinsmore et al, 2005). It
is argued that project planners spin scenarios of success while glossing over the potential for
failure. For that reason, project planner end up promoting ventures which and not budgeted for
on time and tend to deliver promised projects that are out of the budget (Eddy, 2013). The use of
templates like that of Prince 2 and PMP can be useful in helping the project planners to complete
their projects on time (Ireland, 2006).
Scope Changes
It has been noted that project planners tend to ignore project complexities and changes in scope
of the projects. Such ignorance has been found to create underestimation of risks which is often
referred as optimism. Most of the project planners have been found to fall for optimism fallacy
especially with the current trends in technology (Lock, 2005). That is brought about by the
project planners underestimating the cost and time while overestimating the profits. That leads to
changes in the budget leading to the delay in project completion. It has also been argued that
6

Strategic Management of Projects
project planners tend to extrapolate current trends. Planning fallacy has also been found as one of
the ways in which project planners fall victims. That led to bias for the project planners. In most
cases the underperformance in terms of strategic misinterpretation always results due to cost
overestimation and benefits found in the data (Khazanchi, 2012). Consequently, strategic
estimates in terms of costs always end up being low and leading to overrun in absolute costs
which leads to benefit shortfalls.
It has been found out that reference lasses for forecasting tend to help project planners to
understand and see where the projects are heading especially if they are in tandem with the
reference class projects (Lewis, 2012).
Conclusion
Ahmadiah Trading and Contracting Company has been faced with a few challenges, which have
slowed or delayed completion of most of the projects. Government policies are some of the
reasons behind such shortfalls. In addition, challenges such as project complexities resulting
from bias from the project planners has been found to be another reason. Such fallacies always
lead to overestimation of profits and underestimation of work and time. Failure to understand
working processes is also another factor that has been found to lead to incompetence hence
leading to shortfalls of most of the projects. However, in order to strengthen the company further
there is need for the company to ensure strong operational capabilities which will include having
good project managers who are not biased in any way. In addition, the company can avoid slow
completion of their projects by ensuring that they employ good line managers that fully
understand the operations of the company and can be integrated into any culture. Bias has also
been identified in the line of financial management and budgeting. For that reason, looking for
good financial managers and advisers is also logical if the company has to improve and increase
7

Strategic Management of Projects
its profits. The company must ensure that it constantly train its staff so that they can be in tandem
with the recent technology in order to waive stiff competitors that are cropping up especially
from foreign countries. In addition, the company must also invest in new technology and ensure
that quality work is given to its customers.
8

Strategic Management of Projects
Bibliography
Ahmadiah Contracting & Trading Co. (2016). About Us.
http://www.ahmadiah.com/Runtime/PROFILE.aspx
Vickerman R. (2007). Cost-Benefit Analysis and Large Scale Infrastructure Projects: State of the Art
Challanges. London: Wiley.
Eddy, M. (2013, January 7). Mayor to Leave Panel Overseeing Delayed Berlin Airport. Retrieved from
The New York Times: http://www.nytimes.com/2013/01/08/world/europe/mayor-to-leave-
panel-overseeing-delayed-berlin-airport.html?ref=europe&_r=0
Debora, A. (2007). In Praise of teh Incomplete Leader. New York: Cengage.
Fichman, R. (2005). Beyond Valuation: Options Thinking in IT Project Management. New York:
Oxford.
Ireland, L. (2006). Project Management. New York: McGraw-Hill Professional.
Hendrickson, C. (2008). What Is Construction Project Management? New York: Wiley.
Khazanchi, D. (2012). Patterns of Effective Project Management in Virtual Projects: An Exploratory
Study. Los Angeles: TTL Publishing, Ltd.
Lyneis, J. (2007). System Dynamics Applied to Project Managemnet: A Survey, Assessment, and
Directions for Future Research. New York: Oxford University Press.
Lewis, J. (2012). The project manager's desk reference: : a comprehensive guide to project planning,
scheduling, evaluation, and systems. Washington: University of Washington.
Lock, D. (2005). Project Management. London: Gower Publishing.
Mcavoy, J. (2009). The Role of Project Managemnet in Ineffective Decision-Making Within Agile
Software Development . California: Cengage.
Royer, I. (2003). Why Bad Projects are So Hard to Kill. New York: Longman.
https://publications.axelos.com/p3m3/Organisation.aspx
9