RKC Project Management: Carillion Case Study - Planning and Control

This case study analyzes the project management failures that led to the downfall of Carillion, a construction company involved in a 58km road project for the Scottish government. The analysis identifies key issues such as poor financial projections, inability to control subcontractors, and flawed procurement processes. It reviews project management concepts, including the nature of projects, organizational structures, and critical management areas like scope, time, cost, and risk. The study emphasizes the importance of proper project evaluation, resource allocation, and risk management. It concludes with recommendations for portfolio butchering and risk management strategies to help companies recover from similar situations, highlighting the need for effective project management practices to ensure project success and organizational sustainability. Desklib provides access to past papers and solved assignments for further learning.

Project Management Leadership And Skills: Planning And Control1
PROJECT MANAGEMENT LEADERSHIP AND SKILLS: PLANNING AND CONTROL
Student by (Name)
Professor’s (Name)
College
Course
Date

Project Management Leadership And Skills: Planning And Control2
Executive summary
Project planning, control and management is one of the key areas which organizations
dealing with long term building and construction projects should advance. Most of construction
organization have suffered severe losses and some even collapsing without trace base on poor
project planning, control and management. Carillion is a contracting company which is currently
drowning based on poor long period project management practices. The organization has went
down and is looking for the various ways to raise funds to finish the project they took on road
building. Carillion building and Construction Company won the contract to build a 58km road
for the Scottish government and was also expected to create thousands of jobs for the locals,
however the project has failed to go as planned resulting to the reason for fundraising. Carillion
building and Construction Company has limited survival chance and has to look for survival
options. The content of this pare therefore employs various project planning, control and
management concerns which the company would have considered prior to the commencement of
the project. the content views what went wrong on project, what project management concerns
the organization the organization did not do right, they paper also discusses what the company
would have done and how they can recover from their current state and complete the project. The
paper concludes with recommendation on portfolio butcher as well as risk management
procedure the company can employ to rise from the situation.

Project Management Leadership And Skills: Planning And Control3
Table of Contents
Introduction......................................................................................................................................4
What went wrong?...........................................................................................................................5
Project management concepts and ideas..........................................................................................7
Nature of projects and project organizational structures.............................................................7
What has to be managed in PM?.....................................................................................................8
What was not done?.........................................................................................................................9
Carillion portfolio or program management and risk;.....................................................................9
Portfolio.......................................................................................................................................9
Program......................................................................................................................................10
Risks...........................................................................................................................................10
Recommendation.......................................................................................................................11
Stakeholders and their influence....................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Project Management Leadership And Skills: Planning And Control4
PROJECT MANAGEMENT LEADERSHIP AND SKILLS: PLANNING AND
CONTROL
Introduction
The stricken building and construction Carillion as a result of poor project management,
planning and control is currently facing growing calls to commence an emergency fundraising as
it is likely to plunge deeper in financial problems. Project planning, control and management as
stated in above, is one of the key areas which organizations dealing with long term building and
construction projects should advance. Most of construction organization have suffered severe
losses and some even collapsing without trace base on poor project planning, control and
management and Carillion is an example. The content of this paper therefore applies knowledge,
theory as well as practices of project planning and control to the case of Carillion building and
Construction Company. The content also applies various project management techniques and
methods suitable for solving Carillion building and Construction Company. Moreover, the
content with regards to the case study demonstrates a clear and sound understanding of the
significance of the project management in development as well as the maintenance of a
sustainable and global organization operating market surrounding. The paper concludes with the
analysis of various options such as butchering of the organization’s portfolio as well as risks
management strategies Carillion building and Construction Company can employ to prevent its
collapse.

Project Management Leadership And Skills: Planning And Control5
What went wrong?
Undertaking of projects require stipulation of proper management, planning as well as
project control. the 36 mile road project as revealed in the case study indicates various problem
which were as a result of poor project management by Carillion building and Construction
Company. Even though the nature of the project may be seen to some level as the cause of road
building completion, the problem is from Carillion building and Construction Company (Gehring
2007). The construction of Aberdeen typifies road should have been simple with proper
planning, management and control. However, the relatively simple road construction has been
dogged and the process is currently not yet near completion based on a number of factors which
have gone wrong. The building of the road have resulted into pushing cost ups leaving Carillion
building and Construction Company with a magnificent cash flow problems.
a) Poor financial projections
According to the situation of financial cost push-ups in the project leading to cash flow
problems in Carillion building and Construction Company, it is evident that the organization did
not come up with proper project financial forecasts. Project forecasting is a key factor in
ensuring that a project to is successful. Project forecasting is composed of taking key
information on the status of the project which Carillion building and Construction Company did
not take based on time (Kerzner 2013). The organization did not take extrapolate the project in
the current time as well as project performance to the end of 36miles road building. The
organization did not come up the project coting after conducting risk reviews and events which
might have influenced the project in future. Another thing which went wrong with the project

Project Management Leadership And Skills: Planning And Control6
was the inability of Carillion building and Construction Company to identify future risk triggers.
This would have enabled the organization to identify factors such pension which has now
resulted into debts.
b) Inability to control subcontractors
According to the news in the case study, Carillion building and Construction Company
was not able to control the subcontractor. Even though working on a long term project with
subcontractors is cost saving and helps the business to avoid large payrolls, using such parties,
may have a problems which affect the contractor (Sumner 2009). According to the case study,
Carillion building and Construction Company used consortium as the subcontractor an
organization which failed carry out part of the project leading to delays as they cannot work
during winter seasons. This affected mush the organization as they could only be paid once the
building of the road is complete.
c) Procurement
Procurement and budgeting were also among the factor of the project which did not go
well. Carillion building and Construction Company based on the case study got procurement
wrong (Smith, Merritt and Merritt 2012). The organization used the subcontractor to perform
procurement which was a wrong move and miscalculation. The employed subcontractors went to
the market and purchased the materials at a higher rate compared to the estimates affecting the
construction project as a result of cost pushups.

Project Management Leadership And Skills: Planning And Control7
Project management concepts and ideas
Nature of projects and project organizational structures
Various projects has varied nature and organization, however project structure and organization
is identical. The project was to be done for a given period of time and the organization should
have structured the whole project into five faces (Morris and Jamieson 2015). The type of
project the organization was a government project where politicians wanted to minimize the cost
and avoid related risks. Carillion as an organization should have organized the project based on
the cost and time. The project would have taken five phases as below:
i. Management of project conception and initiation
This is the fits which Carillion building and Construction Company as an organization would
have started with to ensure the success of the whole project (Archer and Ghasemzadeh 2007). At
this stage the organization would have examined the whole project carefully to determine the
benefits the project would have brought. A group of decision making team at this level should
identify whether the project should have realistically complete the whole project.
ii. Project definition as well as planning
This phase is managed by the second group appointed by the project manager to come up with a
plan towards executing project. The work to be performed should be well outlined at this step in
order to come up with responsible teams (Barkley 2014). At this point the team dealing with
planning prioritize the project, come up with a budget as well as schedule and the resources
required.

Project Management Leadership And Skills: Planning And Control8
iii. Management of project launch
At this phase the management of the project organize required resources and distribute
resources. Various teams at this point are informed of their responsibilities as well as key
information concerning the project is revealed.
iv. Project performance and control
Management of pm at this level involves comparison of the project status and progress to the
actual plan as resources are directed to the work schedule (Wideman 2011). This phase is normal
carried out by the management team. At this point the managers can also adjust the time based
on the desires of the stakeholders.
v. Closing of the project
This is the last phase and it varies from organization to organization, at this point the tasks are
complete and the client has approved the project based on the evaluation.
What has to be managed in PM?
Success of the whole project was dependent on the management of the various key area of the
project. Project management involve five key factors to be well organized and managed.
Carillion building and Construction Company project manager was supposed to manage a broad
range of activities (Ohara 2015). Project management involves not only the management of
people but the management bifurcates various groups involved in a project. PM involves
management of process groups which include initiation group, planning, execution, monitoring

Project Management Leadership And Skills: Planning And Control9
of the whole process as well as ending the whole project. Project management involves the
management of various key factors at each level. These factors for management include: scope,
time, cost, quality of the work, human resources, communication risks, procurement as well as
manage stakeholders (Kerzner 2013).
What was not done?
According to project management, Carillion building and Construction Company failed
on the most part of the project. The organization did not conduct a proper evaluation of the
whole project to ensure that they would have performed the whole project with the offered cost
and still benefit from the project. At the point of execution, the organization left everything to the
subcontractor (Jeffrey Thieme, Michael and Shin 2013). The subcontractor failed to allocate the
resources as per the plan pushing up the cost of the whole project leaving Carillion building and
Construction Company with cash flow problems. The management team of the 36miles route
failed to perform evaluation of the project. The management did not compare the general
performance of the project execution to realize that their resources would not sustain the whole
project and look for alternatives.
Carillion portfolio or program management and risk;
Portfolio
The organization has failed based on their current project portfolio which cannot lead
them to the final process of the project. Portfolio is the general program an organization follows
to execute a given project. The program prepare by the organization to achieve the completion
of the road building was not inaccurate and they should consider butchering of the portfolio to

Project Management Leadership And Skills: Planning And Control10
come up with appropriate way of finishing the project (Edum-Fotwe and McCaffer 2010). The
organization is currently applying for any means to achieve the ultimate goal of closing the
whole project and getting their benefits. The project management offices should come up with
the best portfolio with techniques, policies, methodologies as well as a new program template for
managing the project within the organization and avoid the use of subcontractors.
Program
The organization had a program for the execution of each group of project activities to
be done. The organization divide the project into various groups where there was tunnel and
drainage building, however the organization never organized each group of program to the right
groups. The organization left the subcontractor with the whole responsibility of performing the
programs without closer supervision. Without project control and control over the
subcontractors, the organization is experiencing difficulties as the subcontractor performance
their responsibilities at their own pace (Gehring 2007).
Risks
There are several risks related to projects with long time span. There is possibility of
price change in the cost of materials for the construction. Based on the type of the project and the
time the organization should conduct risk analysis of the whole project and come up with the
best way to close the whole project (Pinto 2007). The organization should have identified and
projected cost based on the nature the project. The business would have evaluated risk based on
procurement and forecast the cost flexible to absorb the unseen risks.

Project Management Leadership And Skills: Planning And Control11
Recommendation
Since the organization is falling beyond saving, the only way to move forward is it to
lease potential company assets and close the project. The organization should avoid working
with subcontractors who they have no control over and use the payroll (De Reyck et.al 2015).
The organization should also come up with proper financial projections and program to execute
the remaining part of the project.
Stakeholders and their influence
Execution of a project involves various stakeholders who have influence on the project.
Part of the stakeholders involved in the project were from within the construction firm and others
from the public (Turner 2008). The key stakeholders of the project were project management,
project management office, portfolio managers and program managers as well as functional
managers. Apart from the organization project stakeholders, another stakeholder were tax payers
as they were the key sponsors of the project. The government was also another key stakeholders
in the project. Stakeholders in a project are individuals, organizations as well as various groups
involved in the project and are positively or negatively influenced by the project (Schwalbe
2015). Taxpayers as stakeholders had a great influence to the project as they were the main
sponsors of the project. The organization had to involve Scottish taxpayers who sponsored the
project and in any case of cost elevation taxpayers were the party to contribute to the project. The
influence of the taxpayers was therefore great to project and Carillion building and Construction
Company would have worked towards achieving their desires (Artto, Martinsuo, Gemünden and
Murtoaro 2009). The failure of the organization to include taxpayers have resulted to the
problem of finance as they are not ready to sponsor further the construction of the road.

Project Management Leadership And Skills: Planning And Control12
The government is also another key stakeholder to the project as it acts as the link
between the taxpayers and the contractor. The government had the authority to terminate,
increase the contraction cost as well as to minimize cost of the construction (Morris and Pinto
2007). The failure of the organization of not informing the government of their key steps, this is
evident where Carillion building and Construction Company states that they will not be able to
accomplish the project on the set date and the government keep informing the taxpayers that the
project will have been finished (Thomas and Mengel 2008). The failure of Carillion building and
Construction Company to work with government and taxpayers is a problem to the project. This
is because failure of the organization to inform the government and taxpayers inputs as well as
soliciting their needs, satisfaction and expectations on the project.
The project manager is also another key and important stakeholder of the whole project.
The project manager has a greater influence on the project. Every step of the project is
formulated and given direction by the project manager. The manager had the ability to ensure
that the project was successful by delegating duty each team or group (Schwalbe 2015). The
project manager should have informed each group in the project on their inputs on the whole
project. The project manager would have analyzed the whole project and manage all the
stakeholders’ needs and work with them based on their influence throughout the lifecycle of the
project.
Conclusion
Project planning, control and management is crucial for the success a project. Without a
clear and sound understanding and knowledge on project management, a project is likely to fail
as seen in the case study. Any organization involved in a project should come up with a proper