INF70005 - Sydney Opera House Project: Strategic Management Analysis

This case study critically evaluates the Sydney Opera House project, examining its background, initial objectives, and eventual outcomes in light of strategic project management principles. The analysis considers standard project management criteria, including the Iron Triangle (time, cost, and quality), stakeholder benefits, and overall project performance. The study highlights the project's initial failures in adhering to budget and timelines, largely due to design changes, lack of a dedicated project manager, and governmental interference. Despite these challenges and significant cost overruns, the Sydney Opera House ultimately became a cultural icon, raising questions about how project success should be defined beyond traditional metrics. The document concludes with suggestions and recommendations for future project management practices, emphasizing the importance of clear objectives, stakeholder engagement, and adaptable planning.

Sydney Opera House
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Table of Contents
Background of the company and the project case......................................................................3
Discussion of standard criteria, such as those emerging in the reference section......................5
Critical identification and justification of the criteria you think appropriate.............................6
Critical analysis of the case based on the criteria chosen..........................................................7
Conclusion..................................................................................................................................9
Suggestions or recommendations...............................................................................................9
References................................................................................................................................10
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Background of the company and the project case
Sydney Opera House is one of the best iconic buildings commonly regarded as Australia’s
global symbol. The construction of the Sydney Opera House started in the year 1959.
Architect Jon Utzon from Denmark won in the architecture competition organized by the
government of New South Wales for new building in the year 1957. The project of
constructing Opera House in Sydney was scheduled originally for four years. AUS $7 million
was the budget allocated for the Opera House construction project. The construction of the
Opera House took 14 years and AUS $102 million was the total cost of the construction
(Irvine, 2013).
Sydney Opera House is one of the most disastrous projects of construction. The construction
project of Opera House in Sydney was not only disastrous in term of finance management
but the management plan for its construction was also not effective, which resulted in the
project management failure of the Opera House in Sydney (MIT OpenCourseware, 2011).
It is important to clearly define the objectives and the goals of the project by the client, in
order to provide with the accurate guidelines. The three main factors in the project
management are: quality, time and cost. In Sydney Opera House case, the quality was most
important and it was an unrestricted goal of the project due to which, the project was
launched. There were no indications related to the cost and the time limits provided for the
competition. The architects had freedom to design the Opera House according to them. Utzon
presented the report containing the indications related to sections, plans and the reports by the
consultants. The funds were obtained from lottery and hence, there was no financial burden
on the government (ABC Innovation, 2012). In terms of time planning, the goal was defined
to complete the construction project till the end of 1962. It was decided that the grand
opening of the Opera House will be commenced in the beginning of 1963. The construction
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of Opera House should have lasted for four years only however, it got extended greatly owing
to inefficient planning and management.
Utzon was more focused on the designing of the Opera House and he completely ignored the
factor of time and cost which created problems. There was no such project manager
appointed for managing the entire project. There was just collaboration among Arup and
Utzon (Khan, 2017). For the purpose of the supervision, a part time executive committee was
formed. The members had the lack of the technical skills. For the project team, the
government became an obstacle as the changes were made by the government during the
operations, which resulted in the delays and the cost overrun. The public was also an indirect
stakeholder as they were worried about the project success.
The problems were faced since very beginning of the project. It was protested by Utzon that
the designs for Opera House structure had not been finished. However, it was still insisted by
the government that the construction had to get started. Along with this, the requirements of
the clients related to the design were changed after the construction was over. They wanted to
construct four theatres instead of two. This had demanded the modification in the designs and
the plan in the later stage (Swmoore, 2009).
The initial financial estimation for the project was drawn for the incomplete designs and
hence later, the contractors claimed AUS $ 1.2 million more in 1962, because of changes in
designs. The first stage of the project completed in 1963 and consumed extra cost and
resulted in project delay
In the second stage, the new government stepped in. All the payments were monitored by the
new government. The architect submitted the project estimate of AUS$ 12.5 million. More
payments were delivered but no such progress in the construction was seen. Due to the cost
overrun, the government began holding back the payments and forced Utzon to resign in
1966. After that, the project was undertaken by three engineers and the second stage was
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completed by 1967 incurring AUS$ 13.2 million of cost. The new team had to carry out the
construction on the basis of the prepared structure as there were no design sketches and
complication were found by the team. This further increased the cost to AUS $85 million.
Finally in 1973, the Sydney Opera House was inaugurated after underestimates, cost overruns
and redesigns.
Discussion of standard criteria, such as those emerging in the
reference section
Roger Atkinson in his work has clearly mentioned that cost, quality and time which are also
known as the Iron Triangle are the three main components of a successful project
management. These three factors have the ability to decide over the project’s success or
failure. Time and cost factors are considered to be only guesses as they are calculated before
starting the project. Quality is something that is reflected by the attributes of the people which
keeps on changing at different stages of the project. Many other scholars have also linked
these factors with the success of project (Atkinson, 1999). Brown and Adams (2000), have
also mentioned that project success is concerned with meeting the time, cost and quality
factors of the project. Though, Atkinson and others have also suggested that apart from these
three main factors, another attribute should also be considered while measuring the success of
the project. Atkinson has suggested that stakeholders’ benefit should be the fourth attribute
and has named this combination as “The Square Route” of project management. Jugdev and
Muller are also of the view that apart from the three main factors, new factor should also be
evolved in order to measure the projects’ success. The authors have focused on the strategic
value of the project that is how the project is adding value to the business and how efficiently
it has been done (Jugdev & Müller, 2005). The performance of the project should also be
linked by the success of the project. This has the ability to improve the success of the project
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as suggested by Mir and Pinnington. These factors have been ignored by project managers
since ages and hence, it becomes necessary to consider these factors to improve the
effectiveness of the project success. This is so because these new factors are evolving in the
current generation of project management and hence requires attention (Mir & Pinnington,
2013). Project success is a combined result of project management success as well as project
product success. It is very important to develop a link between the two. This is so because it
has been seen many times that the project management fails but the project product is
successful. Project management fails because of conditions like over time taken, over budget
spent on the project, etc. Hence, considering only the traditional criteria is like using a single
constraint only to find out about the success of the project. Therefore, it has been suggested
by many that in order to evaluate the project success, it is very important that the newly
evolved constraints should be considered to get an overall result of the project success
(Westhuizen & Fitzgerald, 2004).
Critical identification and justification of the criteria you think
appropriate
Many different criteria have been developed with the evolution of the project management
and as a result, it is important that the project success measuring criteria should also be
evolved along with it. As a result it has been identified that along with the Iron Triangle that
is time, cost and budget mentioned by Atkinson, other new criteria should also be adopted to
find out that whether the project was a success or failure.
The Iron Triangle (Cost, Time and Budget)
These three factors are been considered since the evolution of project management. On the
basis of the above mentioned literature review, it can be said that these factors are a single
constraint of the project management process. These factors do not reflect a whole picture of
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the success of the project and hence, it becomes very necessary to consider other factors also.
Though, these factors cannot be totally ignored as this form the base of the project
management. Without knowing the appropriate budget, the cost allocation as well as the
quality required of the final output, it is not possible to undertake the project management
process successfully.
Stakeholders benefit
This is also one of the important factor or criteria that should be considered while measuring
the project success. This is so because the project manager, project staffs, customer –client
relationship, as well as the top management plays a very important role in evaluating the
success of the project. It is very important to know about the value that has been added by
this project to the business as well as to the clients (Thomas & Mullaly, 2008). Success of the
post delivery stage forms an important part as this will help in knowing that whether the
project has been able to deliver what was demanded or not. Participation of the stakeholders
can lead to effective decision -making in the project management process (Siles, 2018).
Assessing the time, cost as well as quality is another factor and assessing the end result is
another factor. Customers and users are an integral part of stakeholders and therefore, it
becomes necessary to find out that whether the project product is been able to satisfy the
demands of the users or not (Usmani, 2012). Hence, it is very important to keep the
stakeholders’ benefit into consideration when one is evaluating the project success.
Critical analysis of the case based on the criteria chosen
The criteria chosen are square route, iron triangle (time, cost and quality) and performance
management. It is important to consider these criteria in order to evaluate the project success.
The completion of the project within the estimated time and cost is important as it is the
measure of the project success (Caccamese, 2012) (Dobson & Dobson, 2004). The project
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that complete within the estimated cost and time provides the benefit to the project team and
the other stakeholders of the project. The quality of the project is also one of the most
important criteria to be considered (Schade, 2016). It is important to deliver the quality
project. Along with it, the benefits to the stakeholders and organization are highly important.
In order to attain the success, the effective management of the performance of the project is
also important.
In the case, it has been found that the estimated time for the project completion was 4 years
and the total cost estimated for the project was AUS $7 million. The Sydney Opera House
construction was completed after 14 years of underestimates, cost overruns and redesigns.
The estimation of the time and cost by the architect was unrealistic. It is important to estimate
the time and cost of the project in an appropriate manner. The consumption of the extra cost
and time does not indicate project as successful. In the Sydney Opera House case, the
architect made underestimation of cost and time several times. Along with this, the
interruption by the government in the first stage also resulted in delays and cost overrun.
When the architect resigned, the new team faced many problems in the quality of the project
and continued the construction on the basis of the prepared structure. Although, the process
of construction was long and consumed extra cost and time but the project was successful in
the end. The project manager is considered as the main stakeholder however, there was no
real project manager in the construction project of Sydney Opera House. In terms of user and
customers as the stakeholders, the project was successful as it was open for the public after
14 years. The government did not suffered by the cost overrun in real because the cost was
obtained by the lottery.
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Conclusion
It can be concluded that the construction project of Sydney Opera House succeeded after 14
years and several mistakes in the designing, time and cost estimations by the architect. In the
end, the user and the customers of the project were able to get to visit the Opera House. As
the time, cost and the quality of the project are the factors that are considered for the
evaluation criteria for the project success. In the case of Opera House, after the evaluation of
the project, it has been found that the project was successful for the user and customers but,
the process of the project construction was not successful because of the project cost overrun,
delays and continuous redesigning.
Suggestions or recommendations
 It is recommended that the proper estimation of the cost and time is important as it
indicates the project success. If the proper estimation of the time and cost would
have done by the architect then, the project cost overrun and delay issue could
have been avoided.
 A project manager is important for the effective management of the project and
hence, it is important to hire a project manager for ensuring the project success.
 It is important to maintain the quality of the project through the continuous
evaluation.
 It is important to consider the stakeholders of the project so that the expectation of
the stakeholders can be met.
References
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ABC Innovation, 2012. Part 2 - Engineering and Construction Chapter 20: Stage 3 – Hall,
Todd, Littlemore and Farmer. [Online] Available at:
http://theoperahouseproject.com/#!/transcripts/Stage-3-Hall-Todd-Littlemore-And-Farmer
[Accessed 31 August 2018].
Atkinson, R., 1999. Project management: cost, time and quality, two best guesses and a
phenomenon, its time to accept other success criteria. International Journal of Project
Management, 17(6), pp.337-42.
Brown, A. & Adams, J., 2000. Measuring the effect of project management on construction
outputs: a new approach. International Journal of Project Management, 18(5), pp.327-35.
Caccamese, A., 2012. Beyond the Iron Triangle: Year Zero. Project Management Institute.
Dobson, M.S. & Dobson, M.S., 2004. The Triple Constraints in Project Management.
Berrett-Koehler Publishers.
Irvine, J., 2013. Why Sydney's Opera House was the world's biggest planning disaster.
[Online] Available at: https://www.couriermail.com.au/news/why-sydneys-opera-house-was-
the-worlds-biggest-planning-disaster/news-story/9a596cab579a3b96bba516f425b3f1a6
[Accessed 31 August 2018].
Jugdev, K. & Müller, R., 2005. A Retrospective Look at Our Evolving Understanding of
Project Success. Project Management Journal, 36(4), pp.19-31.
Khan, B., 2017. Seeking project management inspiration from the Sydney Opera House.
[Online] Available at: https://www.nqicorp.com/en/2017/11/30/seeking-project-management-
inspiration-from-the-sydney-opera-house/ [Accessed 31 August 2018].
Mir, F.A. & Pinnington, A.H., 2013. Exploring the value of project management: Linking
Project Management Performance and Project Success. International Journal of Project
Management, 32(2), pp.202-217.
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MIT OpenCourseware, 2011. Project evaluation. [Online] Available at:
https://ocw.mit.edu/courses/civil-and-environmental-engineering/1-011-project-evaluation-
spring-2011/projects/MIT1_011S11_proj_ex01.pdf [Accessed 31 August 2018].
Schade, C., 2016. Disciples of the Iron Triangle: Other People's Guide to Projects and
Project Managers. BookBaby.
Siles, R., 2018. Benefits of Stakeholder Participation. [Online] Available at:
https://www.pm4dev.com/pm4dev-blog/entry/benefits-of-stakeholder-participation.html
[Accessed 31 August 2018].
Swmoore, 2009. The Sydney Opera House and Project Management. [Online] Available at:
https://strategicppm.wordpress.com/2009/09/25/the-sydney-opera-house-and-project-
management/ [Accessed 31 August 2018].
Thomas, J. & Mullaly, M., 2008. Researching the Value of Project Management. [Online]
Available at: https://www.pmi.org/learning/academic-research/researching-the-value-of-
project-management [Accessed 2018].
Usmani, F., 2012. Stakeholders in Project Management. [Online] Available at:
https://pmstudycircle.com/2012/03/stakeholders-in-project-management-definition-and-
types/ [Accessed 31 August 2018].
Westhuizen, D.v.d. & Fitzgerald, E.P., 2004. Defining and measuring project success.
[Online] Available at: https://eprints.usq.edu.au/346/1/DependentVariableArticleV8.pdf
[Accessed 31 August 2018].
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