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Go to him and explain how serious your problem is and that it will have to be
settled before the project is completed.”
Later in the week in the lunchroom she overheard one consulting contractor
bad-mouthing the work of another—“never on time, interface coding not tested.”
In the hallway the same day an accounting department supervisor told her that
tests showed the new software will never be compatible with the Georgia division’s
accounting practices.
While concerned, Karin considered these problems typical of the kind she had
encountered on other smaller software projects.
FOUR MONTHS LATER
The project seemed to be falling apart. What happened to the positive attitude
fostered at the team-building workshop? One contractor wrote a formal letter
complaining that another contractor was sitting on a coding decision that was
delaying their work. The letter went on: “We cannot be held responsible or liable
for delays caused by others.” The project was already two months behind, so problems
were becoming very real and serious. Karin finally decided to call a meeting
of all parties to the project and partnering agreement.
She began by asking for problems people were encountering while working on the
project. Although participants were reluctant to be first for fear of being perceived as
a complainer, it was not long before accusations and tempers flared out of control. It
was always some group complaining about another group. Several participants
complained that others were sitting on decisions that resulted in their work being
held up. One consultant said, “It is impossible to tell who’s in charge of what.”
Another participant complained that although the group met separately on small
problems, it never met as a total group to assess new risk situations that developed.
Karin felt the meeting had degenerated into an unrecoverable situation. Commitment
to the project and partnering appeared to be waning. She quickly decided
to stop the meeting and cool things down. She spoke to the project stakeholders:
“It is clear that we have some serious problems, and the project is in jeopardy. The
project must get back on track, and the backbiting must stop. I want each of us to
come to a meeting Friday morning with concrete suggestions of what it will take
to get the project back on track and specific actions of how we can make it happen.
We need to recognize our mutual interdependence and bring our relationships
with each other back to a win/win environment. When we do get things back
on track, we need to figure out how to stay on track.”
1. Why does this attempt at project partnering appear to be failing?
2. If you were Karin, what would you do to get this project back on track?
3. What action would you take to keep the project on track?
Buxton Hall
Chad Cromwell, head of university housing, gazed up at the tower at Buxton Hall
and smiled as he walked toward the landmark building.
Buxton Hall was built in 1927 as a residential complex for over 350 students at
Pacifica State University. At the time Buxton was the tallest building on campus,
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and its tower had a panoramic view of the athletic fields and coastal range. Buxton
quickly became a focal point at Pacifica State. Students perched on the tower
dominated the campus during the annual spring water fight with their huge slingshots
and catapults. The first intranet on the Pacific coast was created at Buxton
that linked students’ computers and allowed them to share printers. Around the
1970s, some student artists began the tradition of painting their room doors.
Whether a Rolling Stones logo or Bugs Bunny on a skateboard, these colorful
doors were an artistic legacy that caught the attention of students and faculty.
Buxton Hall served as a residence hall for the university for many years, but
time was not kind to the stately building. Leaks destroyed plaster in the interior.
Wiring and plumbing became outdated and so dangerous that the building was
deemed unsafe. Buxton Hall’s doors were closed to students and windows boarded
up at the end of the 1996 spring quarter. For 10 years Buxton sat silent and over
time became a symbol of the general decline of Pacifica State. Now thanks to
state bonds and generous contributions, Buxton Hall was about to be reopened
after a $20 million renovation.
18 MONTHS AGO
Chad and key representatives from university facilities were engaged in the second
of a two-day partnering workshop. Also in attendance were managers from Crawford
Construction, the chief contractor for the Buxton renovation project, as well
as several key subcontractors and architects from the firm of Legacy West. During
the first day a consultant ran them through a series of team-building and communication
exercises that accentuated the importance of open communication,
principle negotiation, and win/win thinking. The second day began with the
“project from hell” exercise, with each group describing the worst project they had
ever worked on. Chad was surprised that the people from Crawford and Legacy
West descriptions were very similar to his own. For example, each group talked
about how frustrating it was when changes were made without proper consultation
or costs were hidden until it was too late to do anything about them. This was
followed by a discussion of the best project they had ever worked on. The consultant
then asked the groups which of the two they wanted the Buxton project to be.
A genuine sense of common purpose emerged, and everyone became actively engaged
in spelling out in specific terms how they wanted to work together. The
session concluded with all of the participants signing a partnering charter followed
by a picnic and a friendly softball game.
12 MONTHS AGO
Chad was on his way, with Nick Bolas, to meet Dat Nguyen, the Crawford Project
Manager, on the third floor at Buxton tower. Dat had contacted him to discuss a
problem with the tile work in one of the communal bathrooms. Dat’s people had
completed the work, but Nick, who was a Pacifica facilities manager, refused to
sign off on it claiming that it was not up to spec. After a 24-hour impasse, the
Crawford foreman exercised the escalation clause in partnering agreement and
passed the issue up to management’s level to be resolved. Dat and Chad inspected
the work. While both agreed that the job could have been prettier, it did meet
specification and Chad told Nick to sign off on it.
Chad met Dat again later in the day at the weekly Buxton status report meeting.
The meeting kicked off with a brief review of what had been accomplished
Chapter 12 Outsourcing: Managing Interorganizational Relations 447
during the past week. Discussion centered on the removal of elm trees. Alternative
strategies for dealing with the city inspector, who had a reputation of being
a stickler for details, were considered. The project was two weeks behind schedule,
which is an important issue since it was imperative that the building be
ready for students to move in at the 2008 fall term. The project was also on a
very tight budget, and the management reserve had to be carefully administered.
Renovation of existing buildings was always a bit of a gamble, since you never
knew what you would find once you began tearing down walls. Fortunately, only
small amounts of asbestos were found, but rot was much more severe than
anticipated.
The meeting included a partnering assessment. The results of a Web survey
filled out by all the principals were distributed. The results revealed a dip in the
ratings between the Crawford foremen and university officials regarding timely
collaboration and effective problem solving. One of Chad’s people said that the
primary source of frustration was Crawford foremen failing to respond to e-mail
and telephone messages. Dat asked for the names of his people and said he would
talk to each of them. The Crawford foremen complained that the university officials
were being too nit-picky. “We don’t have the time or money to do A1 work
on everything,” argued a foreman. Chad told Dat and his people that he would
talk to facilities guys and ask them to focus on what is really important.
6 MONTHS AGO
The project status report meeting started on time. Crawford had been able to
make up for lost time, and it now looked like the building would open on time.
Chad was glad to see that the partnering assessment had been positive and steady
over the past month. The big issue was the surge in costs consuming all but
$50,000 of management reserve. With six months to go everyone knew that this
would not cover all the change orders needed to have the building ready. After all,
there was already $24,000 worth of change orders pending.
Chad looked across the table and saw nothing but grim faces. Then one of the
Crawford foremen proposed postponing treating all of the exterior walls. “Instead
of cleaning and preserving the entire brick building, let’s only do the front entrance
and the North and South walls that the public sees. We can just refurbish
the interior court walls as well as the West side. This would be adequate for at least
eight years, in which time money should be available to complete the job.”
At first Chad didn’t like this idea, but eventually he realized that this was the
only way they could have the building ready for the students. Friendly arguments
broke out over which exterior segments needed the full treatment and which ones
didn’t. The whole team ended up touring the outside of the building identifying
what kind of work needed to be done. In the end, only 70 percent of exterior brick
walls were reconditioned according to plan with a savings of over $250,000. While
this boost to the reserve would still make things tight everyone felt that they now
had a fighting chance to complete the project on time.
TODAY
As Chad mingled with a glass of champagne, no one talked about the walls that
still needed to be refurbished—tonight was a night to celebrate. All of the major
participants and their spouses were at the party, and the university was hosting a
five-course meal at the top of the tower. During the toasts, jokes were exchanged
448 Chapter 12 Outsourcing: Managing Interorganizational Relations
and stories told about the ghosts in the west wing and the discovery of a dead
skunk in the south basement. Everyone talked about how proud they felt about
bringing back to life the grand old building. More than one person mentioned
that this was much more satisfying than tearing down an old relic and constructing
a new building. The president of the university concluded the festivities by thanking
everyone for their hard work and proclaiming that Buxton would become a
bright, shining icon for Pacifica State.
1. How successful was this project?
2. What best practices were evident in the case? How did they contribute to project
objectives?
Goldrush Electronics Negotiation Exercise
OBJECTIVE
The purpose of this case is to provide you with an opportunity to practice
negotiations.
PROCEDURE
STEP 1
The class is divided into four groups, each comprising the project management
group for one of four projects at Goldrush Electronics.
STEP 2
Read the Goldrush Electronics “Background Information” section given below.
Then read the instructions for the project you represent. Soon you will meet with
the management of the other projects to exchange personnel. Plan how you want
to conduct those meetings.
BACKGROUND INFORMATION
Goldrush Electronics (GE) produces a range of electronic products. GE has a
strong commitment to project management. GE operates as a projectized organization
with each project organized as a fully dedicated team. The compensation
system is based on a 40 1 30 1 30 formula. Forty percent is based on your base
salary, 30 percent on your project performance, and 30 percent on overall performance
of the firm.
Four new product development projects have been authorized. They are code
named: Alpha, Beta, Theta, and Zeta. The preliminary assignment of personnel is
listed below. You are assigned to represent the management of one of these projects.
The policy at GE is that once preliminary assignments are made project
managers are free to exchange personnel as long as both parties agree to the
transaction. You will have the opportunity to adjust your team by negotiating
with other project managers.
Case
