FINAL EXAMINATION

City Graduate School

Course :
MPPM7103
Project Management

Date : 2nd July 2022

Time : 9.00am - 12.00pm

Duration : 3 hours

Module Lecturer : DR NOR SAIDI MOHAMED NASIR

Total marks : 100 marks (worth 40%)

Instructions to candidates:

1. Type your name and student number on the Answer Paper.

2. Answer question according to the instruction for each section.

3. All questions to be answered in PDF format and upload to LMS.

Materials allowed for this examination:

1. NIL

DO NOT REMOVE ANY PART OF THIS EXAMINATION PAPER FROM THE

EXAMINATION ROOM

Student ID : ___________________________________________________

Name : ___________________________________________________

NIRC/Passport No : ___________________________________________________

Program : ___________________________________________________
Date : 2nd July 2022 Course : MPPM7103 Project Management

CASE STUDY [Total = 100 marks]

Answer ALL of the following questions.

CASE STUDY 1

Lakes Automotive - PROJECT MANAGEMENT METHODOLOGIES

Lakes Automotive is a Detroit-based tier-one supplier to the auto industry. Between 1995 and
1999, Lakes Automotive installed a project management methodology based on nine life-
cycle phases. All 60,000 employees worldwide accepted the methodology and used it.
Management was pleased with the results. Also, Lakes Automotive’s customer base was
pleased with the methodology and provided Lakes Automotive with quality award recognition
that everyone be- lieved was attributed to how well the project management methodology
was executed.
In February 2000, Lakes Automotive decided to offer additional products to its customers.
Lakes Automotive bought out another tier-one supplier, Pelex Automotive Products (PAP).
PAP also had a good project management reputation and also provided quality products.
Many of its products were similar to those provided by Lakes Automotive.
Because the employees from both companies would be working together closely, a singular
project management methodology would be required that would be acceptable to both
companies. PAP had a good methodology based on five life-cycle phases. Both
methodologies had advantages and disadvantages, and both were well liked by their
customers.

QUESTIONS

1. How do companies combine methodologies?

2. How do you get employees to change work habits that have proven to be successful?
3. What influence should a customer have in redesigning a methodology that has proven to
be successful?
4. What if the customers want the existing methodologies left intact?
5. What if the customers are unhappy with the new combined methodology?
(20 marks)

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CASE STUDY 2

Kombs Engineering - IMPLEMENTATION OF PROJECT MANAGEMENT

In June 1993, Kombs Engineering had grown to a company with $25 million in sales. The
business base consisted of two contracts with the U.S. Department of Energy (DOE), one for
$15 million and one for $8 million. The remaining $2 mil- lion consisted of a variety of smaller
jobs for $15,000 to $50,000 each.
The larger contract with DOE was a five-year contract for $15 million per year. The contract
was awarded in 1988 and was up for renewal in 1993. DOE had made it clear that, although
they were very pleased with the technical performance of Kombs, the follow-on contract must
go through competitive bidding by law. Marketing intelligence indicated that DOE intended to
spend $10 million per year for five years on the follow-on contract with a tentative award date
of October 1993.
On June 21, 1993, the solicitation for proposal was received at Kombs. The technical
requirements of the proposal request were not considered to be a problem for Kombs. There
was no question in anyone’s mind that on technical merit alone, Kombs would win the
contract. The more serious problem was that DOE required a separate section in the proposal
on how Kombs would manage the $10 million/year project as well as a complete description
of how the project management system at Kombs functioned.

When Kombs won the original bid in 1988, there was no project management requirement. All
projects at Kombs were accomplished through the traditional organizational structure. Line
managers acted as project leaders.
In July 1993, Kombs hired a consultant to train the entire organization in project management.
The consultant also worked closely with the proposal team in responding to the DOE project
management requirements. The proposal was submitted to DOE during the second week of
August. In September 1993, DOE provided Kombs with a list of questions concerning its
proposal. More than 95 percent of the questions involved project management. Kombs
responded to all questions.
In October 1993, Kombs received notification that it would not be granted the contract. During
a post-award conference, DOE stated that they had no “faith” in the Kombs project
management system. Kombs Engineering is no longer in business.

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QUESTIONS

1. What was the reason for the loss of the contract?

2. Could it have been averted?
3. Does it seem realistic that proposal evaluation committees could consider project
management expertise to be as important as technical ability?
(20 marks)

CASE STUDY 3

Apache Metals, Inc. - PROJECT MANAGEMENT CULTURES

Apache Metals is an original equipment manufacturer of metal working equipment. The

majority of Apache’s business is as a supplier to the automotive, appliance, and building
products industries. Each production line is custom- designed according to application,
industry, and customer requirements.
Project managers are assigned to each purchase order only after the sales department has a
signed contract. The project managers can come from anywhere within the company.
Basically, anyone can be assigned as a project leader. The as- signed project leaders can be
responsible for as many as ten purchase orders at one time.
In the past, there has not been enough emphasis on project management. At one time,
Apache even assigned trainees to perform project coordination. All failed miserably. At one
point, sales dropped to an all-time low, and cost overruns averaged 20–25 percent per
production line.

In January 1997, the board of directors appointed a new senior management team that would
drive the organization to excellence in project management. Project managers were added
through recruitment efforts and a close examination of existing personnel. Emphasis was on
individuals with good people and communication skills.
The following steps were implemented to improve the quality and effectiveness of the project
management system:
 Outside formal training for project managers
 Development of an apprenticeship program for future project managers
 Modification of the current methodology to put the project manager at the focal point
 Involvement of project managers to a greater extent with the customer

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QUESTIONS

1.What problems can you see in the way project managers were assigned in the past?
2.Will the new approach taken in 1997 put the company on a path to excellence in project
management?
3.What skill set would be ideal for the future project managers at Apache Metals?
4.What overall cultural issues must be considered in striving for excellence in project
management?
5.What time frame would be appropriate to achieve excellence in project management? What
assumptions must be made?
(20 marks)

CASE STUDY 4

Packer Telecom - PROJECT RISK MANAGEMENT

BACKGROUND
The rapid growth of the telecom industry made it apparent to Packer’s executives that risk
management must be performed on all development projects. If Packer were late in the
introduction of a new product, then market share would be lost. Furthermore, Packer could
lose valuable opportunities to “partner” with other companies if Packer were regarded as
being behind the learning curve with regard to new product development.
Another problem facing Packer was the amount of money being committed to R&D. Typical
companies spend 8 to 10 percent of earnings on R&D, whereas in the telecom industry, the
number may be as high as 15 to 18 percent. Packer was spending 20 percent on R&D, and
only a small percentage of the projects that started out in the conceptual phase ever reached
the commercialization phase, where Packer could expect to recover its R&D costs.
Management attributed the problem to a lack of effective risk management.

THE MEETING
PM: “I have spent a great deal of time trying to benchmark best practices in risk management.
I was amazed to find that most companies are in the same boat as us, with very little
knowledge in risk management. From the limited results I have found from other companies, I
have been able to develop a risk management template for us to use.”
Sponsor: “I’ve read over your report and looked at your templates. You have words and
expressions in the templates that we don’t use here at Packer. This concerns me greatly. Do
we have to change the way we manage projects to use these templates? Are we expected to
make major changes to our existing project management methodology?”

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PM: “I was hoping we could use these templates in their existing format. If the other
companies are using these templates, then we should also. These templates also have the
same probability distributions that other companies are using. I consider these facts
equivalent to a validation of the templates.”
Sponsor: “Shouldn’t the templates be tailored to our methodology for managing projects and
our life cycle phases? These templates may have undergone validation, but not at Packer.
The probability distributions are also based upon someone else’s history, not our history. I
cannot see anything in your report that talks about the justification of the probabilities.
“The final problem I have is that the templates are based upon history. It is my understanding
that risk management should be forward looking, with an at- tempt at predicting the possible
future outcomes. I cannot see any of this in your templates.”
PM: “I understand your concerns, but I don’t believe they are a problem. I would prefer to use
the next project as a ‘breakthrough project’ using these templates. This will give us a good
basis to validate the templates.”
Sponsor: “I will need to think about your request. I am not sure that we can use these
templates without some type of risk management training for our employees.”

QUESTIONS

1.Can templates be transferred from one company to another, or should tailoring be

mandatory?
2.Can probability distributions be transferred from one company to another? If not, then how
do we develop a probability distribution?
3.How do you validate a risk management template?
4.Should a risk management template be forward looking?

5. Can employees begin using a risk management template without some form of specialized
training?
(20 marks)

CASE STUDY 5

Telestar International - CONFLICT MANAGEMENT

On November 15, 1978, the Department of Energy Resources awarded Telestar a $475,000
contract for the developing and testing of two waste treatment plants. Telestar had spent the
better part of the last two years developing waste treatment technology under its own R&D
activities. This new contract would give Telestar the opportunity to “break into a new field”—
that of waste treatment.

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The contract was negotiated at a firm-fixed price. Any cost overruns would have to be
incurred by Telestar. The original bid was priced out at $847,000. Telestar’s management,
however, wanted to win this one. The decision was made that Telestar would “buy in” at
$475,000 so that they could at least get their foot into the new marketplace.
The original estimate of $847,000 was very “rough” because Telestar did not have any good
man-hour standards, in the area of waste treatment, on which to base their man-hour
projections. Corporate management was willing to spend up to $400,000 of their own funds in
order to compensate the bid of $475,000.
By February 15, 1979, costs were increasing to such a point where overrun would be
occurring well ahead of schedule. Anticipated costs to completion were now $943,000. The
project manager decided to stop all activities in certain functional departments, one of which
was structural analysis. The manager of the structural analysis department strongly opposed
the closing out of the work order prior to the testing of the first plant’s high-pressure
pneumatic and electrical systems.
Structures manager: “You’re running a risk if you close out this work order. How will you know
if the hardware can withstand the stresses that will be imposed during the test? After all, the
test is scheduled for next month and I can probably finish the analysis by then.”
Project manager: “I understand your concern, but I cannot risk a cost overrun. My boss
expects me to do the work within cost. The plant design is similar to one that we have tested
before, without any structural problems being detected. On this basis I consider your analysis
unnecessary.”
Structures manager: “Just because two plants are similar does not mean that they will be
identical in performance. There can be major structural deficiencies.”
Project manager: “I guess the risk is mine.”
Structures manager: “Yes, but I get concerned when a failure can reflect on the integrity of my
department. You know, we’re performing on schedule and within the time and money
budgeted. You’re setting a bad example by cutting off our budget without any real
justification.”
Project manager: “I understand your concern, but we must pull out all the stops when overrun
costs are inevitable.”
Structures manager: “There’s no question in my mind that this analysis should be completed.
However, I’m not going to complete it on my overhead budget. I’ll reassign my people
tomorrow. Incidentally, you had better be careful; my people are not very happy to work for a
project that can be canceled immediately. I may have trouble getting volunteers next time.”
Project manager: “Well, I’m sure you’ll be able to adequately handle any future work. I’ll report
to my boss that I have issued a work stoppage order to your department.”

During the next month’s test, the plant exploded. Postanalysis indicated that the failure was
due to a structural deficiency.

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QUESTIONS

1.Who is at fault?
2.Should the structures manager have been dedicated enough to continue the work on his
own?
3.Can a functional manager, who considers his organization as strictly support, still be
dedicated to total project success?
(20 marks)

-END OF QUESTIONS-
Thank you and good luck!

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