CHAPTER 1 INTRODUCTION
2.3 Delays and the Management Factor within the internal
2.3.2 Planning 27
Management decides what has to be done or, put another way, executes the task of planning. The act of planning, in this case, means setting up the objectives, including making decisions in regard to the way in which these objectives should be accomplished and the resources that are required to accomplish all the objectives. A construction firm should plan at two different levels, i.e. at the corporate/strategic level and at project level. Corporate plans are roadmaps for the firm towards the achievement of its vision and long term objectives. Long-term objectives may include the following:
• Increased market share
• Growth in terms of projects portfolio
• Growth in terms of annual turnover
• Improved efficiency
• Improved performance and quality
• The creation and maintenance of a competitive advantage over the competition in terms of the efficient and timeous delivery of high quality projects within budget.
Project plans, on the other hand, are project specific and short term. They are roadmaps for the attainment of the objectives of a particular project. Both of the above plans are necessary for the project success in the short run and for the survival of the firm in the in the long run.
2.3.2.1 Strategic Planning
Kerzner (2001:1012) defines strategic planning as the process of formulating and implementing decisions about an organisation’s future direction. The aim is to steer the organisation towards the realisation of its vision and long-term objectives. A construction firm may, for example, wish to increase its turnover by 30% per year over the next ten years. In order to realise this goal, certain decisions must be made and implemented. The formulation and implementation of such decisions, traditionally, follows the models illustrated in figures 1 and 2.
Figure1: Swot Analysis
Source – Pearce & Robinson (2002:204)
NUMEROUS ENVIRONMENTAL OPPORTUNITIES SUCH AS
IN BOTSWANA
CRITICAL INTERNAL
WEAKNESSES SUBSTANTIAL INTERNAL
STRENGTHS
MAJOR ENVIRONMENTAL THREATS
Figure 2: Strategic Management Model
Source – Pearce & Robinson (2002:2)
COMPANYMISSION AND SOCIAL RESPONSIBILITY
EXTERNAL ENVIRONMENT
Remote Industry Operating
INTERNAL ANALYSIS
STRATEGIC ANALYSIS AND CHOICE (Creating competitive advantage at business level)
LONG TERM
OBJECTIVES GENERIC GRAND
STRATEGIES
SHORT TERM OBJECTIVES
FUNCTIONAL
TACTICS POLICIES THAT
EMPOWER ACTION
RESTRUCTURING, REFOCUSSING AND RE-ENGINEERING THE ORGANIZATION
STRATEGIC CONTROL AND CONTINUOUS IMPROVEMENT
Strategic planning should, naturally, translate into strategic choices. This involves making decisions in regard to the objectives of the firm and the strategic path the firm should take in order to achieve such objectives. The firm must then restructure, reorganise, and refocus in line with its strategic choices. A building firm that carries out and implements its strategic plans should be able to succeed in its endeavours, not only in Botswana, but anywhere else in the world. Such success should be reflected in the achievement of its objectives including completion of its projects on schedule, within budget, and to specification.
2.3.2.1.1 Standard Policies and Procedures
Strategic planning, for a construction firm, also involves the formulation and standardisation of its policies and procedures for use on each of its projects.
Procedures for repetitive tasks such as tendering, estimating, purchasing, budgeting, scheduling, quality control and reporting should be standardised. This encourages consistency in the manner in which decisions are made and is a proven recipe for success. In the absence of standard procedures and policies, managers often are inconsistent and haphazard in their decisions and the likely result is failure in the endeavours of the firm.
2.3.2.1.2 Strategic Selection of Projects
The last aspect of strategic planning for a building firm involves the strategic selection of projects. Every firm should evolve a standard method for selecting projects. Firms should only seriously tender for these projects that have been strategically selected based on the availability and quality of resources. It would be a grave mistake for a firm whose resources can only support one project of a given size to take on two or more projects simultaneously. The firm’s available resources should be matched against the prospective project characteristics such as size, quality or specification, complexity and location. The likelihood of project success, which includes completion of projects within schedule, is seriously undermined if there is a mismatch between the available resources and
any of the above mentioned project characteristics. Indeed, according to Kerzner (2001:1028), the critical constraint in this case is the availability and quality of critical resources.
2.3.2.2 Project planning
The tasks that a contractor should carry out during the planning of every building project should include:
• The compilation of the project objectives in line with the firm’s corporate objectives. Project policies and procedures based on the firm’s global policies and procedures should also be set up.
• The preparation of the building programme and the drawing up of schedule monitoring procedures for use during the implementation of the project.
• The preparation of the project budget, the expenditure curve and the setting in place of cost monitoring procedures for use during project implementation. The contractor’s budget, at this stage, should include a priced list of all the required materials and labour. Estimates of overhead costs, contingency amounts to take care of the unforeseen situations and the anticipated profits should also be included. All aspects of the project costs should then be monitored during the construction stage so as to detect any undesirable deviations and take remedial measures.
• The project quality is always as specified in the contract documents. The contractor should set up quality control procedures to be used during project implementation to ensure that the quality of the finished works conforms to the requirements of the contract.
• The preparation of a procurement schedule for the materials, plant, equipment and the consumables required for the project.
• The preparation of a list of all the required plant and equipment including the date when required. This information should then be used as a basis for their procurement, as explained above.
• The preparation of policies and procedures in regard to authorisations, approvals and project variations and Health and Safety.