Management Studies: analysis project

Showing posts with label analysis project. Show all posts

Technological Environment of Project

The one of the environment surroundings that influence projects is technological environment. Technology consists of skills, methods, systems and equipment. It includes inventions and innovations. It makes work more efficient.

Technology influences projects by bringing about changes in jobs, skills, life styles, products, production methods and processes. Automation, computerization, robotics, informatics, biotechnology, new materials and artificial intelligence have all influenced projects.

Factors in the technological environment consist of:

Factors in Technology Environment of Project

1. Level of Technology

The level of technology can be appropriate or sophisticated. It can be labor-based or capital-based. The level of technology influences projects.

Labor-based Technology: Human labor is mainly used for the operations.
Capital-based Technology: Machinery is mainly used for operations. Technology is represented by automation, computerization, robotization, etc. The technology can be high, intermediate or low.

2. Pace of Technology Change

Technology is a dynamic force. Its pace of change is accelerating. Projects should adapt t the changing technological forces.

3. Technology Transfer

Sources of technology can be within the organization, within the country or foreign countries. Technology transfer implies technology imported from technologically advanced foreign countries.

Technology transfer can be through:

Globalization: Global companies are the key sources of technology transfer in developing countries. The modality can be contracts, franchising, technical collaboration, joint ventures, subsidiary establishment.
Projects: Turn-key projects based on global bidding serve as a source of technology transfer.
Trade: This consists of sale of equipment or machines by the manufacturer.
Technical Assistance: Bilateral and multilateral donors under technical assistance provide international consultants who bring new technology with them.
Training and Publications: They provide opportunities to learn about new technology.

4. Research and Development (R & D)

R & D is the essence of innovation. Expectations for improved technology are increasing. Customers expect projects for superior quality which are safe, comfortable and environment-friendly.

You may also like this:

Social Environment of Project

Social Environment is refers to all the social surroundings that influence project. It consists of factors related to human relationships.

Projects operate within the society. They satisfy societal needs. Social factors influence the practices and activities of projects.

Important factors in the social environment consist of demographics, social institutions, pressure groups and social change.

Factors in Social Environment of Project

Factors in Social Environment of Project
i) Demographics: Demography is concerned with human population and its distribution. Demographic forces that affect labor availability in projects are:

Size, distribution and growth of population in project area.
Age mix of population
Migration of population
Foreign employment policies.

ii) Social Institutions: They consist of reference groups and social class:

Reference Groups: They consist of groups that have a direct or indirect influence on the attitudes and behavior of ties or professionally successful people.
Social Class: It is the rank within a society determined by its members. It can be classified into upper, middle and lower. Members of a class share similar values, interests and behavior. Project activities are influenced by classes in the society. Projects need to tailor their activities to meet the needs of specific social classes.

iii) Pressure Groups: They are special interest groups. They use the political process to advance their position on an issues of social concern. They pressurize and lobby government and projects to protect their interests through change in laws, policies and practices.

Pressure groups can be related to consumerism, environment protection, human rights, women rights, good governance etc.

iv) Social Change: Change is making things different. Social change implies modification in relationships and behavior patterns in a society. Life style and social values promote social change.

Life style is a person's pattern of living reflected in his activities, interests and opinions. It affects product choice.

You may also like this:

Economic Environment (Economic Conditions)

Economic conditions indicate the health of the economy in which the projects operate. The factors of economic conditions are:

Income: The level and distribution of income affect expenditure, saving and investment. They together influence the economic conditions of projects. Nepal has a per capita income of US $ 280. The GDP growth rate is very low.
Business Cycles: The stages of business cycle can be prosperity, recession and recovery. They affect the health of projects.
Inflation: It is rise in price level. It influences costs, price and profits of projects.
Regional Economic Groups: They promote cooperation among member countries for projects. They provide opportunities to member countries and threats to non-member countries.

You may also like this:

Economic Environment (Economic Policies)

Policies are guidelines for action. Economic policies of the government significantly influence and guide projects.

Key economic policies influencing projects are:

Monetary Policy: It is concerned with money supply, price stability, interest rates and credit availability. Cheap money reduces project cost costs, dear money increases project costs.
Fiscal Policy: It is concerned with the use of taxation and government expenditure to regulate economic activity. Taxation on income, expenditure and capital exerts an important influence on project decisions. Government purchases, subsidies and other transfers also influence the activities of projects.
Industrial Policy: It is concerned with industrial licensing, location, incentives, facilities, foreign investment, technology transfer and nationalization. It greatly influences the investment climate for projects.

You may also like this:

Economic Environment (Economic System)

Economic environment refers to all the economic surroundings that influence project activities. It consists of economic parameters.

Important components of economic environment are :

Economic System

Economic system determines the scope of private sector participation and market forces. The models of economic system are:

Free Market Economy: This system is based on private sector ownership of the factors of production. Profit serves as the driver of economic engine. The comparative market mechanism guides project decisions. There is freedom of choice. Individual initiative is encouraged.
Centrally Planned Economy: This system is based on public ownership of the factors of production. The economy is centrally planned, controlled and regulated by the government. There is no consumer sovereignty. Public enterprises play a dominant role in projects.
Mixed Economy: This system is a mix of free market and centrally planned economies. Both public and private sectors coexist. The public sector has ownership and control of basic industries including utilities. The private sector owns agriculture and other industries but is regulated by the state.

You may also like this:

Legal Environment

Legal environment refers to all the legal surroundings that affect project activities. It consists of an array of acts, rules, regulations. It defines what projects can and cannot do.

Legal environment is concerned with

Protecting the rights and interests of clients, contractors, employees and the society.
Providing grounds on which project activities can be carried out. It encourages or restrains activities by providing facilities to law abiders and giving punishment to law breakers.
Regulating activities through legal provisions relating to wages, labor relations, foreign investment, foreign exchange, environment protection, habitat protection, project location, imports, exports and taxation etc.

Projects must ensure that their activities conform to the laws of the land. They must comply with legal provisions in force.

The important legal factors that influence projects are given:

Factors in Legal Environment of Project

Law: It consists of an array of laws enacted by the Parliament. It also protects the rights and interest of project participants.
Courts of Law: Courts are institutions established by law to solve disputes. Nepal has a three-tier court system. The Supreme Court is at the national level and is the highest level of judiciary. The courts of Appeal are at the middle level. The 75 district courts are at district level.
Law Administrators: Various law enforcement agencies ensure implementation of laws and the judgements of the courts of law. Government agencies, lawyers, police and jails play an important role in law administration.

You may also like this:

Political Environment of Project

Political environment of project is related to the management of public affairs. The important factors that influence projects are:

Factors in Political Environment of Project

i) Political System

It consists of ideological forces, political parties, election procedures and power centers. A stable, efficient and honest political system is essential for projects. Political instability resulting from civil war, emergencies and terrorist activities adversely effect the projects.

ii) Political Institutions

They consists of legislature, executive and judiciary.

The legislature (parliament) enacts laws that guide project activities.
The executive (Government) implements the decisions of the legislature and lays down policies, regulations and procedures that influence the activities of projects.
The judiciary (Courts of Law) servers as watchdog and their rulings influence project practices. It settles disputes.

iii) Political Philosophy

It can be democratic, totalitarian or a mix of both. Democracy vests power in the hands of people. Totalitarian vests power in the hands of the state. A mix of both is based on power sharing.

Political philosophies influence project activities. Democracy provides greater role to the private sector. Totalitarianism provides greater role to the state. Mixed philosophies provide roles to both private sector and state.

You may also like this:

Project Team Building

Projects involve more than one person. Team work is crucial to achieve project success. Team building is an ongoing process in projects.

A work group is a group that interacts primarily to share information and make decisions to help each member perform. It s performance is summation of what its members perform as individuals.

Related Topic: Concept of Teams and Types of Teams

A team is a group of people performing tasks together. Their individual efforts result in positive synergy through coordinated efforts. Its performance is greater than the summation of what its members perform as individuals. The whole is greater than the sum of its parts.

Work Group Work Team

2+2=5

Synergistic efforts are always more than the individuals efforts. If all individuals work separately then the overall efforts will be 2 + 2 = 4. If same work is performed by the efforts of group or team then it produce 2+2=5 output.

A team has the following characteristics:

Its goal is collective performance. It is guided by specific team objectives.
The outcome is positive synergy through collective outputs. It measures performance directly in terms of collective team effectiveness.
The leadership role share shared. Team members interact and are interdependent on each other.
The accountability is individual and mutual.
The member skills are multiple and complementary.
It discusses and decides through active problem solving meetings. It does real work.
Teams build esprit de crops, build synergy, permit faster decision making, facilitate workforce diversity, increase performance, promote creativity and manage change.

You may also like this:

Part of Functional Organization Structure

The part of functional organization structure is generally suitable for small projects. The project tasks are performed as part of functional departments. Production department, Marketing department, Finance department, Human resource department are some of the functional departments that are included in the functional organization. Authority and responsibility is divided into line and staff in hierarchical order. The line authority will decide where as the staff authority will advise in such organization.

Fig. Project Organization as Part of Functional Organization Structure

Advantages:

This organization structure is flexible in the use of existing human resources. The expertise can be utilized by different projects.
This organization structure will develops expertise and specialization in human resources.
Functional departments can provide knowledge, experience and technical skills to the projects if necessary.

Disadvantages:

There is no clear cut responsibility for the project and no effective mechanism for coordination and integration of resources that are available in the organization for the project. Only functional divisions focus on functional activities.
Since there is no clear cut responsibility and a lot of hierarchy, there is delay in decisions. Due to delay in decision making, project performance is adversely affected.
There is communication gap between top-down or bottom-up members.

You may also like this:

Pure Functional Organization

Pure functional organization is traditional type of structure where total work of organization is divided into various functional department or units as per requirement for making easy management. The required departments are handled by functional managers. A project is assigned to functional department as a result all the project activities are performed under the control of functional manager in functional department. The project is also headed by concerned department manager and the manager can hire required specialist for project purpose.

In this form of the project, a person is generally appointed as a project coordinator who acts as a staff manager to facilitate coordination of line management in functional department. S/he provides valuable information, supports and advices on the time to the concerned managers relating to the project. In this organization, better technical control is possible, specialist can be grouped to share knowledge and responsibilities and they are used for different project at the same time.

This type of structure is more appropriate for small project.

Pure Functional Organization

Advantages of Pure Functional Organization:

It provides maximum flexibility in use of existing staff.
It develops expertise and specialization in human resources.
It makes possible better supervision and control of the project.
It facilitates the mass production.
The functional department provides technical and other support for project success.
Individual experts can be utilized by different projects.

You may also like this:

Project Organization

Organization is the structure of the relationship among the position and jobs which is built up for realization of common objectives. It facilitates the implementation by arranging all the activities in a suitable manner for the use of management control.

Project organization can be defined as an engine of project management because it lays down the rules and regulation for the smooth operation of activities and administration of the project, outlines the relationship between project participants, establishes authority and responsibility relationship, indicates communication lines and channel between project manager with project team and external stakeholders and provides basis for integration and coordination of human and non-human resources in the project.

Project organization is superior than traditional organization. Since traditional form of organization is characterized by superior subordinate relationship, departmentalization, formal communication, chain of command, rigid etc. It is not suitable for handling the non repetitive, unique and complex project activities in a coordinated manner according to changing environment. Therefore, project organization is established to avoid such weakness of traditional organization for proper implementation of the project. Project organization is action oriented and flexible. It is an adhoc (temporary) organization that ceases to exist once the project is terminated.

Related Topics:

Project Analysis : Feasibility Analysis

Feasibility Analysis

Feasibility analysis is the process of determining the ability to implement the proposed project. It is needed to take the final decision whether the proposed project is appropriate to commit (invest) resources or not. It examines the viability of the project through detail investigation. For this purpose, it requires a multi-disciplinary team consisting technician, economist, environmentalist, managerial experts, sociologist, financial analyst who examine the proposed project from different angles like technical, environmental, managerial, marketing, economics, financial etc.

Since feasibility analysis is a series of studies and investigations to examine the project and its capacity to meets the objectives, the project is undertaken to implement if the analysis gives green signal of project success.

Technical Analysis

It is considered as main foundation of feasibility analysis. If technology is sound, project objectives can be achieved within constraint. So in this analysis, technical viability of the proposed project is studied where feasibility of meeting, technical solutions are addressed, availability of alternative technical solution are examined, viability of project design is investigated, legal provision and technical collaboration requirements are analyzed. It covers the following studies:

Choice of technology.
Design requirements.
Human resource requirement.
Size, location and geology.
Technical risk.
Legal provision related to technical collaboration.

Marketing Analysis

It refers to the study of marketing capability of the proposed project in terms of ability to satisfy the customer requirements. Various aspects relating to market are studied and analyze in this section which focus on:

Production capacity of the project.
Aggregate demand of customer.
Consumption trend.
Distribution channel.
Level of competition.
Sales forecasting and estimated revenue.
Availability of required raw materials.
Quality standard.
Cost and price structure.
Marketing policy and strategies.

Environmental Analysis

It is conducted to ascertain the impact of the project on environment and capacity of the environment to support the project. It means it examines both the positive and negative impacts of the project. It focuses on the following area to know the feasibility of the proposed project.

Environmental Suitability:

Capacity of environment to support the project.
Resource management aspect.
Environment impact assessment (guidelines issued by government)

Environmental Impacts:

It examines the positive and negative impact of the project on the environment.
It focuses on the impact of the project on flora-fauna, quality of air and water, scenic beauty, society, noise pollution, soil erosion, resource depletion.

Economic and Financial Analysis

Economic Analysis assesses the economic viability of the proposed project. Cost-benefit analysis is used to find out the net contribution of the project to the society and the economy. The assessment of the net contribution of the project is prime analysis in the economic analysis. It is used in private as well as in public project differently.

For a private project, cost-benefit analysis is applied to assess commercial profitability. For a public project, the analysis is use to assess the social profitability in terms of contribution to national economy by achieving the goals of poverty.

Financial analysis is conducted to measure the financial sustainability of the project. It studies the adequacy of needed fund and proper settlement of the fund. Generally the techniques of capital budgeting are used in these analysis. However the areas of focus in this analysis are:

Total capital requirement
Source of fund
Projected cash flow
Accounting and reporting system
Projected profitability
Break Even Point (BEP)

Managerial Analysis

Managerial Analysis is done to examine the managerial or institutional viability of the project. It studies the adequacy of the management system to direct and control the project, political and legal acceptability of the project. The area of the focus in these analysis are as follows:

i) Form of the project Organization:

Appropriateness of the organizational structure.
Relationship of authority and responsibility.
Communication system.
Flexibility.

ii) Personnel:

Personal availability and their experience, qualification.
Job description.
Need of training.

iii) External linkage/ Institutional Relationship:

Relationship with stakeholders.
Relationship with functional department.
Relationship with regulatory agencies.

iv) Implementation Plan:

Required cost and resources.
Estimated time schedules.
Quality standard.
Use of planning and controlling techniques.

You may also like this:

Pages

Work Group Work Team

2+2=5

Feasibility Analysis

Technical Analysis

Marketing Analysis

Environmental Analysis

Economic and Financial Analysis

Managerial Analysis