Question

1. You are a project manager at a construction company that specializes in building office buildings. You were approached by a representative of a company that was interested in your company’s services. He told you that their company was growing and they decided to build a new office building to address their needs. Then he told you that they already started the process with another construction company. They signed a contract with the other construction company and they started the building process.  Unfortunately, the other construction company experienced financial problems and went out of business. Now they were facing a problem. They have already sold the old office building and committed to a date they would move out. They asked you for a proposal for completing the building process.

As a project manager, you realized that it could be a very good opportunity. This is a win case for you and a lose case for them. Since they must move out of their old office building, they are probably very vulnerable.  Therefore, you can inflate the price, compromise on the specifications and still get the job. You think about how impressed your boss will be.

How will you handle this case?  What will you offer the potential client with respect to the price for completing the project and the specifications you will guarantee?  Please present the different alternatives you have, explain the advantages and disadvantages to each alternative, select the alternative you recommend, and justify your recommendation.

Answer 1

Alternatives that can be offered:

Alternative 1. Full construction works with the demolition of older project and initiation of a new office project according to the planning and styles of the new construction firm.

This alternative can help to stand out the qualities and offering of the new construction firm and their expertise. To build brand goodwill and maintain exclusive working approach, this alternative gives the message of a strong reputation. This might cause more financial implications for the client but this might help them to receive exclusive services offered by the new construction firm. A constructing firm has its own portfolio of service offering and the reason they offer such service are due to the fact that with the years of business, they have attained a level of expertise in their portfolio of service offerings.

Advantages:

a) To select any type of office construction styles offered within the portfolio of the new construction firm.

b) With time constraints and urgency of shifting, an extra premium on the project budget can be charged.

c) To start the project from scratch and remove the issues from the previous construction.

d) To improvise the construction materials and aesthetics which were missing in previous construction.

Disadvantages:

a) Very expensive on the financial implication for the clients.

b) The demolition process and new construction will take a lot of time.

c) The opportunity cost loss due to prolonged period of office construction

Alternative 2. Moving on with completed rooms and cabins and constructing the work in progress materials from new perspective according to the new construction firm.

This can lead to the compatibility issues with the older construction material, style and type of construction. No client wants their properties at the same location to be built in two separate ways. However, with the time constraints, it is difficult to survey the quality and form of construction materials used and take those inputs to build from a new prospect supporting the earlier work along with the new construction. This can be most economical with respect to the financial implications but it could result in not so attractive piece of construction on the benchmarks of office buildings.

Advantages:

a) The best approach in this situation.

b) Least time-consuming option for the remaining office construction works.

c) Not much of financial implication for the client.

Disadvantages:

a) Two different types of office construction styles will not look so good on office aesthetics.

b) The new construction company will charge a premium for compatibility issues of construction with the new project.

Alternative 3. Matching the construction design with previous setups and complete the remaining construction the same the previous firm was offering.

This alternative of construction can be very complicated as the approached new construction firm doesn't need to be expert in the same type of construction patterns and styles of the older firm. This provides a good chance for the new firm to charge inflated budget of construction for matching the type of construction of the older firm. However, this method can be tricky for a new construction firm as well. The type of arrangements and extra inputs required can be difficult to manage for the new construction firm. The types of equipment of construction might be different and exclusive to older firms. This alternative can be complicated depending upon the compatibility issues from the older firm methods of construction.

Advantages:

a) Completion of the project what was required and expected in the first place itself.

b) Uniform style of construction works for the entire office without any construction deformities and differences.

Disadvantages:

a) A very high premium can be charged with the client to complete the previous construction project with the way it was originally anticipated.

b) To match the earlier construction, it might take a longer time than previously estimated time of completion.

Recommendation:

2nd Alternative can be suitable for the new construction firm and the client as the most vital factor here is time constraint. The client doesn't have much time to wait for an entirely new or entirely previous anticipated type of office construction. The client will get the new offices soon with this approach. Now, from the new construction firm's perspective, they can charge a premium to complete construction at an accelerated rate and to make the older construction to be compatible with the new planning of office construction. This is a complex process and the complex process yields more benefits and revenues for the construction firm.