Causes of failure of Projects

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    Management
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    Assignment
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    Undergraduate
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5Causes of Failures in Large Construction Projects

Causes of Failures in Large Construction Projects

Table of contents

3Introduction

3Background and justification

4The research question

4The main question

4Sub-Questions

5Literature Review

10Conclusion

11References

Main Causes of failures in large construction projects

Introduction

Construction industry plays an important role in the growth of a country both economically and socially. Construction provides necessary infrastructure such as schools, roads, and other basic facilities. It is, therefore, important to meet estimated time, budget and quality to construction projects for its success. There have been many project failures in construction departments. Project failure is the inability to meet the objectives and goals of a project. If a project fails to meet the set time, budget and quality work, the project has associated with failure of many issues. There are various causes of project failure, and each failed project has different failure issues. However, most failed projects share a common set of issues. These issues may include control management, risk management, and communication issues. The objectives of a construction project have linked with the overall goals and strategy of the organization including the owner of the construction, project manager, and contractors. Constructing and managing massive construction can be difficult as they are complicated and quite dynamic. Public project management responsibility is to ensure that the project is a success.

Background and justification

The importance of the research is to identify and classify common critical causes of project failures in large construction projects. The information gathered will benefit construction practice by offering suggestions when it comes to the selection of project manager and teams for construction projects. It will also identify potential points of construction failure. Thus the appropriate measures can be taken to help in the success of the project. This research will also provide thoughts and insights about theories which is about construction project management to a student.

Identifying common failures large building works risk, it will help the contractors, clients and project managers’ work on their association and work as a team for the success of the team. They should understand that an excellent cooperation between a project manager and his team members improves their efficiency and productivity leading to improved functionality the entire team. It is beneficial for a successful construction project that the contractors, the project manager, and the client interact freely (Bourne 2016). Teamwork is assurance of a successful project. An example of a failed project is the British Petroleum. There was a situation of BP Oil spill which resulted as a consequence of the project failure (Abbasi et al. 2014). Many reasons were highlighted to explain why the project failed. Reasons were poor risk management, lack of planning, undermining the situation, slow response in a critical situation, lack of timely decisions and extreme geographic location. This situation of oil spillage led to some strategic management decisions that would lead to a better solution of the issue in the future. Some of the recommendations suggested for British Petroleum were training employees before starting the project according to their job responsibilities. Training of employees will ensure they perform their duties in the right manner. Another recommendation was that the project manager and the upper-level manager (owner) should work cooperatively to ensure that all the required standards have fulfilled. Lastly, a company should have enough experts who are running the project, incompetent workers will result in the failure of the project. Overall according to British Petroleum situation of oil spill main causes of project failure is caused by underperformance (Abbasi et al. 2014).

The research question

The research question will guide the research scope. The paper will have main research question and sub-questions. The research questions of the study are as follows;

The main question

What are the common causes of failures in large construction projects?

Sub-Questions

What is the responsibility of project manager on the failure of construction projects?

What are the general economic conditions that result to the failure of construction projects?

What causes the failure of contractors to deliver great performance in large construction projects?

Literature Review

Frequent design changes and poor design capacity

Inflation can cause material costs to increase, the project manager can make an inaccurate material estimation, or the contractors might have frequent design changes. Most organizations have more project initiatives that can be hard to fulfill. Previous research by Sha’ar et al. (2016) on design-construction interface problems in big building constructions projects identified frequent last minutes design changes as a cause of failure. Numerous design changes and poor design capacity causes the failure of the project. They further argued that unnecessary and frequent design changes occur when a scope creep in the project. Scope creep is an increase of the planned issues to deliver without an increase in resources or time. These causes frequent design changes that will suit the allocated time and resources. For the success of the project, the management should be flexible in case of any changes that may occur within the project process. Project managers should have a contingency plan which should be used to manage all expectations and thus no frequent design changes (Arashpour & Arashpour 2015).

Lack of ability, knowledge and experience to manage large construction projects

According to Nguyen and Chileshe (2013) in their article about critical factors causing failure construction projects in Vietnam, project manager plays a crucial role in construction projects or any organization. Being a project manager can be challenging, especially if the job one per taking is the first contract. Therefore, one should, therefore, obtain a copy of his job description and clarify goals, priorities, and expectations with the owner and from identified and trusted managers. Deficiencies in project management include improper planning, lack of a proper project structure, and insufficient methods or lack of knowledge on the project. Assigning a person to management role who does not match education and experience will be incapable of managing a project.

They further say that managers without adequate experience will have a lot of responsibilities when given a project and there is a probability that they fail. However, not all fail, challenges are not wrong, but the owner of the construction should not make the challenge beyond the reach of the manager lacking experience. A project managers will prevent the failures if they communicate and collaborate with the team. A closer collaboration with the client is most likely to successes because they all have a common target plan and planning on the budget will be easier having common goals.

Ali (2010) in his research suggests that it is advisable if the project manager is inexperienced to have collaboration with the contractors, engineers, surveyors and the owner. Cooperation between the employer and client, leads to better opportunities for successfully developing project as well as functional orgnanisations. Collaboration creates trust which further creates transparency throughout the construction project. Similarly, a brilliant partnership between the project managers and contractors also increase the odds of the project achieving the desired objectives.

Project manager influence those around them during the construction project, therefore, they act as the backbone of the success of the project. They manage operations of the workplace ensuring production and quality targets achieve realized. As a project, one has the impact on welfare and safety of all employees, communication between the owner and the contractors, work culture and productivity in the area of work. Therefore, supervisors have operational, leadership and communication roles to play. Poor communication management and lack of teamwork will lead to failure of the project as there will be no linked network among the team.

Poor performance of contractors and incompetent designers

Some of the failures that the project incurs are due to the incompetence on the part of the contractors. This could be due to poor motivation by the management to the workers, lack or inadequate directives to contractors and lack of trust among workers at the construction project site. The best-known project managers, will deliver on time and within budget without constraints and meet the client’s demands argue Adnan et al. (2014). In their research, they further say that leadership is imperative to the success of a project. Public project management aims at ensuring the project is a success.

Contractors are very vital when it comes to construction projects, the manager might be the one controlling the whole project but without the contractors, there is no workload. The contractors, therefore, need motivation and appraisal from the project managers. Occasional project team motivation between the project manager and contractors will generate trust. Contractors will feel appreciated for their work and will, therefore, work harder at the planned time and improve their performance (Adeyemi & Masalila 2016).

Work flow variability

According to Arashpour (2015) on the research about the analysis of workflow variability and its impacts on productivity and performance in the construction of multistory buildings show that fluctuating work quantities have an influence on the outcome of a project. Lack of a stabilized workflow can reduce the performance of contractors causing a failure in the construction project. Working schedules should be planned and timely to keep the control construction activities for best outcomes. Every construction project should have a project control system. The project control section should have staffs with the relevant knowledge about the field operations.

A project is likely to fail if the managers fail to interact and influence the teams, both the employee and the employers positively. The project manager has to attract all the people involved in the project on their side. Reputable project managers deliver on their commitment within the deadlines. They also stick within the budget limitations. Some of the ways project failures in engineering management are preventable including proper planning regarding funds and timeframe (Arashpour & Arashpour, 2015).

Poor estimation

Most of the large projects fail due to cost and time overruns. Naeem Ejaz et al. (2013) concluded that the success of a construction project relies on the quality of the project control systems and the team assigned. Project controls system deals with the schedule, costs, and material control which are all interrelated. Cost control budgets expenditures for the purpose of providing valuable cost data for future projects planning. The failure of the project involves poor schedule management, cost, and quality management. Cost overruns, the inability of the client to reach the required cash flow and time overruns contribute to construction failures. Cost overruns results when construction projects fail to achieve a cost effective performance (Alzebdeh, Bashir & Al Siyabi 2015). When a project fails to achieve its plan, project managers will want to review the plan to find out what could have possibly gone wrong.

Causes of failure of Projects

Figure 1: An illustration of causes of cost overruns in large construction projects.

Poor planning process and project planning

Previous research by Enshassi and Mosa (2015) suggest that one major cause of project failure in construction are mainly due to poor planning. Poor planning can be as a result of poor communication channels between the project team and project manager. Failure to plan causes disorganization. Some project managers may opt to dive into the execution of work without first clearly thinking about it. It is the responsibility of the project manager to provide an effective plan. Planning and construction scheduling is a major management function for successful project implementation. Planning involves organizing, control, and leading which is very effective in management. Working schedules should be planned and timely to keep the control construction activities for the best outcomes. Working under excessive schedule pressure often causes failure in many projects. There should also be a positive coordination and interaction between the expediting and procurement personnel which should be maintained throughout the process of the construction project. The project manager should break a large scale master plan into manageable ones that can be delivered without much struggles. Poor project planning mainly results to underutilization of some contractors while some are overloaded. This results in degraded performance especially in critical areas of the project according to research by Sears et al. (2015).

Lack of financial capacity of the client (owner)

Clients should fulfill payment obligations to contractors, surveyors, project managers and other stakeholders involved in the project. Lack of financial capacity can impair the stakeholders’ ability to finance and perform to the next stage. Clients should merge all financial resource requirements through the use of progressive payment plans. The client should also fulfill their obligation of paying the contractors and project manager by creating cash flow plans for the construction projects to avoid any inconveniences. Having adequate cash flow arrangements will enable the client to hire highly experienced managers who offer advice on the allocation of financial resources (Larsen et al. 2015).

Delays in payments

Financial-related factor such as delay in payments is one of the critical factors of project failure. Construction cost may increase where the estimation of materials was poorly calculated causing an interruption of cash flow mechanism. This disruption causes delays in payment, and the contractors might lack resources to carry on the work. Without enough money, it will be report of shortage in equipment operators, skilled engineers or surveyors. If the client delays payments to contractors may cause the contractors to deliver poor performance. The contractor may also lack the ability to finance the next process of project implementation.

Conclusion

Based on this research paper a lot of project failure causes are poor risk management, cash flow difficulties, poor communication administration and lack of teamwork among others. Having identified the causes of failure in large construction projects, the project manager, the owner and contractors should identify strategies to deal with unexpected risks. Communication management is a crucial facilitator for any project success. All stakeholders related to the construction project should identify a clear channel of communication. The project managers should also come up with risk management frameworks to guide the contractors, clients and all stakeholders in case of any unexpected risk. This move is achieved by having a proper planning covering all financial issues and communication issues.

References

Abbasi, N., Wajid, I., Iqbal, Z. and Zafar, F., 2014. Project Failure Case Studies and Suggestion. International Journal of Computer Applications, 86(6).

Adeyemi, A.Y. and Masalila, K., 2016. Delay Factors and Time-Cost Performance of Construction Projects in Gaborone City Council, Botswana. Journal for the Advancement of Performance Information & Value, 8(1).

Adnan, H., Yusuwan, N.M., Yusuf, F. and Bachik, F., 2014. Critical Success Factors for Contractors. International Journal of Engineering and Technical Research, 2(2), pp.107-113.

Ali, A., 2010. Investigating project management practices in public sector organisations of a less developed country (Doctoral dissertation, RMIT University).

Alzebdeh, K., Bashir, K.A. and Al Siyabi, S.K., 2015. Applying interpretive structural modelling to cost overruns in construction projects in the Sultanate of Oman. The Journal of Engineering Research, 12, pp.53-68.

Arashpour, M. and Arashpour, M., 2015. Analysis of workflow variability and its impacts on productivity and performance in construction of multistory buildings. Journal of Management in Engineering, 31(6), p.04015006.

Bourne, L., 2016. Stakeholder relationship management: a maturity model for organisational implementation. CRC Press.

Enshassi, A. and Mosa, J.A., 2015. Risk management in building projects: owners’ perspective. IUG Journal of Natural Studies, 16(1).

Larsen, J.K., Shen, G.Q., Lindhard, S.M. and Brunoe, T.D., 2015. Factors Affecting Schedule Delay, Cost Overrun, and Quality Level in Public Construction Projects. Journal of Management in Engineering, 32(1), p.04015032.

Naeem Ejaz, J.H., Shabbir, F., Shamim, M.A., Naeem, U.A., Tahir, M.F., Ahmad, N. and Farooq, Q.U., 2013. Assessment of most critical success factors for mega construction projects in Pakistan. Life Science Journal, 10(10s).

Nguyen, T.P. and Chileshe, N., 2013. Revisiting the critical factors causing failure of construction projects in Vietnam (Doctoral dissertation, Association of Researchers in Construction Management).

Sears, S.K., Sears, G.A., Clough, R.H., Rounds, J.L. and Segner, R.O., 2015. Construction project management. John Wiley & Sons.

Sha’ar, K.Z., Assaf, S.A., Bambang, T., Babsail, M. and Fattah, A.A.E., 2016. Design–construction interface problems in large building construction projects. International Journal of Construction Management, pp.1-13.