Case Study: The Project That Wouldnt Die

Ben walked into his bosss office Tuesday morning in a foul mood. Without wasting any time on pleasantries, he confronted Alice. How on earth did I get roped into working on the Regency Project? he asked, holding the memo that announced his immediate transfer. Alice had been expecting such a reaction and sat back a moment to collect her thoughts on how to proceed.

The Regency Project was a minor legend around the office. Begun as an internal audit of business practices 20 months earlier, the project never seemed to get anything accomplished, was not taken seriously within the company, and had yet to make one concrete proposal for improving working practices. In fact, as far as Ben and many other members of the company were concerned, it appeared to be a complete waste of time. And now here Ben was, assigned to join the project!

Ben continued, Alice, you know this assignment is misusing my abilities. Nothing has come from Regency; in fact, Id love to know how top management, who are usually so cost conscious, have allowed this project to continue. I mean, the thing just wont die!

Alice laughed. Ben, the answer to your question can be easily found. Have you bothered taking a look at any of the early work coming out of Regency during its first three months? When Ben shook his head, she continued, The early Statement of Work and other scope development was overseen by Harry Shapiro. He was the original project manager for Regency.

All of a sudden, light dawned on Ben. Harry Shapiro? You mean Vice President Harry Shapiro? Thats right. Harry was promoted to the VP job just over a year ago. Prior to that, he was responsible for getting Regency off the ground. Think about itdo you really expect Harry to kill his brainchild? Useless or not, Regency will be around longer than any of us.

Ben groaned, Great, so Im getting roped into serving on Harrys pet project! What am I supposed to do? Alice offered him a sympathetic look. Look, my best advice is to go into it with good intentions and try to do your best. Ive seen the budget for Regency, and top management has been trimming their support for it. That means they must recognize the project isnt going well. They just dont want to kill it outright.

Remember, Alice continued, the project may not die because Harrys so committed to it, but that also means it has high visibility for him. Do a good job and you may get noticed. Then your next assignment is bound to be better. Alice laughed. Heck, it cant be much worse!

TASK

1. Distinguish among the four main forms of project termination. [12 marks]

2. What termination method does it appear the company is using with the Regency Project and why? [8 marks]

3. Why would you suspect Harry Shapiro has a role in keeping the project alive? [10 marks]

4. What are the problems with motivation when the project team members perceive that a project is earmarked for termination? [10 marks]

Section B

Question 4

5. Consider the following project activity table, identifying each activity, its normal duration and cost, and expedited durations and cost:

6. a) What is the cost per day to crash each of the activities?

7. b) Assuming they are all part of the critical path, which activities should be crashed first and why?

Activity	Normal		Crashed
	Duration (days)	Cost ($)	Duration (days)	Cost ($)
A	3	1,500	2	2,000
B	5	3,500	4	5,000
C	4	6,800	3	7,500
D	5	2,500	3	6,000
E	7	4,200	6	5,400
F	4	2,000	3	2,700

Question 5

8. Your firm has the opportunity to invest $75,000 in a new project opportunity due to cash flow concerns. Your boss wants to know when you can pay back the original investment. Using the discounted payback period, you determine that the project should generate inflows of $30,000, $30,000, $25,000, $20,000 and $20,000 respectively for an expected five years after completion of the project. Your firms required rate of return is 10%. Calculate how long it should take to pay back the initial project investment and explain your findings.