QUESTION 1 [30 MARKS]

1.1 Advise any five relevant roles that you consider are essential for a project

manager to be effective and efficient at Rolls Royce Corporation? Justify

your selections.

(10)

1.2 Critically reflect on the four phases of a project life cycle in particular to Rolls

Royce Corporation and explain the consequences if the problem is not

understood sufficiently.

(20)

QUESTION 2 [40 MARKS]

2.1 "The decision to make an initial investment in new engine technology can

cost a jet engine manufacturer over $1 billion in non-recoverable costs. As

a result, it is critical that Rolls-Royce and its competition make the right

strategic decisions about which aircraft to support."

Based on the above statement, draw a cost-benefit analysis for Rolls Royce

Corporation identifying and quantifying tangible and intangible costs and

benefits. Critically discuss the triple bottom line aspects relevant for Rolls

Royce Corporation.

(20)

2.2 Identify Rolls Royce's principal project management stakeholders?

Elucidate how would you design stakeholder management strategies to

address their concerns?

(20)

QUESTION 3 [ 20 MARKS]

3.1 "Rolls-Royce is currently engaged in a series of strategic decisions with

the potential for huge payoffs or significant losses".

Conduct a risk analysis of Rolls Royce Corporation, clearly showing the

impact and likelihood of specific risks. Be sure to determine the risk

acceptance criteria, risk acceptability and actions proposed to reduce the

risks.

QUESTION 4 [ 10 MARKS]

Critically examine why the following three factors are important in a project

performance report:

a) Overall progress; b) Milestones; and c) Issues.

Highlight how they would help Rolls Royce Corporation in decision making.

Caselet: ROLLS- ROYCE CORPORATION

Although the name Rolls-Royce is inextricably linked with its ultra-luxurious automobiles, the modern

Rolls-Royce operates in an entirely different competitive environment. A leading manufacturer of power

systems for aerospace, marine, and power companies, Rolls-Royce's market is focused on developing

jet engines for a variety of uses, both commercial and defense-related. In this market, the company has

two principal competitors, General Electric and Pratt & Whitney (owned by United Technologies). There

are a limited number of smaller niche players in the jet engine market, but their impact from a technical

and commercial perspective is minor. Rolls-Royce, GE, and Pratt & Whitney routinely engage in fierce

competition for sales to defense contractors and the commercial aviation industry. The two main

airframe manufacturers, Boeing and Airbus, make continual multimillion-dollar purchase decisions that

are vital for the ongoing success of the engine makers. Airbus, a private consortium of several European

partner companies, has drawn level with Boeing in sales in recent years. Because the cost of a single

jet engine, including spare parts, can run to several million dollars, winning large orders from either

defense or commercial aircraft builders represents an ongoing challenge for each of the "big three" jet

engine manufacturers. Airlines in developing countries can often be a lucrative but risky market for these

firms. Because the countries do not maintain high levels of foreign exchange, it is not unknown, for

example, for Rolls-Royce or its competitors to take partial payment in cash with assorted commodities

to pay the balance. Hence, a contract with Turkey's national airline may lead to some monetary payment

for Rolls-Royce, along with several tons of pistachios or other trade goods! To maintain their sales and

service targets, these jet engine makers routinely resort to creative financing, long-term con-tracts, or

asset-based trading deals. Overall, however, the market for jet engines is projected to continue to

expand at huge rates. Rolls-Royce anticipates a 20-year window with a potential market demand of

70,000 engines valued at over $400 billion in civil aerospace alone. When defense contracts are factored

in as well, the revenue projections for jet engine sales are likely to be enormous. As Rolls-Royce sees

the future, the single biggest market growth opportunity is in larger, greater thrust engines that are

designed to be paired with larger jet aircraft.

Rolls-Royce is currently engaged in a series of strategic decisions with the potential for huge payoffs or

significant losses. It is coupling its latest engine technology, the Trent series, with Boeing and Airbus'

focus on more efficient designs. Airbus' A350 and Boeing's 777 and 787 are highly popular and strong-

selling models designed to maximize the efficient transportation of air travelers at the lowest cost. To

gain market share in powering these jets, Rolls-Royce developed the new Trent XWB engine - the

world's most efficient commercial jet engine. Development of the engine started in 2005 when Rolls-

Royce's engineers sat down with Airbus to design an engine powerful enough to ser-vice its A350 XWB

(Extra Wide Body) jet, an airframe powered by only two engines. In order for Airbus and Boeing to make

their aircraft attractive to airlines, these aircraft must be efficient (that is, cheap to operate) but also

powerful enough to carry a large passenger load. The decision to make an initial investment in new

engine technology can cost a jet engine manufacturer over $1 billion in non-recoverable costs. As a

result, it is critical that Rolls-Royce and its competition make the right strategic decisions about which

aircraft to sup-port. Rolls-Royce invested in servicing the A380 double-decker airplane, whose

disappointing sales may result in its cancellation. This potential cancellation will have a serious impact

on Rolls-Royce's bottom line.

Rolls-Royce's decision to pursue engine design efficiency that pairs up with the Airbus and Boeing

models represents a strategic choice for the future. Rolls-Royce anticipates that the commercial

passenger market will triple in the next 20 years. As a result, future opportunities will involve more

economically viable aircraft. Boeing, Airbus and Rolls-Royce have all collectively taken a large financial

gamble that their strategic vision of the future is correct.

(This case let is adapted from Pearson Publication with prior permission and approval from the

publisher).

TOTAL MARKS: 100