Question 2: Halifax Construction Ltd Case (12 Marks)

Halifax Construction, Ltd. (HCL), with headquarters and facilities in eastern Canada, was founded 75 years ago to build large custom-designed machines for construction businesses. Over the years, its product lines focused on building rock-crushing equipment for dam and highway construction. HCL now designs, builds, and operates stationary and portable rock-crushing machines, and services them as well.

HCLs International Expansion

Recently, HCL has made an effort to market its products internationally. Last month, the firm signed a contract to design and build a rock-crushing plant for a Middle East construction project in Algeria. Chuck Johnson secured this contract and will be the project manager. Since HCL has tried to open up markets in this region for a long time, this project is viewed as a major accomplishment. It has had difficulty getting customers to realize that it is a Canadian firm, and not from the United States. Some customers are reluctant to work with North American firms because of political considerations.

A project like this typically starts with selection of a team of managers responsible for various aspects of the design, building, delivery, and installation of the product. In addition to the project manager, all projects include a design engineer, an operations manager, and a cost accountant who oversees all project financial and cost-reporting matters. Each of these people must work together closely if a well-running plant is to be delivered on time and within budget. Because international contracts often require HCL to hire host nationals for plant assembly and to train them for operations, a human resource manager is also assigned to project teams. HCL assigns managers to project teams based on their expertise and availability to work on a project given their other work assignments. A project manager typically has little to say about who is assigned to his or her project team.

Project Algeria

Because he secured the Algeria project and has already developed a positive working relationship with the customer, Johnson has been assigned to be project manager. Johnson has successfully managed similar projects, and knows that this projects success would help to advance his career. The other managers assigned to the project are Blake Reynolds, a brilliant design engineer, Richard Porter, an operations manager responsible for building and installing the plant, Martha Brown, finance and cost accounting manager, and Steve Sanders, human resource manager. Each of these managers has worked together before on many past projects.

For several years now, HCL has used consultants to help new project teams operate effectively. Johnson has been especially impressed with the skills of Bert King, who has now been hired full-time by HCL as an internal consultant. Because Johnson was instrumental in hiring King to work at HCL, he was excited at the prospect of using King to facilitate team building among Project Algeria team members. Johnson told King, This project is really important to HCL and to me personally. I really need you to help us develop into a team that works well together to achieve the projects goals within budget. Ive observed your success in developing teams on other projects, and I expect youll do the same for Project Algeria. King suggested that he would begin by interviewing team members individually to learn their perceptions of each other, and the possible opportunities and problems involved in this project. Meetings of the entire team would follow the interviews, and he would use the information he collected to help establish a team identity and shared vision.

Project Team Members

King interviewed Brown first. She expressed doubts about whether the project would succeed. During the interview, Brown appeared to be distant, and King could not figure out why he was unable to establish good rapport with her. Brown suggested that she expected a lot of cost overruns and missed production deadlines. While she did not directly say so, it was clear to King that she did not want to be a part of Project Algeria. King left this interview confused and wondering what was going on.

Kings next interview was with Porter, the operations manager. Porter has worked at HCL for 15 years, and he immediately came to the point. This project is not going to work. I cannot understand why upper management keeps assigning me to work on projects with Reynolds. We simply cannot work together, and we dont get along. Ive disliked him from the first day I met him; he keeps mentioning that he has earned so many advanced degrees from a prestigious university. I know that hes better educated than I am, and hes really smart. But Im smart, too, and good at what I do. Theres no need for Reynolds to make me feel like an idiot because I dont have a degree. King, Ill be honest with you. Reynolds has only been here for 5 years, but I hold him personally responsible for my problem with alcohol, and for its resulting effect on my marriage. I got divorced last year, and its Reynoldss fault.

King next talked with Reynolds, who said, I dont care what you do. Porter and I simply cant work closely together for the 9 months it will take to get it done. One of us will kill the other. Ever since I arrived at HCL, Porter has hated me, and he does everything he can to ruin my designs. We usually worry about customers creating change orders; here, the operations manager makes them. Porter doubts everything I do, and makes design changes on his own, and they are always bad decisions. He stays awake at night thinking up ways to ruin my designs. I dont have this problem with any other manager.

King left these interviews thoroughly discouraged, and could not imagine what would come up in his interview with Sanders. But Sanders was quite positive: I enjoy these international projects where I get to travel abroad and learn about different cultures. I cant wait to get started on this. King asked Sanders about the ability of the team members to work together. Sanders replied, No problem! Weve all worked together before; sure, there have been some hurt feelings between Reynolds and Porter. Reynolds can be arrogant and Porter stubborn, but its never been anything that we cant work around. Besides, both of them are good at what they do theyre both professionals. Theyll be OK.

Kings Second Meeting with Johnson

After the interviews, King felt confused. Johnson had said that this projects success depends upon his facilitation skills. It seems like the finance manager doesnt want to work on this project, while the design engineer and operations manager admit that they hate each other and cannot work together. And the human resources manager, having worked on projects with Reynolds and Porter before, expects an acceptable working relationship, and expects no major problems.

King had a second meeting with Johnson. Before discussing the team-building sessions, he asked questions to learn what Johnson thought about the ability of team members to work together. Johnson admitted that there have been very heated conflicts between Reynolds and Porter before, but added, Thats why we hired you. Its your job to make sure that the history between those two doesnt interfere with Project Algerias success. Its your job to get them to work together well. Get it done.

Their dialogue toward the end of this meeting progressed as follows:

King: Why do you expect Reynolds and Porter to work well together, given their history? What incentives do they have to do so?

Johnson: As you should know, HCL requires formal goal setting between project managers and functional managers at the beginning of each project. Ive already done this with Brown, Sanders, Porter, and Reynolds. Porter and Reynolds have explicit goals stating they must work well together and cooperate with each other.

King: What happens if they do not meet these goals?

Johnson: Ive already discussed this with top management. If it appears to me after 2 months that things are not working out between Porter and Reynolds, then HCL will fire Reynolds.

King: Does Porter know this?

Johnson: Yes.

2.1 Evaluate the criteria HCL uses to assign managers to project teams. What efficiencies do these criteria create? What are the resulting problems? (3 Marks)

2.2 Why is it even more important that team members work together well on international projects, such as Project Algeria? (3 Marks)

2.3 Discuss the difficult situation that King now faces. (2 Marks)

2.4 What should King recommend to Johnson, and why? (4 Marks)