THE EFFECTS OF PROJECT PLANNING TECHNIQUES ON CONTRACTORS PROFIT
ABSTRACT
The increased complexity of the society and high level of competition in the construction industry has made it imperative for contractors, project managers, and construction companies to carry out serious planning in order to ensure project success and profits. This work examined project planning’s impact on a contractor’s profitability.
The objectives were to identify project planning techniques and tools used by contractors in construction project delivery, determine factors affecting project planning practices of contractors, and to evaluate the impact of proper project planning on contractor’s profitability. The research approach involved survey design using a structured questionnaire administered to 50 respondents in Owerri, Imo, Nigeria… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
INTRODUCTION
Background of the Study
Projects are used in all economic and non-economic fields as a means of organizing the activity, aiming the achievement of desired objectives. There is a direct relationship between projects, projects portfolios, programs, and organizational strategy. Projects, as the main way of creating and dealing with change (Cleland, Gareis, 2006), are used to implement strategies.
Meskendahl (2010) refers to projects as the central building block used in implementing strategies, therefore business success is determined by the success of the projects. A project is an individual or collaborative enterprise, possibly involving research or design that is carefully planned, usually by a project team, to achieve a particular aim New York Times (2009). A project is also temporary because it has a defined beginning, end time, and defined scope and resources (Cathy, 2009)… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
Problem Statement
The general low usage of formal project planning and management techniques by Contractors globally often culminates into project failures, incessant claims for variations, huge financial losses, and sometimes results in bankruptcy of Contractors (Allan et al, 2007).
This situation is more prevalent in redevelopment projects due to the inevitable problems of unexpected additional work, excessive requirements and scope management issues, project funding not aligned with project plans, delay, structural failure, cost overrun, etc (Naaranoja and Uden, 2007). These problems or uncertainties, among others, increase the project risk and make their management crucial if success is desired… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
Research Objectives
- To explore project planning practices applied by Julius Berger at various project levels.
- To assess awareness and usage of formal and informal project planning practices by Julius Berger, Owerri office… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
LITERATURE REVIEW
In this chapter, the researcher will review existing literature generally on project planning and narrow it down to the effects it has on time, cost, and the general performance of an organization. Various concepts of project planning, contract management, and organizational performance are discussed, and previous and recent researches on project planning and its effect on cost and time are well outlined and stated.
The contours of contract theory as a field are difficult to define. Many would argue that contract theory is a subset of Game Theory which is defined by the notion that one party to the game (typically called the principal) is given all of the bargaining power and so can make a take-it-or-leave-it offer to the other party or parties (i.e., the agent(s)). In fact, the techniques for screening contracts were largely developed by pure game theorists to study allocation mechanisms and game design. But then again, carefully defined, everything is a subset of game theory.
Others would argue that contract theory is an extension of price theory in the following sense. Price theory studies how actors interact where the actors are allowed to choose prices, wages, quantities, etc. and studies partial or general equilibrium outcomes. Contract theory extends the choice spaces of the actors to include richer strategies (i.e. contracts) rather than simple one-dimensional choice variables.
Hence, a firm can offer a nonlinear price menu to its customers (i.e., a screening contract) rather than a simple uniform price and an employer can offer its employee a wage schedule for differing levels of stochastic performance(i.e., an incentives contract) rather than a simple wage… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
- The Social Contract Theory
In political philosophy the social contract or political contract is a theory or model, originating during the Age of Enlightenment, that typically addresses the questions of the origin of society and the legitimacy of the authority of the state over the individual.
Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority of the ruler or magistrate (or to the decision of a majority), in exchange for protection of their remaining rights. The question of the relation between natural and legal rights, therefore, is often an aspect of social contract theory.
Although the antecedents of social contract theory are found in antiquity, in Greek and Stoic philosophy and Roman and Canon Law, as well as in the Biblical idea of the covenant, the heyday of the social contract was the mid-seventeenth to early nineteenth centuries when it emerged as the leading doctrine of political legitimacy… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
- The Justice Theory
John Rawls (1921–2002) proposed a contractarian approach that has a decidedly Kantian flavor, in A Theory of Justice (1971), whereby rational people in a hypothetical “original position”, setting aside their individual preferences and capacities under a “veil of ignorance”, would agree to certain general principles of justice and legal organization. This idea is also used as a game-theoretical formalization of the notion of fairness… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
An empirical exploration of contracts is not a new thing. Some trace the roots of serious empirical exploration of private contracting to Stewart Macaulay’s seminal work in 1963. It may be said that empirics are playing catch-up to theory, which has had a significantly longer tradition in scholarship in law and social sciences. To understand the diversity of disciplinary approaches and framings of questions about contracts raised in modern empirical explorations, it may be useful to briefly articulate the intertwined trajectory of contract doctrine, theory, and empirics. Contracts are historically ancient means of managing and regulating dyadic exchanges.
Contract’s doctrinal roots are traceable to actions, which were variations on trespass, used in varied contexts like debt collection, marriage enforcement, surgical mishaps, and similar transactions. An action in contract distinct from trespass was perhaps first noted in1348 in the case of the Humber Ferryman (Simpson 1987). In that case, a ferryman was paid for transporting the plaintiff’s horse across a body of water, but the horse drowned allegedly due to the ferryman’s miscalculations… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
The basic types of contracts that you may come across are defined below.
- A sales contract is a contract between a company (the seller) and a customer where the company agrees to sell products and/or services. The customer in return is obligated to pay for the product/services bought.
- A purchasing contract is a contract between a company (the buyer) and a supplier who is promising to sell products and/or services within agreed terms and conditions. The company (buyer) in return is obligated to acknowledge the goods / or services and pay for liability created… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
THE ROLE OF PROJECT PLANNING IN INCREASING CONTRACTORS PROFIT
Recent empirical work on contracts has advanced our understanding of how contracting entities experience contracts in important ways. First, there is growing consensus among researchers that actors do not consistently behave rationally, or in ways that optimize efficiency.
This has been important particularly for those interested in how contracts may be written to incentivize performance (Brooks, Stremitzer and Tontrup 2012; Fehr, Hart and Zehnder 2011b; Feldman and Teichman 2011)… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
This chapter describes the research design, population, sampling techniques, method of data collection as well as the method of data analysis used in this research.
In designing the research, a plan was set to guide the researcher on data collection and analysis phases of the research project; however, the research design is a descriptive method and percentage representation. The number of the respondent that answer each question will be determined.
This will allow for easier comparison of responses of all the respondent in other to research logical and constructive conclusion also, the researcher adopted survey as one of the research methods which is meant to investigate, budgeting as an effective tool for planning control and increasing productivity as an instrument of development in the private sector as the researcher center of focus.
Julius Berger Nigeria Plc is a Nigerian construction company, in Owerri Imo, located Imo Owerri
The research population of this study of 100 staff of Julius Berger Nigeria Plc
Sample Size and Sampling Technique
The sample sized for this total population in the case of a large population under study, the researcher has decided to take a proportion of the population and study. The sample size used for this study is forty (40) out of the total population of a hundred (100)… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
RESEARCH FINDINGS AND DISCUSSION
Introduction
In this Chapter, all the data collected through the questionnaire administered were presented, analyzed, and interpreted using the Likert rating scale. Out of the 6 questionnaires administered, only 40 were returned representing 63% of the total and this is considered to be adequate.
Characteristics of Respondents
Table 4.1: Age Distribution of the Respondents
| Option | No. of Respondents | Percentage (%) |
| 1 – 5 | – | 0 |
| 6 – 19 | 5 | 12.5 |
| 19 – 25 | 7 | 17.5 |
| 25 years and above | 28 | 70 |
| Total | 40 | 100 |
Table 4.1, 12.5% of the respondents are within the age of 6 – 19 years, 17.5% are within the age of 19-25, and 70% of the total respondents are 25 years and above.
Table 4.2: Sex Distribution of the Respondents
| Option | No. of Respondents | Percentage (%) |
| Male | 30 | 75 |
| Female | 10 | 25 |
| Total | 40 | 100 |
Table 4.2 above shows that the populations of the male are more than female, out of the total population of the respondents, 75% of the respondents are male while 25% are female.
Table 4.3: Education Distribution of the Respondents
| Option | No. of Respondents | Percentage (%) |
| 1 – 5 | – | 0 |
| 6 – 19 | 5 | 12.5 |
| 19 – 25 | 7 | 17.5 |
| 25 years and above | 28 | 70 |
| Total | 40 | 100 |
Table 4.3 above, 12.5% of the respondents are a first school leaving certificate holder, 25% are secondary certificate, 30% are ND/NCE certificate, 20% are HND/BSc certificate while 12.5% are MSc holders.
Table 4.4: Response on Budgeting services as an effective tool for planning and control for an increase in productivity
| Option | SA | A | UD | D | SD | Total | Mean | Remarks |
| X | 5 | 4 | 3 | 2 | 1 | 15 | ||
| F | 15 | 10 | 5 | 4 | 6 | 40 | ||
| Fx | 75 | 40 | 15 | 8 | 6 | 144 | 3.6 | Agreed |
Source: Field Survey, 2016
The above 4.4 fives a mean score of 3.6 which is greater than the cut-off point of 3.0. These mean that budgeting serves as an effective tool for planning and control for the increase in productivity.
Table 4.5: Response on Private Sector apply budgetary planning and control procedure for its own operation
| Option | SA | A | UD | D | SD | Total | Mean | Remarks |
| X | 5 | 4 | 3 | 2 | 1 | 15 | ||
| F | 19 | 11 | 4 | 4 | 2 | 40 | ||
| Fx | 95 | 44 | 12 | 8 | 2 | 161 | 4.0 | Agreed |
Source: Field Survey, 2016.
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The researcher to give an answer to the following question has used this section:
- Budgeting planning and control techniques are used for increasing productivity in profit and non-profit making organizations.
- The budgeting system enhances productivity… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
The research gives an answer to each question using the information fro, the data analysis:
- Budgeting planning and control techniques are used to increase productivity. The research question is answered in the table (7) the term budgeting is needed in both profit and non-profit making organizations to be able to run the affairs of the organization successfully.
- Budgeting system enhance productivity, the research question is answered in the table (4) proper budgeting in an organization will result in greater output in terms of output that is what you produce… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
SUMMARY, CONCLUSION, AND RECOMMENDATIONS
This chapter summarizes the literature review as well as the detailed analysis that has been undertaken in this research work and (budgeting as an effective tool for increasing productivity in the private sector). Therefore, based on the findings arrived at recommendations are given and conclusion… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
The objective of the private sector is to improve the effectiveness and providing power service both internally and externally and to reduce cost. Budgeting as an effective tool, for planning and control, is an important aspect of the accounting system in both service and manufacturing organizations… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
For budgeting to serve as an impact for planning and controlling mechanism technique, there has to be a plan upon which budget productivity is based. Productivity must be planned before it can be controlled operation has to be determined and analyzed into expenditure costs so as to know how realistic would be a contribution to project goals to make a budget without planning. It is just like putting the cart before the horse and a plan without a complimentary control would be pointless… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
The researcher is of the opinion that long-range planning of the company should be pursued. This is because the company has benefited from it, ranging from the creation of economic and minimization e.g. its expenditure. However, in the area of its operational planning, the company should devise a good specialization policy so that each department within the company should perform the specific operation of function… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
BIBLIOGRAPHY
Alces, Peter, and Michael Greenfield. 2010. “They Can Do What!? Limitations on the Use of Change-of-Terms Clauses.” Georgia State University Law Review 26(4):1099-145.
Atiyah, Patrick S. 1979. The Rise and Fall of Freedom of Contract: Oxford University Press.
Ayres, Ian, and Gregory Klass. 2005. Insincere Promises: The Law of Misrepresented Intent. NewHaven: Yale University Press.
Bakos, Yannis, Marotta-Wurgler, Florencia, and David R. Trossen. 2009. “Does Anyone Read the Fine Print? Testing a Law and Economics Approach to Standard FormContracts.”.” NYU Law and Economics Research Paper No. 09-40.
Bal, P. Matthijs, Annet H. De Lange, Paul G.W. Jansen, and Mandy E.G. Van Der Velde.2008. “Psychological Contract Breach and Job Attitudes: A Meta-analysis of Age as a moderator.” Journal of Vocational Behavior 72(1):143-58.
Barthélemy, Jérôme, and Bertrand V. Quelin. 2006. “Complexity of Outsourcing Contracts and Post Transaction Costs: An Empirical Investigation.” Journal of Management Studies43(8):1775-97. (Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)
Bebchuk, Lucian A., and Richard A. Posner. 2006. “One-Sided Contracts in CompetitiveConsumer Markets.” Michigan Law Review 104(5):828-36. (Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)
Becher, Shmuel I. 2009a. “A ‘Fair Contracts’ Approval Mechanism: Reconciling ConsumerContracts and Conventional Contract Law.” University of Michigan Journal of LawReform42:747-804. (Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)(Project Planning Techniques)
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