Attach to this discussion attachment there is 2 word documents for the past 2 units (2 & 3). You need to read and understand Unit 2 & 3 in order to successfully asnwer to Unit 4 discussion.

Unit 2 Discussion

Project

Scope

           The geothermal plant construction project had various goals which were not limited to; finishing the project on time, ensuring the project meets the allocated budget requirements, delivery of a quality project at completion of the project, and the plant after completion should be able to meet the purpose to which it was constructed. The project was to last six and half years and I was project manager, I believe we were able to meet the project goals. (Heagney, 2016). The scope of project was clear because it highlighted the projects estimated costs, the number of people in the project which is 27 members in total, it gives the timelines for completing the project which is 1 and half years as well as subdividing the work into phases together with their timelines.

My team employed three key features that has led to the success of the project this far. These are; clarity of the project goals, clear and open communication, and managed conflict. The project goals were developed after all the team members views were heard and consolidated into a single statement which was agreed upon by all the team members. This was so because no one wanted to embark on a project whose aim was not clear.

The communication channels were clear and each and every member was free to make any communication to any member of any necessary suggestion or present any questions related to the project. (Meredith, Mantel Jr, & Shafer, 2017). The spirit of a free social environment was embraced so that to ensure no member keeps crucial information due to social fever. Mechanisms were put in place to solve any conflict in case it arose. Such things we did to avoid conflict were the team work spirt, and fair competition among the members through open compensation packages. We did this to keep the team together to ensure that no member leaves the team which will disorient the scope of the project.

My team did follow all the team development stages. The formulation stage which look into features such as the members’ interests and skills, the goals of the project and timelines. Then the storming level. Here, as a manager I got to understand each member’s features and the reality of the project hits each member. The norming level is where the team members started appreciating the efforts of each other and people worked as one. The performing stage. Here, the members became confident, familiar with the project quite enough and motivated towards achieving the goals without intense supervision. The final stage was adjourning stage. Here the team disbanded after the project and members feel the loss to each other since they were close to each other.

At the storming stage, a conflict arose between two members where one felt that the other was not working hard enough in meeting the project’s daily goals. (Kerzner, 2017). This seemed bad because the other whom they work as partner felt like he was being drained. However, asked each one to state how best they can work to determine how each will be comfortable working. We had to reshuffle the unit and took one member to another unit which had the same features and it worked. We were able to complete our project one month earlier and to me this was a great success for the team.  

References

Heagney, J. (2016). Fundamentals of project management. Amacom.

Kerzner, H. (2017). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Meredith, J. R., Mantel Jr, S. J., & Shafer, S. M. (2017). Project management: a managerial approach. John Wiley & Sons.

Unit 3 Discussion

Identification & Cost Estimation

           The project that we embarked on was the geothermal power plant construction. We had various objectives as we our planning to embark on the project. These included; finishing the project on time and making sure it meets the expenses projected. The project’s scope had complete clarity since it gave the estimated costs, the quantity of people needed for the project, the timelines for the project completion and the subdivision of the project in phases in relation to the project timelines.

            At the earlier stages of the project, a lot of capital was needed in drilling. Therefore, more debt was acquired to finance the project making the project riskier financially. (Nikolova, Rodionov, & Afanasyeva, 2017). Additionally, the costs and expenditures are always to high at this point and thus pushes investors away. Since the project is more of a public good, the risk was mitigated through funds from the government which invested heavily as well as partnerships with private investors. The project was a success. However, I also believe getting funds from insurance programs could also help mitigate the risk.

            We also faced technical risks that included untested technologies in drilling. However, we our able to acquire drilling and geoscientists personnel who helped us utilize binary and geothermal conventional steam turbines technologies which were very reliable. The project became a success. I also believe we could have used guarantees and warrants to should the investors from such risks.

            The legal risks included the poor relationships with contractor who were not certain of our project. In fact, they almost sued us but we did what the law requires of us. We served them justice by coming up with contract agreements using corporate lawyers. The country of operation has independent judiciary and I believe we could have also used this to shield the investors and lenders too.

            The commercial risk that we could possibly face was higher prices of the end product which make reduce the demand of the product and this may be a loss to the investors. However, the government offered subsidies which reduced the costs of production and thus reduced selling prices. (Edwards, Serra, & Edwards, 2019). This risk was further overcoming through a demand and supply analysis and forecast. This could also be overcoming through a power supply agreement on a pay or take basis to transfer such a risk from lenders and investors to the off takers.

            We faced a power generation default risk which might have hindered us from executing the project. Which included budget overruns but thanks to the supplementary budget that we had in place. Availability of design changes could also prove crucial. Generally, the project was a great success.

            The fixed costs included; maintenance and operational cost, purchase of the site, salaries, insurance covers, and interest expenses, purchase of technologies as well as contracts while variable ones were the utility costs, the purchase of raw materials and labor, salaries, insurance covers, and interest expenses. The non-recurring costs included; lawsuit payments, design costs, and moving expenses while recurring expenses were the rent paid.

            The top-down budgeting approach was utilized where the budgets were done after dividing the costs between the work packages. The projects executed previously can be used as reference points in allocating the project. (Siddikee, 2019). The change of design was a contingency that was considered in making the budget extra higher than the actual estimates. The extra budget was meant to cater for extra costs that may have not been realized during the analysis of the project and generation of the budget estimates.

The risks my classmates identified for their project included; resource risks, environmental and social risks. I also believe the off-take default risk could challenge them since their project is not safeguarded from failures, and institutional risks too. Their risk mitigating strategies are in accordance to the risks identified and thus very practical. However, they utilized the bottom up budgeting strategy where the budget was generated founded on the lowest level work packages and rolled up to get the aggregate project costs.

References

Edwards, P. J., Serra, P. V., & Edwards, M. (2019). Managing Project Risks. John Wiley & Sons.

Nikolova, L. V., Rodionov, D. G., & Afanasyeva, N. V. (2017). Impact of globalization on innovation project risks estimation. European Research Studies, 20(2), 396.

Siddikee, M. J. A. (2018). The Development of the Green Capital Budgeting Approaches Based on Traditional Capital Budgeting Approaches. International Journal of Innovation and Applied Studies, 25(1), 253-262.