Analysis of the People Dynamics of the Construction Project of New Century Global Centre, Chengdu, China
Introduction
Chengdu was designated by the Chinese government to become a major convergence point for trade between China and the rest of the world. The New Century Global Centre in Chengdu is the world’s biggest building and was constructed between 2010 and 2013 as a major project by the Chinese government in the Sichuan Province. The building has a floor space of 1.7 million meters square and covers a floor area of over 170 hectares.
The purpose of this essay is to critically evaluate the human dynamics of the project management that transpired in the construction of the New Century Global Centre. In order to attain this end, the following objectives will be explored:
An analysis of stakeholder identifications and change management;
Evaluation of the challenges, conflicts and opportunities throughout the project
Discussions of the successes and failures of the Project.
Project Governance
The New Century Global Centre is a brainchild of the Chengdu policy of modernising the region and making it an international investment destination. The Sichuan province of China sought to make Chengdu, a benchmark city for investment environment in mainland China. This caused many investors and venture capitalists to move into the region to pursue investment opportunities after 2005 when China opened up to the international community. It is in the light of this process that Deng Hong ordered his ETG Company to conduct a feasibility study on the possibility of building a mega structure that would act as an entertainment centre, business hub and provide enough room for businesses to operate to render a significant part of Chengdu an international zone.
Figure 1: Network of project sponsors, project manager and sub-contractors
Project Sponsors
A project sponsor is the entity that has the overall accountability for the project . Ultimately, this project was handled by the Exhibition Travel Group (ETG). The ETG had accountability to the financiers.
Project Management
In terms of overall management of the project, the Chengdu Century City Company Limited was in charge of it. This entity brought together end users which included some 300 construction and building companies which were in charge of handling aspects of construction.
End Users of the Project
The end user is the group of people who will ultimately use the project deliverable when it is completed. There were another 200 property management and real estate companies that were responsible for providing property management, maintenance and other services to entities that were expected to hire units in the New Century Global City. These were the end-users. The use of corporate entities ensured that there could be proper and effective management of the project including communication and coordination during the construction and after the construction of the structure.
Stakeholder Identification & Analysis
The Project Management Institute identifies a project stakeholder as “an individual, group, or organization, who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project”. Project stakeholders have some right or interest in the project and as such, affect or are affected by the project.
There is a classification of stakeholders based on their remoteness and impact on the project. This includes internal stakeholders who deal with the project directly and external stakeholders who are outside the project whilst it is undertaken.
Internal Stakeholders
-Exhibition Travel Group
-Chengdu Century City Company
-Chengdu Municipal Authority
-Sub-contracted Subsidiary Companies
External Stakeholders
-Sichuan Province
-Chinese Central Bank
-Foreign Investment Partners
-Property Management Companies and Sub-letting Agencies
-Tenants and Occupants
The Mendelow Matrix is used to balance the power and interest of the stakeholders of a project with the impact of each group of stakeholders.
Figure 2: Mendelow Stakeholder Grid for New Century Global Centre
Change Management in the Project
In order to undertake a change management of a project, there is the need to conduct a gap analysis. The gap analysis is done by going through three steps:
Where we are analysis;
Where we want to be analysis;
Deduction of performance gap and the formulation of a strategy
Thus, from the beginning of this project, it was apparent that the desire was to build a mega mall that operated like a major city. This was a major challenge and it was to be built from a land that had nothing on it. Hence, there was the need to identify the nature of the task and its construction implications. This gave impetus for the discussion of the major actions that were to be undertaken.
The Gap analysis model was used at various stages of the project which lasted over some 3 years. This was necessary to establish the progress of the project and also match it up with major circumstances that came with the project including the environmental factors and its related circumstances.
PESTEL Analysis of the Project
China is a major country in the world. It is the largest nation in terms of population and a major military and economic power.
Figure 3: PESTEL Analysis of China
Opportunity/Threat Analysis
The main opportunity for the project was based on the expansionist agenda of the Chengdu city authority and the Sichuan Province’s policy of becoming an investment centre. Thus, a lot of situations were created in order to make the project a reality. This enabled the necessary factors of production to be made available.
The main threat was political in outlook. This is because China is a highly centralised country and a change in the leadership structure was destined to have a far-reaching impact on major project. Thus, this project was something that came under the spotlight for political reasons that threatened its entire progress.
Conflict Analysis
China had a major transition in its power structures in 2012, one year before the end of the New Century Global Centre. This transition came with a promise by the new government to crack down on corruption and due to this, major Chinese entrepreneurs who had a made billions of dollars became subjects of corruption investigations.
Thus, in the rise of the new government, the owner of the Exhibition Travel Group (ETG), Deng Hong was arrested for alleged corruption charges. Ultimately, the project’s blueprints were followed and due to the fact that the project was the largest in the world, it continued and was completed. However, after completion, it became unoccupied and became a White Elephant.
Project Success Analysis
In order to analyse the project’s success or failure, there is the need to rank some elements of the project in order to identify whether it was successful or not. This will help to get an understanding of the impact and implications of the project on the society within which it is executed. To this end, the components of the New Century Global Centre will be ranked from 0 to 10 to show the extent to which important indicators were met.
Efficiency (Input-Output)
Customer Impact
This project could have made the region a major hub for investments and foreign activities. This is because the building could have housed a lot of activities and it would have yielded a lot of results. However, due to political interference, it is now a ghost town and a white elephant. Thus, a score of 2 will be granted for customer impact.
Team Impact
The team work was good and effective. All members of the team contributed their part and a major city was built in a period of just about 3 years. This gives the project a score of 8
Business Success
In terms of business, the owners have still not been able to make any returns from it. It is likely to be expropriated. Thus, a score of 1 is applicable.
Futuristic Dimensions
In the current precarious nature of the project, there is no guarantee that the project will be reopened as it stands now as a white elephant. So a score of 2 is applicable.
Overall
Overall, a score of 21.5 out of 50 shows that the project has performed below average in impacting on people. However, this does not in any way mean that it was done wrongly. The political interference has played a major role in the setback.
Conclusion
This analysis has given me an opportunity to study and understand the nature of project management in a local context that I am familiar with. This showed me the broader context of the governance of a project and how this translates to project sponsors and project managers as well as end users. This gave me a broad understanding of stakeholders as a broad context that includes project governance and team members as well as those affected by the project.
I also learnt about some practical tools for the effective execution of project management including Gap Analysis, PESTEL Analysis, Opportunity and Threat and Conflict Analysis. This case showed me how politics of a government could have far reaching impacts on major projects. I also conducted a project success analysis and learnt how projects can be graded and ranked.
Three main good things I learnt in this project include:
Projects are effective if they are structured;
Project management succeeds if stakeholders are all handled wisely;
Projects efficient if input-output factors are optimised and teamwork is enhanced.
Three shortfalls that affects project management include:
Projects that are conducted without compliance with government rules including corruption standards as government could take action that can render a project useless if the laws of the land are not respected;
Projects must focus on long-term and short-term impacts on stakeholders. It is from this that risks can be analysed and if it is not done properly, a project could fail in totality.
I also learn that project management priorities vary across borders. The project management approach that will work in Europe will not necessarily work in China and this is evident in the Chinese government’s reaction to corruption. Thus, project managers and project sponsors must study critical issues and address them.
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