Construction Company's Entry into a New Country's Construction Industry - Assignment Example

Title: Strategically managing a construction company's entry into a new country's construction industry Abstract: The construction industry is being annoyed continuously by risks and frequently it has been showing poor outcomes. There are a large number of risk management techniques easy to get to assist in improving this, but generally these are based on equipped study techniques developed in the 1960s, and for the most part have unsuccessful to meet the needs of project managers. This research proposal r uses a common language for unfolding risks and other problem related to establish a new company in a different culture. Other issues regarding costs, loans, safety issues and some drawbacks are also taken into consideration. Introduction: Task 1:While setting up a new construction into an entirely different cultural set up requires financial aid. This financial assistance can be obtained through loans or borrowing. Long term Finance: A capital can be required for five to ten years in order to set up a new company. Particularly this type of loan is mainly issued for construction industries; therefore, the risks to the loaner are high due to the time period. Short term Finance: The construction company will need a short term capital to control the sudden cash flow problems. Tangible substance needs to be bought, industrial labor to be employed, man power and sub-contractors needs to be given payment and similar payment to be received from the Employer (Howes & Tah, 2003). But loans are not easy to incur. Many of the banks are reluctant to lend long term to newly established companies. In many cases they request the borrower to provide a proportion of the finance from internal resources. Short Term Loans: Short term loans can easily be obtained from individuals, banks, and other financial institutions. They are needed for the preparation of working capital, carry an official rate of interest upon the entire quantity of money and can not be recalled before the due date. The new firm can get short term loan are obtained from commercial banks (Howes & Tah, 2003). Task 2: safety features cannot be ignored at any cost. The construction risks should be carefully examined before starting a new company under the following categories:  Technical Risks: 1. Detailed blueprint of the construction company should be prepared. 2. Site where company is to be established should be carefully examined and assure that the place is suitable. 3. Assure availability of materials, man power and other sources. 4. All kind of specifications should be mentioned without any ambiguity Logistical Risks Accessibility of assets, funds, materials, capital construction equipments including spare parts, fuel and labor. Accessibility of sufficient transportation facilities. Construction Risks Inconsistent ratio of the quantity and quality of resourceful nesses. Weather and seasonal difference should be kept in mind. Industrial relations of both the countries. Financial Risks General and progressive increase in prices. Availability and fluctuation in foreign exchange. Delay in Payment. Returning of funds. Local taxes. Political Risks Controls on the presence and employment of exiled staff. Traditions and import constraints and functions. Hardships in casting away of plant and equipment. Continual and persistent demands on use of local firms and agents. Task3: scheduling techniques to be used in construction projects need careful examination. Approach: Bar Charts and Linked Bar Charts Network Analysis and Critical Path Method Line of Balance Q Scheduling Task4: construction cost control system should render a manager to unfold current cost degrees, examine them with a prepare standard designs or models, and bring designs to promote correct series of procedures to keep cost within satisfactory bounds (Howes & Tah, 2003). Approach: There are three advancements in construction management which reveals loyalty of amending cost control system in the construction industry. 1. Short term scheduling and control. This system was developed at Loughborough University in compliance with a contractor. It targets to the fusion of the planning and supervision and therfore, to achieve a more or less zero response time (Howes & Tah, 2003). 2. Project Cost model. This a system developed by Dr Martin Barnes for creating a representation future actions and thus assisting the manager in his choice between them. 3. Quantitative scheduling One of the unique Construction Software that enables a better construction cost control tool for construction management is the CFF3 for cash flow forecasting. Modernized guesses are provided each time an actual figure is added such that the end cost remain same as was originally estimated. It provides an excellent guide for managers through the construction project to capture the best possible actions in each period activity. Labor rate and skillfulness comprises mainly of Quantitative Scheduling which is highly recommended if cost minimization in respect of productivity rates is sought (Borish & Noel, 1996). Construction Cost is linked with price of the Material, utilization and consumption of the Material, spending of constant and variable budget items. These are the fields where managers should look for activities for future benefits in order to achieve pilot calculations. Task 5: A contract signed by two companies with the terms that one company corresponds to execute a particular job for which the other company also corresponds to pay. Approach: categories of contracts mainly used in construction: A complete payment consisting of a single sum of money contract Item rate or unit price contract Percentage rate contract Cost plus percentage rate contract Cost plus fixed fee contract Cost plus increase in price fee contract aim cost contract Task 6: The quality is also concerned with the timing when it is deployed. Approach: Quality control in the construction industry can be viewed with three different type of components (Borish & Noel, 1996): To generate a construction which fulfill the needs of the customer. To generate a construction where quality is more important as compared to the price. To generate a construction in which enough time is given to achieve the needed quality. It can be divided into five primary phases: Maintaining the quality principles or quality of design that are demanded by user. Designing how to get the desired quality, construction processes, instrumentality needed for an undertaking or to perform a service, stuffs and people to be hired. Construct the building for the very first time. Accurately defined quality flaws. Provide for long lasting quality control through the established systems and formulating a quality culture. Task 7: The duration of construction projects right from starting point to fully developed company is of vital importance in the construction industry. Approach: The following elements have been discovered to have affect on the construction with various relative importance assigned to them by each individual designer. Components apposite to customers Financial capability or monetary arrangement for the project Previous working relationship Category ( Public, private) Priority on construction time Specified sequence of completion Possible changes to initial design Components apposite to Advisors integrity and opportune ness of project data Build-ability of architecture. planning for comfort of conveying information Previous working relationships Priority on construction time Components apposite to contractors Availability of suitable management team given firm's current work load. Scheduling structure work. old functioning of site management team Number of sub-contractors Components apposite to Contract Form compatibility to project time Use of ideal form of contract Components apposite to project considerations The actions and activities assigned to or required or expected of a person or group The quality of being intricate and compounded The workplace. External Components atmospheric conditions principle or condition that customarily governs behavior Legal contractual arrangement for water, gas, etc. Task 8: construction management must have a superior grade business concern for safety and therefore should have a task assigned for individual study, economical, and legal trait of sincere and steadfast fixity of purpose to assure work safety on the workplaces (Borish & Noel, 1996). However the obligation for safety must begin toward the source of the construction stage of a project; designers and engineers must have the proficient cognition to construct buildings which can be safely constructed, as well as a dedication to safe working conditions for site workers. Methodology: Names of UK construction companies used for questionnaire are listed below: Blueprint construction Ltd 148 Picton Road, Wavertree, LIVERPOOL, L15 4LJ SIP KITS Ltd Unit A, Mochdre Industrial Estate, NEWTOWN, SY16 4LE JDB Industrial Roofing Ltd 2 Nene Close, Barton Seagrave, KETTERING, NN15 6TA Carpenter and General Builder Sheerness Granville Rd, SHEERNESS, ME12 2LX Architectural Glazing Solutions Ltd Southampton Road, Port Solent, PORTSMOUTH, PO6 4RJ Grosvenor Builders and Property Services 501 International House, 223 Regent Street, West End, LONDON, W1B 2QD The research project will include the following tasks, which are geminated with the questions that need to be answered. 1. Consider in detail the functioning of other construction companies in the country. Questions: What acting techniques have been used by other construction companies? Have their operations been successful? What is procedure of operations of those companies? What actions have been disqualified? What is annual output of already existing companies? How does it present information? How does the newly established company face the challenges by other companies? 2. Count on the needs and demands of the present and precedent staff of the construction companies. Questions: what type of needs and wishes are at the top priority? Managers, advisors or the customers? What are the problems with the current construction companies? How do the advisors feel about the company? What do advisors require for the company? What kinds of techniques are obsolete? 3. How much time, effort and/or amounts paid will be necessary to keep this construction company in operating condition throughout its life? 4. How much will it cost regarding the amount of dollars, in terms of power and capital to live contentedly with other companies? 5. Does this company‘s design, characterized by an appreciation and architectural structure effect to the to the surrounding conditions? Strategic management: Some important series of questions needs to be answered for strategic management: Who should do it? The strategic management actions can be completed to perfection by an individual present inside an institution or cooperative division or an extraneous advisor or managers. A compounding of both internal and external arrangements can also be used. When should it be done? An authoritative rule of happening of the strategic management is essential to its attainment of goals. What strategies are best? There is no such kind of best strategy that is most suitable for dealing with all kinds of conditions. An ultimate advancement to strategic management that is linked with the goal intended to be attained regarding the strategic managers that are very important. Levels of Strategy: The corporate level: Before starting a new company one should consider the businesses or markets the company should be in. The business level: business should be able to measure oneself against others in a construction industry. The operational level: Decisions are to be made by heads of functional departments for accounts, purchasing, industrial labor, etc, and decisions by managers of Construction Company will affect the overall business because the company represents a large proportion of a building contractor's turnover and profit (EH, Taylor & Francis, 1983). Literature review: The time duration of construction projects right from the beginning to the complete establishment is of vital importance in the construction industry. Customers or users are no more capable to simply with least potential monetary value and plenty functional implementation for their projects with qualified interest rates, changing rates of prices and other commerce disputes. Some other components are made up out of many demonstrations of most productive relative to the cost to finish a project in the limits of the shortest possible time (EH, Taylor & Francis, 1983).  There is no correspondence in the creative writing of recognized artistic value on the acknowledgment of constituents which regard explicitly stated, designed or accomplished construction times of buildings. One justification for this is those research workers have widely been considered as the subject from various point of views. Such view points consist of recognition of distinct elements which influence productivity on site and taking a systems view of the construction process and end product (EH, Taylor & Francis, 1983). Works Cited:  EbscoHost, Taylor & Francis. “Construction Management and Economics”. IngentaConnect.1983, E. & F.N. Spon Borish, Michael., and Michel Noel. Private Sector Development During Transition: The Visegrad Countries. World Bank Publications, 1996. Howes, R and tah, J. Strategic Management Applied to International Construction. Thomas Telford Services Ltd, 2003. Read More