Chat with us, powered by LiveChat What is your assessment of the Councils commercial motivation? Why did - EssayAbode

What is your assessment of the Councils commercial motivation? Why did

 1. Title: Podcast: The Political Butterfly Effect: Did Mr Blobby upend local politics in Lancashire? https://www.bbc.co.uk/sounds/play/m0012scy 

2. Aim: a reflective activity that makes significant contribution to the attainment of the unit’s learning outcome as well as form part of the MSc examination. 

3. Objective: To demonstrate understanding of key concepts through practical application. 

Background: The questions that form part 2 of this assignment relate to the appraisal of sustainable public commercial ventures, in/formal networks and decision-making.  The prerequisite work required of students prior to the final assignment report submission draws heavily on your workbook, case study analysis during tutorial sessions, guided self-study and broad knowledge of the project management book of knowledge covered in semester one. Experience in running a virtual company in teams will be advantageous. 

 Answer these questions as part of the continuous final assessment for this unit.

 Question 1: What is your assessment of the Council’s commercial motivation? (5 marks)

 Question 2: Why did the project fail and state three (3) lessons identified? (10 Marks) 

Question 3: Drawing on the lessons learned (in Q.2) and your knowledge of social value, what sustainable venture would you prescribe for Morecambe Council and why? (15 Marks) 

Note: For this reflective report a maximum of 1000 words excluding figures and references is required. 

You need to modify it again based on the feedback.

What does ‘Commercial’ Mean?

Procurement, Tendering and Contract Analysis

Lecture 2 [9 am – 12 pm]

10 February 2023

MACE 63012 | Simon_Th C

Dr. Obuks Ejohwomu

[email protected]

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

1

1

Management of Projects (MoP)

MOP60061

Faculty of EPS

Semester 1 2017/18

Recap from previously…

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

2

Introduction to commercial management practices

Focus on decision-making as a core concept

Case studies

Feedback on in-class activity

BBC documentary: Group discussion presentation

Assignment brief: Enginuity

Mike Fletcher’s slides

Teams to appoint team leads

Lecture 1…

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

3

3

https://docs.google.com/document/d/11DIK7UexnXP-n3fk5SJe1hPLrO7mP7OkLoZpimwuONY/edit#heading=h.ncae5vgek0w8

In summary…

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

4

Could be…

Buying a project

Buying Goods or Services for a project

Client

Could be…

Selling a project

Supplying Goods or Services for a project

Vendor

Social Value

Contract & Payments

Sell-Side

Buy-Side

Lead generation of

Win-Plans

Requirements Definition

Proposal Development

Bid Management

Negotiation

Project Marketing

Procurement strategy

Production of Requests

Appraisal criteria

Tendering Process

Downselect – Bid appraisal

Negotiation

Contract development

Award

Assign 1, 2

& 3

Assign 1 & 2

What does the commercial partner want?

How might they act?

What are the risks of this relationship?

How can we get the margin that we want?

How can we get the behaviour that we need?

Assign 1 & 2

A Commercial Manager

What does my job involve?

How do I create value for my organisation?

What do I need to be effective in this area?

Week 1

Week 12

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

10/02/2023

Anupam Dey 10081980

5

MCQs: Formative Assessments

Class/GoogleDoc Discussions

Small Group Tutorials

Guest Lectures

Group Work, Individual Presentation, Report Writing and Case Study Analysis

For deep learning you’d participate in:

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

6

Lecture 2: Today

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

7

Today’s Learning Objectives

Define the term ‘commercial management’.

Deconstruct the concept of win-win.

Discuss the procurement motivation for undertaking a commercial project.

Discuss issues and strategies for protecting projects.

Understand contracting procedures and management.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Projectification involves the cultural and discursive societal processes whereby projects and project-‐like circumstances are institutionalised in individuals. lives, the organising of all sorts of work, and society at large.

10/02/2023

Anupam Dey 10081980

8

Core Concept

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

9

Core concept

Emphasis is on Win-Win and not 50:50 – this means buying the right product and services to fit the longer term needs of businesses, which are key driver for achieving best value, rather than quick price focused fit.

Leading businesses are constantly seeking innovation with their industry which support Win-Win.

Purchasing & Procurement managers need to understand the needs and wants of their internal customers, the constantly changing business environment, often affected by a range of factors including new customer requirements, changing regulatory requirements and new ways of working (Cary Sumpter Owner & Director Kelmat Services Ltd.).

Buyers and suppliers have to understand each others’ needs and expectations and work together to ensure that they develop relationships that will deliver successful business outcomes for both parties.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

10

See Gilang 2017

Win-Win ≠ 50:50

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

11

Is there a difference between Project Success and Project Management Success? Discuss.

In Class Discussion

Dr Obuks Ejohwomu

https://docs.google.com/document/d/1XRl6CKLgZStwD6cXdfh53yDcqEny7coxCQ33Pf3luCU/edit?usp=sharing

Combining the strengths of UMIST and

The Victoria University of Manchester

12

Recapping… Projects, programmes & portfolios…

12

Commercial

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

13

Defining the commercial management function?

The Management of contractual and commercial issues relating to projects, from project inception to completion (Lowe and Leiringer 2006).

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

14

14

The role of a Commercial Manager is highly varied. Those working within the commercial departments of large, multinational corporations may take individual responsibility for sales, marketing, contracting, negotiations, finance, contract law or property management to name but a few.

In some smaller companies ( and in the case of entrepreneurs ) commercial managers would be expected to deal with all these various roles themselves, rather than oversee a department containing expert teams in each field. In either business environment, a commercial manager must be adept at understanding and engaging in all aspects of the strategic function, which is where a specialist qualification in commercial management comes to the fore

Commercial motivation for undertaking a project

To generate new products to replace old lines.

To create new plant and facilities that are more suitable to current needs.

To improve a business process so that it performs more effectively.

To obtain research information that could be used to advantage – remote social sensing.

To raise the organisation's profile in the market.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

15

15

Commercial Strategy

Product development projects exist:

Sell what you can make.

Make what you can sell.

The make or buy decision.

Offensive/defensive market strategies

What is your buy/sell strategy?

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

16

How to Make Money?

Cost

Margin

Selling price

reduce

increase

Total Cost

“Why do organisations invest in projects? The simple answer is to make a profit; that is they expect the financial returns from the project to be greater than the money invested.”

Rodney-Turner, J. (1995) The Commercial Project Manager

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

How can we reduce cost or charge a higher price?

Where such tactics involve the work of other parties, i.e. buyers, suppliers, business partners, these things become points of negotiation, made permanent through binding contracts and imposition of penalties – commercial management! But what if players are seeking to maximise their profits? And what will competitors be seeking to do?

When the decisions begin to affect other parties in the industry and the long term behaviour of the organisation, even its structure, they become strategic.

Cost

Margin

Selling price

reduce

increase

Total Cost

Fundamental Conflict

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Institutional, Economic and Legal factors

Competitors, New Entrants and Substitutes

The Commercial ‘Space’

Stewart (2011, 2016)

Information Negotiation Contract

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Comments?

10/02/2023

Anupam Dey 10081980

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Lowe (2013)

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Procurement

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

21

Procurement is the process by which the resources (goods and services) required by a project are acquired.

It includes the development of the procurement strategy, preparation of contracts, selection and acquisition of suppliers, and management of the contracts.

What is procurement?

APM BOK 6th edition (Section 5.4)

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

22

Why the different procurement routes?

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

23

Largely for Risk Allocation..

Source: ASCE Library

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Procurement

How do I buy/sell my goods or service?

Five (5) main procurement routes:

Traditional/conventional

Design and Build (D&B)

Turnkey

Management

Partnering

Customised/Hybrid systems

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

25

25

Procurement Risks

Procurement type Client Risk Vendor Risk Price Built speed Comment
Traditional/ Conventional High Low Low Very slow Design by Client, built by vendor
Design & Build Medium Medium Medium Fast Client need to know what they want
Turnkey Low High Very high Fast Client specifies and wait for completion
Management Low Medium High Medium 3rd party takes responsibility for delivery
Partnership Medium Medium Medium Slow Client & Vendor signs charter before start

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

26

Which of these methods will you recommend for the purchase of the Chernobyl Safe Confinement Project?

26

Tendering and the tendering process

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

27

27

The role of a Commercial Manager is highly varied. Those working within the commercial departments of large, multinational corporations may take individual responsibility for sales, marketing, contracting, negotiations, finance, contract law or property management to name but a few.

In some smaller companies ( and in the case of entrepreneurs ) commercial managers would be expected to deal with all these various roles themselves, rather than oversee a department containing expert teams in each field. In either business environment, a commercial manager must be adept at understanding and engaging in all aspects of the strategic function, which is where a specialist qualification in commercial management comes to the fore

Tendering and the tendering process

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

28

Tendering

https://www.ojec.com/usefullinks.aspx

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Tendering can be defined as the process by which offers are sought, received, accepted or rejected for the execution of works or supply of goods. When it is in the public sector, it is referred to as procurement process.

29

Tendering process generally involves the following key steps:

Tender Planning

Tender Documents Scrutiny

Choice of Tendering Method

Preparation of Tendering Documents

Advertisement of Tender Solicitation

Receipt and Opening of Tenders

Tender Analysis

Preparation of Tender Analysis Report

Tendering process

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Contract Analysis

The Nature of Contracts

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

What is a Contract?

An agreement that affects the legal relationships between two or more persons.

A promise or set of promises for the breach of which the law in some way recognizes a duty.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

What is Contract Analysis?

Review, monitoring and management of contractual terms and conditions through the procurement process.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

When Disputes Arise, the Contract Will be Crucial

If the language is clear, the dispute may be quickly resolved.

If not, litigation is a common result.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Descriptors of Contracts

Bilateral vs. Unilateral

Executed vs. Executory

Express vs. Implied

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Bilateral and Unilateral

Bilateral:

both sides expressly make promises

Unilateral:

promise is made by only one party

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Unilateral Contracts Example

An advertisement to deliver a particular product upon receipt of a payment of a given amount. The contract is formed when the payment is made.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Executory Contract Example

The purchase of a reserved seat at a performance or sporting event. One party promises to hold a particular seat for the other party for the specified event, i.e., one party has a promise outstanding.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Executory Contracts

An alteration contract stated: “Material and labour to be supplied for £3,075 to be paid as follows: £150 on signing the contract; £1,000 on delivery of materials; £1,500 on completion of rough carpentry and plumbing; £425 upon project completion”. After materials were delivered, contractor had been paid £1,150. Contractor did rough carpentry and plumbing and requested payment of £1,500. Payment was refused. Contractor sued for payment.

Q: How much is the contractor entitled?

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Executory Contracts

Decision:

The contract is entire.

The single amount of £3,075 was the single consideration for the whole job, with the payment schedule not absolutely allocating value to each portion.

Contractor is entitled to £3,075 less the cost of completion.

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Elements of Contracts

Meeting of the minds

Offer and acceptance

Consideration

Lawful subject matter

Competent parties

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Meeting of the Minds

Contractor was to build a building that was in compliance with all applicable laws, regulations, and codes. When construction was well underway, it was discovered that the building had major deficiencies related to fire escape laws. The owner contended the contract had been breached. The contractor said it was his first building in that city and was not aware of the laws.

Q: Is ignorance of the law an excuse?

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Meeting of the Minds

Decision:

No. When a contract is entered stipulating compliance with certain laws, it is the contractor’s duty to ascertain what the laws are.

The Contractor’s Legal Problems by Hayward – p. 27

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Meeting of the Minds

A purchaser agreed to buy a cargo of cotton being shipped “to arrive ex Peerless from Bombay”. Two ships (each named Peerless) sailed from Bombay: one arrived in October, the other arrived in December. The parties were not in agreement on the same ship.

Q: Was there a binding contract?

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Meeting of the Minds

Decision:

There was no agreement since there was no meeting of the minds (mutual mistake).

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Meeting of the Minds

A company entered a purchase agreement with a supplier of roofing materials for a set price. The contract could be altered due to “strikes, fires, transportation, and business conditions that render performance commercially impracticable”. Both parties were beneficiaries of the clause. The price of roofing materials spiraled up (+25%). The supplier refused to deliver at the agreed price contending it was “commercially impracticable”.

Q: Was the supplier obligated to deliver?

Dr Obuks Ejohwomu

Combining the strengths of UMIST and

The Victoria University of Manchester

Meeting of the Minds

Decision:

Yes. Although it may be “commercially unprofitable”, the clause in the agreement did not apply. The contractor bought the supplies from another firm and successfully sued the original supplier for the difference in the prices.

Dr Obuks Ejohwomu