A real estate contract

At what point and to what extent does it become binding?

 

STUDENT PAPER

By Alix Sion

SKEMA Business School

Paris, France

 


 
ABSTRACT

The purchasing process in the real estate world can be very complex for both the buyer and the seller of the property. Both can be reluctant to signing the contract in regards to the level to which it is binding, so it is important to be informed about the different steps of the process and the level to which they are binding to one or both parties.

We will here review all eleven steps of the real estate purchasing process and determine what contingencies can be found at which step. We will then deduct from this analysis the level to which each step is binding and create a ranking of the steps.

This will lead to the resolution of our problem which is to determine at what point and to which extend a real estate contract becomes legally binding.

Key words: Contract; real estate; legal; binding; offer; seller; buyer; contingency; dispute

INTRODUCTION

When individuals are asked about their life goals, a very common response is to “buy a house”. Nearly everyone will be concerned by this situation at one point in their life and will have to look into the procedure of doing so. On the other hand, if you own a property and wish to sell it you will also have to inform yourself about those procedures to conclude a deal with a potential buyer. The real estate market is enormous and concerns everyone; in the United States, in 2015, 5,250,000 existing homes were sold as well as 510,000 newly constructed ones.

Once a buyer and a seller have come together to conclude a deal, buyers can agree verbally with the sellers on their decision to purchase or not. They will then proceed to sign a real estate contract.

But can they change their mind after the contract is signed? How binding is the signed contract and at what stage of the buying procedure does the action of the house being sold from the seller to the buyer become official? Can the buyer retract from the contract and until what stage? What about the seller?

It can be interesting to look into this situation to try and determine exactly at what point a real estate contract becomes binding and to which level. We will examine the contingencies decided by the attorneys and the contract’s details that can prevent a party to be unable to retract from the contract, and we will reflect on the reasons a buyer and a seller each have to make the contract more or less easy to cancel.

This will bring us to the resolution of our problem which is to determine at what point and to which extend does a real estate contract become legally binding?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Sion, A. (2018). A real estate contract: At what point and to what extent does it become binding? PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Sion-when-does-real-estate-contract-become-binding.pdf

 



About the Author


Alix Sion

Paris, France

 

 

 

Alix Sion is a MSc student studying Project and Programme Managament and Business Development in the Paris campus of SKEMA business school. Born in France, she lived three years in Chester, England and three years in Manila in The Philippines during her childhood, before moving back to France at age 11. Once she obtained her baccalauréat, she then went on to study a double degree in Global Business. After two years of studies in Dublin City University and two years in NEOMA Reims in France she graduated with first class honours in 2017.

During her two years in NEOMA, she was vice president of the student union and contributed to the organization of a business weekend reuniting more than 500 students from many different countries. She was very passionate about it and this has contributed to her desire to spend her life engaging in temporary projects.

Once she has obtained her masters degree, she will go on to start her career abroad, possibly in Ireland or Switzerland where her family currently lives.

 

 

Incorporating CSR in contracts

More than a necessity, a competitive advantage

 

STUDENT PAPER

By Kristen Zimbardo

SKEMA Business School

Paris, France

 


 
ABSTRACT

Corporate Social Responsibility is a raising issue for every organization. This paper’s objective is to explore different alternatives to find opportunities for organizations to be engaged in this issue in their daily business and not only with actions not related to their activities. Developing three alternatives, comparing them with multi-attribute decision making tables and non-compensatory model we found an alternative bringing more benefits to the organization. AIA developed this year a sustainable exhibit to implement in contracts that facilitates to reach sustainable goals. By working with this type of document, an organization will be involved in long-term strategy and sustainability, therefore, improving its social impact.

Key words: Corporate social responsibility; CSR; Clauses; Sustainability; AIA; Stakeholders management; Sustainable contract

INTRODUCTION

Many social and environmental scandals have been unveiled in recent month and years, affecting large companies. Often, these scandals link those companies to their subcontractors. Sometimes, they are not aware because they have many subcontractors and they suffer from the information asymmetry. However, they could have avoided that kind of situation. Some big companies do not seem to remember the lessons of the past and always repeat the same mistakes. For example, Apple, affected by the repeated suicides scandal at its main supplier Foxconn in 2010, which had promised to improve the working conditions of workers and who reported on improvements since, was again denounced in 2017 for the unbearable working conditions imposed on workers at another of its Pegatron suppliers. But Apple is not the only one, all sectors have been hit by scandals about their subcontractors: The 1100 deaths due to the collapse of Rana Plaza in Bangladesh, a building operated by subcontractors of many Western fashion companies, Findus and horse meat, Nike and child labor in the 90s … But once the truth is out, these scandals dishonour their public image for a while with the public opinion and shows above all an incredible detachment regarding the treatment of employees and the environment. Thinking of hiding themselves behind subcontractors, they are primarily responsible for these scandalous situations. Why wait for a disaster before taking action to reduce the risks? Human lives are at stake and the environment must be protected, all of which goes well beyond profits.

The first that can play a role are the major distributors towards their suppliers and subcontractors. It is up to them to demand concrete measures and tangible proof of their commitment to decent working conditions and the use of products that reduce risks to the environment and workers’ health. In order to put man and Earth back in the heart of the economic game and thus avoid new scandals, it is essential for all distributors to act today at the level of their suppliers in order to commit to their social responsibility.

Step 1 – Summary of problem statement

How can organization use CSR in contracts?

Our aim will be to understand:

  • What are the possibilities to implement CSR in contracts?
  • Which is the most important criteria that organisation should choose to select an alternative?
  • What benefits can they make from incorporating CSR in contracts?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Zimbardo, K. (2018). Incorporating CSR in contracts: more than a necessity, a competitive advantage, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Zimbardo-incorporating-csr-in-contracts-student-paper.pdf

 



About the Author


Kristen Zimbardo

Paris, France

 

 

 

Kristen Zimbardo is a French MSc student in SKEMA Business School, major in Project and Programme Management & Business Development (PPMBD). He comes from Sarcelles in the North of Paris (France) and studied at Lycée Jean-Jacques Rousseau in Sarcelles until the age of 20. He studied one semester in Raleigh (USA) in 2016 and worked 4 months in Kuala Lumpur (Malaysia) in 2017. In 2016, he has worked for Société Générale, a French Bank as a Human Resources research officer in Paris. He is developing a strong interest in Corporate Social Responsibility and would like to work in this field. He lives in Sarcelles, France now, and can be contacted at [email protected]

 

 

Managing risks on construction projects

 

STUDENT PAPER

By Shangjia Yu

SKEMA Business School

Paris, France

 

 


 
ABSTRACT

Due to the large investment and long construction period of the project, the contractor is bound to face the set goals of project impact such as quotation, construction period, quality, safety, lawsuit, natural climate and contractor behavior after it is completed and put into use. The realization of the above project objectives are agreed through the construction contract signed by the contract parties, so the ability of risk control must be emphasized so as to reduce the contract risk and reduce the loss of the parties. This article analyzes risk management and countermeasures on the construction projects. The author will set up two scenarios with the application of Addictive Weighting Technique of MADM method for each of these risk types, one for the threat and the other one for the opportunity.

Keywords: Control, Risk, Manage, Factors, Impact, Predict, Avoid, Resolve

INTRODUCTION

  1. Problem Recognition

Construction projects have complex characteristics varying for different construction projects, such as bridge projects, road project, etc. The components in the contract should be defined carefully and practically, since they are often carried out in the form of, corrupt bidding, over budget, or outsourcing. Therefore, there must be a clear contracting structure in the construction contract, to determine the construction details, project scope, capital budget, material specifications and audit Standards, etc., which is to ensure not only the quality of the project, but also being effectively restricted the relationship among owners, contractors and subcontractor. This is known by organizations widely; however, the risk still exists in contracting and managing process in the modern world.

As the core management of construction projects, the increasingly intensity of contract management is necessary to manage the project effectively. The implementation of each construction project is based on the contract signed. After the project contract is signed, due to the complexity of construction, unpredictability and the impacts of external environment, the risk of financial loss will often result from the change of contract contents, such as the exchange rate, the interest rate, as a result, the organizations are supposed to form a sense of contracting, risk awareness, emphasis on risk management. Only by focusing on the core of contract management, people can co-ordinate the operating status of entire construction project and better achieve the construction objective.

  1. Step 1- Problem Definition

The purpose of risk management is to achieve the objectives of the contract and achieve the success of the project. Before analyzing how to manage risk, the author will identify the risk from the whole contracting process to correctly manage the risks, analyze the risk factors existing in the project contract, and make accurate definitions between the source of the risk and the impact of the risk, to predict, evaluate, and avoid the risk.

In summary, the purpose of this paper is to identify the risk factors that may arise in a construction contract and to analyze how to manage them in order to make that the project process is operated properly and achieve the final success. In the following article, the author will identify the nature of risk, as well as give the author’s perspective in how to deal with them.

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Yu, S. (2018). Managing risks on construction projects, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Yu-managing-risks-on-construction-projects-student-paper.pdf

 



About the Author


Shangjia Yu

Paris, France

 

 

 

 

Shangjia YU is a clever and smart Chinese student, who is majoring in Program Project Management and Business Development in Skema Business School, Paris, France. She is certificated by Prince2 and Agile. She acquired Language and Literature bachelor’s degree in Beijing, China. In 2016, she worked on a lighting project in her family’s corporation as a temporary project manager, and led the project team to deliver the products before the scheduled time with high quality, which achieved a great benefit for the whole organization. As a result, she was recommended to ‘Programme Grande Ecole’ in Skema Business School. She is a young and talented girl who will be a promising project manager later in her career.

She is now living in Paris, and can be contacted at [email protected] .

 

 

Challenges to creating an eLearning process

An analysis of the contractual terms and conditions using Multi Attribute Decision Making

 

STUDENT PAPER

By Premvadan Solanki

SKEMA Business School

Paris, France

 


 
ABSTRACT

In a world pushing educators to prepare students to be creative, collaborative, and interdisciplinary in their approach to technology and online, how do we ensure the integrity of student work and navigate derivative works? This presentation seeks to answer some of the questions that arise when educators look to engage student creativity, but still ensure mastery of core competencies and learning outcomes. As a trade-off, students have fewer opportunities, overall, for face-to-face learning which is an integral component of the traditional classroom learning environment. The purpose of this research is to investigate the advantages and disadvantages of using Different learning tools versus traditional methods, while examining individual learning styles and the role they might play in the efficacy of learning and retention.

Keywords: Request for Change, Methodology, Monte Carlo simulation, e-learning, digital technology, IT.

INTRODUCTION

In this era of constant technological development, it became a necessity for every type of business to adapt themselves to these changes. Learning is one of the sectors that has successfully adapted to the development of new technology with what is globally called E Learning. The e learning process by which the person can learn through online content is now a becoming a norm even in a business or at school. The major players provide a vast array of solutions that can be customized according to the requirements of the user. Most frequently it seems to be used for web-based distance education, with no face-to-face interaction. Furthermore, it is often used interchangeably with various other related terms, such as distance learning, distributed learning, and electronic learning.

E-Learning is the delivery of instructional content using various electronic technologies. The learning medium, solving the problem of time and financial constraints, may be delivered either synchronously (live) or asynchronously, also called distributed or self-paced learning. Since its introduction, e-Learning has found widespread applications in IT, marine, retail, healthcare, telecommunications, and financial services sectors, which utilize these programs for training employees as well as for disseminating information. Worldwide e-Learning market continues to witness rapid developments which are driving adoption among the academic and business sectors. Robust growth in the online learning market is driven by increasing accessibility and cost-effectiveness of learning and training initiatives. Multiple advantages offered by e-Learning technology in the form of faster delivery, reduced learning cost, greater degree of flexibility, and ability to generate user-specific content are driving demand for e-Learning programs. Another factor favoring adoption of e-Learning products and technologies is the proliferation of Internet.

Furthermore, content packages are set as per the requirements of the curriculum and can be conformed to suit the needs of the end-users. Increasing adoption of training solutions in the corporate landscape, irrespective of their industry vertical, is a major factor promoting the e-learning market growth. Online solutions continuously collect the user information and give a customized feedback of the user’s performance. Furthermore, the students can immediately connect to a tutor or service provider in case of any issues. However, it requires constant connection with the internet to function effectively. Online solutions are increasingly gaining a foothold in the global e-learning marketplace.

This paper examines the creation of the eLearning module comprises of three tasks: writing content, creating graphics, and integrating the multimedia elements.

It will answer the question what is the main challenges to create an e learning module?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Solanki, P. (2018). Challenges to creating an eLearning process: An analysis of the contractual terms and conditions using Multi Attribute Decision Making, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Solanki-challenges-to-creating-an-elearning-process.pdf

 



About the Author


Premvadan Solanki

Paris, France

 

 

 

Premvadan Solanki, from India, has worked as a Regional Service Manager, with nearly 7 years of Extensive Experience in Service and Sales Manager from Consumer electronics, Communications, and Sanitary ware Industries.  He received a Bachelor of Engineering in Electronics and communication from Visvesvaraya Technological University (VTU) in India, and was enrolled in an exchange semester in 2018 at SKEMA Business School in France pursuing the specialization “MSc Project and Program Management and Business Development”.

Premvadan Can be contacted at [email protected]

 

 

When Collaborating with Online Tour Agencies

How to Prevent and Handle Disputes in Contracts

 

STUDENT PAPER

By Erhang Zhou

SKEMA Business Schou

Lille, France

 


 
ABSTRACT

Travel industry has faced many new issues and disputes as the Online Tour Agencies (OTA) has emerged and become a main trend to sales and distributions of tour operators. With new channels to improve sales, many tour operators and providers are willing and eager to work with OTAs. However, as indeed more potential clients are reached through the efforts of OTAs, many disputes also appeared during the partnership. Most of the reasons behind are commissions related, privacy and intellectual property breach or other issues related to interest of either party, which are actually prevented and properly handled through a comprehensive contract.

Therefore the aim of this paper is to find out what kind of disputes clause can be considered and applied in drafting a contract between OTAs and tour operators. By comparisons of several references the muti-attributes decision analysis will be used to see which one is better practice in travel industry.

The findings show that while they all share some common standing in regulating disputes. Some part of each alternative will give some weights on the final preferred options for industrial players to consider when they want to enter a contract to extend their business with OTAs.

In summary, risk attitudes, decision making and disputes procedures compliance will be three major components to reflect to what extend both parties prepare ready to cater for foreseen and unforeseen risks and potentials disputes arising from the risks. Travel industry is changing with the clients’ ideas and habits. So it is necessary to adjust providers and OTAs cooperation in order to provider quality service and responsive after-service to their clients.

Keywords: Online tour agency, tour operators, distribution channels, contractual disputes, Agent-Tour Operator Relations

INTRODUCTION

More and more brick-and-mortar traditional tour agencies extend their distributions channels to online services. It is a smart move to follow the trends with the rise of technological and global economic advances. Mostly people, for personal leisure or business trips, will search a destination on the searching engine and many major online tour agencies will come out.

Online tour agencies (OTAs) is a new norm of e-tourism arises and becomes a trend.  First it is vital to understand the difference between tour operators and online tour agencies (OTA).  A tour operator provides designed or tailored services for customers ‘trip to or at a destination, including the signing contracts or agreements, booking and accommodations either separately or in a  package as a  or more product sold to the end-user, the customer, or the travelers. Tour operator can be a hotel group, a cruise trip provider, a city tour provider, or operator providing services of transportation, guides, meals and airline flights.

The mechanism of online tour products sales channels are booming with great momentum. OTA takes prides in their powerful sales and marketing approaches and serves a platform that sells different tour products and service, and the tour operators or tour providers. Travelers, or the customers benefit a lot from multiple travel products.

Complains by customers happens against either the direct tour operators or the OTAs where the products and services are sold. In most cases customers are the victims that have nowhere to get a refund or a responsible responses. These are dependent on the contractual relations established by the OTAs and tour operators.

Therefore this paper is intended to answer the following questions:

  • What are common clauses for claims and disputes in the contracts between OTAs and tour operators?
  • What are the unresolved disputes and how they arose?
  • How to improve dispute resolutions in contracts?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Zhou, E. (2018). When Collaborating with Online Tour Agencies, How to Prevent and Handle Disputes in Contracts, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Zhou-contract-disputes-with-online-tour-agencies.pdf

 



About the Author


Erhang Zhou

Lille, France

 

 

 

Erhang Zhou, CAPM, is a Master of Science student enrolled in Project and Program Management and Business Development in SKEMA Business School, Lille Campus, with 3 years working experiences in hospitality and investment sectors. She is currently residing in Lille, France and can be contacted at erhang,[email protected]

 

 

How to manage the dispute in clothing industry

 

STUDENT PAPER

By Mengshu Qiao

SKEMA Business School

Paris, France

 


 
ABSTRACT

The clothing industry is expanding to every corner of the world. The trend of outsourcing is still on its way. However, the dispute between owner and oversea outsourcing contractor is becoming a tough problem. Problems like environment pollution, labor environment and intelligence protection are three main issues causing dispute between owner and contractor. When the dispute happens, the production process is heavily affected and delayed. So it is urgent to solve them in an appropriate way. Here, by referring to different documents, we choose six feasible alternatives. Combing with certain criteria, we select the best alternative, which is prevention in advance by using Compensatory model of Additive Weighting Technique. We believe it would be the most efficient way to solve the dispute from the root.

Keywords: dispute resolution, clothing industry, contract, international, outsourcing, environment

INTRODUCTION

The consumption of garment is a rigid demand. However, the most influential brands do not equal to the biggest clothes producers. The typical way is that the brand owners they just designed and marketed them but outsources production factories overseas where the work was done at a tiny fraction of the cost. In 2015, China was the top ranked global textile exporter with a value of approximately 106 billion U.S. dollars.[1] However, oversea outsourcing contractors not always make their job flawless. Different disputes may happen between the owner and contractor.

  1. Problem definition:

Here, I found three typical problems:

  • Problem ONE: About the local environmental pollution

The materials that are involved in the clothing industry have an influence on the environment. Many synthetic materials are derived from petroleum. For example, jeans are way much dirtier behind the shiniest appearance. That denim wash appearance is the result of a several chemical-intensive combinations. The process of printing and dyeing involves such heavy metals as cadmium, lead and mercury.

  • Problem TWO: About the local labor human right

The lack of protection for workers in the labor-intensive clothing producing industry lead to many problems. Many workers in Indian factories earn so little that an entire month’s wages would not buy a single item they produce. Except the low salary, physical and verbal abuse is usual, not mention other welfare. Such behavior will bring in the invention from government, leading to complicated political cost and brand reputation cost.

  • Problem THREE: About the Intelligence Property

Product life-circle in clothing industry is really short, together with increased competition, producers are forced to be even more initiative in terms of innovation. Usually the owner makes new fashion with the help of powerful creative designers and modern technology, as well as marketing campaigns. When it is outsourced to factory, imitators get used of the owner’s original idea, and they do not often have a quality product. And the consumer they are not aware the reality, so they will leave a bad impression on the owner. Such behavior has a very bad influence brand image and customer loyalty.

All in all, the management of the dispute above is non-excusable and should be regulated appropriately and efficiently in the level of contract. So to summarize, the purpose of this research is to answer the following questions:

  • What are the different alternatives to resolve disputes in clothing industry in the level of contract?
  • What is the most suitable dispute process in this particular industry? And why?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Qiao, M. (2018). How to manage the dispute in clothing industry, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Qiao-how-to-manage-dispute-in-clothing-industry.pdf

 



About the Author


Mengshu Qiao

Paris, France

 

 

 

 

Mengshu QIAO is a PGE student in SKEMA Business School, major in Project and Programme Management & Business Development (PPMBD). She graduated from Jinan, China and holds a Bachelor’s degree in Translation Study. In 2016, she has worked for Veolia Campus, a renewable energy company, as knowledge management assistant in Zhuhai, China. She has also worked for NGO AIESEC for the project “Explore China”. She has both project management and translation study background. She lives in Levallois Perret, France now, and can be contacted at [email protected]

 

[1] Top 10 textile exporting countries | Statista. (n.d.). Retrieved from https://www.statista.com/statistics/236397/value-of-the-leading-global-textile-exporters-by-country/

 

 

CM-At-Risk V/S Bridging CM at Risk

V/S CM-Agency: Which is Better & When?

 

STUDENT PAPER

By Khushboo Rupak Kothare

SKEMA Business School

Paris, France / Mumbai, India

 


 
ABSTRACT

Selecting the right construction management project delivery method is the most important decision which is made by the owner before starting any construction project. However, it is easy to get confused when it comes to construction management project delivery methods. But, it is extremely important for the owners to know and understand these methods before starting any construction project. During making the decision the owner should know and have a clear understanding of all the options available and should compare each project delivery method’s advantages & disadvantages to maximize the objectives and minimize the risk. Selection of the most appropriate construction management project delivery method reduces the risk & improves the likelihood of attaining projects quality, cost and schedule goals. Selection of the right project delivery method has a direct impact on the level of success of the project. Hence, it is important to know the numerous factors which should be taken into account while making a decision. While there are many different types of delivery methods, for our purpose, we will discuss the difference between the three major delivery methods and understand which method is most appropriate to use in a particular situation. To explain this, we have used Disjunctive Reasoning to rank our criteria and further, we came to the decision of which construction management project delivery method is the best with the help of Compensatory Model of Additive Weighting Technique.

Keywords: Construction Management, Project Delivery Methods, Construction Management Agency, CM at Risk, Bridging CM at Risk.

INTRODUCTION

Globalization has led to rapid development of construction projects and the research has identified the increase in projects from past 100 years. The Construction Projects are large in size and it plays a significant role in the economy. With the evolution of construction projects, they tend to grow larger and have more complexity. In recent years projects have witnessed an increasing number of construction failures. Project owners are continually attempting to balance power, responsibility and control. However, do owners have confidence in their ability to meet quality, schedule & budget? Are they sure to know each and every contractual policy? Are they trained enough to deal with the issues?

The fact is unless an owner undertakes a great deal of construction, he reasonably is not aware that there can be many different ways of structuring a construction project. Even though an owner is frequently involved with construction, there is a possibility that he may not realize that his regular approach to construction is not the only way that it can be done, and he most probably is not familiar with the manifolds of variations in structuring construction projects.

Project delivery method selection is of very high importance. It’s a system used by owners for organizing and financing operations, maintenance of services, design, and construction by entering into legal agreements with one or more entities. This selection is done at the beginning of a project. This is the best position that the owners can be in to affect its outcomes. There isn’t a best or worst form of construction project delivery. But each approach has corresponding advantages and disadvantages depending on the circumstances and situation. The project owner should as such select a method wherein its advantages would maximize his goals of the project and its disadvantages would be of least importance to him.

STEP 1: Problem Recognition, Definition and Evaluation

Construction Delivery Methods are easy to get confused with, however, a better understanding of them is important to select one for the project. The level of their success mainly depends mainly on selecting the correct delivery method.

This article will thus identify and discuss the types of construction project delivery methods such as CM Agency, CM at Risk and Bridging CM. It will also describe the advantages and disadvantages of using these methods with a view from a practical standpoint, to assist owners in selecting a method that best fits their project.

To summarize this paper is mainly written to answer the following questions:

  1. What are the differences between CM-At-Risk, Bridging CM & CM Agency?
  2. When & under what circumstance each method would be most appropriate to use?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Kothare, R. K. (2018). CM-At-Risk V/S Bridging CM at Risk V/S CM-Agency: Which is Better & When?, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Kothare-cm-at-risk-student-paper.pdf

 



About the Author


Khushboo Rupak Kothare

Mumbai, India

 

 

 

 

Khushboo Kothare is an MSc student at SKEMA Business School, Paris studying Project & Programme Management and Business Development. She holds a Lean Six Sigma Green Belt and is certified in Project Management Prince 2® Foundation, Agile Project Management (AgilePM®) Foundation, Certified Associate in Project Management (CAPM) and Certified Green Project Manager (GPM-b™). She originates from Mumbai, India where she studied Management Studies (BMS) and also holds a Master degree in Commerce (MCOM-Management). She has worked for First Advantage Private Limited in India as a Client and Candidate Associate for a year and thereafter at Intelenet Global Services in India as a Senior Customer Service Executive (Senior Underwriter) & Quality Analyst for more than a year and a half followed by her internship at Balshoi SARL in France as an Intern Business Developer for five months.

Khushboo can be contacted through mail at [email protected] and also on LinkedIn at 422785137.

 

 

Public or Private Construction Contract

The Contractor’s Dilemma Resolved

 

STUDENT PAPER

By Jordy Efanga

SKEMA Business School

Lille, France

 



ABSTRACT

The World is still recovering from a crisis that no one really anticipated. In the United States, numerous banks, companies and contractors went bankrupt. At that time, contractors working for the Federal government, more precisely those executing contracts for it, were quite protected from the effects of the crisis compared to the ones operating in the commercial construction project sector. However, as the economy is recovering, a problem may arise. In a situation in which a contractor can choose between the two alternatives suggested by the paper title, its choice may be influenced by many factors. For instance, a contractor’s decision to bid for one alternative or the other and the resulting contractual obligations due to the choice can affect its profitability. It may increase the probability that the amount the contractor devoted to the project goes up.  After analyzing the dynamics of this topic, the paper suggests that private construction contracts provide the best framework to protect the contractor against carrying unwanted increase in the contract price. Also among the industry’s best practices in relation to private construction contracts, the FIDIC framework provides the best guarantee.

Keywords: Performance bonds, Payment bonds, Contract, Construction, Claims, Procurement, Cost

INTRODUCTION

It is commonly accepted that the main goal of every single private company or organization is to make profit. In that purpose, companies are constantly looking for market opportunities and contracts to cover their initial investment. Some companies work closely with government and bid contracts in which they engage to deliver goods and/or services. The private sector often struggles when the economy is in recession. It is not always the case for the government which primarily get its income by taxing the citizens and companies operating on its territory. Therefore, its cash flows remain quite steady. There are firms that try to grab some public contracts when the economy is not performing well and tend to go back to private sector when things get better.

Getting involved with a government is not as simple as working with a private company. Because given the fact that the government pays the bill with taxpayer’s money, it must be very careful and needs to justify clearly where the money goes, what is it used for. As a result, there are more control and, most of the time, less revenue for the companies contracting with the State. In the field of project management, dealing with Cost is very important, as the final cost of a project must not exceed the budget allocated to it. However, once a project has started, many factors can lead to a cost increase. Many contractors find themselves bankrupt because those contractors chained contracts on which it is hard to make a margin. One reason for it, is that those contractors had to face a contract cost increase. Most of the time, this could not have been avoided because the contractor had to respect the contractual obligations.

Choosing carefully the type of contract to execute is essential for a contractor survival. In this paper, the aim is to analyze clauses in contracts that may increase the financial cost of a project compared to the estimated cost from the contractor’s perspective, when it decides to bid with whether a Public or Private contract (a comparison of the bidding processes will be performed). Change orders are excluded because usually the owner carries the extra cost involved. Based on this analysis, the contract that will minimize the probability of a project’s cost increase will be highlighted.

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Efanga, J. (2018). Public or Private Construction Contract: The Contractor’s Dilemma Resolved, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Efanga-public-or-private-construction-contract.pdf

 



About the Author


Jordy Efanga

Lille, France

 

 

 

 

 Jordy Efanga is currently a Masters Candidate at SKEMA Business School, Lille Campus, based in France for the academic year 2017-2019. He hails from the Republic of Congo. He has previously completed his Masters in Globalization and the World Economy from the University of Lille, 2016-2017. Previously, he has also completed his bachelor’s degree from University of Lille in Strategic Management 2012 – 2016. He may be contacted at [email protected]

 

 

How to Integrate Claims in Public Private Partnerships

Indian International Airports

 

STUDENT PAPER

By Yashwanth Mula

SKEMA Business School

Lille, France

 



ABSTRACT

Public-Private Partnerships (PPPs) are increasing daily in most developing nations such as India, for bringing innovation with proper expertise to deliver services or products. However, the inefficiency in PPP projects occasionally is because of several reasons which mainly arise due to the claims made without prior commitment of the contracting parties. The motto of this paper is by using Multi-Attribute Decision Making analysis and in that with additive weighing technique to determine which is the best alternative method to ensure that the claims are properly integrated in PPPs.  Based on the analysis, contracting parties should understand well a concession contract model and adopt it. Also, considered in it, with a detailed planning and allowing appropriate change order requests as soon as possible.

Key words: Claims, PPP, Construction, Concession, Agreement, Contract, Greenfield, India.

INTRODUCTION

A PPP or 3P is Public-Private-Partnership, which is defined in many ways, generally, it can be referred to as a contractual arrangement between a public-sector entity and a private sector organisation, ensuring that skills, risks and assets are shared together for the provision of products and/or services. There are several types of contracts in PPP such as Build-Operate-Transfer (BOT), Design-Build-Finance-Operate-Maintenance (DBFOM), Concession and few more etc.[1]

There are many issues causing failures in PPP contraction projects in India. Issues, such as the implementation of improper contract models like Concession, BOT, DBFOM, Management etc, inflated traffic projections, corruption, land acquisition, red tape, lack of safety clearances on time.[2] These can result in a compounded issue like improper risk transfer between the parties which create controversies that could delay or stall the overall process and delivery of the intended services. Such issues can be minimised by understanding the requirements, the socio-economic benefits of the intended service and by initially considering that the appropriate contract models are well interpreted and selected by the respective contracting parties. In addition, clear-cut claims of both the parties must be negotiated initially, which can reduce the controversies towards the later stages of the project.

For mega-infrastructure projects, claims made in accordance to their own obligations will often cause controversies between parties. Therefore, “How can Claims help contracting parties perform efficiently in PPP projects”. So, in this case, considering that claims can be an efficient way to ensure both parties face minimum or no issues, is mainly by taking into account that, the additional clauses of claims which are beneficial for either parties are evaluated and then to be incorporated, considering the reasons particularly for arise of claims issues such as, delay in payments, force majeure, schedule delays, liquidated damages, disputes, change order and proposal requests etc.

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Mula, Y. (2018). How to Integrate Claims in Public Private Partnerships: Indian International Airports, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Mula-integrate-claims-in-public-private-partnerships.pdf



About the Author


Yashwanth Mula

Lille, France

 

 

 

Yashwant Mula is an MSc student in SKEMA Business School, Masters in Project and Programme Management & Business Development (PPMBD). He graduated from National Institute of Technology-Calicut, India and holds a Bachelor’s in Technology degree in Civil Engineering. In 2016, he worked at Sri Vatsa Engineers, a local construction company, as assistant site engineer in Visakhapatnam, Andhra Pradesh, India. He has both project management and civil engineering education and background. He currently lives in Lille, France and can be contacted at [email protected].

 

[1] See Yong Hee Kong (2007). Different models on PPP  https://ppiaf.org/sites/ppiaf.org/files/documents/toolkits/Cross-Border-Infrastructure-Toolkit/Cross-Border%20Compilation%20ver%2029%20Jan%2007/Session%204%20-%20Private%20Sector%20Participation/Private%20Sector_02%20Diferent%20Models%20of%20PPP%20-%2029%20Jan%2007.pdf 

[2] Arindum Chaudhuri (2013). Why the public-private partnership model has failed in India http://www.thesundayindian.com/en/story/why-the-public-private-partnership-model-has-failed-in-india/46608/

 

 

The importance of contract execution management

in project management

 

STUDENT PAPER

By Yang Xu

SKEMA Business School

Paris, France

 



ABSTRACT

The modern enterprise’s economic contacts and the determination of all kinds of relations are mainly carried out through contracts. As one of the important contents of the modern enterprise management system, contract management is one of the important factors to realize the successful operation and management of enterprises. Contract management is an important part of project management. Project contract management is an important guarantee to ensure the smooth implementation of construction projects. It is also an important means to ensure the legitimate interests of the project implementation.

Key words: Contract Management; Enterprise Project Management; Importance; Execution; risk identification, Management of risk

INTRODUCTION

In a world of business were contract are the most important proof that we can have, the contract execution management in a project is important. The implementation of contract management helps to improve business development, reduce investment in business costs, and improve an important way of business economic benefits.

When we talked about the contract execution management in enterprise project management we can mainly follow two aspects to consider: On the one hand, the production and operation can be successfully merged with the market organically so that the competitiveness and resilience of the enterprise in the market can be enhanced; on the other hand, the contractual execution management can enable the enterprise to maintain its own rights while performing its functions so as to ensure the economic efficiency of enterprises.

Therefore, contract execution management occupies an absolute position in project management. Systematically elaborating on its characteristics and importance possesses the significance of the times and science.

The role of contract management in the project can be subdivided into: helping company to establish and improve the concept of the legal system and the using of legal means to safeguard their legitimate rights and interests; Promote the level of their own management to improve and create business benefits; Clarify the business and Employee rights and obligations; contract management can effectively reduce risk and ensure equity; it can also improve efficiency and quality.

However, in today’s society, many companies or engineering projects lack a contract management system. And it can cause issues very important for the company: For example, the lack of dynamic management of the contract; the contract is not standardized, the terms are too simple; the concept of contract law is weak, etc.

This paper mainly analyses the importance of contract execution management in project management, analyzes the specific content of contract execution management and its focus in different stages, and then emphasizes that contract execution management is the top priority of project management.

From this analysis this paper will help answer the following question:

1   How to Identify Contract Defects and Risks in Projects?

2   How to effectively implement the contract management can reduce or avoid the risk?

3 Correctly identify the Strengths; Weaknesses; Opportunities; Threats of contract management in project.

 

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 Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Xu, Y. (2018). The importance of contract execution management in project management, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Xu-importance-of-contract-execution-management-student-paper.pdf



About the Author


Yang Xu

Paris, France

 

 

 

 

Yang Xu is an MSc student in SKEMA Business School, majoring in Project and Programme Management & Business Development (PPMBD). He graduated from la Rochelle business school (sup de co) and obtained a Bachelor’s degree in commercial management. He had worked in urban construction in China and now has his own business in Paris. He lives in Paris, France now and can be contacted at [email protected].

Yang chose SKEMA Business School because first it started out to be more suitable. The second was because there are more international students and internationalization in the school. The school atmosphere was very good. At the same time, the school rankings were not bad, still in progress.

He has been in France for 5 years. He says “the French people are good and bad. This is certain. French elegance, Paris, the temperament of those ladies, make you think that is the classic interpretation. However, in some small cities, some French people are still quite arrogant. They have some prejudice against China. This was something I did not expect before I came to France. They all say that French people are romantic, but they will always deny that because their romance is not deliberate, but into life, just as visiting the park, they often see Grandma and Grandpa hand in hand, watching in the years of quiet.

Skema helped me a lot, and after two years of classes in Skema I learned a lot about business theory, which made me yearn more for the coming life.”

 

 

Contractual Issues of Flights Overbooking

 

STUDENT PAPER

By Rui Zheng

SKEMA Business School

Paris, France

 



ABSTRACT

Overbooking is a revenue management measure of airline companies while these years more and more issues show up along with airline companies using this to boost benefits. The author finds three problems which are: the airline contract terms vary among companies and there is no baseline, customer may not know clearly the company responsibility and customers’ rights, and the improvement should make towards overbooking terms. To answer these questions, the author used dominance method (Pair Wise Comparison and Additive weighting technique) to analyze, and find out that Air France contract provides the most comprehensive terms regarding overbooking and could become a baseline. Also, another finding is that customers don’t really know what is written in the contract because the contract is too long, hard to understand or hard to access. Based on all the findings that we gave some suggestions, this paper aims to help improve all airline companies contract regarding overbooking.

Key words: Overbooking, Contract, Terms and Conditions, Contract of carriage, Revenue management, Airline, Oversell

INTRODUCTION

On 9 April 2017, a man was dragged off from a United Airlines which was overbooking and failing to find volunteers willing to go down. Therefore, they choose to kick off the people randomly and forced him to leave. Later, the video disseminated all over internet. This made a huge impact to the brand reputation of United Airlines and ended with United Airlines paying a lot to fix the problem and avoid litigation. This brings overbooking issues back to people’s attention and lets people begin to think. Does an airline company have rights to do that? What are costumer rights when this happens? Further, what are written in the airline contract of carriage?

Overbooking is a revenue management measure of airlines companies, aiming at reducing or eliminate the negative economic impact of customer no shown up (cancel or change flights). It means that the actual number of seats exceeds the actual carrying capacity of the flight, so that it is very frequently for passengers who have purchased tickets but was denied boarding.  This oversell method solves the problem of the seat-emptiness in a flight because of customer not shown-up. While at the same time this cause a lot of delays of flights and complains of customer. Severely, as the worst case, company may loss customers forever as what happened to United Airlines.  Obviously, it has a critical signification for companies’ development and marking strategy.

  1. 1. Problem definition

As we can see, numerous problems arise in particular as regard to the problem overbooking. Some people even think flights overbooking as a kind of “contract fraud”. Is that true? This paper tries to figure out what is written in airline company’s contract, clarifies the specific terms and conditions regarding overbooking. By comparing the different statements about overbooking among the contracts of carriage of United Airlines, Air France and Air China which can represent their located region (USA, France, China) to compare and analyze their terms and conditions on overbooking. This paper will find out the best contract which is more favorable to customers and should become a baseline for other airline companies. In addition, based on the findings of the problems the author will give several suggestions in order to make airline contracts more comprehensive and practical.

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Zheng, R. (2018). Contractual Issues of Flights Overbooking, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Zheng-contractual-issues-of-flights-overbooking-student-paper.pdf



About the Author


Rui Zheng

Paris, France

 

 


Rui Zheng
is a master student in SKEMA Business School Paris, major in Project and Programme Management & Business Development (MSC). She graduated from South China University of Technology and holds double bachelor degrees on both Tourism & Hotel Management and Finance. After that she had one year master study of Project Management in CNAM Paris. She loves to embrace change. Passion is a word that defines the way she sees life and that drives her actions in every path of the journey. Now she is well equipped with the knowledge of project management and ready to become a real Project Manager in the future. She lives in Paris now and can be contacted at [email protected].

 

 

Disputes in IT contracts

Source, Impact and Resolution tactics in early stages

 

STUDENT PAPER

By Abhinay Kumar Jha

SKEMA Business School

Paris, France

 



ABSTRACT

Agreements and disagreements are part of everyday life and when it comes to contracts a disagreement can lead to some serious repercussions. The Information Technology sector in particular has been subjected to major contractual disputes, some leading to closure of businesses. The impact of dispute in this sector can be significantly reduced by understanding its sources and implementing effective methods of resolution in the contract documents. This paper describes the different techniques that if applied early in stages of a contract will help to scale down or even diminish an unpleasant situation. The paper provides enough evidences to support the use of Alternative Dispute Resolution techniques in combination with Litigation option in a contract. The results of this document will help to understand the benefits of using both techniques together, with reasoning and will prove that this is the method of the future.

Key words: Dispute, Information Technology, Early Stages, Resolution, Impact, IT, Solution, Tactics

INTRODUCTION

The development of new technologies, the globalization of business and the current political uncertainty in the last 5 years has prompted international organizations to increase its resources to Informational Technology (“IT”).  IT frequently involves contracting with third parties. This is due to the specific and complex nature of this services and the need for different teams and systems.

IT contracts, like any other contract, will always entail legal and operational risks. Accordingly, for any organization one of the key focus areas to ensure sustainability of is legal dispute management. How well an organization handles the disputes that arise with growth and the entering into complex contracts determines the sound progress and development of the company.

The use of emerging technology and online programs has been critical in mitigating and/or resolving a material number of disputes. While there are international bodies and organizations that help to resolve disputes such as the World Trade Organization (“WTO”), the International Chamber of Commerce (“ICC”), and the National Center for Technology and Dispute Resolution (the “NTCDR”), these are organizations whose dispute systems are too specialized.

No doubt, when it comes to budgeting for a legal department, the need to cover for any IT legal fees will result in a significant part of the budget, a direct consequence of the drafting, negotiation and review of agreements. Having a carefully crafted contract may help in reducing the number of disputes arising out of it, but it will not guarantee that such agreement is free from dispute. How a contract works in practice will depend on how it was drafted, the actual underlying facts and eventually how the parties construe or interpret its terms. There may also be external aspects outside the contract which a company cannot foresee.

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Jha, A. K. (2018). Disputes in IT contracts – Source, Impact and Resolution tactics in early stages, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Jha-disputes-in-IT-contracts-student-paper.pdf



About the Author


Abhinay Kumar Jha

Paris, France

 


Abhinay Kumar Jha
is a student of MSC. Project & Programme Management and Business Development from AACSB accredited SKEMA Business School, Paris. With nearly 11 years of extensive work experience in Information technology and Customer management, Mr. Jha has experience in both Private and Government sectors. A Post Graduate Diploma in Management, he was working for The Embassy of the United States of America in India as a System Administrator. He has many excellence performance awards under his belt from his previous employers. Working as Senior System Analysts in HCL technologies, Indian multinational service IT Service Company, he resolved technical issues for EMC customers. An experienced solution provider, Mr. Jha also handed disputes for British Gas Business customers under EXL services.com and British Telecom under HCL infrastructure in customer management. He can be contacted at [email protected] or www.linkedin.com/in/abhinaykjha

 

 

Benchmarking Chinese Construction Contracts

Against Global Standards

 

STUDENT PAPER

By Xingshi Guo

SKEMA Business School

Lille, France

 



ABSTRACT

During the development of property project, many contracts involved to be signed which greatly affects the success of the project. As the conflict and dispute caused by complicated conditions in those contract, contracts play an essential role in a project. Hence, this paper takes one kind of those contract, contract of construction from a Chinese client as the sample and basement from the Southernstar Consultant LLC (SsC) and Consensus Docs, to check and compare it with global standard and checklist of contract of construction as benchmark from The American Institute of Architects (AIA), Sarah Fox’s 500 Words and National Community Development Association (NCDA). It is to represent an international standard as the lesson learned for developing countries. From the comparison analysis, it found the client should take Consensus Docs as a standard of the contract of construction and some conditions are advised to improve.

Key words: Chinese construction contract, global construction contract standard, benchmark analysis, employer and contractor, contract management

INTRODUCTION

Since it is common to witness the phenomenon of dispute and profit-lose of the construction project in China, the issue of the contract of construction in contract management, instead of the sole negotiation process, should be paid high attention to. It not only could reduce amount of cost at contractor side and guarantee the quality at employer side, but also could eliminate project time-wasting and maintain sustainable cooperation. At the same time, based on good foundation of the construction contract at original level, the tendency of the company is growing up to develop itself nationally even internationally, while the priority is to update the contract items and standards to follow up the senior level work.

At a lower-level, the conditions of the contract of construction illustrate and limit both the deliverables and deviations on how to do the project. At a higher-level, it involves the responsible parties and relevant rights to implement in all aspects of the project. For this reason, it involves many aspects of conditions in the contract of construction, which is the complicate and crucial part to cover exhaustive aspects of it. Therefore, at the perspective of both contractor and employer, the paper would analyze and benchmark one type of actual construction contract in a company in China from the author’s client who is the contractor, taking the baseline of checklist from SsC and Consensus Docs, to compare it with global guide and checklist of contract of construction as benchmark from AIA, Sarah Fox, and NCDA. It is to figure out the necessary general conditions to be added and needed in the Chinese construction contract.

In a nutshell, this paper is intended to research and find answers to the following questions:

  • What are the required and crucial general conditions missed in this Chinese contract of construction to avoid conflict and/or dispute?
  • What is the global standard of general terms and conditions for Chinese contract of construction based on these checklists?

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Guo, X. (2018). Benchmarking Chinese Construction Contracts Against Global Standards, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Guo-benchmarking-chinese-construction-contracts-against-global-standards.pdf



About the Author


Xingshi Guo

Lille, France

 

 


Xingshi Guo
is an MSc student majoring in Project and Programme Management & Business Development (PPMBD) in SKEMA Business School. She is studying and practicing contract management, leadership management and scheduling in project. She has her two postgraduate years respectively in Nice and Lille, France campus. She is the member of PMI and the PMI France Chapter with the certifications of PRINCE2 foundation and AgilePM foundation. She graduated from Hubei Normal University and majored in English for Bachelor’s degree in China; she published two papers about interpreting and translation in magazines guided by her professor, XIANG Qunxing in Jan, 2015. She had an internship working as the assistant of project manager in industry cooperation department in Shanghai Jiaotong University in China in 2017.

Xingshi can be contacted at [email protected].

 

Deal with risks

between different franchise agreements

 

STUDENT PAPER

By Aurélie Driant

SKEMA Business School

Paris, France

 



Abstract

Europe is the most dynamic sector around the world for franchises business, 14 000 franchisors are registered. Moreover, this number is raising up year after year since 1930. According to this information we can think that the franchise unit is an easy way to set up. But what’s happened in reality? What are the main risks when someone decide to sign his first franchise agreement? How could we be sure to sign the more relevant franchise agreement?  Thanks to this paper the reader will be able to understand the difference between the direct franchising and the master franchising agreement. Then a comparison between four agreements will be developed. By using the additive weighting technique, we are going to prove that multi-unit agreement with an area development is the best choice for handling a successful business without any particular background.

Keys words:  Franchise qualities, Contractors, Security, Franchisor, Franchises, Viability, Business success

Introduction

Nowadays, the franchise sector in France represents more than 55 billion of euros every year. The number of franchisors has tripled between 2004 and 2016. In France, this dynamic sector includes 1900 franchisors for more than 70 000 franchises. These numbers are not impressed when you know that franchisor has twice as likely to overpass two years of its existence instead of an individual company.

Under the definition of Oxford dictionary, a franchise is defined as: « An authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities, for example acting as an agent for a company’s products. »

Franchise contract is signed between two independent parties. The franchisee will have the right to use services under the operating methods of the franchisor. Besides, the franchisor will provide rights and resources to support the franchisee.

The most notorious names in this sector are:

  • 7Eleven: food and various product distribution stores, born in 1920 in the US, which includes 60 000 stores in 18 countries
  • Subway: fast food restaurants, born in 1965 in the US, which includes 44 500 restaurants 27 000 of which are in US
  • MacDonald’s: fast food restaurants, born in 1955 in the US, which includes 36 000 restaurants around the world

Many rumors say that buying a franchise is an easy way to set up: « Everything is all set-up for you », « You’re buying a business in a box when you buy a franchise ».

Within all of these sentences, how could we find an objective point of view to look for the most successful business? Which are the exact risks when we decide to set up a franchise unit?

This document aims at, first defining the main risks within a franchise contract and then to identify and analyze them against different franchise agreements.

Thanks to this essay, the future contractor will be able to understand the different handling risks between different contracts. This essay will go further through the pros of franchise ownership and the cons of franchise ownership. Then, we will able to know which agreement is going to be the most relevant for handling a successful franchise business without any particular background.

More…

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 Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Driant, A. (2018). Deal with risks between different franchise agreements, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Driant-deal-with-risks-between-franchise-agreements.pdf



About the Author


Aurélie Driant

Paris, France

 

 



Aurélie Driant
is currently a student at Skema Business School in Paris for the preparation of a Master 2 Grande École specialized in project management & business development with a semester in China and the US  2 years of experience in the high-end retail, hotel and e-commerce sector at international level.

 

 

Benchmarking change orders (variation order)

in oil and gas contract versus FIDIC, AIA, EJCDC and CONSENSUS DOCS Baselines

 

STUDENT PAPER

By Meryem Benachour

SKEMA Business School

Paris, France

 


 
ABSTRACT

Change Orders (variation) are very common in oil and gas projects, they induces a change in the project original contractual scope of work.  They, often lead to project overruns, dissatisfaction of stakeholders and can end in claims and disputes. Thus, the purpose of this paper is to explore the best practices related to change management. This paper aimed to analyse change contractual clause of four different standard forms; EJCDC, AIA, FIDIC and Consensus Docs. Then, compare them with the change clause of an oil and gas contract. The analysis and comparison were conducted using Multi Attribute Decision Making non-compensatory and compensatory methods. The result of the analysis showed that the oil and gas contract is the most efficient contract regarding the variation (change) management. This contract defined the modifications that are not considered as variation to the contractual scope and established means to manage the disagreements about change orders during the project life cycle. The variation terms in the oil and gas industry has to set up more adequate methods to evaluate the cost and time effects of the change orders.

Key words:  Variation order, Change order, change request, request for information, impact of change order, causes of change order, oil and gas project, change control

INTRODUCTION

Nowadays, the oil and gas market is very unstable due to the recent dropping in prices and to the fact that the “easy oil” approaches its end. A lot of companies plunged into the red and several projects have been cancelled or frozen since 2015. The project owners are obliged now to adapt their organization and project execution processes to a lower price future. On the other hand, the contractors are constrained to lower their prices and reduce their margins to stay competitive.

The projects have to be more efficient and adaptive to their changing environment and establish sustainable project management processes. The industry research showed that “approximately 40% of construction projects undergo more than 10% change in their scope of work” [1]. Those variation orders lead often to delays, cost, overruns and many other negative impacts such as the relationship degradation between owner and contractor, claims or disputes.

It is important to understand the best practices in regard to change or variation management in order to ensure a successful project delivery and enhance the performance of project management in the oil and gas industry.  Evaluate the effectiveness of the variation terms and clauses in oil and gas contracts, identify the best way for the contractor to prove that there’s a change in scope of work and analyze the ways the variation and change orders are kept control in oil and gas projects.

In this paper, the author explores the variation clause of an oil and gas contract and compares it to the major references in construction projects, such as, AIA, EJCDC, FIDIC and Consensus Doc. The author uses the Multi Attribute Decision Making techniques to analyze the different statements on change (variation) in an oil and gas contract and the reference documents listed above, evaluate the issues and try to determine any improvement in order to ensure a successful project delivery and enhance project’s performance.

More…

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Benachour, M. (2018). Benchmarking change orders (variation order) in oil and gas contract versus FIDIC, AIA, EJCDC and CONSENSUS DOCS Baselines, PM World Journal, Volume VII, Issue VII – July. Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Benachour-benchmarking-change-orders-in-oil-and-gas-contracts.pdf



About the Author


Meryem Benachour

Paris, France

 

 

 

Meryem Benachour is an enthusiastic and confident project engineer with extensive experience in managing complex Projects in the Energy and IT Industries. Meryem graduated in industrial engineering from the Polytechnic School of Algiers. She gained significant project management experience in her career during her tenure in a leading Engineering Firm. This experience consists in large onshore and offshore Oil & Gas construction projects in both Algeria and France. Meryem has also worked as an Operations Lead for Google Italy, supporting Google Maps Projects in very challenging contexts.

Meryem is currently enrolled in a Master of Science in SKEMA Business School specializing in Project & Programme Management and Business Development.

 

[1] IMPACT OF VARIATION ORDERS ON PUBLIC CONSTRUCTION PROJECTS. (2012). [ebook] UK: Association of Researchers in Construction Management

 

 

Wholesale Food Service Contract

Resolution of conflicts between distributors and suppliers on the wholesale food service market

 

STUDENT PAPER

By Mikael Aboudarham

SKEMA Business School

Paris, France

 



ABSTRACT

The wholesale food industry is one of the heaviest industrial sectors worldwide. It employs thousands of people and is responsible for the safety and well-being of billions of people. Within this industry, one chore relation is the one between suppliers and distributors. Since years now, the overall climate has fostered tension and conflicts, with issues of payment, delays and non-respect of mutual agreement between the different parties. From established contract to mediation and even arbitration, resolution of conflicts must ensure efficiency. Lack of understanding of the special needs of each part is a reason to conduct an analysis and comparison in order to understand what needs to be done to improve the relation between two main actors of the wholesale food service market. To ensure that, the following report focuses on five different alternatives which are contracts that are all different at their basis. The author analyses each contract thanks to a process that allows clear understanding of advantages and disadvantage, in order to select a preferred alternative to resolve conflict between suppliers and distributors.

Key Words: Conflict, Dispute, Default, Claim, Resolution

INTRODUCTION

Food industry is a wide area, generating more than 172 billion euros in France, with more than 17 647 companies sharing the market. This industry is the most important one in France in terms of revenues, employment, R&D and many actors with their own working ways are composing it. Because of the singular specificities of each company in this sector, this paper will be focused on the wholesale food service contracts, from the producer to the retailer, a common document for each relation between these parties.

The current situation in the Food Industry highlights many difficulties from the producers’ point of view, especially concerning their relationships with retailers, who gain more and more power through years. Because of these evolving relations, consequences may appear between the partners; conflicts may occur and need to be solved before any negative repercussions on the relation, on the final customer. Indeed, in the current French market, more and more retailers have the status of big multinationals or even conglomerates, and use their power in order to manage the payment’s delay. In wholesale food service contract, this is called a Default, a growing trend within the French food industry which is the major source of dispute between the both parties and should be efficiently resolved.

Are there some methods to solve conflicts between distributors and suppliers? How do they work? What are the parties’ responsibilities in this kind of situation? What are the possible consequences? What tools should be used? Although the use of food service contracts between parties and the possible intervention of the government to manage this kind of situation, the resolution methods seem unclear, without a real viability. And this situation may concern each actor of this market and have consequences on final consumers, reasons why it should be understood by all.

Objective Statement of the project

Through this report will be analyzed what is an original food service contract, and its role in case of dispute between distributor and supplier in food industry to understand the used methods to resolve it. In order to analyze it, an original food service contract will be compared to 4 types of contract that are most used: FIDIC, Consensus, EJCDC and AIA to demonstrate its viability and feasible alternatives to face this kind of issue through the MADM methodology which allows to show both qualitative and quantitative research.

The objective of this report is to focus on solutions to change the initial relationship between producers and retailers and to resolve conflicts between them as well. Since a long time now, the climate is tense between parties. So, it’s important to put in light all the issues and create some recommendation bases on assumptions and research. As a future member of the food industry, my major concern is to help my colleagues to create a better understanding of the market needs and reduce the degree of dissatisfaction within an industry in transformation.

We will answer the following questions: What are the current issues regarding the relation between supplier and distributor in the wholesale food service market that creates conflict? How can we determine which alternative would work and avoid dispute claim?

More…

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 Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Aboudarham, M. (2018). Wholesale Food Service Contract: Resolution of conflicts between distributors and suppliers on the wholesale food service market, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Aboudarham-wholesale-food-service-contract-student-paper.pdf



About the Author


Mikael Aboudarham

Paris, France

 

 



My name is Mikael Aboudarham. I am a 24 year old French student at SKEMA Business school. I am currently following the Msc in Project and program management & Business development (Msc PPMBD) which is one of the best ranked Msc in the world. I’m a former student of the Fundacao Dom Cabral in Belo Horizonte in Brazil and also in Coventry University in UK. I also got a bachelor degree in sport management in 2016. I consider myself as an optimistic person, always looking for ways to improve my performances and my relation with people. I’m also very sociable and like to exchange with other people. This is for me the best way of learning, listening to people with previous experience.

My professional background relates mostly in sales and business development. I had previous internship in Ferrero as area sales manager. I also worked for Mercedes Benz as assistant customer relations. I had opportunity to manage teams, take responsibilities and develop the sales of every company I worked with. Regarding project management, I count one main experience in the sport sector. I worked as an assistant project manager for the league of Tennis in Paris. The main purpose of this work experience was to put in place an international tournament of tennis, with players ranked from 300 to top 100 in the world.

Within the associative world, I also have some experience as project manager. I worked with Amaury Sport Organization (ASO) for very big events such as the « Marathon de Paris » which counts more than 40,000 participants, or even the ‘Challenge du Monde des Grande Ecoles’ which is a competition gathering students from all French business schools.

All those big events helped me to develop my skills and competence for project management, and I am looking forward to developing it thanks to the new challenge that I have embraced. From January 2018, I work in a new internship as brand manager in a great FMCG company, where I am developing my knowledge in a new industry for me. This is part of my will to learn the maximum in order to leave SKEMA business school with a toolbox as complete as possible.

I am currently living in Paris and can be contacted at [email protected]

 

 

Terms and Conditions for Payments

from Online Music Streaming Platforms

 

STUDENT PAPER

By Mathieu Sabadie

SKEMA Business School

Lille, France

 



ABSTRACT 

The problem we speak about is very important within the whole musical industry. In fact, payments from online platforms are to be one of the most important sources of revenues for artists. We should care about this issue because it could provoke discouragement of artists but also because, with the emergence of DIY (Do It Yourself) artists and the difference of money they earn, this situation could finish with the end of Major Labels.

Our problem is that payment terms and conditions are not equally dispatched between online platforms, Major Labels and Artists when we speak about benefits created by the online music market.

I have chosen to base my analysis on 3 particular contract frameworks to see, thanks to different tools, which framework could be the more efficient to provide more equity.

We easily see that the two frameworks from the CSI Documents are the most efficient to solve (not perfectly) our issue. From these two solutions, we should retain the Cost plus Fee one, because it is more flexible and precise than the other one.

Our answer could provide more equity, but also more flexibility in payments and terms, and a real adaptation to the music industry could save Major Labels by regulating the market better, and providing more equity.

Key words:  Music Streaming, Payments, Online Platforms, Youtube, Royalties, Spotify, Labels

INTRODUCTION

Among passion, the most important motivation for artists is to earn money. The fact is that the music industry has been radically changing during the past decade. Indeed, with the emergence of a highly connected world, big musical labels had to find a new way to attract people towards buying music while they now can have it for free thanks to illegal fire sharing. In fact, the sources of benefits were drastically cut by the end of the material disk: benefits for disks sales passed from 12.8 billion dollars to 5.4 billion dollars between 1999 and 2008[1] and Labels were not able to find radically new ways of making money. Due to this situation, a new actor came into play with the Apple Itunes Store in 2004: the downloading and streaming web platforms. The system they created was rules free because completely new. Labels and digital actors went into struggle to control this fast growing market, overcoming since 2015 the physical one[2].

If we go out this general vision and look more into details, we can see that even if web platforms are all losing money (174 million dollars for Youtube, 250 million dollars for Pandora between June 2016 and June 2017[3] ³), artists with label contracts payments are not as important as we can imagine in this area.

Nowadays, web platforms must pay advances to Major Labels to exploit their music catalogs. Major Labels next verse royalties to the Artist, based on the contract clause(s) related to this topic. The fact is that Major Labels redistribute only a few parts of it (17 $ per 1000 plays on free platforms for example).

Payments are formally formulated and decided within the artist’s contracts and must be documented to prevent stakeholders’ issues or misunderstandings. It is a mandatory to use element and must be agreed by all parts. Different payment frameworks are usually available, and I have decided to base my reflection in five different forms: AIA, CSI and Consensus Doc.

I will provide answers to the next questions:

  • What are the differences between the different Payment forms useful to improve artists’ retribution?
  • Which one would be the most efficient to enable artists’ royalties to be higher?
  • What are the potential risks, among artists’ benefits, not to use the relevant change orders form?

More

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Sabadie, M. (2018). Terms and Conditions for Payments from Online Music Streaming Platforms, PM World Journal, Volume VII, Issue VI – June. Available online at https://pmworldjournal.net/wp-content/uploads/2018/06/pmwj71-Jun2018-Sabadie-payments-from-online-music-streaming.pdf



About the Author


Mathieu Sabadie

Lille, France

 

 

Mathieu Sabadie is a Student and a Project Management Practitioner both in associative and in professional life. He has run events, projects and Programmes in further different sectors (Music, Arts, Logistics, Consulting). He has been Project Manager for the SKEMA Arts Week (event for 1500 participants) or Place, Beverage and Media Manager at Skip the Beat Festival (first edition of a House Music Festival in Lille for 1000 participants). He has also been a Project Manager for the three French Speaking curses of the Escola Europea de Short Sea Shipping in Barcelona and Junior Consultant for International Team Consulting, also in Barcelona. He is now working as a Freelance Consultant for various French SME and passing and MSc in Project and Programme Management / Business Development in SKEMA Business School in Lille, France and will be graduated on June of 2019. Throughout this Master he is involved in the organization of a TEDx Conference in SKEMA and has run a project in rural village development in Morocco. He is Agile PM Foundation and Green Project Management certified and currently passing the Prince 2 Foundation Certification. He also has some experiences in Recruitment, Sales, Business Development, Customer Service and Team Management. Mathieu can be contacted at [email protected].

 

[1] Ben Kilmer (2010). The Evolution Of The Music Industry The Effect Of Technology And Law On Strategic Management And Sustainability. SlideShare. Retrieved from https://www.slideshare.net/BenKilmer/theevolutionofthemusicindustrytheeffectoftechnologyandlawonstrategicmanagementandsustainabilitykilmer2010

[2] IFPI (2016) GMR 2016. IFPI.org. Retrieved from http://www.ifpi.org/downloads/GMR2016.pdf

[3] Daniel Sanchez (2017). What Streaming Music Services Pay (Updated for 2017). Digitalmusicnews.com. Retrieved from https://www.digitalmusicnews.com/2017/07/24/whatstreamingmusicservicespayupdatedfor2017/

 

Dwarves’ Forge or High Tech Manufacturer?

Bombardier’s Quality Crisis

 

STUDENT PAPER

By Fei Wang

SKEMA Business School

Paris, France

 



ABSTRACT

The objective of this paper is to resolve the quality control issues at Bombardier™ Inc., recipient of a $1.2 billion contract to manufacture 204 light rail vehicles (LRVs) for the Toronto Transit Commission (TTC). It has identified a major crisis in the municipal transportation system of Canada’s largest city, Toronto, which is also North America’s third largest city. In the ten years since the contract was awarded, Bombardier has missed every single delivery deadline many times over, threatening the operational network of the TTC. The author has referenced and researched news articles and opinion, as well as corporate financial and legal documentation and industry publications to arrive at the conclusions. It was discovered that Bombardier has few problems with timely LRV delivery from its European manufacturing plants, but many from the plants in Ontario, Canada and Mexico. In conclusion, it is recommended that the application of stringent Root Cause Analysis (RCA) methodology be implemented in all of Bombardier’s Transportation division.

Key words: Quality control, Just-in-time (JIT), Bombardier, Toronto, Toronto Transit Commission (TTC), Work breakdown structure (WBS), Pareto, Root Cause Analysis (RCA), define-measure-analyze-improve-control (DMAIC), Six Sigma (6σ), Supply Chain, quality pre-warning mechanism (QPWM),

INTRODUCTION

A Toronto Transit Commission (TTC) engineer characterized the assembly of vehicles in Thunder Bay as being “hand-built.” A factory worker characterized it more bluntly: “They take f–king hammers and they smash the steel into shape, like it’s a f–king dwarves’ forge.”

“Bombardier has been shut out of a $4-billion contract to supply subway cars to New York City because of past delivery delays.”

These statements dramatically demonstrate the quality management crisis facing Bombardier Inc., the largest producer of railcars in the world. In 2009, the TTC inked a contract with Bombardier for a $1.2 Cdn billion order for 204 new low floor “Flexity” light rail vehicles (LRVs) to replace the existing 30-year old dilapidated fleet. Since the commencement of the order, a host of contractual problems have significantly delayed production, so much so that Toronto Mayor John Tory called the repeated delays a “farce” in October 2017.

It was announced in the 1998 Bombardier Annual Report to Shareholders that …” The Six Sigma program will be a key contributor in our aim to reach our new five-year pre-tax target profit margin of 10%. After its successful introduction at Bombardier Aerospace in 1997, the Six Sigma quality and productivity improvement program is now being implemented company-wide.”

It has not worked.

In 2016 the TTC exercised a legal claim against Bombardier for $50 million. The proceeds of the lawsuit are to be used to repair existing surface transit vehicles as well as to commission buses to replace them, resulting in fewer buses for existing routes. The importance is that Toronto requires a reliable and efficient transit system NOW, not years down the road.

How can Bombardier improve quality control and supply chain management to ensure it meets its contractual agreements for future deliveries?

More…

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Wang, F. (2018). Dwarves’ Forge or High Tech Manufacturer? Bombardier’s Quality Crisis, PM World Journal, Volume VII, Issue VI – June. Available online at https://pmworldjournal.net/wp-content/uploads/2018/06/pmwj71-Jun2018-Wang-Fei-dwarves-forge-or-high-tech-manufacturer.pdf



About the Author


Fei Wang

Paris, France

 

 

 

Fei Wang is a MSc student in SKEMA Business School, Majoring in Project and Programme Management &Business Development, with nearly 10 years of working experience in business management and International construction projects. He has worked as a project manager assistant, administrator, financial assistant and international business manager in China Railway Design Corporation (CRDC) and “TSDI-APEC-EDON” railway engineering consortium consultancy in different international projects in North America, Russia, Kenya and Tanzania. He has both infrastructure engineering and project management education background and experience. He lives in Paris, France now and can be contacted at [email protected]

 

 

Problems of Bidding Process in China

 

STUDENT PAPER

By Peng Wang

SKEMA Business School

Paris, France

 



ABSTRACT

The bidding process is one of the most important processes in a project, it decides whether a group could have a chance to do a project or not. In such a vital process, there are companies making profits by using special method based on relationship. For this paper, the author interviews an employee to get the real data and analyze these data with the MADM method. The author points the deep reason behind the problems of bidding process. That is the relationship plays the key role in the bidding process. To reach a healthy BAU environment, the author gives suggestions to solve the problems in bidding process.

Key words:     Bidding process, relationship, technical parameter, IT, China, culture

INTRODUCTION

Problem Recognition

Bidding process is one of the most important processes in a project, it decides whether a group could have a chance to do a project or not. From the 21st century, Chinese market is becoming more attracting in the whole world. Based on the data from Ministry of Commerce of the PRC, from January to July 2017, there are 17695 foreign companies founded, and the actual foreign capital is used 72.14 billion dollars[1].Therefore, the basic research on Chinese bidding system is necessary in order to get the bid among several competitors. There are a lot of visible and invisible rules and conventions during the bidding process. By interviewing an employee in a Telecommunication/ Network company located in Harbin, North-east of China, second-line city, and seeing through the Chinese bidding laws and some bidding documents in the real business, this paper will provide a different view on Chinese bidding process, choosing IT field as an example, to show some process which does not write down in the Chinese bidding law.

Since there is no effective paper reflecting the system of ‘operating in shadow’, the author will carry on the analysis from an exclusive perspective; Chinese view. One process the author will discuss is that sometimes basing the special relationship between two parties in bidding process, the part of making the bid will communicate the specific parameter of their bid in order to let the only company they want to cooperate have the chance to win the bidding. So the deeper reason is well worth researching.

The purpose of this paper is to let those people who want to do business with Chinese companies know some hidden rules in the bidding documents. This might enable some readers to get higher competitive advantage in Chinese market. By looking through the backgrounds of all the bidding process with corruption, the author can find that there is a black-box operation between bidders, and there are communications between bidder and agency.  Also there is manipulation by employees in the bid management institution, as well as some leaders’ involvement.

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Wang, P. (2018). Problems of Bidding Process in China, PM World Journal, Volume VII, Issue VI – June. Available online at https://pmworldjournal.net/wp-content/uploads/2018/06/pmwj71-Jun2018-Wang-problems-of-bidding-process-in-china-student-paper.pdf



About the Author


Peng Wang

Paris, France

 

 

 

Peng Wang is a MSc student in SKEMA Business school, major in Project Management & Business Development (PPMBD). He graduated from North-East Forestry University, China and holds a Bachelor’s degree in Electrical Information Engineering. He has experience in Customer Service. He has both project management and IT engineering background, and certificated by PRINCE2 and AGILE, as a project controller, project planner. He has potential to be a promising project manager. He lives in Paris, France now, and can be contacted at [email protected].

 

[1] Ministry of Commerce of PRC. (2017, September 1). 2017年1-7月The Statement of Attracting Investment from Foreign Companies Website of Ministry of Commerce of the PRC. Retrieved November 2017 from http://www.mofcom.gov.cn/article/tongjiziliao/v/201709/20170902640365.shtml

 

 

Research on the risks and opportunities

of international railway projects based on FIDIC-EPC contract

 

STUDENT PAPER

By Shangxin Yang

SKEMA Business School

Paris, France

 



ABSTRACT

The globalization encourages the rise of international construction project. The risk which can be positive or, in most case negative, is no doubt one of the most important parts to control in the project. This article is based on international railway projects under FIDIC-EPC contract, trying to explore the risk factors and the opportunity factors which are less considered in the project, using Multi-attribute decision-making (MADM) method to choose best solution for responding to risks or opportunities and finally give relevant recommendations.  This might help owners and contractors to understand and choose optimal risk response solutions to improve their risk management. It is concluded that there are five main risk factors: external, operational, project management, engineering and financial, and four main opportunity factors:  scope, technology, working process and external. The best risk response solution is to mitigate while the best opportunity response is to share. Focusing on risk prevention and projection, also exploring the opportunities and sharing them can lead to more competitive advantages in the project.

Key words: International railway projects; EPC; International contract; Risk analysis; Decision making

INTRODUCTION

Globalization and urbanization are becoming a trend in the world. The railway transport is booming following the city growth. Just in China 2017, the government has invested 100 billion euro on railway construction and about 30 billion euro on oversea railway construction [11]. International railway projects have both opportunities and risks. Generally, they use the FIDIC-EPC contract, on the condition of which risks balanced mechanism was changed. The owner pays a higher price at the same time the contractors are supposed to get a lot of extra additional risks, such as accidents, unforeseen difficulties and quality requirements [3].

It is well known that railway construction projects are always being a large-scale projects with high investment (For example, Shanghai metro line 2, construction cost is up to 10 million dollars per kilometer); taking a long time from construction to final operation phase will need 5-6 years in general and high risk. As a result, international railway projects face various risks which may diminish project profitability or even cause a project to fail. In 2004, a railway construction accident of Shanghai line 14 has caused hundreds injured and 150 million yuan lost, which was caused by the changed construction method with bad control of quality.

People began to study risk management after World War II [6]. In the 1950s, researchers undertook fundamental studies of risk management. Until now, In PMBOK (2000), it expands the risk management part from 4 aspects to 6 aspects [6]. It’s becoming more and more important so that lots of international researchers are focused on this subject. It is found that there is a strong relationship between the amount of risk management efforts undertaken in a project and the level of the project success [3].

This paper will focus on international railway projects in terms of EPC contract and go into the different aspects of risks including external risk, financial risk, project management risk, engineering risk and operational risk. We will answer two questions:

  • What are the main risk factors or opportunities that owners and design-builders must consider when selecting the railway project under EPC contract type? Because only when we fully understand the risk factors during the railway construction projects can we take effective measures to make sure the project is accomplished well.
  • Which risk response strategies are better in dealing with the risk and opportunities?

The findings will be able to help stakeholders make better decisions or considerations for controlling or reducing risks.

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Yang, S. (2018). Research on the risks and opportunities of international railway projects based on FIDIC-EPC contract, PM World Journal, Volume VII, Issue VI – June. Available online at https://pmworldjournal.net/wp-content/uploads/2018/06/pmwj71-Jun2018-Yang-risks-opportunities-international-rail-projects-student-paper.pdf



About the Author


Shangxin Yang

Paris, France

 

 

 

Shangxin YANG specialized in transportation engineering at Tongji University, Shanghai, China.  She has double competences in industrial risk management (MS l’Ecole des Mines de Paris) and project management (SKEMA Business School). Internship experiences at RATP (Autonomous Operator of Parisian Transports) in learning from experience of railway accidents and establishing procedures accordingly. Also, she had internship experience in Valeo PowerTrain System Business Group on knowledge management. Shangxin can be contacted at [email protected]