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Chapter 12 Outsourcing: Managing Interorganizational Relations 441

Nissen, M. E., Procurement: Process Overview and Emerging Project Manage-


ment Techniques, in The Wiley Guide to Managing Projects, P. W. G. Morris and
J. K. Pinto (Eds.), (New York: Wiley, 2004), pp. 64354.
Quinn, R. E., S. R. Faerman, M. P. Thompson, and M. R. McGrath, Becoming a
Master Manager: A Competency Framework (New York: Wiley, 1990).
Schultzel, H. J. and V. P. Unruh, Successful Partnering: Fundamentals for Project
Owners and Contractors (New York: Wiley, 1996).
Shell, G. R., Bargaining for Advantage: Negotiation Strategies for Reasonable
People (New York: Penguin, 2000).

Case

The Accounting Software Installation Project


Sitting in her office, Karin Chung is reviewing the past four months of the large
corporate accounting software installation project she has been managing. Every-
thing seemed so well planned before the project started. Each company division
had a task force that provided input into the proposed installation along with
potential problems. All the different divisions had been trained and briefed on
exactly how their division would interface and use the forthcoming accounting
software. All six contractors, which included one of the Big Five consulting
companies, assisted in developing the work breakdown structurecosts, specifi-
cations, time.
Karin hired a consultant to conduct a one-day partnering workshop attended
by the major accounting heads, a member of each task force group, and key repre-
sentatives from each of the contractors. During the workshop, several different
team-building exercises were used to illustrate the importance of collaboration
and effective communication. Everyone laughed when Karin fell into an imagi-
nary acid pit during a human bridge-building exercise. The workshop ended on an
upbeat note with everyone signing a partnering charter that expressed their com-
mitment to working together as partners to complete the project.

TWO MONTHS LATER


One task force member came to Karin to complain that the contractor dealing
with billing would not listen to his concerns about problems that could occur in
the Virginia division when billings are consolidated. The contractor had told him,
the task force member, he had bigger problems than consolidation of billing in the
Virginia division. Karin replied, You can settle the problem with the contractor.
Go to him and explain how serious your problem is and that it will have to be set-
tled before the project is completed.
Later in the week in the lunchroom she overheard one consulting contractor
bad-mouthing the work of anothernever on time, interface coding not tested.
In the hallway the same day an accounting department supervisor told her that
tests showed the new software will never be compatible with the Georgia divisions
accounting practices.
While concerned, Karin considered these problems typical of the kind she had
encountered on other smaller software projects.
442 Chapter 12 Outsourcing: Managing Interorganizational Relations

FOUR MONTHS LATER


The project seemed to be falling apart. What happened to the positive attitude fos-
tered at the team-building workshop? One contractor wrote a formal letter com-
plaining that another contractor was sitting on a coding decision that was delaying
their work. The letter went on: We cannot be held responsible or liable for delays
caused by others. The project was already two months behind, so problems were
becoming very real and serious. Karin finally decided to call a meeting of all par-
ties to the project and partnering agreement.
She began by asking for problems people were encountering while working on
the project. Although participants were reluctant to be first for fear of being per-
ceived as a complainer, it was not long before accusations and tempers flared out
of control. It was always some group complaining about another group. Several
participants complained that others were sitting on decisions that resulted in their
work being held up. One consultant said, It is impossible to tell whos in charge
of what. Another participant complained that although the group met separately
on small problems, it never met as a total group to assess new risk situations that
developed.
Karin felt the meeting had degenerated into an unrecoverable situation. Com-
mitment to the project and partnering appeared to be waning. She quickly decided
to stop the meeting and cool things down. She spoke to the project stakeholders:
It is clear that we have some serious problems, and the project is in jeopardy. The
project must get back on track, and the backbiting must stop. I want each of us to
come to a meeting Friday morning with concrete suggestions of what it will take
to get the project back on track and specific actions of how we can make it hap-
pen. We need to recognize our mutual interdependence and bring our relation-
ships with each other back to a win/win environment. When we do get things back
on track, we need to figure out how to stay on track.
1. Why does this attempt at project partnering appear to be failing?
2. If you were Karin, what would you do to get this project back on track?
3. What action would you take to keep the project on track?

Case

Buxton Hall
Chad Cromwell, head of university housing, gazed up at the tower at Buxton Hall
and smiled as he walked toward the landmark building.
Buxton Hall was built in 1927 as a residential complex for over 350 students at
Pacifica State University. At the time Buxton was the tallest building on cam-
pus, and its tower had a panoramic view of the athletic fields and coastal range.
Buxton quickly became a focal point at Pacifica State. Students perched on the
tower dominated the campus during the annual spring water fight with their huge
slingshots and catapults. The first intranet on the Pacific coast was created at
Buxton that linked students computers and allowed them to share printers.
Around the 1970s, some student artists began the tradition of painting their
room doors. Whether a Rolling Stones logo or Bugs Bunny on a skateboard,