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1.1 Aim:
1.2 Objectives:
This reports focus on the analysis of the research findings and the
recommendations were based using financial and Non-Financial appraisal
techniques. It applies the knowledge of the three (3) main areas of
Managing Resources in a project: Information, Human Resource and
Financial Management.
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2.0 HUMAN RESOURCE MANAGEMENT
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• The Identification of Key Roles and Competencies,
• Effective selection strategy,
• Performance appraisal methods,
• Conflict Resolutions and Leadership.
Just like in most Recruitment and Selection process, which involves Job
description, Advertising Job roles and then conducting tests and
interviews. Our team identified roles and competences that will be
required in the course of the project. This is illustrated in the Table below:
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Managing performance is a critical focus of HR activity. Armstrong and
Baron (2004, cited by Cannell, M. 2009) define performance management
as 'a process which contributes to the effective management of
individuals and teams in order to achieve high levels of organisational
performance.
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Our Project team was not a perfect one, just like all teams we had lots of
arguments which lead to conflicts. Some of the conflict issues include
Choice of meeting days
Duration of meetings
Power and Politics
Use of Cell Phones during Meeting
Conflict Resolution
Thomas (1976) provides what might be considered one of the most useful
models of conflict management utilizing the contingency approach to
conflict diagnosis. This typology examines five styles of conflict
management. Two basic dimensions of behaviour that can produce
conflict are identified: attempting to satisfy one's own concerns
(Assertiveness) and attempting to satisfy others' concerns (Cooperation).
From this analysis, five major perspectives are identified which may be
used in conceptualizing conflict and behaviours commonly associated with
those perspectives. These perspectives/management styles are identified
as avoidance, compromise/sharing, competition/ domination,
accommodation and collaboration/integration (Treslan, 1993).
The team members matched the five conflict management styles with the
appropriate situation, and based on suggestions by Thomas we were able
identify this situations and applied the appropriate strategy and it proved
effective in resolving those conflict issues.
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3.0 INFORMATION MANAGEMENT
Evaluat
e
Evaluat
Access e
Manage
Evaluate Locate
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This system of information gathering was applied in the course of this
project, in analysing, identifying and sourcing for UK dealers and suppliers
of various Laptop machines.
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Step 2: Identify and Appraise Likely Sources: We defined search themes
(Laptop costs) and specific terms (Specifications) which were then used to
locate needed information from the appraised sources:
➢ Focused on needs
➢ Accurate
➢ Complete
➢ Unambiguous
➢ Cost-beneficial
➢ User-Targeted
➢ Suitably Structured
➢ Well Presented
➢ Relevant, Timely
➢ Easy to Use
➢ Potential for further use and
➢ Should have links to other sources.
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Steps 6-9: The stages involved the storage of the information gathered,
interpreting, Analysing, presenting and evaluating the quotations obtained
from selected Laptop suppliers. This is illustrated in table below:
(√) mark shows that the product matches exactly with the required
specification on a particular area. From the analysis we can see that the
five (5) different brands of the products short-listed would be suitable for
the clients needs in terms of specifications. However, the objectives of the
project team were to recommend the most suitable product based on
quality, technical specifications and the cost implications. Hence, these
five (5) selected brands were subjected to further financial analysis and
appraisal.
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4.0 FINANCIAL MANAGEMENT
This section covers the financial aspects of the project. It shows how the
use of some financial appraisal tools and techniques helped the project
team in making decisions and recommendations for the best option for
purchase.
The Total Unit Cost of the Machines in each case includes: The total cost
of the softwares as specified:
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For example, the Cash Flow Table for one of the Machine options is as
follows: (Please refer to the appendix A for the cash flow table of the
other machine options)
DELL
DELL LATITUDE TOSHIBA
SONY VAIO ACER: 7736G PRECISION
E6500 A500-17X
M4400
PAYBACK 1yr , 1yr, 1yr, 1yr , 1yr,
PERIOD 4 months 6 months 7 months 3 months 9 months
1yr, 3 months
The Rule for selection is: the longer the payback period, the greater the
risk to the firm. Hence, for mutually exclusive situation like this one, the
option with a shorter payback period should be selected.
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However, at this stage Machine B seems to be the favourable options
since they have the lowers payback time of 1year, 3 months, but
considering the fact that the payback method ignores the money that
comes in after the payback time and the cost of capital, we did not base
our recommendations solely on this method.
This is the simple return on the investment, averaged out over the life of
the investment. The results of the ARR calculations for the machine
options are as follows:
The results shows that Machine A and B has the highest return of 20% and
19% respectively, however we did not base our decisions on only this
method considering the disadvantage of the method, which assumes that
investment cost remains for the whole period.
The ARR and the Payback methods used above are said to be non-
discounted cash flow oriented. The concept of discounting cash flow is to
place a value on what a payment in the future is worth at present. This
concept of applying time value of money toan investment or project
valuation is called the discounted cash flow criteria (Callahan, 2007).
Net Present Value then is a measure of the value or worth added to the
company by carrying out the project. If the NPV is positive the project
merits further consideration. When ranking projects, preference should be
given to the project with the highest NPV (Burke, 1999).
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The table above shows the results of the NPV calculations of the machine
options(See appendix B-F). Machine A seems more attractive with the
higher NPV of £181,550.
This is also called DCF yield of DCF return on investment. The IRR is the
value of the discounted factor when the NPV is zero. The IRR is calculated
by either a trial and error method or plotting the NPV against IRR (Burke,
1999). The NPV’s of each machine option were obtained and plotted
against the discounted rate as shown in the table below:
Comparing the IRR of the
Products
In summary, the results of the IRR calculations for the Five(5) brands
are:
MACHINE Machine
MACHINEA: IRR = 43.3%
MACHINE A MACHINE D MACHINE E
B C
DELL DELL
SONY ACER: TOSHIBA
LATITUDE PRECISION
VAIO 7736G A500-17X
E6500 M4400
IRR 43.3% 36.8% 29.3% 43.0% 26.2%
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5.0 NON-FINANCIAL FACTORS
Increase Productivity √ √ 1
Payback period √ √ 2
Good Service √ √ 1
Agreement
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Good Value for Money √ √ 1
Total 15 10
The results of the Scoring model also show that Machine “A” is a preferred
option.
Having evaluated the five different machine options available for purchase
the group came to a compromise and thus recommend the first option
which is Machine “A”- Dell Latitude E6500. It is true that he Machine D-
Toshiba laptop would have been a better option consider the fact that it
has the shortest payback period. However, we did not base our decisions
only on the payback period technique of financial appraisal.
The results of the other financial techniques like the NPV, ARR and IRR
depicts that the preferred option is the Machine A. Above all the
qualitative analysis done by applying the Scoring model by Meredith,
which uses some selected criteria in evaluating the available option for
purchase also justifies the group’s choice on recommending Machine “A”.
Challenges
Like every other project team, our team (Group C) had several set backs
and challenges in course of carrying out this research. Some of these
challenges led to conflicts in the group and was discussed in the Human
Resources section. However, there were other factors that affect the
smooth delivery of this project assignment. For instance, sourcing and
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getting for the price quotes of the machines from the UK dealers was big
challenges because of some the suppliers will not give the exact quotes
for the specifications and they were thrilled by the quantity we request
for.
7.0 References
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Cannell, M. (2009). Performance Management: An Overview, London:
Chartered Institute of Personnel and Development.
http://www1.euro.dell.com/uk/en/business/Laptops/latitude/ct.aspx?
refid=latit&s=bsd&cs=ukbsdt1&~ck=mn [Accessed: 22 January, 2010].
Mathis, K (2008) Choosing the Best Team for Your Project, Project Smart
2000-2008,[online]. Available from< http://www.projectsmart.co.uk/pdf>
[Accessed on 22 January 2010].
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Michael Marland ‘Information skills in the secondary curriculum’. In
Schools Council Curriculum Bulletin; 9, (1981). Methuen Educational.
Strebler, M., D. Robinson and P. Heron (2001). Getting the best out of
you competencies. Brighton, Institute of Employment Studies - University
of Sussex.
Torrington D., Hall L., Taylor S.(2005) Human Resource Management. 6th
ed. Harrow: Prentice Hall. P.290-323
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Treslan, D.L. (1993) Achieving Effective Conflict Management: Faculty of
Education- Winter 1993 [online]. Available at: <
http://www.mun.ca/educ/faculty/mwatch/vol1/treslan.html>[Accessed:
January 27, 2010]
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