Why Projects Fail in Airbus – A380

Singapore Airlines Limited (SIA) is the largest five star airline in Singapore. The company operates a hub in Changi International Airport, Singapore’s main airport and a major hub in South East Asia. Singapore Airlines however also has considerably strong presence in South Asia and East Asia. The company became famous for being the first company to acquire the Airbus A380, which is still the world’s largest passenger aircraft. Apart from passenger and cargo transport, SIA also engages in aircraft handling and engineering. Even though the company is a network carrier, it has also diversified its operations to the regional and low cost carrier subsectors through its subsidiaries such as Silk Air, Singapore Airlines Cargo and Tiger Airways and Scoot. The company ranks among the top 10 carries in term the number of international passengers carried and top 15 in terms of revenue. The airline is renowned for effective human resource management, which has been a major source of sustainable competitive advantage over the last few decades (Wirtz, et al., 2008, p. 4). This was achieved through stringent recruitment and selection practices, rigorous training and development, control of service quality through empowerment of frontline staff and employee motivation.

The report will analyse the project managements practices at the company in bid identify the factors that contribute to project failure. To this end, the report will adopt a case study research design. The case study will highlight the various project management practices that contribute to project success of failure and investigate the measures that have been taken by the company to ensure project success. Because the outcome of the Airbus-A380 project at SIA also relies heavily on the aircrafts manufacture, the report will also focus the conceptualization and initial production of the A 380 in order to identify any challenges that can be traced back to the manufacturer.

In order to facilitate a critical analysis of the case, an extensive literature will be carried out to establish the theoretical framework in project management. This framework will provide valuable insights into the signs, major causes and solutions to project failure. Even though the case study research design provides a holistic perspective of the organization and offer a means of investigating complex social units, the findings of the research could be highly subjective because they are prone to bias. Another big challenge associated with research design is that information about the company will have to be obtained from a variety of primary and secondary sources, which might only provide general information about the company as opposed to information related to project management. The case study design is however best suited for this research because of the nature of the research question and information to be collected. Finally, the report will provide recommendations that will help to solve some the company’s project management challenges

Literature Review

Lewis (2007, p. 22) defines a project as a temporary endeavour undertaken to produce a unique product, service or result.” It can however also be considered as a problem that is scheduled for solution and as such it requires management knowledge, skills, tools and techniques in order to achieve an effective solution. Effective project management on the other hand is a detailed and sequential process that entails initiating, planning, executing, monitoring and controlling (Klastorin, 2009). This process is particularly necessitated by the fact that most if not all projects are constrained by various factors such as time, costs, performance and scope requirements. In order to ensure that projects are completed successfully and within these constraints, project managers are charged with various responsibilities including quality assurance, leadership, team building, performance management, motivation, goal setting, communication, establishing priorities and problem solving (Kimmons, 1990, 279).

Another common characteristic for most projects is the fact that they usually involve a wide range of stakeholders from both within and outside an organization. Each of these stakeholders has a number of expectations, which ultimately determine the parameters that are used in measuring the success of the project. Other stakeholders such as suppliers and contractors might also have a direct impact on the success of the project because they are responsible for availing some of the project deliverables. In a case where the entire project is outsourced to a contractor, the latter should be in a position to meet the quality standards specified by the by the customer.  Whenever these quality standards are compromised, the contractor should be able to identify the problems inherent in the project, contain the situation and take necessary measures to recover the project and regain the customer’s confidence. Other than that, the contractor should root out any practices that could cause problems in future. Like contractors, suppliers should also adhere to quality standards and ensure timely delivery of goods and services.

Projects generally fail when they are not in a position to achieve predetermined goals and objectives within a set of stipulated constraints. According to (Eden, et al., 2005) they fail because they are completed late, fall short of expectations or exceed their budgets. Based on a ten year research with partners in the European and US aerospace and defence industries Lawrence & Scanlan (2007) identified the major causes of project failure in engineering projects as poor initial planning, lack of understanding of dependencies, lack of clear objectives and deliverables, inadequate resource allocation, poor change management, poor understanding of priorities, lack of “buy-in” from stakeholders and poor risk analysis. (Lewis, 2007) further argued that the main reason behind project failure is the inability to define the problem being solved. On the other end of the spectrum, in a research that sought to elaborate role of project culture and systematic biases in project failures Shore (2008,5) highlighted the critical factors for project success, which include top management support, sufficient resources, a competent project manager and team members, clear project goals, effective communication control mechanisms and responsiveness to clients. These success facators echoe the role of effective projects managers so in essence, the project success relies heavily on effective project management skills.

Despite the variuos strategies that have over the years been adopted by companies to the enusre project success, many projects epecially in the the fiel of Information Technology (IT) are still riddled with high failure rates. This is an indication that the current strategies and theoretical frameworks are either not sufficient to facilitate the effective management of project failure or they are not being applied appropriately. Various scholars have analysed the project management and process and proposed a number or approaches than can be adoped to ensure project success, these include the Project Management Body of Knowledge approch, the Capability Maturity Model Integration approach, Earned Value Management approach and the critical success facactors apporach. These approaches provide rational and consistent approach to project management thereby enabling an organization to identify and address project challenges.  It should however be noted that the mere fact that an organization follows these approaches does guarantee poject success.

The most imporant aspect the varios project management approaches is rationality. When project manager fail incoporate rationality in their project management decisions, they fall victim to systematic biases. Different project managers respond differently to circumstances associated with ambigutity and unceratinty owing to varying psychological processses that influence their individual percetions and decisions. This could explain why project mangers more often than not establish overly ambitious plans at the onset of a project  only to realise that they are unattainable midway through the projects. According to (Shore, 2008) these sytematic biases include the factor that distort effective decision making such as limeted data, conservatism, group think, illusion of control, overconfidence, recency, selective percetion and sunk costs.

Project failure not only generates negative publicity for the companies involved but also has far reaching consequences on the industries and professionals related to these companies. Companies should therefore make deliberate efforts to counter project failure by addressing current challenges formulating long lasting solutions for gure

Results and Discussion

Airbus was established in 1970 as consortium of aerospace companies that included sixteen facilities in Britain, France, Germany and Spain, all of which were previously independently owned. The famous A380 project begin in 2000 as the company made several attempts to become an integrated organization. Its management structure however remained convoluted even until 2006, when the company begun to exhibit serious signs of project failure. The company had no choice but to put the project on hold for another two years. This would cost the company not less than six billion dollars due to the inability to meet the predetermined time constraints. The A 380 was perhaps the most ambitious project for Airbus. The aircraft was designed to mark a new era of superjumabo jets with a capacity of up to 800 passengers. There were however red flags as early as the assembly stage, when the the wiring harnesses that had been preassembled in Germany failed to fit into the airplane frames assembled in France. This mishap was occaised by poor communication between the two plants. They used different versions of computer software to convery the order specifications, which were unforutnately incompatible and consequently

One of the major challenges that affected project management in the company was the fact that most manager remained loyal to their former constituents. This led to poor communication between the different plants in the individual countries. The lack of effective communication between different teams in the company could also be attributed to group think. Other than that, company’s corporate managers also succumbed to illusion of control because believed that they had the entire organization under control while this was far from the case. Finally the company, was also affected by lack of adequate data. The use of different software in the two plants was clear indicator that the company’s project manager lacked adequate information about the current trends in the airline manufacturing industry.

The airbus in not only the largest carrier in the world but also the most complicated aircraft. It is therefore only natural that it experienced a bungled conceptualization and initial production. These challenges were however not unique to the aircrafts manufacturers, they also spread to the airlines that acquired the aircraft.

Conclusion

Decision making is the main determinant of the project’s outcome

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