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The Globe Construction Company Case Analysis

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THE GLOBE CONSTRUCTION COMPANY

CASE ANALYSIS

ERIC LUIS CABRIDO

LEAH B. FLORES

A paper on case analysis submitted to Professor Jewel S. Cabardo for partial fulfillment of the requirements in Management 201 on this 5th

day of April 2019, at the Department of Agribusiness Management

and Entrepreneurship College of Economics

University of the Philippines Los Baños

  1. POINT OF VIEW

The President of Globe Construction Company

  1. PROBLEM STATEMENT

How to re-structure the organizational chart of Globe Construction Company to improve its efficiency and effectiveness and be able to adapt in the change of external environment amidst stiff competition?

  1. ANALYSIS OF RELEVANT CASE FACTS

      History of the Company

1950’s  

Mr.  Eduardo Concepcion started the construction company

1970’s -80’s

Under the presidency of Ferdinand Marcos, constructed large projects for both government and private sectors, dominating the projects under the government and there was no problem in competition.  

Late 80’s

Change of political administration to Cory Aquino changed the infrastructure environment shifted more on the private sectors, competition increased forcing Globe to reduce its bidding margins.  

At present

Globe still exist and currently working on 18 on-going projects at a price of at least 100M each project, employing 20 project managers who are in-charge of construction operations. The Head Office is in Paco, Manila and maintain their Central warehouse in Antipolo.

A workshop was conducted and attended by the top managers to tackle the main issue: discuss ways to improve organizational efficiency and effectiveness.

Analysis of external environment and internal environment

Macroenvironment

The issue from external environment focuses on addressing the competition on the shift from government sector projects to private sector projects. The biggest threat is the increasing rise of firms engaging in the construction business. The company adjusted by lowering down the margin in their bids, and they became flexible to the ongoing trends in public and private procurement in order to win bid awards of projects. Opportunities from the private sectors will continue to be a trend: As urbanization continues so as construction projects will continue, both in government, and in the private sector.

Internal environment

       

The most significant strength of the company is being rooted in more than 40 years in the industry. The availability of 20 Project managers and maximizing them reflects capability to accept more projects, which is an advantage of the company. However, to adapt to this change from external environment, the company realized the need to increase their competitive edge by acting on the internal or task environment in order to improve their efficiency and effectiveness. Finishing projects on time can be their challenge and possibly, their weakness. This can be attributed to the delays and confusion in purchasing brought about by an ineffective organizational structure. Hence, re-structuring of the organization is a way to be more flexible and responsive to the needs and goals of the respective construction projects. During the workshop, significant adjustment/s must come from the department that are interdependent - operations, purchasing, accounting and finance.

  1. SWOT ANALYSIS

           

         Macro / External    

                 Environment

Task /

Internal

Environment

     OPPORTUNINTIES

  1. Urbanization leading more infrastructures to be built
  2. High demand of businesses engaged in construction

           THREATS

  1. Private sector projects in the country outnumbered government projects.
  2. Increasing competition from other firms

      STRENGHTS

  1. Established company (40yrs)
  2. Sufficient manpower
  3. On-going large projects (18 w/ at least 100M bid price)

SO Strategy

Make will use the company’s established reputation to acquire more construction projects.

ST Strategy

Enhance marketing strategies thru efficient project development.

 

       WEAKNESS

  1. Delay in purchasing
  2. Ineffective organizational chart
  3. No clear line of authority.
  4. The office of the buyers is distant from the central warehouse.

WO Strategy

Re-structure organizational chart to accommodate the needs of increasing demand in construction business.

WT Strategy

1. Re-structure to a much more flexible organization to be able to adapt to the demands of the client.

2.Implement work specialization to increase efficiency and productivity

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