Altex Corporation Project Management BN205

Executive Summary

Altex Corporation was awarded a contract to deliver the R&D phase of the Advanced Tactical Missile Program (ATMP). The project manager is in the process of developing the project plan but the sponsor does not see a risk management plan is important. The case involves numerous violation of the PMI code of ethical and professional conduct by the company. The firm is dishonest and irresponsible in communication and providing information about its capabilities. It raises ethical issues on the failure to follow PMI guideline and puts the project manager in a dilemma whether to report the violation to the authorities. The breach to standards2.2.2, 2.2.3, 5.2.2, 5.2.4, and 5.3.1 are evident in the case. This could affect the reputation of the firm, end the career of the project manager, and incur high loses to the Army. Using the PMI ethical decision-making tool, the report recommends that the project manager should inform the sponsor about the PMI code of ethics and the importance of an RMP and illustrate how the PM can develop a mitigation plan for the risk by eliminating them or avoiding them.

Project Management

Introduction

Altex Corporation was awarded a contract to deliver the R&D phase of the Advanced Tactical Missile Program (ATMP). The Army requires the organisation to deliver a formal project plan within 60 days. However, the new project manager at Altex is concerned over the lack of a risk management plan for the project. The sponsor argues that the risk management plan is unnecessary since the military does not require the document and developing the plan might make the company lose the contract based on its complexity. This report examines the ethical issues, breaches of the PMI code of ethics and professional conduct and the best decision the project manager can make guided by the PMI ethical decision-making framework. The report will also examine the potential impact of the ethical issues and ethical breaches concerning the PMI code of ethics and ethical decision-making framework by the PMI.

Analysis of the Case Study

Ethical issues

The Altex Corporation case study raises some ethical concerns regarding the behavior and perspective of the sponsor. The sponsor does not regard the ethical guidelines provided by the Project Management Institute which applies to him as an organisation that operates in the project management sector. One of the ethical includes breach of the PMI code of ethics concerning the responsibility of the company and the honesty in communication and sharing of information (Stackpole, 2013). The sponsor is irresponsible by accepting an assignment which he cannot deliver as required. He is also dishonest by failing to provide a risk management plan which would provide an in-depth analysis of the project with details on the challenges that might make the project a failure. However, the greed of the management proceeds with the project for financial gain despite lacking the qualification and experience to meet client needs.

The project manager faces an ethical dilemma/issue about reporting the sponsor to the relevant authority for unethical behaviors. According to the PMI code of ethics, a member of the PMI has the responsibility to report unethical or illegal conduct as stated in principle 2 sections 2 and subsection 2.32 (Stackpole, 2013). The manager can also report the sponsor for taking assignment he cannot deliver as promised to see that the proposal guaranteed ‘over-expectation’ delivery while the company illustrates its satisfaction with 60-70% success.

Potential Consequences

The stakeholders that stand to lose in this aggressive and risk-involved project include the project manager, Altex Corporation, and the Army. The project manager could destroy his career if he undertakes the project without considering the ethical concerns that might portray him as an individual operating without the knowledge of professionalism. On the other hand, the Army may not receive the expected results; may incur a high cost, or the project might fail due to its poor contract awarding system that focuses on the proposals without a background check of the company’s ability, qualification, and experience. The company might fail to achieve its objective leading to legal wars from the PMI and the customer

Potential Breaches

Altex Corporation has breached two major ethical standards as provided by the PMI: responsibility and honesty aspirational standards. The responsibility aspiration standard violated includes 2.2.2 on the type of assignment individuals and companies should accept, and 2.2.3 on the commitment to fulfil the commitment based on the agreement made (Stackpole, 2013). In this case, Altex placed a bid and won a contract that it cannot complete as per the expected standard based on its background, experience, skills, preparedness, and qualification. Moreover, it cannot deliver what it promised or committed to delivering due to its inability. Concerning honesty aspirational standards, the company violates standard 5.2.2 by providing wrong information about its experience and ability (Stackpole, 2013). In the proposal, the company stated that it can deliver above expectation whereas the reality is that the firm has challenges in meeting 60-70% of its promise.  We are truthful in our communications and our conduct. This also explains the breach of standard 5.2.4 on good faith in its promises and commitment.

Altex Corporation also violates the honesty mandatory standards 5.3.1 on engaging in deceitful behaviours “designed to deceive others, including but not limited to, making misleading or false statements, stating half-truths, providing information out of context or withholding information that, if known, would render our statements as misleading or incomplete.” It also violates standard 5.3.2 that disapproves participating in dishonest behaviour with the intention of personal gain or at the expense of another (Stackpole, 2013). The company commits to the contract with prior knowledge of the risks and its limited ability to meet the expectation but the financial prospect of engaging in this and similar contracts makes it commit to the task.

Potential Consequences

The consequence of these breaches is numerous and affects the customer and the Altex Corporation. Firstly, the company will loss of the contract if the Army realises it involves so much risk, and the company cannot guarantee to deliver 100% of its promise. Secondly, this can lead to legal action by the customer and relevant authority against the company for breach of principles and project management standards (Stackpole, 2013). Finally, Altex Corporation will experience reputation damage when the report reaches mainstream media about its conduct of bidding for projects beyond its abilities.

Project Life Cycle for the Risk Management Plan

A risk management plan is an essential undertaking that helps the project manager and his team prepare for the unknown. The risk management plan should be prepared at the initial phases since this is the time where many things are unknown (Watt,  2014). At this stage, the plan helps to weigh the probability of the project success and influence the decision of whether to proceed or terminate the project or make amendments. 

Resolving the Ethical Dilemma

The project manager should follow the steps provided by the PMI ethical decision-making framework. The assessment phase should identify the facts about the ethical issues as shown in the previous sections (Edge, 2013). This should be followed by considering the available alternatives/ in this case the alternatives are: identify the facts

1. Prepare the RMP and inform the Army/employees/sponsor
2. Inform the sponsor about the PMI code of ethics and the importance of an RMP and illustrate how the PM can develop a mitigation plan for the risk by eliminating them or avoiding them

• Prepare the RMP and stay without telling anyone to maintain the status quo of the organisation

The manager should analyse the selected alternative to ensure it’s free from external influence and has a positive impact and prevent harm for all stakeholder. In this case, the highlighted alternative meets these criteria. The application of ethical principles examines if the alternative has a greater good (Edge, 2013). In this case, the greater good is that the organisation learns the appropriate way to handle project legally and ethically, and it is fair to all concerned since it educates, sensitises, and provide a solution for the ethical challenge. Based on these steps, the project manager should take the action by preparing the risk management plan after informing the sponsor about the PMI code of ethics and professional conduct as well as providing a comprehensive strategy to eliminate or mitigate the risks.

Conclusion

The case study involved Altex Corporation a company awarded the R&D phase of the Advanced Tactical Missile Program by the Military. The new project manager inquires if he should develop a risk management plan but the sponsor does not see it necessary. The case demonstrates a violation of the PMI code of ethics and professional conduct regarding responsibility and honesty. Using the PMI ethical decision-making tool, the report recommends that the project manager should inform the sponsor about the PMI code of ethics and the importance of an RMP and illustrate how the PM can develop a mitigation plan for the risk by eliminating them or avoiding them.

References

Edge, P. (2013). The leader’s choice—five steps to ethical decision making. Paper presented at PMI® Global Congress 2013—EMEA, Istanbul, Turkey. Newtown Square, PA: Project Management Institute.

Stackpole, C. S. (2013). PMP® Certification All-in-One for Dummies. The PMI Code of Ethics and Professional Conduct (2nd ed., pp. 713-725). Hoboken, NJ: John Wiley & Sons Inc.

Watt, A. (2014). Project Management by Adrienne Watt. In Risk Management Planning. Retrieved from https://opentextbc.ca/projectmanagement/chapter/chapter-16-risk-management-planning-project-management/