This case study focuses on Turner Construction Company, the largest building contractor and construction company in the USA, and its use of the IOR system, a project management control system. This case study also looks into the possible contingencies that could threaten or invalidate the viability of the said project management system.
Hilary A. Weston
Harvard Business Review (190128-PDF-ENG)
June 29, 1990
Case questions answered:
- What is Turner’s business strategy? How does it differ from competitors?
- What contingencies could threaten or invalidate the viability of Turner’s strategy?
- Does the IOR system force the managers and project team of Turner Construction Company to address the contingencies you identified in question 2?
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Case answers for Turner Construction Company: Project Management Control Systems
Background – Turner Construction Company:
Turner Construction Company was the largest building contractor and construction company in the USA. Though it is a building construction company, its main business is risk management. Using several management tools appropriately aided them to expand their business prosperously and make them an iconic company in their field.
Q1. What is Turner’s business strategy? How does it differ from competitors?
Turner Construction Company’s most significant competitive advantage was being proactive in the way they use the IOR system and other controls like GMP. This leads them to build a strong connection with their clients through accurate and continuous information flow. They spend more time on the IOR system than their any other comparator.
Even though the company builds buildings, their actual business is risk management, and the IOR system was the tool that allows them to do that more efficiently. Using Turner Construction Company’s expert estimator, cost engineer, previous project experience, and the IOR system, the company can produce an accurate and continuous information flow to the owners, creating a good partnership.
This bond with their clients helps them to make repeat business. Other comparators may only have a financial tracking system instead of good relations and information sharing with clients. Alongside this, Turner Company has more focus on quality work and does not compete much on pricing.
Another great tool that the company employs is the use of GMP, which leads to savings sharing between the owner and the company. Utilization of the IOR system tells them exactly when they should release their savings so that the clients are happy. They do not get shortfalls as well. In that case, Turner Construction Company’s expert managers play a significant role while making decisions.
Finally, Turner’s decentralized organization structure is also a good differentiator with its competitors. Their application of project management tools, financial control efficiently, and having a forward-looking IOR system helped the company’s business to stand out of the crowd. They have also proven that their strategy to educating owners, their expert management implications and delivery saves time and money at the end of the day for both the company and its clients.
Q2. What contingencies could threaten or invalidate the viability of Turner’s strategy?
Turner Construction Company’s strategy is comprised of two factors. Firstly…