REDAFI RESEARCH AND DEVELOPMENT AFRICA INITIATIVE

Why Projects Fail Case Study of Airbus- A380

By
DANIEL M.W

ABSTRACT

This paper analyses why projects fail in Airbus- A380. It equally explores the impact the
organization policies and performance, including commitment at work. It explores the impact of
"classic mistakes" in such failure on the company as a whole, policies and profit.

2017

Redafi, Research and Development Africa Initiative

P.O Box 20045-00200, Nairobi (Kenya)
Email: info@redafi.com, redafikenya@gmail.com
Contact Person: daniel.musobia@redafi.com
1.0 Introduction

Different authors have come up with different definitions to a project but the Oxford Dictionary
(2014) defines a project as a collaborative enterprise, involving research or design, which is
carefully planned to achieve a particular aim. A mega project is attributed to as a project that can,
by its size and character, disrupt or change its own project environment. 1 Through out Europe
and America gigantic or mega project failures have hit the news media often. In UK the BAE
Systems in 2002, NIMROD Maritine Air Reconnaissance Project, Airbus 380, while in America
such projects as Lockheed and Boeing F22 among others. All these projects failed to meet the
key goals and results were catastrophic.2

Air bus A380 is the most complex commercial jet that Airbus ever built by airbus and it is
installed with 100,000 different wires, totaling 530 kilometers, in length, that perform 1,150
separate functions. Airbus's next largest commercial jet, the 380 seat A340-600, has 60,000
wires.3 The manufacturing of the project was attributed to extra cost and time delay this means
ineffective project management. The project realized its failures in the fall of 2006 due to wire
shortage and poor designing by using an older version of CATIA which is software commonly
used in the aircraft design industry therefore the failure to fit in the wiring process into the plane
halting the process and causing further delay and extra cost of over $6 billion

1.1 Case Study

The paper will use Bechtel which is an engineering, construction and project management
company also associated with the famous Big Dig project in America. It was founded in 1898
and has worked in more than 23,000 projects in 140 countries through out the world. The Bechtel
Company provide a perfect base for analysis mainly because it has years of experience in project
management as well as it was involved in the Big Dig project in Boston which faced almost
similar failure as Air bus A380, thus results from this study will be beneficial to Bechtel
Company in order to avoid similar future challenges.

1.2 Objective and Rationale of the Study

The main objective of the study is to establish theoretically the impact of project failure using the
example of Air bus A380 in Bechtel Company in relation to the organization policies,
performance, including commitment at work and profit. This study is relevant for future scholars

1 Naomi Brookes (2013). Mega Projects: Shaping The Research Agenda Symposium Record.

2 Philip Lawrence, Jin Scanlan. Planning In The Dark: Why Major Projects Fail To Achieve Key Goals. Journal of
Technology Assessment and Strategic Management.

3 Nicola clerk (2006). The Airbus saga: Crossed wires and a multibillion-euro delay - Business - International
Herald Tribune. http://www.nytimes.com. Accessed on 8th March 2017.
and provides a platform for further study. The study is based on the need to provide possible and
practical guideline to ensure projects are successful. However, it may be limited to advance more
issues that deal with mega projects than other projects.

2.0 Literature Review

There is no one general used theory that is used in project management. However this paper will
use organization theory to analyze the phenomenon under study. Other theories of comparison
are the political economy theory, Marxist theory and liberal theory among others.

Other scholars prove that free market is a myth because it is not sustainable as an autonomous
entity from the society and the state and whenever these entities are distinguished they grossly
affect the project outcome either to the state or the society. He further claims that the friction
between free market tendencies and the embodied market structure in the society. Equally so the
liberal that is the free market and the Marxists theories are inadequate to determine the
equilibrium of these phenomenon overtime in relation to values of society change, 4 therefore the
organization theory is relevant and able to draw a balance between the organization, state and the
society in terms of the outcome of the project. It is from this point that it is important to point out
that organization theory is a sociological study of formal social organizations, such as businesses
and bureaucracies and their interrelationship with the environment in which they operate. It
complements the studies of organizational behavior and human resource studies.5

Equality the ideas of Carnegie School should not be undermine in project management. It
explores transaction cost economics and organizational behavior and the application of decision
analysis, management science, and psychology as well as theories such as bounded rationality to
the understanding of the organization and the firm.6 However in measuring the relevance of the
Airbus A380 project failures to Bechtel Company this approach may not be very effective
because it deals more on the organization perspective rather than the project management. It may
not address situation where changes in the modification of project direct may influence the
organization. I may not completely ignore its relevance but for this reason I choose not to use it
in my analysis.

Further other scholars advance theory of theory of three rationalities that bound governing,
planning and decision making. These included political, technical and ethical rationalities. Key
stakeholders in a project normally affect the outcome of the project by imposing unitary
4 Polany, Karl (2001). The Great Transformation: The Political and Economic Origins of Our Time,

Beacon Press, Boston.

5 Perrow, Charles (1991). A Society of Organizations. Theory and Society: 725762.

6 Jens Beckert, Milan Zafirovski (2006). International encyclopedia of Economic Sociology. p.48
rationalities. It is important to note these rationalities do not work effectively when distinguished
yet they are open to some degree of substitution. This theory however proposes that the three
rationalities can affect the outcome of the project if not carefully handled. 7 The Air bus project
has very less projects on the ethical or environmental aspect of the project but rather the
technical and political were more projected.

Most scholars add that creating and maintaining public trust in a project is critical to its
marketing strategy. The idea of marketing must answer thee needs of the public and value
addition of the project which attracts the need for trust in the implementation of the project.
Therefore, more emphasis should be placed on communication, transparency and accountability
of the project to achieve public trust.8

3.0 Methodology

This is a qualitative research study and involves the use of Structured Pragmatic Situational
(SPS) approach to case research,9 this is because it provides a systematic and practical manner to
deal with case study and in this case it is the convenient approach to this study in order to
effectively meet the objectives of the study. The study gathers data from e-book, journals, books,
biographies, letters, newspapers, electronic articles and blogs to gather important background
information about both the organization and the phenomenon understudy.

4.0 Findings, Results and Discussions

There is no smoke without fire and the project failure to a larger extent has negative impact to
the company, policies and profits attributed to underestimation of complexity cost and schedule,
failure to establish appropriate control over requirements, lack of communication, failure to
involve stakeholders, address cultural change, poor oversight, unqualified workers, inadequate
risk management, failure to address adequate project requirements and poor planning.

To begin with, just like Big Dig project by Bechtel Company, Airbus A380 was a huge and a
complex project and its failure was caused by underestimation of complexity cost and schedule.
As mentioned earlier the A380 is so far the most complex commercial jet that Airbus ever built
by airbus and it is equipped with 100,000 different wires, totaling 530 kilometers, in length, that
perform 1,150 separate functions. Airbus's next-largest commercial jet, the 380-seat A340-600,
has 60,000 wires, thus making the project massive and complex. The myriad options requested

7 Goulet, Dennis (1986). Three Rationalities in Development Decision-Making, World Development, Vol. 14, No.
2, p 301-317.

8 Lauri koskela, Greg Howell (2002). The Theory of Project Management: Explanation to Novel Methods. Pdf.

9 S. L. Pan and B. Tan (2011), Demystifying case research: A structured-pragmatic-situational (SPS) approach to
conducting case studies, Information and Organization, vol.21, pp.161-176.
by customers for the A380 further complicated its manufacturing process. This resulted to
delayed project completion and negative publicity to the company due to underestimation of its
complexity. As mentioned earlier the project incurred additional costs due to delays. 10 Though
this was unrealistically blamed on inflation rates but i believe it was due to underestimating the
complexity of the project. Studies indicate that mega project costs are consistently
underestimated, a practice most commonly attributed to the desire of project advocates to have
their projects approved and to achieve enormous or unrealistic dreams, thus the failure of the
project.11

Another reason why the project failed was due to failure to establish appropriate control over
requirements of the project. This occurs when the projected likelihood of success is higher than
an objective evaluation of the situation would warrant.12 This is because people are motivated
and expected to control their environments. Theoretically people are believed to have a need to
feel competent by controlling chain of evens and this was a drastic mistake or illusion that a
project may undergo.13 This illusion at the end affects the organization behavior and motivation
of employees in a project as well, thus leading to unrealistic plans and implementation process
halt.

Equally, lack of communication during the project undermines the credibility of the organization
performance as well as the employee motivation. This is attributed to conservatism which is the
failure to consider and communicating new information or negative information during and after
the project.14 It was not until the fall of 2006 that the Airbus A380 started realizing and
communicating its failure. Some authors claimed that the project managers were in denial of the
facts surrounding the project. Conservativeness affects the employee performance and Bechtel
Company is in position to grasp this fact since its patent to its line of service. Therefore the
failure to communicate and consider new and negative information during and after the project
leads to failure of projects achieving its key goals.

One of the notions in classic mistakes is failure to engage stakeholders during a project. It is
important to realize one of the key elements in application of decision analysis in an organization
essentially depicts the need to involve all stake holders in the key processes for instance in the

10 Calleam Consulting Ltd. Why projects fail: Airbus A380. http://www.calleam.com. Accessed on 8th March 2017.

11 Philip Lawrence, Jin Scanlan. Planning In The Dark: Why Major Projects Fail To Achieve Key Goals. Journal of
Technology Assessment and Strategic Management.

12 Martz, B., Neil, T., & Biscaccianti, A. (2003). TradeSmith: An Exercise to Demonstrate the Illusion of Control in
Decision Making. Decision Sciences Journal of Innovative Education, 1 (2), 273-287.

13 Langer, E. (1975). Illusion of Control. Journal of Personality and Social Psychology, 32 (2), 311-328.

14 Beach, L. R., & Connolly, T. (2005). The Psychology of Decision Making. London: Sage
project process. I believe that if all stakeholders were included in the Airbus A380 project which
includes prior, during and after the project then the challenge that halted it would have been
isolated earlier. Thus Bechtel Company can learn to include key stakeholder in all stages of the
project to ensure effective completion of their projects.

Failure to address cultural change issues is patent to project success. The outcome of a project,
successful or not, can be related to the influence of cultural, project, and management factors. 15
This includes organization culture. It is therefore true to pursue the idea that an organizational
culture influences project culture.16 Therefore, project planning, execution and control emerge
from project culture, project characteristics and management decisions. Project standards and
processes equally influence management decisions. It is important to not that from the Airbus
A380 project failure experience Bechtel Company can learn that failure to establish culture
change can halt the deployment of a new system to solve the existing problems in the project.
Similarly other challenges there are other factors associated to organisation culture that
influences a project such as the political environment. It is important to note that the organisation
structure and flow of information in the hierarchy significantly influences the outcome of the
project. Therefore better organisation culture and values such as openness, honesty, knowledge
sharing and trust are patent to organisation performance, employee motivation and profit making
in the organisation.17 The cultural factors unearthed in our research revealed a deep
conservatism in the engineering community and some reluctance to embrace new methods. This
especially compounds issues of interoperability, which has plagued the A380. As Charles
Champion, former A380 boss admits, legacy issues work against the uptake of new tools,
Attempts to have common tools failed for various reasons. It's all about legacy: When you start
to use a tool, changing tools is an enormous investment. But in addition we found that
organisations become used to their own tool sets and find it difficult to give up established
practices and familiar software products.18

Poor project planning or lack of oversight is a major cause attributed to project failure. Most
authors have blamed the failure of Airbus A380 to failure by the project managers to make key
decisions at the right time, thus poor project management. Bechtel Company is therefore

15 Hofstede, G. (2007). Asian Management in the 21st Century. Asia Pacific Journal of Management, 24 (4), 411-
420.

16 Van Marrewijk, A. (2007). Managing Project Culture: The Case of Environ Megaproject. International Journal of
Project Management, 25 (3), 290-299.

17 R. Westrum (1993). Cultures with Requisite Imagination .in Wise, J. Hopkins, D. and Stager, P. (eds).
Verification and Validation in Complex, Man Machine Systems, Springer, New York.

18 Philip Lawrence, Jin Scanlan. Planning In The Dark: Why Major Projects Fail To Achieve Key Goals. Journal of
Technology Assessment and Strategic Management.
obligated to identify the need of proper project management team who are qualified and well
trained in their duties as well as se of up to date technologies or resources. The airbus a 380
failed to address these issues and used outdated technologies to design the plane which resulted
to failure to completion of the project in time and equally making the project incur unnecessary
costs. Most scholars have indicated that project managers tend to be over confident and end up
speculating the project complication earlier than the ideal time. This equally affects the
performance of the project, employee motivation as well as profit making capabilities o the
organization this is because with this kind of management most definitely the project will not be
completed at the appropriate time as expected.

To add on that poor quality workmanship also affects outcome of the project. It is the duty of
project managers to employ necessary resources at the right time, when they fail to employ well
trained and incorporated employees, may likely to result into ineffectiveness of the project which
affect other employee performance especially those who are well qualified, it equally undermines
the organization culture and performance. For Airbus A380 this was evident, different
workmanship was hired from different parts of Europe who were not incorporated into the
project goals, visions and values and I must say they were inadequately skilled to notice the first
stages of the project were not effectively done. Therefore employing quality management in the
project is relevant to the accomplishment of its key goals and values, by for instance
implementing the design of the aircrafts structure, systems fabrication of components, systems
and tooling, as well as systems production and static and fatigue testing requires well trained
and skilled worker for a bigger project as Airbus A380.

There is need for the project to access its risk management. One important stages in the airplane
development programme involves risk management which is tested and validated to ensure that
all processes run effectively and concurrently to the satisfaction of the project goals. However,
this may equally involve the need for modifications and alterations in the processes of the project
systems and component design. This calls for modifications in the assembling of the initial
prototypes. It is important to note that this is one of the complex stages of an aircraft project,
where stream of modifications highlighted into the design will significantly affect configuration
and requirements.19 Modifications also have knock on effects and require careful attention to
traceability issues. Modifications required for the Airbus A380s wiring appear to have far
exceeded the project planners expectations and caused a major bottleneck in the run up to
production.20 Therefore the need to incorporate risk management into the project is necessary
and relevant to effective completion of a project. It carries a lot of weight and it is very important
since it initiates the final/finished product into use. This is therefore an important part of a project
if undermined the project is likely to fail affecting the organisation performance, employee
motivation due to derails in the project completion. From the air bus project experience it

19 Ibid. Page 8

20 Ibid. page 8
therefore true to say that the risks were heavy and huge since it was the first project of its kind
and require keen interest in risk management.

In relation to that the failure to address the system performance requirement equally leads to
projects to fail. The organization as well as the project management is required to incorporate the
values and goals of the project to the entire project team. This ensures that key goals are met and
addressed. With this in mind it is therefore easy to ensure checks and balances in the project
system and the initial plans to be related in order to weight the achievement of the project goals.
This involves all workers at every stage and calls for the project to address the system
performance requirements are effectively met. This begins at the initial stage of project planning
till the end, therefore failure to address this issue affect not only the organization performance
but also the employee performance in turn leading to low yield or output thus, affecting the
profitability of the organization.

It is important to note that poor planning results to failure of the project which as mentioned
above does not only affect the organization performance but also the employee motivation and
output. One of the ingredients of a successful project for instance the Air bus A380 encompasses
the view of whether the planning process yielded an approved project to address transportation
problems in the airline industry, equally the ability of the project to have incorporated the key
plans into the final product following the initial planning process of the project, that is within the
established scope, schedule, and budget at the time the project was approved. Another important
measure of success is whether a mega-project such as the Airbus A380, once constructed,
performs according to the expectations that formed the underlying basis for approval of the
project, including impacts, benefits, revenue estimates, operating and maintenance costs, and
service life. The successful completion of a project is dependent on structure as well as the
attributes of the proposed project. This means that strategic flow of elements from the
development of the structure in which project is achieved and the unique characteristics of the
project is of relevant importance in determining the ultimate outcome of the project.21

5.0 Conclusions

All in all good planning therefore means proper scheduling and workload assessments, without
these projects become null and void. There is, of course, no doubt that cultural and behavioral
factors are also highly relevant and affect the project completion process. Yet political influence
and antagonism can easily be associated to a big hindrance in achieving organizational goal of
the project. From the Airbus A380 experience it is important to note that although
underestimation of complexity cost and schedule, failure to establish appropriate control over
requirements, lack of communication, failure to involve stakeholders, address cultural change,
poor oversight, unqualified workers, inadequate risk management, failure to address adequate
21 Ibid
project requirements and poor planning have been attributed to project failure, a great deal of
responsibility falls to the role of the organization in ensuring the project is effectively achieved.
The failure of the organization to manage its project equally results to the failure of the
employees though most scholars have always pointed out that the employees performance
influences organization performance which is true though much of the responsibility falls to the
side of the organization as a whole in ensuring that the project is effectively achieved to the
satisfaction of its goals and objectives in measurable/proposed time frame.

References

Beach, L. R., & Connolly, T. (2005). The Psychology of Decision Making. London: Sage

Calleam Consulting Ltd. Why projects fail: Airbus A380. http://www.calleam.com. Accessed on
8th March 2017.

Goulet, Dennis (1986). Three Rationalities in Development Decision-Making,

World Development, Vol. 14, No. 2, p 301-317.

Jens Beckert, Milan Zafirovski (2006). International encyclopedia of Economic Sociology. p.48

Lauri koskela, Greg Howell (2002). The Theory of Project Management: Explanation to Novel
Methods, Pdf.

Langer, E. (1975). Illusion of Control. Journal of Personality and Social Psychology , 32 (2),
311-328.

Martz, B., Neil, T., & Biscaccianti, A. (2003). TradeSmith: An Exercise to Demonstrate the
Illusion of Control in Decision Making. Decision Sciences Journal of Innovative
Education, 1 (2), 273-287.

Naomi Brookes (2013). Mega Projects: Shaping the Research Agenda Symposium Record.
Nicola clerk (2006). The Airbus saga: Crossed wires and a multibillion-euro delay - Business -
International Herald Tribune. http://www.nytimes.com. Accessed on 8th March 2017.

Hofstede, G. (2007). Asian Management in the 21st Century. Asia Pacific Journal of
Management, 24 (4), 411-420.

Perrow, Charles (1991). A Society of Organizations. Theory and Society: 725762.

Polany, Karl (2001). The Great Transformation: The Political and Economic Origins of Our
Time, Beacon Press, Boston.

Philip Lawrence, Jin Scanlan. Planning In The Dark: Why Major Projects Fail To Achieve Key
Goals. Journal of Technology Assessment and Strategic Management.

R. Westrum (1993). Cultures with Requisite Imagination .in Wise, J. Hopkins, D. and Stager, P.
(eds). Verification and Validation in Complex, Man Machine Systems, Springer, New
York.

Van Marrewijk, A. (2007). Managing Project Culture: The Case of Environ Megaproject.
International Journal of Project Management, 25 (3), 290-299.