CWRU Management Maechelle Bróhaen’s Discussion

Individual Assignment 2 – Mammoth Energy case – Grading
Rubric (how to earn points)
Total points: 9
Structure and Readability (2 Points)
Structure: How is your report built?
A Managerial Report is a particular type of report which intentionally does not include an
Absract. Abstracts promise a reader what they will read. They ‘tease’ the reader, “if you read
this, you will find out x, y z”. In a Managerial Report, start with an Executive Summary, a
paragraph or two that should provide a reader with the bottom line (including your more
sweeping, overall conclusion(s)) and yet still interest them in reading the full report. Think of it
not as a movie trailer (that would be the abstract) but rather a movie review, complete with
spoilers.
You should also have a Recommendation and/or Conclusion paragraph (titled so) at the end that
wraps things up. Also included in “structure’ is staying within the assignment length guidelines.
Readability: Is this easy to read?
That includes: grammar and syntax, proper use of English (suggestion; if you have English as a
2nd language, seek help and guidance from someone who speaks it as a first language). We’re
not looking for perfection, but you cannot have so many errors in spelling and grammar as to be
distracting.
Content (5 Points)
This is the ‘meat of the matter’. The main points we’ll look for:

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Did you demonstrate reading and understanding the case?
Did you answer all of the questions as listed in the case?
Did you focus on program-level, strategic decisions about which projects should continue or not,
and the rationale for those decisions?
Did you take on the viewpoint and attitude of the protagonist (Maechelle)?
References (2 Points)
Did you make strong assertions, cite them, and provide solid references (minimum 4) and use APA Style
for the references?
The Case of the Mammoth Energy Company (MEC): An Upgrade to its Airstrip Infrastructure
By Mohammed Almaqbal and Rich Maltzman, PMP ©2021
MEC is based in Hy-Breasal, a large fictional oil-rich island nation located off the fictional coast of
the fictional continent of Eufraszia. See the Quick Facts box (Exhibit 3) on Hy-Breasal for
important information of the country.
The firm employs 30,000 staff and almost double that number in contractors, across a total area
of nearly 900,000 square miles in Hy-Breasal. Moving equipment and staff between their
refineries, solar, and wind farm installations requires an enormous fleet upgrade to its internal
transportation infrastructure, including, especially of note for this case, the installation and
maintenance of airstrips. An airstrip is defined (Diffsense.com, 2021) as “an aircraft landing field,
usually with one runway and only basic facilities.” See Exhibit 0 for an example of one of MEC’s
airstrips.
Background
MEC has been granted exclusive oil and gas rights for operations in Hy-Breasal. This includes
exploring, drilling, refining, and distributing oil and gas products. They also have permits to build
and operate several very large solar and wind power generation stations, as well as some
experimental pilots of new solar and wind technology. As such, MEC requires a massive network
of logistics, air, and land to transport workers and equipment across the country. Some locations
are remote, and in an extremely harsh environment surrounded by moving dunes in some
locations where the nearest village is up to 100 miles away. As early as 1930, when MEC oil
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production started, airstrips were constructed across MEC’s Hy-Breasalian company locations,
wherever there is a need to serve the business and cover the vast distance. Some areas are
difficult to reach on land due to the harsh topography, steep mountains, or moving sand dunes
that could bury a road in less than one month; thus, air transportation is the optimum means of
transportation.
The company currently owns 16 airstrips (See Exhibit 0) across the country (See Exhibit 1) to
transport employees, contractors, and cargo to serve the business in general. These airstrips vary
in age; some are as old as the 60 years. Aside from these airstrips, MEC uses some of the HyBreasal’s regional airports to land and fuel if needed for a (fairly high!) fixed rate charged by HyBreasal authorities to MEC. The company owns four aircraft with up to 80-person seating capacity
per aircraft and smaller airplanes used for oil spills, solar panel repair, medical evacuation,
employee field training, and surveys. It also has several private jets for executives and customer
tours.
The strategic value behind the upgrade
One of the MEC’s primary and strategic values is to “invest in energy efficiency, as the well-being
of future generations depends on how well we manage energy consumption” (MEC Annual
Report, 2021). Environmental performance is as valuable as business performance, which means
no shortcuts; reducing emissions and carbon impact is a stated business driver for MEC. HyBreasal was a reluctant signatory to the Paris Climate Agreement (UNFCCC, 2015) but a recent
change of government has the country reaffirming its commitments. In fact, companies with a
combined revenue of over $11.4 trillion (equivalent to more than half of the US GDP), are now
pursuing net zero emissions by the end of the century, according to the United Nations (UNFCCC,
2020). MEC has stated its intent to be part of that growing set of companies.
Demand for energy continues to increase, and MEC correspondingly requires more workers and
more spacious facilities, and additional flights. The existing fleet is aging, as is the set of airstrips.
Frequent maintenance is causing massive disruption to the company’s performance, and one of
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its 2021 business drivers, to “improve shareholder monetary value by 12% over 2020”. MEC has
selected an option to replace the current fleet with a newer fleet or upgrade it with a bigger
aircraft, doubling its current capacity, better serve the current and expected increase, and reduce
the number of flights per destination. This aims at another MEC business driver, “Increase ability
to serve customers by 10%”. Nonetheless, bigger aircraft means bigger airstrips – which means
bigger runways, larger aircraft ramp/aprons Exhibit 2, and upgrades to Ground Support
Equipment (GSE) to allow compatibility with the newer aircraft. Each airstrip’s main facilities are
runway, airfield lighting, weather station, ramp/apron (aircraft parking), GSE, and a passenger
terminal.
The birth of the MEC Airstrip Program (MAP)
Knowing that as part of the upgrade projects temporary airstrip shutdowns are inevitable, and
that the upgrades will require shut-downs during construction, it is essential for MEC to minimize
the airstrip shut-down time. In fact, some Senior Managers and other stakeholders in the
company were very much opposed to this Program, due to this “shut-down effect”. The
overarching infrastructure Program for MEC consists of three sub-Programs:
the fleet
replacement program, the GSE upgrade Program, and finally, the MEC Airstrip Program (MAP)
covering all 16 airstrips. MEC’s Program Management Office (PMO) has deemed the MEC
Airstrip Program as a priority, with each of the 16 airstrips identified as an individual project
under the MAP.
This case focuses on that Program, which for the remainder of the case we will call the MEC
Airstrip Program (MAP).
The company will sign a contract with the Hy-Bresalian government to operate on its nearest
regional airport to each of MEC’s airstrips during the project execution and use buses to travel
the extra distance to the company’s operation facilities. Each of the runway projects must
follow an extremely tight schedule within the planned shutdown window. Another constraint is
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the simultaneous shutdown limitation, limiting the closure of more than one airstrip due to the
operational impact and the increased burden for adjacent airstrips.
The MAP program was approved by Senior Management and assigned to a ‘rising star’
Senior Program Manager, Maechelle Bróhaen. At the time of her assignment to MAP,
Maechelle had 6 years of experience in large projects and programs that cost over US$50M
each and with her success in recent years on a set of smaller airstrip programs in mainland
Eufraszia, she is assigned to take over MAP and does so with gusto.
The Program Manager has an Idea
Listening carefully to the ‘back-and-forth’ at the MAP kick-off meeting, and in particular, the
amount of energy, resources, disruption, and time each of these upgrades would take, along
with the environmental impact each brings with it, Maechelle has an idea. She requests a
feasibility study to see if it makes sense to cancel the upgrade of some of the airstrips
(highlighted in the Eastern part of the map in Exhibit 1). Instead of upgrading these airstrips,
MEC will sign a long-term contract with a nearby regional airport (RA), and the cost of the
contract should offset the cost of the upgrade, plus the operational costs and the future
maintenance cost, as well as some intangible benefits. The bottom line of her idea: MEC would
cancel or at least postpone half of these airstrip upgrades.
There are threats and opportunities with her idea, as well – some particular to each of these
airstrip upgrade cancellations, and some which affect the entire Program. For example, this will
require negotiations with local Hy-Breasalian authorities, who, in the past, are notorious for
trying to take advantage of large corporations. Luckily, Maechelle is politically savvy and knows
that a new Government – with a strong focus on environmental responsibility – has come into
power recently (See Exhibit 3). Another downside may be reduced work for MEC airport
construction and maintenance personnel, resulting in unpopular layoffs. Despite the threats
involved, Maechelle also sees some opportunities – the energy and resources consumed by half
of the runway upgrades will be avoided, and those shutdowns won’t be needed.
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NOTE: There are a few threats and opportunities for each option listed here. One of your
tasks in your readout on this case will be expand on these and to find other threats and
opportunities for which there are many hints throughout this case. Hint: think broadly and
deeply about assumptions and stakeholders as sources of threats and opportunities.
Exhibit 1 below illustrates the changes on the country map. Maechelle’s idea reduces the
operating cost and the overhead cost to maintain the airstrip, and in the 8 projects she’s
considering canceling, the regional airport is always 55 or less miles away. This option should
allow an immediate transfer of the operation plus minimizing the environmental impact caused
by the demolition and construction work associated with the upgrade project, and overall
promises to reduce the MAP schedule by five to seven months.
A comparison of the monetary aspects of the option to upgrade the airstrips or to use the
Regional Airports is shown in a spreadsheet screenshot in Exhibit 4.
NOTE: This case also has an accompanying spreadsheet if you want to do what-if analysis.
The Idea Faces Pushback
There is mumbling amongst the project managers and senior managers and other key
stakeholders. You can imagine that the project managers of the 8 canceled projects are
displeased, but other influential stakeholders are detractors. Why? The decision could result in
limitations. For example, MEC would be subject to congestion at the regional airport and may
end up needing to use MEC airstrips anyway in urgent situations. Also, aside from the fees that
the Hy-Breasalian authorities will charge, there may be expenses needed to meet requirements
of landing at the regional airports.
Another consideration: The Hy-Breasal Civil Aviation Authority (HBCAA) enforces airstrip safety
and control, and that agency requires all runways identified as an airstrip – those listed in the
International Civil Aviation Organization (ICAO) maps – to be staffed (an ongoing expense of
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$0.9M per year) otherwise the owner must demolish the existing airstrip (a one-time expense
of $0.75M per airstrip).
On the other hand, MEC has fairly significant influence in the new Hy-Breasalian government.
Perhaps there is some other way to negotiate or partner with the government to avoid the need
to demolish the unused airports.
Many factors and viewpoints for the Program Manager to consider
One of the key responsibilities of a Program Manager is dealing with a wide variety of
stakeholders, many of them high-powered, and heavily opinionated individuals or groups
(Müller and Blomquist, 2004). Maechelle also knows that she will also, of course, be doing a lot
of communicating – both sending and receiving. Here are a couple of communications she’s
just received from key MEC stakeholders:
Ragna Bjornsdottir, Senior Director, Transport Operations, recently emailed the Program
Manager, saying “Maechelle, operating our own airstrips means fixable flight-schedule, ZERO
delays, and no additional charges for extra flights or unscheduled flights. We need to build our
own airstrips!”
Sigurður Joaenssi, a Corporate VP of MEC’s Safety and HR Organization left her a brief text on
her mobile phone. “I want to talk to you about the Airstrip program, Maechelle – from a safety
perspective”, it says. He follows up 10 minutes later with an email stating, “The regional
airport has additional aviation facilities and equipment helps enhancing the flight experience
(take-off and landing) and reducing the number of flights canceled due to bad weather and low
visibility. The regional airport is equipped with advanced airfield lighting, weather station, and
Instrument Landing System (ILS); a radio navigation system that provides short-range guidance
to the aircraft directing it to approach the runway at night or in bad weather. We should take
advantage of these important differences”. Note: (an ILS system can cost nearly $800,000).
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While reading the email, she gets a text from Sigurður which says, “have you seen my email,
Maechelle?”.
You have 24 more emails and 38 texts, just in the past few days, with the subject, “Airstrip
program feedback” or something to that effect, but for this case, you can stick with these two
to get the idea.
Exhibit 0 – Example Hy-Breasalian Airstrip (Example is Breagan Oubha, #9 on Exhibit 1)
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Exhibit 1: The fictional country of Hy-Breasal, showing the 16 airstrips of MAP
Exhibit 2: Existing Apron/Ramp with new fleet, red dashed line is a violation
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Exhibit 3: Quick Facts on Hy-Breasal
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Exhibit 4: Comparison of costs for the options (Upgrade MEC airstrips or sign contract with
Regional Airport). The upgrade costs are shown in orange, the contract costs in blue. The cost
advantage for the upgrade is shown in green (thus negative numbers indicate a cost advantage
for the regional airport).
Notes for Exhibit 4:
Upgrade cost = average total cost of each airstrip upgrade project.
Annual operation Cost – This includes the annual preventive maintenance contract, average
spare parts/repairs, and other related expenses.
5+ Heavy maintenance cost = Runway asphalt usually requires milling and overlay due to cracks
and caused by stress and weather. Runway marking requires re-marking after milling and
overlay. Sometimes re-marking is required sooner if not visible to pilots. This also includes fire
protection chemicals and equipment require replacement, and some require calibration.
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Case Study Discussion Questions:
Assume that Senior Program Manager Maechelle Bróhaen has a very strong feeling that her
idea is a good one, that she believes in it, and that indeed it does make very good sense.
1. What will help Maechelle Bróhaen’s effort to push forward her idea to cancel/postpone
half of the airstrip projects in her program?
2. What is going to get in the way of implementing her Program? What can she do to get
these “roadblocks” out of the way, thinking at the more strategic, holistic
program/portfolio level?
3. A few of the stakeholders were mentioned here in the case study background. Who are
other individual and group stakeholders and where do they sit in terms of attitude,
interest, and power?
4. Looking at the map, could Maechelle’s idea be taken even further? Why may she have
decided to stop at 8? Are there any advantages to starting with an even smaller number
of airstrip cancellations? What approaches can she take to help “sell” her idea,
especially to the main detractors identified in the case?
5. Looking at the associated spreadsheet (Exhibit 4), what conclusions can you draw by
changing some of the key amounts? You may learn a lot (and please share that in your
Report) by ‘playing’ with the spreadsheet.
6. Possible extra credit: consider the italicized sentence at the end of the section, “The Idea
Faces Pushback”. What ideas do you have here for negotiation and partnership with the
government agency?
References
Al-Husban, Yusra. (2020). Risk Assessment of Sand Dune Hazards for Land Use/Land cover
(LULC) in Ma’an Governorate/Jordan. 24.
Cavion, Renata. (2018). TRADEOFFS OF LARGER AIRCRAFT IN AIRPORT OPERATIONS AND
INFRASTRUCTURE.
Diffsense, 2021, retrieved from Internet https://diffsense.com/diff/airport/airstrip
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Annual Report of the Mammoth Energy Company, 2021, an imaginary document imagined for
this case study.
Commitments to Net Zero Double In Less Than a Year (UNFCCC, 2020), retrieved from
https://unfccc.int/news/commitments-to-net-zero-double-in-less-than-a-year
Paris Climate Agreement, United Nations, 2015, downloadable here.
Müller, R, and Blomquist, T, Conference Paper presented 2004, Analysis of Roles and
Responsibilities of Program and Portfolio Managers, available here
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Mammoth Energy Airstrip Runway options (per runway)
Upgrade
Runway & Ramp
Runway re-marking
Airstrip Workforce
Fire-Protections Workforce
Fire-Protections Equipments
Weather-Station
Airfield-Lighting
Passenger Terminal
Security Equipments
Ground Support Equipments
water and electricity
Land lease
Total=
Upgrade cost Annual Operational cost
$ 1.650.000 $
650.000
$
150.000
$
1.536.000
$
614.400
$ 1.500.000 $
355.000
$
700.000 $
270.000
$ 1.900.000 $
280.000
$
600.000 $
450.000
$
200.000 $
150.000
$
550.000 $
350.000
$
1.350.000
$
3.000.000
$ 7.250.000 $
9.005.400
Regional Airport Contract (per airport)
One-time costs Rate cost
Car parking
$1,000 per car/ month
Turnaround
$2,551.32 per aircraft
Landing Fees
$725.39 per aircraft
Additional Bus transportation $
550.000 $150 per bus ride
Total=
Note: amounts are converted from Hy-Breasalian Kóði (ð)to US Dollars ($)
nway)
5+ Years Heavy Maintenance
$
1.500.000
$
150.000
$
100.000
$
150.000
$
100.000
$
40.000
$
80.000
$
2.120.000
Monthly Cost
$
128.000,00 40 Employee 2 shifts
$
51.200,00 16 Employee 2 shifts
5 Years
10 Years
15 Years
20 Years
$ 52.277.000 $
99.424.000 $ 146.571.000 $ 193.718.000
Annual cost per fixed schedule
(7 flights per day)
$
1.200.600
$
6.429.326
$
1.827.983
$
222.743
$
9.680.652,00 $ 48.953.260 $
Cost Advantage for Upgrade
$ (3.323.740) $
% Cost Advantage for Upgrade
-6%
97.356.520 $ 145.759.780 $ 194.163.040
(2.067.480) $
(811.220) $
445.040
-2%
-1%
0%
25 Years
30 Years
31 Years
$ 240.865.000 $ 288.012.000 $ 335.159.000 $ 491.990.000
$ 242.566.300 $
$ 1.701.300 $
1%
290.969.560 $ 339.372.820 $ 486.232.600
2.957.560 $ 4.213.820 $ (5.757.400)
1%
1%

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