Project Management: The Managerial Process, 7th Edition Solution Manual

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Project Management: The Managerial Process1of9Chapter 1Modern Project ManagementChapter Outline1.What Is a Project?A.What a Project Is NotB.The Project Life CycleC.The Project ManagerD.Being Part of a Project Team2.Current Drivers of Project ManagementA.Compression of theProduct Life CycleB.Knowledge ExplosionC.Triple Bottom Line(Planet, People, Profit)D.Increased Customer FocusE.Small Projects Represent Big Problems3.Project GovernanceA.Alignment of Projects with Organizational Strategy4.Project Management Today:A Socio-Technical Approach5.Summary6.Text Overview7.Key Terms8.Review Questions9.Exercises10.Case1.1:A Day in the Life11.Case1.2:The Hokie Lunch Group

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Project Management: The Managerial Process2of9ChapterLearning ObjectivesAfter reading this chapter you should be ableto:LO 1-1Understand why project management is crucial in today’s world.LO 1-2Distinguish a project from routine operations.LO 1-3Identify the different stages of project life cycle.LO 1-4Understand the importance of projects inimplementing organizationstrategy.LO 1-5Understand that managing projects involves balancing the technical andsociocultural dimensions of the project.

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Project Management: The Managerial Process3of9Review Questions1.Define a project. What are five characteristics which helpdifferentiate projectsfrom other functions carried out in the daily operations of the organization?A project is a complex, non-routine, one-time effort limited by time, budget, resource,and specifications. Differentiating characteristics of projects from routine, repetitivedaily work are below:a.A defined life spanb.A well-defined objectivec.Typically involves people from several disciplinesd.A project life cyclee.Specific time, cost, and performance requirements.2.What are some of the key environmental forces that have changed the wayprojects are managed? What has been the effect of these forces on themanagement of projects?Some environmental forces that have changed the way we manage projects are theproduct life cycle, knowledge growth, global competition, organization downsizing,technology changes, time-to-market. The impact of these forces is more projects perorganization, project teams responsible for implementing projects, accountability,changing organization structures, need for rapid completion of projects, linkingprojects to organization strategy and customers, prioritizing projects to conserveorganization resources, alliances with external organizations, and so on.3.Why is the implementation of projects important tostrategic planning and theproject manager?Strategic plans are implemented primarily through projects—e.g., a new product, anew information system, a new plant for a new product. The project manager is thekey person responsible for completing the project on time, on budget, and withinspecifications so the project’s customer is satisfied. If the project is not linked to thestrategic plan of the organization, resources devoted to the project are wasted and acustomer need is not met. This lack of connectivity occurs more in practice than mostwould believe.4.The technical and sociocultural dimensions of project management are two sidesto the same coin. Explain.The system and sociocultural dimensions of project management are two sides of thesame coin because successful project managers are skillful in both areas. The point issuccessful project managers need to be very comfortable and skillful inbothareas.

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Project Management: The Managerial Process4of95.What is the impact of governance to managing an individual project?Why isthis approach important in today’s environment?Governance signals to the project manager that decisions at a higher level can impactmanagement of an individual project.Reviews (called “Gating”) during projectimplementation assess current performance and priorities and decide to continue, halt,hold, or revised the project.Governance is most frequently used to balance resources and risk over allorganizational resources. It is also used to enforce or alter priorities and to ensureproject align with organizational strategies and goals. In today’s fast-paced worldprioritiescan change quickly and can impact in process projects.

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Project Management: The Managerial Process5of9Exercises1.Review the front page of your local newspaper, and try to identify all theprojects contained in the articles. How many were you able to find?It is nearly impossible to open a newspaper and not find articles relating to projects.Sunday editions are especially good for this exercise. Even experienced projectmanagers find the number of projects far greater than they would have predicted.Each oneismanaged by a project manager! This is a good illustration of theimportant role projects play in our daily lives.2.Individually identify what you consider to be the greatest achievementsaccomplished by mankind in the last five decades. Now share your list with threeto five other students in the class, and come up with an expanded list. Reviewthese accomplishmentsin terms of the definition of a project. What does yourreview suggest about the importance of project management?Typical responses center on technology, medical advances, space exploration—e.g.,computer advances, laser operations and new drugs, building the space station. Oftenyou have to point out that many of these projects are really programs.We usually select two or three student suggestions of projects (there will be plenty!)and ask the students to identify the kinds of problems the project manager of theproject may have had to deal with. Again, once the students get into the exercise, theproblems they can envision are many. These problems are placed on the board. Afterthe board is near filled and most students have participated, we try to show or classifyon the board the problems by the content of the text chapters. The intent is todemonstrate to the class the course and text will address many of the problemssuggested by the students.3.Individually identify projects assigned in previous terms. Were bothsociocultural and technical elements factors in the success or difficulties in theprojects?Students will naturally focus on sociocultural aspects in part because they are morefamiliar withconcepts such as leadership, problem-solving, and teamwork than scope,WBS, and baseline budgets. Furthermore interpersonal friction is often a source ofconsternationonstudentprojects.Theinstructormayhavetopointoutthatinterpersonal conflicts often arise from ill-defined scopes, uneven work schedules, andpoor planning.

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Project Management: The Managerial Process6of94.Check out the Project Management Institute’s home page atwww.pmi.org.a.Review general information about PMI as well as membership information.Answers will vary. The PMI website undergoes periodic updates.b.See if there is a PMI chapter in your state.If not, where is the closest one?Answers will vary depending on your location.c.Use the search function at the PMI home page to findinformation on ProjectManagement Body of Knowledge (PMBOK).What are the major knowledgeareas of PMBOK?This search turns up a very wide variety of information including books thestudent can purchase, how to articles, and tools and templates. It will take somesearching but the student can find that the ten knowledge areas are as follows:1.Project Integration Management2.Project Scope Management3.Project Time Management4.Project Cost Management5.Project Quality Management6.Project Human Resource Management7.Project Communications Management8.Project Risk Management9.Project Procurement Management10.Project Stakeholder Managementd.Explore other links that PMI provides.What do these links tell you about thenature and future of project management?

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Project Management: The Managerial Process7of9Case1.1A Day in the LifeRachel, the project manager of a large information systems project, arrives at heroffice early to get caught up with work before her co-workers and project team arrive.However, as she enters the office she meets Neil, one of her fellow project managers,who also wants to get an early start on the day. Neil has just completed a projectoverseas. They spend 10 minutes socializing and catching up on personal news.(Rest of case not shown due to length.)This case shows a glimpse of what it is like to be a project manager. It also underscoresthat being a project manager is more social than technical and that project managers spendthe majority of their time interacting with various people who impact a project.Note: This case can either be used up front in the course or towards the end when thesociocultural aspects of project management have been covered.1.How effectively do you think Rachel spent her day?Students will be divided in their evaluation of Rachel. Some will argue that she isinefficient and does not have control over her time. Others will argue that this is thenature of the job, and is to be expected. They will point out that she is appropriatelyspending her time managing relations and keeping on top of things that affect the project.We tend to observe that students with little work experience are much more critical thanthose with work experience.Note: International students often take exception to Rachel devoting lunch time togossiping and taking time to relax and listen to music. They feel these are inappropriatebehaviors. When used towards the end of the course the case can stimulate a livelydiscussion between international and American students.2.What does the case tell you about what it is like to be a project manager?Rachel’s day underscores three key functions project managers spend their timeperforming:a.Building and sustaining interpersonal relations. Project managers have to networkand develop good working relations with team members and other projectstakeholders.b.Information gathering and dissemination. Project managers are the informationhub for their projects. They are in constant communication with variousstakeholders, collecting information from various sources, and sending it to thosewho have a need to know.c.Decision-making. Project managers consult with various people to make decisionsnecessary to complete the project.

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Project Management: The Managerial Process8of9Case1.2The Hokie Lunch GroupFatma settled down for lunch at the Yank Sing Chinese restaurant. She was earlyand took the time to catch up on her e-mail. Soon she would be joined by Jasper andViktoria, two fellow 2014 grads from Virginia Tech in Blacksburg, Virginia.(Rest of case not shown due to length.)This case is designed to provide students a glimpse of what it is like to work on projects.Over the course of monthly lunch meetings students are exposed to a variety ofmanagement issues as well as the different phases of the project life cycle.1.For each part (A, B, C) what phase of the project lifecycle is each project in?Part AViktoria and Jasper’s projects are in the Executing phase with PAX2 entering a criticaltesting stage.Fatma’s project appears to be in the Defining phase where she is workingon defining the scope of the project.Part BViktoria and Jasper’s projects continue to be in the Executing phase with Jasper feelingintense pressure after missing a second milestone.Fatma’s project appears to be in theplanning phase since she is involved in scheduling work.Part CViktoria is wrapping up her successful project during the Closing phase.Jasper’s project,on the other hand, has been canceled and he is now looking for work.Fatma’ renovationproject isnow in the Executing phase.2.What are two important things you learned about working on projects from thecase?Why are they important?This is an open ended question and responses will vary depending upon level ofexperience and exposure toproject management.The case involves a number of key project management issues:Part AHow projects vary in the degree that scope can be defined up front, and how difficult itcan be to define the score of software projects.

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Project Management: The Managerial Process9of9The creation of a global tag team whereby people can be working on the project aroundthe clock.The importance of establishing project priorities up front.Part BThe importance of risk management and utilizing what was learned from previousprojects.The pressure of working on urgent projects that are behind schedule.The political side of project management and how people try to influence each other onprojects.Part CTherisks andrewards of working on projects.The importance of conducting projectretrospective during the Closing phase of theproject.The sometimes boring nature of the Closing phase

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Project Management: The Managerial Process1of20Chapter2Organization Strategy and Project SelectionChapter Outline1.TheStrategicManagement Process:An OverviewA.Four Activities of the Strategic Management Processi.Analyze and Formulate Strategiesii.Set Objectives to AchieveStrategiesiii.Implement Strategies through Projects2.The Need for a Project Priority SystemA.Problem 1:TheImplementation GapB.Problem 2:OrganizationalPoliticsC.Problem 3:ResourceConflicts and Multitasking3.A PortfolioManagementSystemA.Classificationof the Project4.SelectionCriteriaA.Financial Criteriai.Financial ModelsB.NonfinancialCriteriai.Two Multi-Criteria Selection Models5.Applying aSelectionModelA.Project Classificationi.Selecting a ModelB.SourcesandSolicitation ofProjectProposalsC.RankingProposalsandSelection ofProjectsi.Responsibility for Prioritizing6.ManagingthePortfolio SystemA.Senior Management InputB.The Governance Team ResponsibilitiesC.Balancing thePortfolioforRisks andTypes ofProjects

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Project Management: The Managerial Process2of207.Summary8.KeyTerms9.ReviewQuestions10.Exercises11.Case2.1:Hector Gaming Company12.Case2.2:Film Prioritization13.Case2.3:FundRaising Project Selection

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Project Management: The Managerial Process3of20Chapter Learning ObjectivesAfter reading thischapter you should be able to:LO 2-1Explain why it is important for project managers to understand theirorganization's strategy.LO 2-2To identify the significant role projects contribute to the strategicdirection of the organization.LO 2-3To understand the need for a project priority system.LO 2-4Apply financial and nonfinancial criteria to assess the value of projects.LO 2-5Understand how multi-criteria models can be used to select projects.LO 2-6Apply anobjective priority system to project selection.L0 2-7Understand the need to manage the project portfolio.

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Project Management: The Managerial Process4of20Review Questions1.Describe the major components of the strategic management process.The strategic management process involvesassessing what we are, what we want tobecome, and how we are going to get there.The major generic components of theprocess include the following:a.Defining the mission of the organizationb.Analysis of the external and internal environmentsc.Setting objectivesd.Formulating strategies to reach objectivese.Implementing strategies through projects.2.Explain the role projects play in the strategic management process.Strategy is implemented primarily through projects.Successful implementation ofprojects means reaching the goals of the organization and thus meeting the needs ofits customers.Projects that do not contribute to the strategic plan waste criticalorganization resources.3.How are projects linked to the strategic plan?Projects are linked to the strategic plan because projects representhowa strategy is tobe implemented.Since some projects are more important than others, the best way tomaximize the organization’s scarce resources is through a priority scheme whichallocates resources to a portfolio of projects which balance risk and contribute themost to the strategic plan.4.The portfolio of projects is typically represented by compliance, strategic, andoperations projects.What impact can this classification have on projectselection?By carefully aligning your project proposal with one classification, you may increasethe chances of it being selected.Remember, senior management typically allotsbudgets for each category independent of actual projectselection.Knowledge offunds available, risk portfolio, senior management bias, etc. may cause some toattempt to move their project proposal to a different classification to improve thechances of the project being selected.

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Project Management: The Managerial Process5of205.Why does the priority system described in this chapter require that it be openand published?Does the process encourage bottom-up initiation of projects?Does it discourage some projects?Why?An open, published priority system ensures projects are selected on the basis oftheircontribution to the organization.If the priority system is not open, squeaky wheels,strong people, and key departments all get their projects selected for the wrongreasons.Bottom-upevaluationis encouraged because every organization member canself-evaluatetheir project idea against priorities–and so can everyone else in theorganization.To some, this approach may look intimidating butitrarely is inpractice; however, it does discourage projects that clearly will not make positive,significant contributions to the organization vision.6.Why should an organization not rely only on ROI to select projects?Financial criteria, like ROI alone, will not ensure that selected projects contribute tothe mission and strategy of a firm.Other considerations such as developing newtechnology, public image, brand loyalty, ethical position, and maintaining corecompetencies should be considered.Furthermore, it is difficult or next to impossibleto assess ROI for many important projects (e.g., projectsto develop newtechnologies).While ROI is likely to be a key consideration for many organizations,multiple screeningcriteria are recommended for selecting and prioritizing projects.7.Discuss the pros and cons of the checklist versus theweighted factor methods ofselecting projects.Checklist ModelFlexibleApplies over a wide range of different types of projects, divisions,and locationsImpossible to rigorously compare and rank project by priorityPolitics, power, and manipulation of project selection is very possible.Weighted Factor ModelAllows comparison and ranking of potential projectsOpen systemAllows forself-evaluationof proposed projectPower and politic games are exposed.

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Project Management: The Managerial Process6of20Exercises1.You manage a hotel resortlocated on the South Beach on the Island of Kauai inHawaii.You are shifting the focus of your resort from a traditional fun-in-the-sun destination to eco-tourism.(Eco-tourism focuses on environmentalawareness and education.)How would you classify the following projects interms of compliance, strategic, and operational?a.Convert the pool heating system from electrical to solar power.b.Build a 4-mile naturehiking trail.c.Renovate the horse barn.d.Launch a new promotional campaign withHawaii Airlines.e.Convert 12 adjacent acres into a wildlife preserve.f.Update all the bathrooms in condos that are 10 years or older.g.Change hotel brochures to reflect eco-tourism image.h.Test and revise disaster response plan.i.Introduce wirelessInternet service in café and lounge areas.How easy was it to classify these projects?What made some projects moredifficult than others?Most students classify the projects as follows:Compliance:f.,h.Operational:a.,c.,i.Strategic:b.,d., e.,g.Most students claim it was not too difficult to classify the projects other than they hadto make judgment calls given the limited information.In real life they would havesuch information.Debates occur around whether converting the heating system tosolar polar was an operational necessity or to fit the eco-friendly image.Likewise,launching the promotional campaign with Hawaii Airlines would be consideredstrategic if it promoted the eco-tourism theme,otherwise it could be consideroperational.What do you think you now know that would be useful for managing projects atthe hotel?By classifying the projects, prioritizing is more easily done.Different selectioncriteria can be used for selecting strategic versus operationalprojects.Financially,senior management would have more information to divide the total money pieallocated to projects.

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