Chapter 2 & 3 Project Management

Why Project Managers Need to Understand Strategy:

• Make appropriate decisions and adjustments: Decisions about changes, delays, etc. should support the organization's strategy.

• Be effective project advocates: Show management how the project supports the mission, gain stakeholder buy-in, and explain the project's importance to the team.

Strategic Management:

The process of assessing where the organization is now and deciding where it wants to go and how it will get there. It connects the organization’s mission, goals, objectives, strategy, and implementation.

What are the two major dimensions of Strategic Management?

• External: Respond to changes in the external environment and allocate resources to improve the firm’s competitive position.

• Internal: Develop and implement action programs within the organization to improve its competitive position.

What are the four activities of the Strategic Management Process in order?

1. Review and define the mission

2. Analyze and formulate strategies

3. Set objectives

4. Implement strategies through projects

What does SMART stand for in project management?

S — Specific
M — Measurable
A — Assignable
R — Realistic
T — Time related

What are the 3 problems caused by not having a strong priority system linked to strategy?

• Implementation Gap

• Organization Politics

• Resource Conflicts & Multitasking

What is an implementation gap?

The difference between what was planned and what actually happens

What is Organization Politics in project selection?

Selecting projects based on the power and persuasiveness of supporters rather than facts and sound reasoning.

What is a Sacred Cow?

A project advocated by a powerful, high-ranking official.

What is Multitasking in project management?

Stopping work on one task to work on another project, then returning to the original task.

What are the three classifications of projects?

• Compliance: Must-do/required projects

• Operational: Improve current operations

• Strategic: Support long-term strategy and goals

Phase gate model

A series of decision gates a project must pass through to be completed.

What is the purpose of the Phase Gate Model?

To ensure time and resources are invested in worthwhile projects that support the organization’s mission and strategy.

What are the 3 possible Phase Gate outcomes?

Go (proceed), Kill (cancel), or Recycle (revise and resubmit).

What are the main project selection criteria/models?

• Financial: Payback & NPV

• Nonfinancial: Strategic importance

• Multi-Criteria: Checklist & Multi-Weighted Scoring

Payback Formula

Estimated Project Cost ÷ Annual Savings.

What are the 3 limitations of the Payback Model?

Ignores time value of money, cash flows beyond the payback period, and profitability.

What is a Checklist Model?

A project selection model that uses a list of questions to review projects and determine acceptance or rejection.

What is the main limitation of the Checklist Model?

It does not show the relative importance or value of projects and does not allow comparison between potential projects.

What is a Multi-Weighted Scoring Model?

A model that uses several weighted selection criteria to evaluate and compare project proposals.

What types of criteria can a Multi-Weighted Scoring Model use?

Qualitative and/or quantitative criteria.

What are the three main project management structures?

Functional Organization, Dedicated Project Team, and Matrix Structure.

What is a functional organization?

A structure where the project is completed within existing functional departments and the functional manager has the main authority.

What is a dedicated project team?

A separate, full-time team created specifically for a project and led by a project manager.

What is a matrix structure

A hybrid structure where employees typically report to both a project manager and functional manage

What are the three types of Matrix Structures?

Weak, Balanced, and Strong.

What are the advantages and disadvantages of a Functional Organization for projects?

• Advantages: No change, flexibility, in-depth expertise, easy post-project transition.

• Disadvantages: Lack of focus, poor integration, slow, lack of ownership.

What is Projectitis?

A negative effect where a “we-they” attitude develops between the dedicated project team and the rest of the organization.

What are the strengths and weaknesses of a Dedicated Project Team?

Strengths: Simple, fast, cohesive, cross-functional integration.
Weaknesses: Expensive, internal strife, limited technological expertise, difficult post-project transitio

What is a Matrix Structure?

A hybrid structure that combines the functional hierarchy with project management, where employees report to both functional and project managers.

What is the purpose of a Matrix Structure?

To use resources efficiently while balancing functional/technical expertise with project requirements.

What is a Weak Matrix?

A matrix similar to a functional structure where functional managers have most authority and the project manager mainly coordinates activities.

In a Balanced Matrix, what are the responsibilities of the project manager and functional manager?

PM = WHAT needs to be accomplished; Functional Manager = HOW it will be accomplished.

How does authority differ across the three matrix structures?

Weak = functional manager has more authority; Balanced = shared authority;

Strong = project manager has more authority.

What are the advantages and disadvantages of a Matrix Structure?

• Advantages: efficient, strong project focus, easier post-project transition, flexible.

• Disadvantages: dysfunctional conflict, infighting, stressful, slow.

What factors should be considered when choosing a project management structure?

Consider organizational factors (importance of projects and available resources) and project factors (size, strategic importance, innovation, integration, environmental complexity, budget/time constraints, and resource stability).

Bread-and-butter projects:

Evolutionary improvements to current products and services.

Pearls

Revolutionary commercial advances using proven technology.

Oysters:

Technological breakthroughs with tremendous commercial potential.

White elephants:

Projects that once showed promise but are no longer viable.