Description

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Project Management (MGT 323)
Due Date: 06/08/2022 @ 23:59
Course Name: Project Management
Student’s Name:
Course Code: MGT323
Student’s ID Number:
Semester: Summer Semester
CRN:
Academic Year:2021-22
For Instructor’s Use only
Instructor’s Name:
Students’ Grade: /15
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
•
•
•
•
•
•
•
•
The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted. Peer-Reviewed Journals are required as
references.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
• Do not make any changes in the cover page.
Assignment Workload:
• This Assignment comprise of a Case Study and Discussion questions.
• Assignment is to be submitted by each student individually.
Assignment Purposes/Learning Outcomes:
After completion of Assignment-2 students will able to understand the
1. Defining the concepts, theories and approaches of project management. (L.O-1.1)
2. Analyze to work effectively and efficiently as a team member for project related
cases. (L.O-3.1)
3. Evaluate to monitor and control the project. (L.O-3.2)
Assignment-2: Case Study & Discussion questions
Assignment Case study Question:
(Marks 9)
Please read the Case-8.3 “Tham Luang Cave Rescue.” from Chapter 8
“Scheduling Resources and Costs” given in your textbook – Project
Management: The Managerial Process 8th edition by Larson and Gray page
no: 304-307 also refer to specific concepts you have learned from the chapter
to support your answers. Answer the following questions for Part-1, Part-2.
Part-1: Case study questions
1. How did the physical environment of the cave affect the rescue
plan? Explain in 250 words (3 Marks).
2. How did the rescue team respond to the risks of the project?
Explain in 250 words (3 Marks).
3. Some have called the rescue a miracle and that luck was the
decisive factor. Do you agree? Explain in 150 words (3 Marks)
Part-2: Discussion questions
Please read Chapter 8 Pg-No. 279 & 281 carefully and then give
your answers on the basis of your understanding.
4. Why would people resist a multi project resource scheduling
system? (3 Marks) (200 words)
5. What do you think would have happened if the Washington
Forest Service did not assess the impact of resources on their
two-year plan? (3 Marks) (200 words).
Answers:
Final PDF to printer
lar38865_fm_i-xxiii.indd i
09/06/19 02:39 PM
Final PDF to printer
FOR INSTRUCTORS
You’re in the driver’s seat.
Want to build your own course? No problem. Prefer to use our turnkey,
prebuilt course? Easy. Want to make changes throughout the semester?
Sure. And you’ll save time with Connect’s auto-grading too.
65%
Less Time
Grading
They’ll thank you for it.
Adaptive study resources like SmartBook® 2.0 help
your students be better prepared in less time. You
can transform your class time from dull definitions to
dynamic debates. Find out more about the powerful
personalized learning experience available in
SmartBook 2.0 at www.mheducation.com/highered/
connect/smartbook
Laptop: McGraw-Hill Education
Make it simple,
make it affordable.
Solutions for your
challenges.
Connect makes it easy with seamless
integration using any of the major
Learning Management Systems—
Blackboard®, Canvas, and D2L, among
others—to let you organize your course
in one convenient location. Give your
students access to digital materials at
a discount with our inclusive access
program. Ask your McGraw-Hill
representative for more information.
A product isn’t a solution. Real
solutions are affordable, reliable,
and come with training and
ongoing support when you need it
and how you want it. Our Customer
Experience Group can also help
you troubleshoot tech problems—
although Connect’s 99% uptime
means you might not need to call
them. See for yourself at status.
mheducation.com
Padlock: Jobalou/Getty Images
Checkmark: Jobalou/Getty Images
lar38865_fm_i-xxiii.indd ii
09/06/19 02:39 PM
Final PDF to printer
FOR STUDENTS
Effective, efficient studying.
Connect helps you be more productive with your study time and get better grades using tools like
SmartBook 2.0, which highlights key concepts and creates a personalized study plan. Connect sets you
up for success, so you walk into class with confidence and walk out with better grades.
Study anytime, anywhere.
Download the free ReadAnywhere app and access your
online eBook or SmartBook 2.0 assignments when it’s
convenient, even if you’re offline. And since the app
automatically syncs with your eBook and SmartBook 2.0
assignments in Connect, all of your work is available
every time you open it. Find out more at
www.mheducation.com/readanywhere
“I really liked this
app—it made it easy
to study when you
don’t have your textbook in front of you.”
– Jordan Cunningham,
Eastern Washington University
No surprises.
The Connect Calendar and Reports tools keep you on track with the
work you need to get done and your assignment scores. Life gets busy;
Connect tools help you keep learning through it all.
Calendar: owattaphotos/Getty Images
Learning for everyone.
McGraw-Hill works directly with Accessibility Services
Departments and faculty to meet the learning needs
of all students. Please contact your Accessibility
Services office and ask them to email
accessibility@mheducation.com, or visit
www.mheducation.com/about/accessibility
for more information.
Top: Jenner Images/Getty Images, Left: Hero Images/Getty Images, Right: Hero Images/Getty Images
lar38865_fm_i-xxiii.indd iii
09/06/19 02:39 PM
Final PDF to printer
The McGraw-Hill Series
Operations and Decision Sciences
SUPPLY CHAIN MANAGEMENT
BUSINESS FORECASTING
BUSINESS MATH
Benton
Purchasing and Supply Chain
Management
Third Edition
Keating and Wilson
Forecasting and Predictive Analytics
Seventh Edition
Slater and Wittry
Practical Business Math Procedures
Thirteenth Edition
LINEAR STATISTICS AND
REGRESSION
Slater and Wittry
Math for Business and Finance:
An Algebraic Approach
Second Edition
Bowersox, Closs, Cooper, and Bowersox
Supply Chain Logistics Management
Fifth Edition
Burt, Petcavage, and Pinkerton
Supply Management
Eighth Edition
Johnson
Purchasing and Supply Management
Sixteenth Edition
Simchi-Levi, Kaminsky, and Simchi-Levi
Designing and Managing the Supply
Chain: Concepts, Strategies, Case Studies
Third Edition
Stock and Manrodt
Fundamentals of Supply Chain
Management
PROJECT MANAGEMENT
Brown and Hyer
Managing Projects: A Team-Based
Approach
Larson
Project Management: The
Managerial Process
Eighth Edition
SERVICE OPERATIONS
MANAGEMENT
Bordoloi, Fitzsimmons, and Fitzsimmons
Service Management: Operations,
Strategy, Information Technology
Ninth Edition
MANAGEMENT SCIENCE
Hillier and Hillier
Introduction to Management Science: A
Modeling and Case Studies Approach
with Spreadsheets
Sixth Edition
BUSINESS RESEARCH METHODS
Kutner, Nachtsheim, and Neter
Applied Linear Regression Models
Fourth Edition
BUSINESS SYSTEMS DYNAMICS
Sterman
Business Dynamics: Systems
Thinking and Modeling for a
Complex World
OPERATIONS MANAGEMENT
Cachon and Terwiesch
Operations Management
Second Edition
Cachon and Terwiesch
Matching Supply with Demand:
An Introduction to Operations
Management
Fourth Edition
Jacobs and Chase
Operations and Supply Chain
Management
Sixteenth Edition
Jacobs and Chase
Operations and Supply Chain
Management: The Core
Fifth Edition
Schroeder and Goldstein
Operations Management in the Supply
Chain: Decisions and Cases
Eighth Edition
Stevenson
Operations Management
Fourteenth Edition
BUSINESS STATISTICS
Bowerman, Drougas, Duckworth, Froelich,
Hummel, Moninger, and Schur
Business Statistics in Practice
Ninth Edition
Doane and Seward
Applied Statistics in Business and
Economics
Sixth Edition
Doane and Seward
Essential Statistics in Business and
Economics
Third Edition
Lind, Marchal, and Wathen
Basic Statistics for Business and
Economics
Ninth Edition
Lind, Marchal, and Wathen
Statistical Techniques in Business and
Economics
Eighteenth Edition
Jaggia and Kelly
Business Statistics: Communicating with
Numbers
Third Edition
Jaggia and Kelly
Essentials of Business Statistics:
Communicating with Numbers
Second Edition
McGuckian
Connect Master: Business Statistics
Swink, Melnyk, and Hartley
Managing Operations Across the
Supply Chain
Fourth Edition
Schindler
Business Research Methods
Thirteenth Edition
lar38865_fm_i-xxiii.indd iv
09/06/19 02:39 PM
Final PDF to printer
Project
Management
The Managerial Process
Eighth Edition
Erik W. Larson
Clifford F. Gray
Oregon State University
lar38865_fm_i-xxiii.indd v
09/06/19 02:39 PM
Final PDF to printer
PROJECT MANAGEMENT: THE MANAGERIAL PROCESS, EIGHTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2021 by McGraw-Hill
Education. All rights reserved. Printed in the United States of America. Previous editions © 2018, 2014, and
2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a
database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not
limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 LWI 24 23 22 21 20 19
ISBN 978-1-260-23886-0 (bound edition)
MHID 1-260-23886-5 (bound edition)
ISBN 978-1-260-73615-1 (loose-leaf edition)
MHID 1-260-73615-6 (loose-leaf edition)
Portfolio Manager: Noelle Bathurst
Product Developer Manager: Michele Janicek
Executive Marketing Manager: Harper Christopher
Lead Content Project Manager: Sandy Wille
Senior Content Project Manager: Angela Norris
Senior Buyer: Sandy Ludovissy
Design: Egzon Shaqiri
Content Licensing Specialist: Beth Cray
Cover Image: Gina Pricope/Getty Images
Compositor: SPi Global
All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.
Library of Congress Cataloging-in-Publication Data
Names: Gray, Clifford F., author. | Larson, Erik W., 1952- author.
Title: Project management : the managerial process / Erik W. Larson,
Clifford F. Gray, Oregon State University.
Description: Eighth edition. | New York, NY : McGraw-Hill Education, [2021]
| Clifford F. Gray appears as the first named author in earlier
editions. | Includes bibliographical references and index. | Summary:
“Our motivation in writing this text continues to be to provide a
realistic, socio-technical view of project management. In the past,
textbooks on project management focused almost exclusively on the tools
and processes used to manage projects and not the human dimension”–
Provided by publisher.
Identifiers: LCCN 2019028390 (print) | LCCN 2019028391 (ebook) |
ISBN 9781260238860 (paperback) | ISBN 1260238865 (paperback) |
ISBN 9781260242379 (ebook)
Subjects: LCSH: Project management. | Time management. | Risk management.
Classification: LCC HD69.P75 G72 2021 (print) | LCC HD69.P75 (ebook) |
DDC 658.4/04–dc23
LC record available at https://lccn.loc.gov/2019028390
LC ebook record available at https://lccn.loc.gov/2019028391
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does
not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not
guarantee the accuracy of the information presented at these sites.
mheducation.com/highered
lar38865_fm_i-xxiii.indd vi
09/06/19 02:39 PM
Final PDF to printer
About the Authors
Erik W. Larson
ERIK W. LARSON is professor emeritus of project management at the College of
Business, Oregon State University. He teaches executive, graduate, and undergraduate
courses on project management and leadership. His research and consulting activities
focus on project management. He has published numerous articles on matrix management, product development, and project partnering. He has been honored with teaching awards from both the Oregon State University MBA program and the University
of Oregon Executive MBA program. He has been a member of the Project Management Institute since 1984. In 1995 he worked as a Fulbright scholar with faculty at
the Krakow Academy of Economics on modernizing Polish business education. He
was a visiting professor at Chulalongkorn University in Bangkok, Thailand, and at
Baden-Wuerttemberg Cooperative State University in Bad Mergentheim, Germany.
He received a B.A. in psychology from Claremont McKenna College and a Ph.D. in
management from State University of New York at Buffalo. He is a certified Project
Management Professional (PMP) and Scrum master.
Clifford F. Gray
CLIFFORD F. GRAY is professor emeritus of management at the College of Business,
Oregon State University. He has personally taught more than 100 executive development seminars and workshops. Cliff has been a member of the Project Management
Institute since 1976 and was one of the founders of the Portland, Oregon, chapter. He
was a visiting professor at Kasetsart University in Bangkok, Thailand, in 2005. He was
the president of Project Management International, Inc. (a training and consulting firm
specializing in project management) 1977–2005. He received his B.A. in economics
and management from Millikin University, M.B.A. from Indiana University, and doctorate in operations management from the College of Business, University of Oregon.
He is a certified Scrum master.
vii
lar38865_fm_i-xxiii.indd vii
09/06/19 02:39 PM
Final PDF to printer
“Man’s mind, once stretched by a new idea, never regains
its original dimensions.”
Oliver Wendell Holmes, Jr.
To my family, who have always encircled me with
love and encouragement—my parents (Samuel and
Charlotte), my wife (Mary), my sons and their wives
(Kevin and Dawn, Robert and Sally), and their children
(Ryan, Carly, Connor and Lauren).
C.F.G.
“The reasonable man adapts himself to the world;
the unreasonable one persists in trying to adapt the
world to himself. Therefore all progress depends on the
unreasonable man.” Bernard Shaw, Man and Superman
To Ann, whose love and support have brought out the
best in me. To our girls Mary, Rachel, and Tor-Tor for
the joy and pride they give me. And to our grandkids,
Mr. B, Livvy, Jasper Jones!, Baby Ya Ya, Juniper Berry,
and Callie, whose future depends upon effective project
management. Finally, to my muse, Neil—walk on!
E.W.L
viii
lar38865_fm_i-xxiii.indd viii
09/06/19 02:39 PM
Final PDF to printer
Preface
Our motivation in writing this text continues to be to provide a realistic, socio-technical
view of project management. In the past, textbooks on project management focused
almost exclusively on the tools and processes used to manage projects and not the
human dimension. This baffled us, since people, not tools, complete projects! While we
firmly believe that mastering tools and processes is essential to successful project management, we also believe that the effectiveness of these tools and methods is shaped and
determined by the prevailing culture of the organization and interpersonal dynamics
of the people involved. Thus, we try to provide a holistic view that focuses on both the
technical and social dimensions and how they interact to determine the fate of projects.
Audience
This text is written for a wide audience. It covers concepts and skills that are used by
managers to propose, plan, secure resources, budget, and lead project teams to successful completions of their projects. The text should prove useful to students and prospective project managers in helping them understand why organizations have developed a
formal project management process to gain a competitive advantage. Readers will find
the concepts and techniques discussed in enough detail to be immediately useful in
new-project situations. Practicing project managers will find the text to be a valuable
guide and reference when dealing with typical problems that arise in the course of a
project. Managers will also find the text useful in understanding the role of projects
in the missions of their organizations. Analysts will find the text useful in helping to
explain the data needed for project implementation as well as the operations of inherited or purchased software.
Members of the Project Management Institute will find the text is well structured
to meet the needs of those wishing to prepare for PMP (Project Management Professional) or CAPM (Certified Associate in Project Management) certification exams.
The text has in-depth coverage of the most critical topics found in PMI’s Project
Management Body of Knowledge (PMBOK). People at all levels in the organization
assigned to work on projects will find the text useful not only in providing them with a
rationale for the use of project management processes but also because of the insights
they will gain into how to enhance their contributions to project success.
Our emphasis is not only on how the management process works but also, and more
importantly, on why it works. The concepts, principles, and techniques are universally applicable. That is, the text does not specialize by industry type or project scope.
Instead, the text is written for the individual who will be required to manage a variety
of projects in a variety of organizational settings. In the case of some small projects,
a few of the steps of the techniques can be omitted, but the conceptual framework
applies to all organizations in which projects are important to survival. The approach
can be used in pure project organizations such as construction, research organizations,
and engineering consultancy firms. At the same time, this approach will benefit organizations that carry out many small projects while the daily effort of delivering products or services continues.
ix
lar38865_fm_i-xxiii.indd ix
09/06/19 02:39 PM
Final PDF to printer
x Preface
Content
In this and other editions we continue to try to resist the forces that engender scope
creep and focus only on essential tools and concepts that are being used in the real
world. We have been guided by feedback from reviewers, practitioners, teachers, and
students. Some changes are minor and incremental, designed to clarify and reduce confusion. Other changes are significant. They represent new developments in the field
or better ways of teaching project management principles. Below are major changes to
the eighth edition.
∙ All material has been reviewed and revised based on the latest edition of Project
Management Body of Knowledge (PMBOK), Sixth Edition, 2017.
∙ Discussion questions for most Snapshots from Practice are now at the end of each
chapter.
∙ Many of the Snapshots from Practice have been expanded to more fully cover the
examples.
∙ Agile Project Management is introduced in Chapter 1 and discussed when appropriate in subsequent chapters, with Chapter 15 providing a more complete coverage of
the methodology.
∙ A new set of exercises have been developed for Chapter 5.
∙ New student exercises and cases have been added to chapters.
∙ The Snapshot from Practice boxes feature a number of new examples of project
management in action.
∙ The Instructor’s Manual contains a listing of current YouTube videos that correspond to key concepts and Snapshots from Practice.
Overall the text addresses the major questions and challenges the authors have
encountered over their 60 combined years of teaching project management and consulting with practicing project managers in domestic and foreign environments. These
questions include the following: How should projects be prioritized? What factors contribute to project failure or success? How do project managers orchestrate the complex
network of relationships involving vendors, subcontractors, project team members,
senior management, functional managers, and customers that affect project success?
What project management system can be set up to gain some measure of control? How
are projects managed when the customers are not sure what they want? How do project
managers work with people from foreign cultures?
Project managers must deal with all these concerns to be effective. All of these
issues and problems represent linkages to a socio-technical project management perspective. The chapter content of the text has been placed within an overall framework
that integrates these topics in a holistic manner. Cases and snapshots are included from
the experiences of practicing managers. The future for project managers is exciting.
Careers will be built on successfully managing projects.
Student Learning Aids
Student resources include study outlines, online quizzes, PowerPoint slides, videos,
Microsoft Project Video Tutorials, and web links. These can be found in Connect.
lar38865_fm_i-xxiii.indd x
09/06/19 02:39 PM
Final PDF to printer
Preface xi
Acknowledgments
We would like to thank Scott Bailey for building the end-of-chapter exercises for Connect; Pinyarat Sirisomboonsuk for revising the PowerPoint slides; Ronny Richardson
for updating the Instructor’s Manual; Angelo Serra for updating the Test Bank; and
Pinyarat Sirisomboonsuk for providing new Snapshot from Practice questions.
Next, it is important to note that the text includes contributions from numerous
students, colleagues, friends, and managers gleaned from professional conversations.
We want them to know we sincerely appreciate their counsel and suggestions. Almost
every exercise, case, and example in the text is drawn from a real-world project. Special thanks to managers who graciously shared their current project as ideas for exercises, subjects for cases, and examples for the text. John A. Drexler, Jim Moran, John
Sloan, Pat Taylor, and John Wold, whose work is printed, are gratefully acknowledged.
Special gratitude is due Robert Breitbarth of Interact Management, who shared invaluable insights on prioritizing projects. University students and managers deserve special accolades for identifying problems with earlier drafts of the text and exercises.
We are indebted to the reviewers of past editions who shared our commitment to
elevating the instruction of project management. We thank you for your many thoughtful suggestions and for making our book better. Of course, we accept responsibility for
the final version of the text.
Paul S. Allen, Rice University
Victor Allen, Lawrence Technological University
Kwasi Amoako-Gyampah, University of North
Carolina–Greensboro
Gregory Anderson, Weber State University
Mark Angolia, East Carolina University
Brian M. Ashford, North Carolina State University
Dana Bachman, Colorado Christian University
Robin Bagent, College of Southern Idaho
Scott Bailey, Troy University
Nabil Bedewi, Georgetown University
Anandhi Bharadwaj, Emory University
James Blair, Washington University–St. Louis
Mary Jean Blink, Mount St. Joseph University
S. Narayan Bodapati, Southern Illinois University at
Edwardsville
Warren J. Boe, University of Iowa
Thomas Calderon, University of Akron
Alan Cannon, University of Texas–Arlington
Susan Cholette, San Francisco State
Denis F. Cioffi, George Washington University
Robert Cope, Southeastern Louisiana University
lar38865_fm_i-xxiii.indd xi
Kenneth DaRin, Clarkson University
Ron Darnell, Amberton University
Burton Dean, San Jose State University
Joseph D. DeVoss, DeVry University
David Duby, Liberty University
Michael Ensby, Clarkson University
Charles Franz, University of Missouri, Columbia
Larry Frazier, City University of Seattle
Raouf Ghattas, DeVry University
Edward J. Glantz, Pennsylvania State University
Michael Godfrey, University of Wisconsin–Oshkosh
Jay Goldberg, Marquette University
Robert Groff, Westwood College
Raffael Guidone, New York City College of
Technology
Brian Gurney, Montana State University–Billings
Owen P. Hall, Pepperdine University
Chaodong Han, Towson University
Bruce C. Hartman, University of Arizona
Mark Huber, University of Georgia
Richard Irving, York University
Marshall Issen, Clarkson University
09/06/19 02:39 PM
Final PDF to printer
xii Preface
Robert T. Jones, DePaul University
Susan Kendall, Arapahoe Community College
George Kenyon, Lamar University
Robert Key, University of Phoenix
Elias Konwufine, Keiser University
Dennis Krumwiede, Idaho State University
Rafael Landaeta, Old Dominion University
Eldon Larsen, Marshall University
Eric T. Larson, Rutgers University
Philip Lee, Lone Star College–University Park
Charles Lesko, East Carolina University
Richard L. Luebbe, Miami University of Ohio
Linh Luong, City University of Seattle
Steve Machon, DeVry University–Tinley Park
Andrew Manikas, University of Louisville
William Matthews, William Patterson University
Lacey McNeely, Oregon State University
Carol Miller, Community College of Denver
William Moylan, Lawrence Technological College
of Business
Ravi Narayanaswamy, University of South
Carolina–Aiken
Muhammad Obeidat, Southern Polytechnic
State University
Edward Pascal, University of Ottawa
James H. Patterson, Indiana University
Steve Peng, California State University–East Bay
Nicholas C. Petruzzi, University of Illinois–Urbana/
Champaign
Abirami Radhakrishnan, Morgan State
University
Emad Rahim, Bellevue University
Tom Robbins, East Carolina University
Art Rogers, City University
Linda Rose, Westwood College
Pauline Schilpzand, Oregon State University
Teresa Shaft, University of Oklahoma
Russell T. Shaver, Kennesaw State University
William R. Sherrard, San Diego State University
Erin Sims, DeVry University–Pomona
Donald Smith, Texas A&M University
Kenneth Solheim, DeVry University–Federal Way
Christy Strbiak, U.S. Air Force Academy
Peter Sutanto, Prairie View A&M University
Jon Tomlinson, University of Northwestern Ohio
Oya Tukel, Cleveland State University
David A. Vaughan, City University
Mahmoud Watad, William Paterson University
Fen Wang, Central Washington University
Cynthia Wessel, Lindenwood University
Larry R. White, Eastern Illinois University
Ronald W. Witzel, Keller Graduate School of
Management
G. Peter Zhang, Georgia State University
In addition, we would like to thank our colleagues in the College of Business at
Oregon State University for their support and help in completing this project. In particular, we recognize Lacey McNeely, Prem Mathew, and Jeewon Chou for their helpful advice and suggestions. We also wish to thank the many students who helped us
at different stages of this project, most notably Neil Young, Saajan Patel, Katherine
Knox, Dat Nguyen, and David Dempsey. Mary Gray deserves special credit for editing
and working under tight deadlines on earlier editions. Special thanks go to Pinyarat
(“Minkster”) Sirisomboonsuk for her help in preparing the last five editions.
Finally, we want to extend our thanks to all the people at McGraw-Hill Education
for their efforts and support. First, we would like to thank Noelle Bathurst and Sarah
Wood, for providing editorial direction, guidance, and management of the book’s
development for the eighth edition. And we would also like to thank Sandy Wille,
Sandy Ludovissy, Egzon Shaqiri, Beth Cray, and Angela Norris for managing the final
production, design, supplement, and media phases of the eighth edition.
Erik W. Larson
Clifford F. Gray
lar38865_fm_i-xxiii.indd xii
09/06/19 02:39 PM
Final PDF to printer
First Pages
Guided Tour
30
Chapter 2
First Pages
Organization Strategy and Project Selection
global competition, and financial uncertainty. These conditions make strategy/project
alignment even more essential for success.
The larger and more diverse an organization, the more difficult it is to create
and maintain a strong link between strategy and projects. How can an organization
ensure this link? The answer requires integration of projects with the strategic plan.
Integration assumes the existence of a strategic plan and a process for prioritizing
projects by their contribution to the plan. A key factor to ensure the success of integrating the plan with projects is an open and transparent selection process for all
participants to review.
This chapter presents an overview of the importance of strategic planning and the
process for developing a strategic plan. Typical problems encountered when strategy
and projects are not linked are noted. A generic methodology that ensures integration
by creating strong linkages of project selection and priority to the strategic plan is
then discussed. The intended outcomes are clear organization focus, best use of scarce
organization resources (people, equipment, capital), and improved communication
across projects and departments.
C H A P T E R
2
Established Learning Objectives
Learning objectives are listed both at the beginning of each
chapter and are called out as marginal elements throughout the
narrative in each chapter.
2.1 Why Project Managers Need to Understand Strategy
LO 2-1
Explain why it is important for project managers to understand their
organization’s strategy.
T W O
Organization Strategy
and Project Selection
LEARNING OBJECTIVES
OUTLINE
After reading this chapter you should be able to:
2.1 Why Project Managers Need to Understand
Strategy
2-1 Explain why it is important for project managers to
understand their organization’s strategy.
Project management historically has been preoccupied solely with the planning and
execution of projects. Strategy was considered to be under the purview of senior
management. This is old-school thinking. New-school thinking recognizes that project management is at the apex of strategy and operations. Shenhar speaks to this
issue when he states, “It is time to expand the traditional role of the project manager
from an operational to a more strategic perspective. In the modern evolving organization, project managers will be focused on business aspects, and their role will
expand from getting the job done to achieving the business results and winning in
the marketplace.”1
There are two main reasons project managers need to understand their organization’s mission and strategy. The first reason is so they can make appropriate decisions and adjustments. For example, how a project manager would respond to a
suggestion to modify the design of a product to enhance performance will vary
depending upon whether his company strives to be a product leader through innovation or to achieve operational excellence through low-cost solutions. Similarly,
how a project manager would respond to delays may vary depending upon strategic
concerns. A project manager will authorize overtime if her firm places a premium
on getting to the market first. Another project manager will accept the delay if
speed is not essential.
The second reason project managers need to understand their organization’s strategy is so they can be effective project advocates. Project managers have to be able
to demonstrate to senior management how their project contributes to their firm’s
mission in order to garner their continued support. Project managers need to be able
to explain to stakeholders why certain project objectives and priorities are critical in
order to secure buy-in on contentious trade-off decisions. Finally, project managers
need to explain why the project is important to motivate and empower the project team
(Brown, Hyer, & Ettenson, 2013).
2-2 Identify the significant role projects contribute to
the strategic direction of the organization.
2.2 The Strategic Management Process:
An Overview
2.3 The Need for a Project Priority System
2-3 Understand the need for a project priority system.
2.4 Project Classification
2-4 Distinguish among three kinds of projects.
2.5 Phase Gate Model
2-5 Describe how the phase gate model applies to
project management.
2.6 Selection Criteria
2-6 Apply financial and nonfinancial criteria to assess
the value of projects.
2-7 Understand how multi-criteria models can be
used to select projects.
2.7 Applying a Selection Model
2.8 Managing