Project Management Mid-Term Study Guide Essay Sample
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Project Management Mid-Term Study Guide Essay Sample
Culture – unwritten rules of behavior, or norms that are used to shape and guide behavior, that are shared by some subset of organizational members Escalation of commitment – Occurs when, in spite of evidence identifying a project as failing, no longer necessary, or beset by huge technical or other difficulties, organizations continue to support it past the point an objective viewpoint would suggest that it should be terminated. External environment – consists of all forces or groups outside the organization that have the potential to affect the organization. Some elements in a company’s external environment that can play a significant role in a firm’s activities are competitors, customers in the marketplace, the government and other legal or regulatory bodies, general economic conditions, pools of available human or financial resources, suppliers, technological trends and so forth. Functional structure – Most common organizational type used in business today.
The logic of the functional structure is to group people and departments performing similar activities into units. It is common to create departments such as accounting, marketing or research and development. Division of labor in the functional structure is not based on the type of product or project supported, but rather according to the type of work performed. In an organization having a functional structure, members routinely work on multiple projects or support multiple product lines simultaneously Heavyweight project organization – refers to the belief that organizations can sometimes gain tremendous benefits from creating a fully dedicated project organization.
The concept is based on the notion that successful project organizations do not happen by chance or luck. Measured steps in design and operating philosophy are needed to get to the top and remain there. Intervenor groups – Defined as groups external to the project but possessing the power to effectively intervene and disrupt the project’s development. They are External stakeholders. Matrix organization – Any organizational structure in which the project manager shares responsibilities with the functional managers for assigning priorities and for directing the work of persons assigned to the project. Matrix structure – a combination of functional and project activities, seeks a balance between the functional organization and the pure project form.
It achieves this balance is to emphasized both function and project focuses at the same time. Objectives – Something toward which work is to be directed, a strategic position to be attained, a purpose to be achieved, a result to be obtained, a product to be produced, or a service to be performed. Organizational culture – The solution to external and internal problems that has worked consistently for a group and that is therefore taught to new members as the correct way to perceive, think about, and feel in relation to these problems.
Organizational structure – Consists of three key elements: 1. Organizational structure designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors. 2. Organizational structures identifies the grouping together of individuals into departments and departments into the total organization. 3. Organizational structure includes the design of systems to ensure effective communications, coordination and integration of effort across departments. Program – a series designed to achieve strategic goals.
Project management office – (PMO) a centralized unit within an organization or department that oversees or improves the management of projects. It is seen as a center for excellence in project management in many organizations, existing as a separate organizational entity or sub unit that assists the project manager in achieving project goals by providing direct expertise in vital project management duties such as scheduling, resource allocation, monitoring and controlling the project.
Project organizations – Are set up with their exclusive focus aimed at running projects. Construction companies, large manufacturers are designed as pure project organizations. Within the project organization, each project is a self-contained business unit with a dedicated project team. Project stakeholders are All individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development. Project Stakeholder analysis, then consists of formulating strategies to identify and, if necessary, manage for positive results the impact of stakeholders on the project. Project structure – The main function of the project structure is to define standards the team will use during the project.
These include communication standards, documentation standards, and change control procedure standards. Program Management takes the lead in defining the project structure. Resources – Skilled human resources (Specific disciplines either individually or in crews or teams), equipment, servicers, supplies, commodities, material, budgets or funds. Stakeholder analysis – A tool for demonstrating some of the seemingly irresolvable conflicts that occur through the planned creation and introduction of any new project. Strategic management – the science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.
Strong matrix – The balance of power is in favor of the project manager. The project manager controls most of the project activities and functions, including the assignment and control of project resources, and has key decision-making authority. Functional manager have some input into the assignment of personnel from their departments, their role is mostly consultative. It is probably the closes to a project organization mentality while working in a matrix environment. Technology – refers to its conversion process whereby it transforms inputs into outputs.
The technical means for creating projects can be highly complex and automated or relatively simple and straightforward. Weak matrix – Sometimes called a functional matrix, functional departments maintain control over their resources and are responsible for managing their components of the project. The project manager’s role is to coordinated the activities of the functional departments, typically as an administrator. The project managers job is to prepare schedules, update project status and serve as the link between the departments with their different project deliverables. Has no direct authority to control resources or make significant decisions on their own.
Analytical Hierarchy Process (AHP) – developed by Dr. Thomas Saaty, to address many of the technical and managerial problems frequently associated with decision making through scoring models. An increasing popular method for effect project selection, the AHP is a 4 step process: 1. Structuring the hierarchy of criteria and subcriteria
2. Allocating weights to criteria (Some use the pairwise comparison approach) 3. Assigning numerical values to evaluation dimensions
4. Evaluating project proposals
Checklist – The simplest method of project screening and selection. A list of criteria that pertain to the choice of projects and then applying them to different possible projects. Discounted cash flow method (DCF) – Is to estimate cash outlays and expected cash inflows resulting from investment in a project. All potential costs of development, most of which are contained in the project budget, are assessed and projected prior to the decision to initiate the project. They are then compared with all expected sources of revenue from the project. Kfirm=Wdkd1-t+(we)(ke)
Wd = debt
We = equity
Kd = percentage costs of debt
Ke = percentage costs of equity
Efficient Frontier – the set of project portfolio options that offers either a maximum return for every given level of risk or the minimum risk for every level of return. Internal rate of return (IRR) – IO= n=1tACFt1+IRRt
ACF – Annual after-tax cash flow for time period t
IO= Initial cash outlay
N=projects expected life
IRR = project’s internal rate of return
Lead time – time it takes to bring a new product to market Net present value (NPV)- most popular decision making approach in project selection – it employs discounted cash flow analysis. Discounting future streams of income to estimate the present value of money. If the NPV is positive the firm will make money — and its value will rise – as a result of the project. NPV(project)= I0+ n=1tFt/(1+r+Pt)t
Ft= net cash flow for period t
R = required rate of return
I= initial cash investment (cash outlay at time 0)
Pt = inflation rate during period t
The optimal procedure for developing an NPV calculation consists of several steps, including the construction of a table listing the outflows, inflows, discount rate, and discounted cash flows across the relevant time periods. Nonnumeric models – does not employ numbers as decision inputs, relying on other data instead. Numeric models – seek to use numbers as inputs for the decision process involved in selecting projects. These values can be derived either objectively or subjectively, that is, we may employ objective, external values or subjective, internal values. Neither of these two input alternatives is necessarily wrong.
Pairwise comparison approach – a method of weighting in which every criterion is compared with every other criterion. The procedure, argue the researchers, permits more accurate weighting because it allows managers to focus on a series of relatively simple exchanges – name two criteria at a time. Payback period – the estimated amount of time that will be necessary to recoup the investment in a project, that is how long it will take for the project to pay back its initial budget and begin to generate positive cash flow for the company. Present value of money – Money we cannot invest is money that earns no interest.
In real terms, therefore, the present value of money must be discounted by some factor the farther out into the future. Profile models – allow managers to plot risk/return options for various alternatives and then select the project that maximizes return while staying within a certain range of minimum acceptable risk. Project Portfolio – the set of projects that an organization is undertaking at any given time.
Project portfolio management – The systematic process of selecting, supporting and managing a firm’s collection of projects. Project Screening model – generates useful information for project choices in a timely and useful fashion at an acceptable cost can serve as a valuable tool in helping an organization make optimal choices among numerous alternatives. Required rate of return (RRR) – what a project should earn. Risk/Return –
Simplified scoring model – A model where each criterion is ranked according to its relative importance. Time value of money – suggests that money earned today is worth more than money we expect to earn in the future. We expect future money to be worth less for two reasons:
1. The impact of inflation
2. The inability to invest the money.
Champion – An individual who “identifies” with a new development (whether or not he made it), using all the weapons at his command, against the funded resistance of the organization. Chunking Time – creating units of future time to be used for scheduling. Creative Originator is usually an engineer, scientist or similar person who is the source of and driving force behind the idea. Empathy – The willingness to consider other team members’ feelings in the process of making an informed networks. Entrepreneur is the person who adopts the idea or technology and actively works to sell the system throughout the organization, eventually pushing it to success. In many organizations it is not possible Future orientation – Future time perspective, the extent to which the future drives an individual’s current behavior.
Enables contingency planning, creating a vision for the project, skills needed are time warping, predicting and creating future vision. Godfather – A senior level manager who does everything possible to promote the project, including obtaining the needed resources, coaching the project team when problems arise, calming the political waters, and protecting the project when necessary. Sponsor – a person who has elected to actively support acquisition and implementation of the new technology and to do everything in his power to facilitate this process. One of the most important functions of godfathers is to make it known throughout the organization that this project is under their personal guidance or protection.
Leadership – the ability to inspire confidence and support among the people who are needed to achieve organizational goals. For the project manager, leadership is the process by which she influences the project team to get the job done! Motivation – comes from within each of us; it cannot be stimulated solely by an external presence. Each of us decides, based on the characteristics of our job, our work environment, opportunities for advancement, coworkers and so forth, whether we will become motivated to do the work we have been assigned.
Past orientation – time orientation, project leader duties include project problem solving, team member evaluation, lessons-learned meetings, temporal skill needed is recapturing the past or remembering and using information from the past. Predicting – Generating estimates of what will occur in the future. Present orientation – time orientation, project leader duties include scheduling, managing multiple project problems. Temporal skills needed are time warping and polychromicity – or a desire for doing more than one thing at a time aka multi-tasking.
1. Recognition that Project management techniques are being applied to everyday business. 2. Critical need to upgrade the skills of those doing project work. 3. Recognizes the need to create career paths for those who serve as project managers and support personnel. Self-regulation – A key ability to reflect on events, respond to them after careful consideration, and avoid the mistake of indulging in impulsive behavior.
Temporal Alignment – has the effect of influencing our behavior and causes each of us to perform some tasks well, while making others more difficult. Each of us has a natural tendency to focus on one of the three time orientations, past, present or future. Time orientation – The temporal context or space to which an individual is oriented, past, present or future. Time warping – Cognitively bringing the past and future closer to the present.
Baseline – A project’s scope fixed at a specific point in time.
Configuration management – Control systems – vital to ensure that any changes to the project baseline are conducted in a systematic and thorough manner. Some types of control systems are: * Configuration control – includes procedures that monitor emerging project scope against the original baseline scope. * Design control – relates to systems for monitoring the project’s scope, schedule and costs during the design stage. * Trend monitoring is the process of tracking the estimated costs, schedules and resources needed against those planned.
* Document control ensures that important documentation is compiled and disseminated in an orderly and timely fashion Document control is a way of making sure that anything contractual or legal is documented and distributed. * Acquisition control monitors systems used to acquire necessary project equipment, materials, or services needed for project development and implementation.
* Specification control ensures that project specifications are prepared clearly, communicated to all concerned parties and changed only with proper authorization. Cost control accounts – accounts assigned to various units engaged in performing project activities within the company. Cost-plus contracts – Fix the company’s profit for a project in advance. Deliverables – any measurable, tangible, verifiable outcome, result or item that must be produced to complete a project or part of a project. Milestone – a significant event in the project.
Organization Breakdown Structure (OBS) – a result of the cost control accounts, it allows companies to define the work to be accomplished and assigning it to the owner of the work packages. The budgets of these activities are then directly assigned to the departmental accounts responsible for the project work. Project Closeout – a step that requires project managers to consider the types of records and reports they and their clients will require at the completion of the project.
Project scope – Everything about a project – work content as well as expected outcomes. Project scope consists of naming all activities to be performed, the resources consumed and the end products that result, including quality standards. Scope includes a project’s goals, constraints, and limitations. Responsibility Assignment Matrix (RAM) – a matrix that identifies team personnel who will be directly responsible for each task in the project’s development. Also known as a linear responsibility chart. Scope baseline – a document that provides a summary description of each component of the project’s goal, including basic budget and schedule information for each activity.
Creation of the scope baseline is the final step in the process of systematically laying out all pre-work information, in which each subroutines of the project has been identified and given its control parameters of cost and schedule. Scope Management – is the function of controlling a project in terms of its goals and objectives through the processes of conceptual development, full definition, execution and termination. Scope reporting – Element of Scope Management that includes cost, schedule, technical performance status.
Scope statement – Element of scope management that includes goal criteria, management plan, work breakdown structure, scope baseline, activity responsibility matrix Statement of Work (SOW) – a detailed narrative description of the work required for a project. USE SOWs contain information on the key objectives for the project, a brief and general description of the of work to be performed, expected project outcomes and any funding or schedule constraints. Turnkey contracts – a lump-sum contract in which the project organization assumes all responsibility for successful performance .
WBS codes – assigned to each activity by accounting to allocate costs more precisely, to track the activities that are over or under budget, and to maintain financial control of the development process. Work Authorization – the formal go ahead for the project work to officially begin after all planning, documents, management plans and other contractual documents have been prepared and approved. Can consist of a formal sign off on all project plans, including detailed specifications for project delivery.
Work Breakdown Structure – one of the most vital planning mechanisms, this divides the project into its component sub-steps in order to begin establishing critical interrelationships among activities. Work packages – WBS elements of the project that are isolated for assignment to work centers for accomplishment. These are the smallest indivisible components of a WBS. The lowest level in the WBS composed of short-duration tasks that have a defined beginning and end, are assigned costs, and consume some resources.
Accessibility – the perception by others that a person is approachable for communicated and interacting with on problems or concerns related to the success of a project. Adjourning – recognizes the fact that projects and their teams do not last forever. At some point the project has been completed and the team is disbanded to return to their other functional duties within the organization. In some cases, the group may downsize slowly and deliberately. Administrative conflict – arises through management hierarch, organizational structure or company philosophy. Often centered on disagreements about reporting relationships, who has authority and administrative control for functions, project tasks and decisions.
Cohesiveness – refers to the degree of mutual attraction that team members hold for one another and their task. It is the strength of desire all members have to remain a team. It is safe to assume that most members of the project team need a reason or reasons to contribute their skills and time to the successful completion of a project. Conflict – is a process that begins when you perceive that someone has frustrated or is about to frustrate a major concern. Two important elements of this definition are: 1 – it suggests that conflict is not a state but a process. It contains a dynamic aspect that is very important.
Conflicts evolve. The one time causes of a conflict may change over time. 2 – the definition is that conflict is perceptual in nature. It does not ultimately matter whether or not one party has truly wronged another party, the important thing is that one party perceives that state or event to have occurred. Cross-functional cooperation – Two stages – first stage is a set of factors that influence cooperation: Super-ordinate goals, rules and procedures, physical proximity and accessibility. The second stage, as a result of the first stage are Task outcomes and psychosocial outcomes. Differentiation – individuals each bring to the team, their preconceived notions of the roles that they should play, the importance of their various contributions, and other parochial attitude. Forming stage – consists of the process or approaches used to mold a collection of individuals into a coherent project team.
Goal-oriented conflict – associated with disagreements regarding results, project scope outcomes, performance specifications and criteria, and project priorities and objectives. Often results from multiple perceptions of the project and are fueled by vague or incomplete goals that allow project team members to make their own interpretations. Interaction – how team members work together based on their level of trust for one another. Interdependencies – degree of knowledge that team members have and the importance they attach to the interrelatedness of their efforts.
Developing an understanding of mutual interdependencies implies developing a mutual level of appreciated for the strengths and contributions that each team member brings to th.e table and is a precondition for team success. Team members must become aware not only of their own contributions but also of how their work fits into the overall scheme of the project. Interpersonal conflict – occurs with personality differences between project team members and important project stakeholders. Interpersonal conflict sources include different work ethics, behavioral styles, egos and personalities of project team members.
Negotiation – is a process that is predicated on a manager’s ability to use his influence productively. Represents the art of influence taken to its highest level. Norming stage – implies that the team members are establishing mutually agreed-upon practices and attitudes. Norms help the team determine how it should make decisions, how often is should meet, what level of openness and trust member emerges, and feelings of camaraderie and shared responsibility become evident. will have, and how conflicts will be resolved. During this stage that the cohesiveness of the group grows to its highest level. Close relationships develop a sense of mutual concern and appreciation
Orientation – When each member of the project team is committed to achieving the project’s goals. Outcomes – The project manager can influence team performance in many ways but it is through constantly emphasizing the importance of task performance and project results.
Performing stage – The actual work of the project team is done during this stage. It is only when the first three phases have been properly dealt with that the team will have reached the level of maturity and confidence needed to effectively perform their duties. During this stage, team relationships are characterized by high levels of trust, mutual appreciation for each others performance and contributions, and a willingness to actively seek to collaborate.
Physical proximity – Refers to project team members’ perceptions that they are located within physical or spatial distances that make it convenient for them to interact. Individuals are more likely to interact and communicate with others when the physical characteristics of buildings or settings encourage them to do so.
Principled negotiation – the art of getting agreement with the other party while maintaining a principled, win-win attitude. Psychosocial outcomes – represents the team member’s assessment that the project experience was worthwhile, satisfying and productive. Punctuated equilibrium – proposes that rather than evolution occurring as a steady state of gradual changed, real natural change comes about through long periods of stasis, interrupted by some cataclysmic event that propels upward, evolutionary adjustment.
Storming stage – refers to the natural reactions members have to the initial ground rules. Members begin to test the limits and constraints placed on their behavior. Storming is a conflict-laden stage in which the preliminary leadership patterns, reporting relationships, and norms of work and interpersonal behavior.
Superordinate goal– refers to an overall goal or purpose that is important to all functional groups involved, but whose attainment requires the resources and efforts of more than one group.
Task outcomes – refers to the factors involved in the actual implementation of the project (time, schedule, and project functionality)
Team building – an important people skill to develop. Putting together individuals with the necessary skillset to complete the project and motivate them.
Trust – can be understood as the team’s comfort level with each individual member. Given the comfort level, trust is manifested in the team’s ability and willingness to squarely address differences of opinion, values, and attitudes and deal with them accordingly.
Virtual teams – involves the use of electronic media, including e-mail, the internet and teleconferencing, to link together members of a geographically dispersed project team.
Analysis of Probability and consequences – the potential impact of these risk factors, determined by how likely they are to occur and the effect they would have on the project if they did occur.
Change management – part of risk mitigation strategies also requires a useful documentation system that all partners can access. Any strategy aimed at minimizing a project risk factor along with the member of the project team responsible for any action, must be clearly identified.
Commercial risk – For projects that have been developed for a definite commercial intent, a constant unknown is their degree of commercial success once they have been introduced into the market place. Commercial risk is an uncertainty that companies my willingly accept, given that it is virtually impossible to accurately predict customer acceptance of a new product or service venture.
Contingency reserves – in several forms, includes financial and managerial, are among the most commons methods to mitigate project risks. They are defined as the specific provision for unforeseen elements of cost within the defined project scope. They are viewed differently, however, depending upon the type of project undertaken and the organization that initiates it.
Contractual or legal risk – Often consistent with projects in which strict terms and conditions are drawn up in advance. Many forms of contracted terms result in a significant degree of project risk. Companies seek to limit their legal exposure through legal protection.
Control and documentation – creating a knowledge base for future projects based on lessons learned. Cross-training – training team members so they can fill in for one another in the case of unforeseen circumstances.
Execution risk – What are the specific unknowns related to the execution of the project plan? A broad category that seeks to asses any UNIQUE circumstances or uncertainties that could have a negative impact on the execution of the plan.
Financial risk – refers to the financial exposure a firm opens itself to when developing a project. Fixed price contact – establishes a firm, fixed price for the project upfront. Should the project’s budget begin to slip, the project organization must bear the full cost of these overruns. Alternatively if the goal is to ensure project functionality, the concept of liquidated damaged offers a way to transfer risk through contracts.
Liquidated damages – represents project penalty clauses that kick in at a mutually agreed upon points in the project’s development and implementation. Managerial contingency – is budget safety measures that address higher-level risks. May be used to offset “Acts of God”. Mentoring – junior or inexperienced project personnel are paired with senior managers in order to help them learn best practices. The goal of mentoring is to help ease new project personnel into their duties by giving them a formal contact who can help clarify problems, suggest solutions and monitor them as they develop project skills.
Project risk – Can be simply defined as any possible event that can negatively affect the viability of a project. Project Risk Analysis and Management (PRAM) – a generic methodology that can be applied to multiple project environments and encompasses the key components of project risk management. Present a systematic alternative to ad hoc approaches to risk assessment, hence can help organizations that may not have a clearly developed, comprehensive process for risk management and are instead lock into one or two aspects.
Key features of PRAM are:
* Recognition that risk management follows its own life cycle, much as a project follows its own life cycle. * The application of different risk management strategies at various points in the project life cycle. * The integration of multiple approaches to risk management into a coherent, synthesized approach.
The nine phases are:
5. Clarify ownership
Risk identification – The process of determining the specific risk factors that can reasonably be expected to affect our project. Some ways risk factors are identified:
2. Expert opinion
4. Multiple or team based assessments
Risk management – recognizes the capacity of any project to run into trouble, is defined as the art and science of identifying analyzing, and responding to risk factors throughout the life of a project and in the best interests of its objectives.
Risk mitigation strategies – Steps taken to minimize the potential impact of those risk factors deemed sufficiently threatening to the project. Task contingency – used to offset budget cutback, schedule overruns or other unforeseen circumstances by accruing to individual tasks or project work packages. Technical risk – When a new project contains unique technical elements or unproven technology they are being developed under significant technical risk. The greater the level of technical risk, the greater possibility of project underperformance in meeting specifications.