Project Management –MGMT627 VU

LESSON 01
INTRODUCTION TO PROJECT MANAGEMENT

Broad Contents

• Management
• Key management concepts
• Functions of management
• Comparison of 20th and 21st century organizations

1.1 What is Management?

Managing is an art of getting things done through and with people in formally organized
groups.
Management is the process of designing and maintaining an environment in which individuals,
working together in groups, efficiently accomplish selected aims towards any project. It is the
art of creating an environment in which people can perform as individuals and yet cooperate
towards the attainment of group goals.

1.1.1 Management as a Process:

According to this, management is the process of using organizational resources to
achieve the organization’s goals through planning, organizing, leading, and
controlling. It is thus, a set of activities directed at an organization’s resources with the
aim of achieving organizational goals in an efficient and effective manner.

1.1.2 Management as People:

This refers to a group of people who engage in “Process of Management”.

1.2 Key Management Concepts:

• Project Organization: It comprises of people working together and coordinating their

actions to achieve specific goals.
• Goal: A desired future condition that the organization seeks to achieve.
• Resource: An asset, competency, process, skill, or knowledge controlled by organization.
Various types of resources that an organization possesses are as follows:
o People
o Information
o Machinery
o Financial capital
o Raw Materials

A resource is strength, if it provides an organization with a competitive advantage. On the

contrary, a resource is a weakness; if it is something the organization does poorly or does not
have capacity to do. Organizational resources include: Human, Physical, Financial,
Technological, and Information.

1.3 Evolution of Management Concept in Modern Era:

a) Frederick Taylor – Father of Scientific Management was a Mechanical Engineer. He

invented high speed steel cutting tools. He got the opportunity to know first hand problems
and attitudes of the workers. Based on these he identified that in order to improve the
quality of management, the major concern was to increase efficiency in production, lower
cost, raise profits through higher productivity, and also increase the pays/salaries of the
workforce.

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His message of management was to give people their best opportunities to be productive,
and in turn reward workers for their individual productivity. This increase in labor
productivity is not possible without the following:
• Providing ample rewards
• Adequate trainings
• Continuous managerial support

Thus, Fredrick Taylor concluded that “low productivity in any project is matter of
ignorance on part of labor and management”.

b) Henry L. Gantt stressed the importance of “developing understanding of systems both for
labor as well as management.” He emphasized that in all problems of management, human
element is the most important one.
Gantt gave graphic methods of describing project plans in order to have better managerial
control. He highlighted the importance of time and cost in planning and controlling projects.
He made the famous Gantt chart which is the forerunner of PERT.

1.4 Key Aspects of the Management Process:

The key aspects of the Management Process can be explained with the help of the following
diagram:

Figure 1.1: Management Process Aspects

1.5 Functions of Management:

The process of management consists of four basic managerial functions. These are:

a) Planning:
Planning is the process of setting objectives in any project and then determining what
should be done to accomplish them. It is a capstone activity of management. Managers at
every level do planning. Planning activities determine an organization’s objective and based
on these helps it in establishing appropriate strategies for achieving them. These strategies
provide the organization with the direction and serves to obtain a match between the
external environment and internal capabilities. The strategies are intended to achieve a
sustained competitive advantage over the competitors.

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b) Organizing:
Organizing is the process of assigning tasks, allocating resources, and arranging coordinated
activities to implement plans. It involves establishing intentional structure of roles for
people to fill in organizations.

c) Leading:
Leading is the process of arousing enthusiasm and directing human resource efforts toward
project and organizational goals. It involves influencing people so that they contribute
towards organizational and group goals. Leadership predominantly is concerned with the
interpersonal aspect of managing.
In projects most important problems arise from people in terms of their desires, attitudes,
and behavior (as individuals as well as in groups). Thus, effective project managers also
need to be effective leaders.
Leadership implies follower-ship and people tend to follow those who offer means of
satisfying their own needs, wishes, and desires.

d) Controlling
Controlling is the process of measuring performance and taking actions to ensure desired
results in any project. It involves measuring and correcting individual as well as
organizational performance to ensure that events conform to plans.
Controlling facilitates accomplishment of plans. There are three basic elements that are
involved in controlling. These are:

1. Management should establish standards of performance.

2. Performance should be assessed periodically and information should be updated that
indicates deviation between actual versus the established standards.
3. Actions should be taken to correct performance that does not conform to the standards.

1.6 Management Functions: Planning, Organizing, Leading & Controlling:

Figure 1.2: Management Functions

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1.7 Managerial Functions in Organizations Undertaking Projects:

Figure 1.3: Managerial Functions

Organizations are arranged in ways that try to maximize synergy, i.e. the ability of the whole to
equal more than the sum of its parts. This means that an organization ought to be able to
achieve its goals more effectively and efficiently than would be possible if the parts operated
separately. Organizations comprise of various levels. These are depicted in the following figure:

Figure 1.4: Various organizational levels

Figure 1.5: A model for organizational environment

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1.8 Comparison of 20th And 21st Century Organizations:

20th Century Organizations 21st Century Organizations

Structure Structure
• Bureaucratic • Not bureaucratic, with fewer rules and
• Multi-leveled employees
• Organized with the expectation that senior • Limited to fewer levels
management will manage • Organized with the expectation that
• Characterized by policies and procedures management will lead, and lower-level
that create many complicated internal employees will manage.
interdependencies • Characterized by policies and procedures that
produce the minimal internal interdependence
needed to serve customers.
Systems Systems
• Depend on few performance information • Depend on many performance information
systems. system, providing data on customers
• Distribute performance data to executives especially
only • Distribute performance data widely
• Offer management training and support • Offer management training and support
systems to senior people only systems to many people

Culture Culture
• Inwardly focused • Externally oriented
• Centralized • Empowering
• Slow to make decisions • Quick to make decisions
• Political • Open and candid
• Risk averse • More risk tolerant

1.9 Economic And Social Forces Driving Need For Major Changes in Organizations:
This is illustrated in the following figure:

Figure 1.6: Economic and Social changes driving change

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In order to have large scale changes in organizations, there are some distinctive transformation
processes. These are as follows:
• Reengineering
• Restructuring
• Quality programs
• Mergers and acquisitions
• Strategic changes
• Cultural changes

1.10 Paradigm Shifts:

From To
Industrial Society Information Society
Forced Technology High Tech/High Touch
National Economy World Economy
Short Term Long Term
Centralization Decentralization
Institutional Help Self-Help
Representative Democracy Hierarchies Participatory Democracy
North South
Either/OR Multiple Option

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LESSON 02

CONCEPTS, DEFINITIONS AND NATURE OF PROJECTS

Broad Contents

What is a project?
Why projects?
Attributes of a project
Characteristics of projects
Project environment
Project participants
Projects and strategic planning
Examples of projects
Project types

2.1 What is a Project?

J. M. Juran defined that “a project is a problem scheduled for solution.” Problem refers to the
gap between where you are and where you want to be, with an obstacle that prevents easy
movement to close the gap.
Projects are a group of activities that have to be performed with limited resources to yield
specific objectives, in a specific time, and in a specific locality. Thus, a project is a temporary
endeavour employed to create a unique product, service or results. Projects are an
investment on which resources are used to create assets that will produce benefits over an
expanded period of time. It is a unique process, consisting of a set of coordinated and controlled
activities with start and finish dates, undertaken to achieve an objective conforming to specific
requirements, including the constraints of time, cost and resources.

2.1.1 Short Range Projects:

They are completed within one year, and are focused towards achieving the tactical
objectives. They are less rigorous; require less or no risk. They are not cross functional.
These projects require limited Project Management tools, and have low level of
sophistication. It is easy to obtain approval, funding and organizational support for short
range projects. For example, reduce defect in shop number two from 6 to 4 percent.

2.1.2 Long Range Projects:

These projects involve higher risk and a proper feasibility analysis is essential before
starting such projects. They are most often cross functional. Their major impact is over
long period of time, on internal as well as external organization. Large numbers of
resources are required to undertake long range projects and they require breakthrough
initiatives from the members.

2.2 Why Projects are initiated?

Projects are initiated in the following scenarios:

• When starting a new business.
• In order to develop/ modify a product or service.
• For relocating and/or closing a facility.
• For regulatory mandate.
• For some community issues.
• In order to re-engineer the process so as to reduce complaints, reduce cycle time, and
eliminate errors.
• For implementing a new system or process.
• To introduce new equipment, tools or techniques.
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2.3 Attributes of a Project:

Projects focus on a single goal as compared to a program. They have customers who are
affected by the end results. They have to be completed within specified time frame (completion
date), within budget (limited resources including, people, money, machines) and should be
according to the specifications (with a certain level of functionality and quality).

In brief projects are:

• Directed towards achieving a specific result.
• Coordination of undertaking of interrelated activities.
• Of limited duration, a beginning and an end.
• Prone to risks, that is, every project has a certain amount of risk.

2.4 Characteristics of Projects:

• As already mentioned projects are temporary with a definite beginning and a definite end.
• They also have temporary opportunities and temporary teams.
• Projects are terminated when the objectives are achieved, or conversely, if the objectives
cannot be met.
• Most of the projects last for several years. However, they have a finite duration.
• They involve multiple resources (human and non-human) and require close coordination.
• They are composed of interdependent activities.
• At the end of the project, a unique product, service or result is created. Some degree of
customization is also a characteristic of projects.
• Projects encompass complex activities that are not simple, and may require repetitive acts.
• They also include some connected activities. Some order and sequence is required in project
activities. The output from one activity is an input to another.
• Project Management lives in the world of conflict. The management has to compete with
functional departments for “resources and personnel”.
• There exists a constant conflict for project resources and for leadership roles in solving
project problems.
• In every project, clients want changes, and the parent organization aims at maximization of
profits.
• There can be two bosses at a time and that too with different priorities and objectives.

2.5 Project Environment:

All projects are planned and implemented in a social, economic, environmental, political and
international context.

• Cultural and Social Environment is that how a project affects the people and how they
affect the project. This requires understanding of economic, demographic, ethical, ethnic,
religious and cultural sensitivity issues.

• International and Political Environment refers to the knowledge of international, national,

regional or local laws and customs, time zone differences, teleconferencing facilities, level
of use of technology, national holidays, travel means and logistic requirements.

• Physical Environment is the knowledge about local ecology and physical geography that
could affect the project, or be affected by the project.

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Figure 2.1: Project Environment

2.6 Project Participants:

2.6.1 Stakeholders:
Stakeholders are the ones who have a share, or an interest in an enterprise. Stakeholders
in a company may include shareholders, directors, management, suppliers, government,
employees, customers, and the community. Stakeholders are influenced by the
outcomes and objectives. They have varying level of responsibility and authority. Thus,
they should not be ignored. A project manager should try to manage and fulfill the
expectations of the stakeholders. There are both positive and negative stakeholders. In
some cases, stake holder’s roles and responsibilities are overlapping. For example, an
engineering firm also provides financing.

Project stakeholders are individuals and organizations that are actively involved in the
project, or whose interests may be affected as a result of project execution or project
completion. They may also exert influence over the project’s objectives and outcomes.
The project management team must identify the stakeholders, determine their
requirements and expectations, and, to the extent possible, manage their influence in
relation to the requirements to ensure a successful project.

As already mentioned, stakeholders have varying levels of responsibility and authority

when participating on a project and these can change over the course of the project’s
life cycle. Their responsibility and authority range from occasional contributions in
surveys and focus groups to full project sponsorship, which includes providing financial
and political support. Stakeholders who ignore this responsibility can have a damaging
impact on the project objectives. Likewise, project managers who ignore stakeholders
can expect a damaging impact on project outcomes.

Sometimes, stakeholder identification can be difficult. For example, some would argue
that an assembly-line worker, whose future employment depends on the outcome of a
new product-design project, is a stakeholder. Failure to identify a key stakeholder can
cause major problems for a project.

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Stakeholders may have a positive or negative influence on a project. Positive

stakeholders are those who would normally benefit from a successful outcome from the
project, while negative stakeholders are those who see negative outcomes from the
project’s success. For example, business leaders from a community that will benefit
from an industrial expansion project may be positive stakeholders because they see
economic benefit to the community from the project’s success. Conversely,
environmental groups could be negative stakeholders if they view the project as doing
harm to the environment. In the case of positive stakeholders, their interests are best
served by helping the project succeed, for example, helping the project obtains the
needed permits to proceed. The negative stakeholders’ interests would be better served
by impeding the project’s progress by demanding more extensive environmental
reviews. Negative stakeholders are often overlooked by the project team at the risk of
failing to bring their projects to a successful end.

2.6.2 Key Stakeholders:

Key stakeholders include the following:

a) Project Manager:
The person, who is responsible for managing the project.

b) Customers, End Users:

The person or organization that will use the project’s product. These may be
multiple layers of customers. For example, the customer for a new pharmaceutical
product can include the doctors who prescribe it, the patient who take it and the
insurers who pay for it. In some application areas, customers and user are
synonymous, while in others, customer refers to the entity acquiring the project’s
product and users are those who will directly utilizes the project’s product.

c) Performing Organization:
The enterprise whose employees are most directly involved in doing the work of
project.

d) Project Management Working on the Project:

The members of the team who are directly involved in project management
activities.

e) Project Team Members:

The group that is performing the work of the project. It includes the members who
are directly involved in the project activities.

f) Sponsors:
The person or group that provides financial resources, in cash, or kind, for the
project.

g) Influencers:
People or groups that are not directly related to the acquisition or use of the
project’s product, but due to an individual’s position in the customer organization
or performing organization, can influence, positively or negatively, the course of
the project.

h) Project Management Organization:

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If it exists in performing organization, the Project Management Organization can be
a stakeholder if it has direct responsibility for the outcomes of the project.

2.6.3 Project Stakeholders:

In addition to these key stakeholders, there are many different names and categories of
project stakeholders, influencing internal or external, owners and investors, sellers and
contractors, team members and their families, government agencies and media outlets,
individual citizens, temporary or permanent lobbing organizations, and society-at-large.
The naming or grouping of stakeholders is primarily an aid to identifying which
individuals and organizations view themselves as stakeholders. Project Managers must
manage stakeholder expectations, which can be difficult because stakeholders often
have very different or conflicting objectives.
For example:
• The manager of a department that has requested a new management information
system may desire low cost, the system architect may emphasize technical
excellence, and the programming contractor may be most interested in maximizing
its profit.
• The vice president of research at an electronics firm may define new product
success as state-of-the-art technology, the vice president of manufacturing may
define it as world-class practices, and the vice president of marketing may be
primarily concerned with the number of new features.
• The owner of a real estate development project may be focused on timely
performance, the local governing body may desire to maximize tax revenue, an
environmental group may wish to minimize adverse environmental impacts, and
nearby residents may hope to relocate the project.

Figure 2.2: Stakeholders and Projects

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Figure 2.3: Relevant Stakeholders

2.7 Projects and Strategic Planning:

Projects are the means of achieving organization’s strategic plans. Following are the strategic
considerations that have to be kept in mind while planning for projects:
• The market demand (e.g. a new refinery).
• Organizational needs (e.g. a university offers new courses for revenue generation).
• Customer’s requests (e.g. an Internet Service Provider ISP provider lunches DSL).
• Technological demand (e.g. new video games, new cell phones with advance features).
• Legal requirements (e.g. child labor control project, toxic waste disposal center).

2.8 Sub Projects:

Projects are frequently divided into more manageable components or sub projects. Individual
sub projects are also a project and are managed as such. They can be sub contracted or out
sourced.

2.9 The Triple Constraint of Project Management:

Meeting stakeholder needs and expectations involves balancing competing demands among
cost, quality, scope, and time.
Q = f (T, C, S)

• Where Q is Quality, S is Scope and T is Time.

• Project quality is affected by balancing these three factors.
• Projects fail when:
a) Estimates are faulty
b) Time, talent and resources are insufficient or incorrectly applied

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Figure 2.4: Overview of Project Management

Figure 2.4 is a pictorial representation of project management. The objective of the figure is to
show that project management is designed to manage or control company resources on a given
activity, within time, within cost, and within performance expectations. Time, cost, and
performance are the constraints on the project. If the project is to be accomplished for an
outside customer, then the project has a fourth constraint: that is good customer relations.

2.10 Examples of Projects:

• Designing and implementing an auto tax filing system in a revenue collection organization.
• Hosting a web site of your department.
• Executing an environmental clean-up of a contaminated site.
• Holding a University alumni reunion.
• Provision of clean water to Pakistani nation by 2008.
• Developing a new product or service.
• Effecting a change in structure, staffing, or style of an organization.
• Developing or acquiring a new or modified information system.

2.11 Operations and Projects:

Operations are ongoing and repetitive activities conducted by the staff. Some of these include:
• Financial management and control
• Continuous manufacturing
• Product distribution

Projects are temporary and unique, and are performed by teams that have:
• Clearly defined team and individual roles
• Open and effective communication systems
• Visible rewards for good performance, and have constant pressure to improve poor
performance

Common Characteristics between operations and projects are as follows:

• They are both performed by people
• They are constrained by limited resources
• Both are planned, executed, and controlled

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2.12 Project Types:

Project End Requirements

Well Defined Poorly Defined

Project Well Defined Type I Type III

Construction Software
Methods
Poorly Defined Type II Type IV
Product Development, OD, Vision, Training
Space Assessment

Figure 2.5: Project Types

• Type I Projects – Large Engineering Projects:

They have well defined project methods and end project requirements, such as construction
projects.

• Type II Projects – Product Development Projects, Early Space Projects:

They have poorly defined project methods but have well defined project end requirements.

• Type III Projects – Software Development Projects:

In these, the shape of end product proceeds. They have well defined project methods, but
poorly defined project end requirements.

• Type IV Projects – Organizational Development Projects, Vision Definition, Assessment

of Impact of Trainings:
They have both poorly defined project methods as well as project end requirements.

Figure 2.6: Why are systems necessary?

Figure 2.6 shows how many companies are structured. There are always "class or prestige" gaps
between various levels of management. There are also functional gaps between working units of
the organization. If we superimpose the management gaps on top of the functional gaps, we find
that companies are made up of small operational islands that refuse to communicate with one
another for fear that giving up information may strengthen their opponents.

The project manager's responsibility is to get these islands to communicate cross-functionally

toward common goals and objectives.

Projects fill an essential need in society. Indeed, projects are the major mode in which change is
accomplished. It is the mode in which corporate strategy is implemented, business change is

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addressed, productive teams and their necessary competencies are dealt with, quality of
deliverables, and tracking pre-established metrics for management’s decision making, as well as
closing out a project and creating lessons learned are performed.

This discipline changes over time but the basic business premise never changes:

Accomplish the right thing right the first time within justifiable time, resources, and budget.
Projects are the means for responding to, if not proactively anticipating, the environment and
opportunities of the future.

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