Zimbabwe Institute of

Management

MODULE: PROJECT
PLANNING A
Facilitator:
Mr C Ncube
Phd Candidate (Management)
Contact Details:
+263 775 558 922
[email protected]

1
Overview

 The purpose of this course is to provide an overview of Project

Management – the principles and practices to help you to manage a
project or to participate more effectively as part of a project team.
 This module covers Project Management principles related to
planning and executing a project, managing people and resources,
connecting with stakeholders, maintaining and managing scope,
budget and timelines.
 3
Preamble

Day 1 Unit 5: Project Scheduling (PERT &

Unit 1: Introduction to Project Planning Critical Path Analysis
Unit 2: The Project Manager Unit 6: Project Investment Appraisal
Unit 3: Project Lifecycle Unit 7: Project Closure
Unit 4: Feasibility Study

Day 2
 4

Day 1
 AT THE END OF THIS UNIT, YOU
SHOULD BE ABLE TO UNDERSTAND
THE FOLLOWING:

• THE EVOLUTION OF PROJECT

PLANNING
• WHAT IS A PROJECT?
Unit 1: • PROJECT ATTRIBUTES

Conceptualisation of • WHAT IS PROJECT MANAGEMENT?

• THE TRIPLE CONSTRAINT
Project Planning • KNOWLEDGE AREAS
• PROJECT CHARACTERISTICS
• TRIPLE CONSTRAINT OF PROJECT
SUCCESS
• HOW DOES PROJECT
MANAGEMENT BENEFIT YOU?
Evolution of Project Planning
2570 BC: The Great Pyramid of Giza Completed

 The Pharaohs built the pyramids and today

archaeologists still argue about how they
achieved this feat.
 Ancient records show there were managers
for each of the four faces of the Great
Pyramid, responsible for over seeing their
completion.
 We know there was some degree of
planning, execution and control involved in
managing this project.
Evolution of Project Planning: 208 BC- Construction of
the Great Wall of China

 Later still, another wonder of the world was built. Since the Qin
Dynasty (221BC-206BC), construction of the Great Wall had
been a large project.
 According to historical data, the labour force was organised into
three groups: soldiers, common people and criminals.
 The Emperor Qin Shihuang ordered millions of people to finish
this project.
Evolution of Project Planning: 1917 - The Gantt chart
Developed by Henry Gantt (1861-1919)

 One of the forefathers of project management, Henry Gantt, is

best-known for creating his self-named scheduling diagram, the
Gantt chart.
 Itwas a radical idea and an innovation of worldwide importance
in the 1920s. One of its first uses was on the Hoover Dam
project started in 1931.
 Gantt charts are still in use today and form an important part of
the project managers' toolkit.
What Is a Project?

 A project is “a temporary endeavor undertaken to create a

unique product, service, or result.”
 Operations is work done to sustain the business.
 A project ends when its objectives have been reached, or the
project has been terminated.
 Projects can be large or small and take a short or long time
to complete.
Additional Definitions

A project is a unique venture with a beginning and

an end, conducted by people to meet established
goals within parameters of cost, schedule, and
quality.
Projects are goal-oriented, involve the coordinated
undertaking of interrelated activities, are of finite
duration, and are all, to a degree unique.
Project Definitions Summarised

A project can be considered any series of activities and

tasks that have:
 Specific objectives to be completed within certain
specifications,
 Defined start and end dates,
 Funding limits,
 Human and nonhuman resources, and
 Multifunctional focus.
Project Attributes

A project:
Has a unique purpose.
Is temporary.
Is developed using progressive elaboration.
Requires resources, often from various areas.
Should have a primary customer or sponsor.
The project sponsor usually provides the direction and funding for the project.
Involves uncertainty.
What is Project Management?

Project management is “the application of

knowledge, skills, tools and techniques to
project activities to meet project
requirements.”
 The Triple Constraint

Successful project
management means
meeting all three
goals (scope, time,
and cost) – and
satisfying the
project’s sponsor!
Knowledge Areas

Scope Management
Time Management
Cost Management
Quality Management
Human Resources Management
Communications Management
Risk Management
Procurement Management
Integration Management
Project Characteristics
 Causes of Project Failure

 Failure to establish upper-management commitment to the project

 Lack of organization’s commitment to the methodology
 Taking shortcuts through or around the methodology
 Poor expectations management
 Feature creep– uncontrolled addition of technical features to a
system.
 Scope creep – unexpected and gradual growth of requirements
during an information systems project.
 At the end of this unit, you should
be able to understand:
• The role of project managers.
• The skills for Project Managers
UNIT 2: THE • Belbin’s team roles
• Conditions Favoring
PROJECT Development of
High Performance Project
MANAGER Teams
Definition

 A Project Manager is a professional in the field of

project management. Project managers can have
the responsibility of the planning, execution and
closing of any project.
 They are organized, passionate and goal oriented,
who understand what projects have in common,
and their strategic role in how organizations
succeed, learn and change.
The role of project managers

Leading

Controlling Planning

Staffing Organizing
ROLE OF PROJECT MANAGER

TECHNICAL TRANSACTIONA
L

TRANSFOR-
MATIONAL
RESPONSIBIBILITIES OF A PROJECT
MANAGER

 The project manager is the person responsible for managing the

project.
 The project manager is the person responsible for accomplishing the
project objectives within the constraints of the project. He is
responsible for the outcome of the project.
 The project manager is involved with the Planning, Controlling and
monitoring, and also managing and directing the assigned project
resources to best meet project objectives.
RESPONSIBIBILITIES OF A PROJECT
MANAGER

The project manager controls and monitors project scope, time and
cost in managing project manager controls and monitors project
scope, time and cost in managing project requirements.
The project manager examines the organizational culture and
determines whether project management is recognized as a valid as
role with accountability and authority for managing the project.
The project manager is responsible for identifying, monitoring and
responding to risk
Skills for Project Managers

 Communication skills: Listens, persuades.

 Organizational skills: Plans, sets goals, analyzes.
 Team-building skills: Shows empathy, motivates, promotes
esprit de corps.
 Leadership skills: Sets examples, provides vision (big
picture), delegates, positive, energetic.
 Coping skills: Flexible, creative, patient, persistent.
 Technology skills: Experience, project knowledge.
 25

Belbin’s team roles

Meredith Belbin and his colleagues have spent years studying team
work in an experimental environment
They have defined eight team roles
 Coordinator (calm, confident, controlled)
 Plant (creative, unorthodox, non-practical)
 Implementer (conservative, dutiful)
 Shaper (extrovert, dynamic, pushing, provoking)
 Monitor/Evaluator (analytic, strategic, dry)
 Team worker (sensitive, mild, indecisive, caring)
 Resource Investigator (curious, communicative)
 Completer-Finisher (thorough, perfectionist, anxious )
Conditions Favoring Development of
High Performance Project Teams

 Ten or fewer team members  Members report only to the

project manager
 Voluntary team membership
 Continuous service on the team
 All relevant functional areas
are represented on the team
 Full-time assignment to the team
 The project has a compelling
 An organization culture of objective
cooperation and trust
 Members are in speaking
distance of each other
Creating a High-Performance Project Team
Project Management Lifecycle

Unit 3
Project Management
Five phases - the project management life cycle
 Scoping the Project - Identify problems, opportunities,
goals, resources, success criteria, risks, and obstacles
 Develop a Detailed Plan - identify, estimate duration, and
resource the activities, prepare proposal
 Launch the Plan - recruit and organize team, schedule and
document work
 Monitor/Control Progress - establish progress reporting,
change control tools, monitor progress, amend plan
 Closing - obtain client acceptance, install deliverables,
complete documentation, post-implementation report,
issue final project report.
 Project Process Life Cycle

Planning Monitorin
Productio
Initiati or g and
developm
n or
controllin Closing
on execution
ent g
Project management
Step 1 - Scope the Project
 Five components in a project statement
– Problem and opportunity - a statement of fact
– Project goal - what the project will address
– Project objectives - what the project includes
– Success criteria - business value; quantitative
business outcome
– Assumptions, risks, objectives - what will
hinder the project in achieving its goals
Project management lifecycle
Step 2 - Develop a detailed plan
 Identify project activities (work breakdown structures)
– break-down tasks by: “design-build-test-implement”,
functional, or geographic area
– should have clearly defined start and end
 Estimate activity duration (focus on early activities)
– consider comparability to similar, historical projects or
expert advice
– use Delphi technique where expert is not available
(group polls each member for estimates, with gradual
consensus over several iterations)
– 3 point techniques identifies optimistic, pessimistic and
likely estimates
 Project management lifecycle
Step 2 - Develop a detailed plan (continued)
 Determine resource requirements
– be sure to schedule activities based on available
resources
– consider leveling resources (see Slide 15)
– at some point, adding more resources provides
no incremental benefit
– more to coordinate
– more to communicate
Project management lifecycle
Step 2 - Develop a detailed plan (continued)
 Dependencies of activity B and Activity A:
– Finish to start: complete A before starting B
• e.g., finish creating table structure before final
query/form
– Start to start: begin B only after A begins
• e.g., begin issuing reports after data entry starts
– Start to finish: end B only after A has started
• e.g., shut off old system once new system is
working
– Finish to finish: end B only once A has also ended
• e.g., testing can be finished only after development
work is completed.
Project management lifecycle
Step 3 - Implement the plan
 Recruit and organize the project team
– Project manager: leader of the project
– Core team: will be there from beginning to end
– Contracted team: only there for selected activities/tasks
 Leveling project resources utilization
– necessary to prevent wild fluctuation in staff levels
– can be done by adjusting any of: activity start/end
dates, sequencing activities schedules, using float
 Scheduling and documenting work
– describes/reports work done / to do (e.g., Gantt chart)
Project management lifecycle
Step 4 - Monitoring and controlling progress
 Purpose, contents and frequency of reports
– current period, cumulative and/or exception reports
 Graphical tools
– Gantt charts, milestone charts, cost/budget
 Reporting detail
– team members and project manager need detail
– senior managers prefer graphical exception reports
 Conduct regular status review meetings
– weekly for team, bi-weekly for other stakeholders
 Change control - formalize it.
– measure and report impact of changes on project
Project management lifecycle
Step 5 - Closing the project
 Ensure all deliverables are installed
• avoid penalties
 Obtain client acceptance of
deliverables
 Ensure documentation is complete
– includes project overview, RFP, detailed
plan, meeting minutes, change control,
testing, client acceptance, post
implementation review, etc.
 Conduct post-implementation review
 Party!
Project management lifecycle
Objectives for the post-implementation
review
 Was project goal achieved?
 Was the project done on time, on budget, in
accordance with specifications?
 Was client satisfied with the project results?
 Was the business value realized?
 And most importantly:
What were the lessons learned for the benefit of
future projects?
Feasibility study

UNIT 4
Feasibility study

 This is the study of a proposed project to indicate

whether the proposal is attractive enough to justify
more detailed preparation
A feasibility study is part of the process of project
identification, preparation and selection
 Itinvolve the process of appraising projects or group of
projects and then choosing to implement some of them
 This is an extremely important stage in project
management
Feasibility study

 A feasibility study should contain the following analyses:

Commercial /market analysis
Technical analysis
Organization/administrative analysis
Financial analysis
Environmental analysis
Economic analysis
Socio-political analysis
Commercial/market analysis

 The commercial aspects of a project include the arrangement for

marketing output produced by the project, and the arrangements for the
supply of inputs needed to built and operate the project
 On the output side, careful analysis of the proposed market for the
projects production is essential to ensure that there will be an effective
demand at a remunerative price e.g questions to be asked include: where
will the products be sold?, is the market large enough to absorb the new
production without affecting the price?, if the price is likely to be
affected, by how much?, what share of the total market will the proposed
project supply?, are there appropriate facilities for handling the new
production.
Technical analysis

 The technical analysis concern projects inputs (supplies) and outputs

(production) of real goods and services
 Itis extremely important, and the project framework must be defined
clearly enough to permit the technical analysis to be thorough and precise
 The other aspects of project analysis can only proceed in light of the
technical analysis
 Good technical staff are essential for this work, they must be drawn from
consulting firms or technical assistance agencies abroad
 Technical analysis may identify gaps in information that must be filled
either before project planning or in early stages of project implementation
Organisational analysis

 A whole range of issues in project preparation revolves around the

overlapping institutional, organizational, and managerial aspects of
projects
 This
factors clearly have an important effect on the project
implementation
 Frequent questions asked is whether the institutional setting of the
project is appropriate and, whether the socio-cultural patterns and
institutions of those communities that the project will serve must be
considered
 E.g does the project design take into account the customs and culture of
the farmers who will participate? Or will the project involve disruption
of the ways in which farmers are accustomed to working?
Financial analysis

 The financial aspects of project preparation and

analysis include the financial effects of a proposed
project on each of its various participant.
 In agricultural projects, the participants include
farmers, private sector firms, public corporations,
project agencies and perhaps the national treasury.
 A major objective of the financial analysis of farms
is to judge how much farm families who are
participating in the project will have to live on.
Economic analysis

 Economic analysis is basically concerned with the

following:
 How to identify effects of a proposed project to the
society
 Quantification of the effects of the proposed project
 Pricingof costs and benefits to reflect their values to
the society
 Ineconomic analysis, shadow prices are used while in
financial analysis the market prices are used
Social analysis

 We have mentioned that projects should consider the social

patterns and practices of the clientele the project will serve
 More frequently, project analysts are expected to examine carefully
the broader social implications of proposed investments
 Social consideration should be carefully considered to determine is
a proposed project is responsive to national objectives e.g the case
of creating employment opportunities , and also issues that are
dealing with income distribution within the society
 For social reasons, when governments what to emphasize on
growth in particular regions, they would encourage projects that
can be implemented in these areas
Environmental analysis

 Pollution
 Environmental degradation
 49

End of Day 1
Unit 5: Project Time
Management (Project
Scheduling: PERT & Critical
Path Analysis)
Importance of Project Schedules
 Managers often cite delivering projects on time as
one of their biggest challenges
 Schedule issues are the main reason for conflicts
on projects, especially during the second half of
projects

51
Project Time Management Processes

Process Integration Management Major

Group Process Output
P1: Defining Activities Activity List

P2: Estimate Activity Duration Activity Duration Estimates

Planning
P3: Sequence Activities Project Schedule Network
Diagram

P4: Develop Schedule Project Schedule

Monitoring
Work Performance
and MC1: Control Schedule
Measurements
Controlling
52
Project Time Management Processes

53
P1: Defining Activities
 An activity or task is an element of work
normally found on the work breakdown structure
(WBS) that has an expected duration, a cost,
and resource requirements

54
Activity Lists, Attributes &
Milestones
 An activity list is a tabulation of activities to
be included on a project schedule that
includes
 Activity attributes

 A milestone is a significant event that

normally has no duration
 Examples include obtaining customer sign-off
on key documents or completion of specific
products

55
 P2: Activity Duration Estimating
 Duration vs. Effort

 People doing the work should help create

estimates, and an expert should review them

56
 P3: Sequencing Activities
 Involves reviewing activities and determining
dependencies
 A dependency or relationship is the
sequencing of project activities or tasks
 You must determine dependencies in order to
use critical path analysis

57
Network Diagrams
 A network diagram is a schematic display of
the logical relationships among, or
sequencing of, project activities
 Two main formats are the arrow and
precedence diagramming methods

58
 Network Diagrams
 Activity-on-Node (AON):
 Uses nodes to represent the activity
 Uses arrows to represent precedence relationships

© Wiley 2007
 P4: Developing the Schedule

 Ultimate goal is to create a realistic project

schedule that provides a basis for monitoring
project progress for the time dimension of the
project

60
Gantt Charts

 Gantt charts provide a standard format for

displaying project schedule information by listing
project activities and their corresponding start
and finish dates in a calendar format

61
Gantt Chart Showing Each Activity Finished
at the Earliest Possible Start Date

© Wiley 2010
 Project Time Management Techniques

 Managers have been planning, scheduling, monitoring, and controlling

large scale projects for hundred years, but it has only been in the last
50 years that management science techniques have been applied to
major projects.
 In 1957, the Critical Path Method (CPM) was developed by Kelly and
Walker to assist in building and maintenance of chemical plants.
 In 1958, the special projects office of the US navy developed the
Program Evaluation and Review Technique (PERT) to plan and control
the Polaris missile program.
 In the recent time, PERT and CPM are two popular management
science techniques that help mangers plan, schedule, monitor, and
control large scale and complex projects
PERT/CPM

 PERT stands for Program Evaluation and Review Technique.

 CPM stands for Critical Path Method.
 PERT/CPM is used to plan the scheduling of individual activities that make
up a project.
 PERT/CPM can be used to determine the earliest/latest start and finish times
for each activity, the entire project completion time and the slack time for
each activity.
 PERT and CPM are similar in their basic approach, they do differ in the way
activity times are estimated.
 For each PERT activity three times (optimistic, pessimistic and most likely
times) are combined to determine the expected activity completion time and
its variance. Thus, PERT is a probabilistic technique: it allows us to find the
probability of the entire project being completed by any given date.
 CPM, on the other hand, is called a deterministic approach. It uses two time
estimate, the normal time and the crash time, for each activity
Critical Path Method (CPM)
 A critical path for a project is the series of
activities that determines the earliest time by
which the project can be completed

65
 Step 1-Define the Project: Cables By Us is bringing a new
product on line to be manufactured in their current facility in
existing space. The owners have identified 11 activities and their
precedence relationships. Develop an AON for the project.

Immediate Duration
Activity Description
Predecessor (weeks)
A Develop product specifications None 4
B Design manufacturing process A 6
C Source & purchase materials A 3
D Source & purchase tooling & equipment B 6
E Receive & install tooling & equipment D 14
F Receive materials C 5
G Pilot production run E&F 2
H Evaluate product design G 2
I Evaluate process performance G 3
J Write documentation report H&I 4
K Transition to manufacturing J 2
© Wiley 2010
Step 2- Diagram the Network for
Cables By Us

© Wiley 2010
Step 3 (a)- Add Deterministic Time
Estimates and Connected Paths

© Wiley 2010
Step 3 (a) (Con’t): Calculate
the Project Completion Times
Paths Path duration
ABDEGHJK 40
ABDEGIJK 41
ACFGHJK 22
ACFGIJK 23
 The longest path (ABDEGIJK) limits the
project’s duration (project cannot finish in
less time than its longest path)
 ABDEGIJK is the project’s critical path

© Wiley 2010
 Unit 6: Project
Investment Appraisal Should we
build this
plant?
After this unit, students should be able to:
(1) Demonstrate understanding of the following methods of investment
appraisal for financial decision making:
• Payback
• Net Present Value (NPV)
• Accounting Rate of Return
(2) Conduct an investment appraisal in a given business context
(3) Evaluate the outcomes of an investment appraisal and make
recommendations for investment decision making
(4) Evaluate the methods of investment appraisal a professional business
services firm can use with a client when advising on financial decision
making
The Payback Period Method
 How long does it take the project to “pay
back” its initial investment?
 Payback Period = number of years to recover
initial costs
 Minimum Acceptance Criteria:
 Set by management
 Ranking Criteria:
 Set by management

5-72
The Payback Period Method
 Disadvantages:
 Ignores the time value of money
 Ignores cash flows after the payback period
 Biased against long-term projects
 Requires an arbitrary acceptance criteria
 A project accepted based on the payback
criteria may not have a positive NPV
 Advantages:
 Easy to understand
 Biased toward liquidity
5-73
Example
 You invest $100 in a business, the free cash
flow is as follows:
Cumulative Cashflow
Year 1: $40 $40
Year 2: $30 $70
Year 3: $30 $100
Year 4: $24 $124
Year 5: $15 $ 139
5-74
Question
 You invest $2000 in a certain business and
your required payback is 2 years. The free
cash flow is as follows:
Year 1: $100
Year 2: $600
Year 3 $1100
Year 4: $200
Year 5: $950
Calculate the payback and comment. 5-75
Payback in between years
 You invest $100 in a business, the free cash
flow is as follows:
Collected payback
Year 1: $40 $40
Year 2: $30 $70 ($100-$70)/$45
Year 3: $45 $115 0.667
Year 4: $24 $139 2+0.667= 2.667yrs
Year 5: $15 $154 2.667*12= 32 months
2 years 8 months 5-76
Question
You invest $200 in a business, the free cash flow
is as follows:
Year 1: $40 $40
Year 2: $30 $70
Year 3: $30 $100
Year 4: $140 $240
Year 5: $15 $255
Calculate payback period
5-77
PAYBACK TYPICAL EXAM QUESTION:
COMPARE TWO PROJECTS

Our task is to select which of the two investments is more advantageous. The payback
method simply suggests choosing the capital project that provides quicker repossession
of the capital expenditure. Hence, we need to calculate the cumulative Net Cash Flow
that is obtained after each year in the future and see when the cumulative Net Cash
Flow is at least equal to the capital expenditure. You can see from the calculation made
in the example that Project A repays its capital expenditure of $ 150,000 in Year 4,
while Project B does so in Year 3. Other things being equal, Project B would be
selected. 5-78
 TIME VALUE TO MONEY!!

Which would you prefer -- $10,000

today or $10,000 in 5 years?

Obviously, $10,000 today.

You already recognize that there is

79
The Discounted cash flow methods
 How long does it take the project to “pay
back” its initial investment, taking the time
value of money into account?
 Decision rule: Accept the project if it pays
back on a discounted basis within the specified
time.
 By the time you have discounted the cash
flows, you might as well calculate the NPV.

5-80
Net present value (NPV)
 The net present value (NPV) of the project is the total of the discounted
net cash flows over the lifetime of the project. The mathematical
expression for the NPV is:

 where is the project’s cash flows (either positive or negative) in time t; t

takes on values from 0 to year n, where n represents the point in time
when the project comes to the end of its life; and r is the annual rate of
discount or the time value of money (which is assumed to remain a
constant over the life of the project), which should reflect the
organisation’s cost of capital.

5-81
The Net Present Value (NPV) Rule
 Net Present Value (NPV) =
Total PV of future CF’s + Initial Investment
 Estimating NPV:
1. Estimate future cash flows: how much? and when?
2. Estimate discount rate
3. Estimate initial costs
 Minimum Acceptance Criteria: Accept if NPV > 0
 Ranking Criteria: Choose the highest NPV

5-82
Example which shows the calculation of Net Present
Value of an investment in a capital project
A company is deciding whether to invest in a project that requires an initial
capital expenditure of $180,000. The project is expected to generate annual
Net Cash Flows (NCFs) of $60,000 during its estimated five-year working
life, and the asset is expected to have no residual value at the end of this
period. The company’s cost of capital is 10%.

5-83
The Net Present Value
Please be clear about the difference between the discount rate and the discount factor.
The discount rate is r. The discount factor is given by

In this example, r = 0.10, so in Year 1 the discount factor is 1/(1 + 0.10) or 0.909. In
Year 2 the discount factor is 1/(1 + 0.10)2 or 0.826. The net cash flow in each year is
multiplied by the discount factor for that year. Discount factors can be obtained from
discount tables often included in accountancy and finance texts, and can be used for
manual calculations. Of course, we can conveniently use the spreadsheet to make the
required calculations. In the example, the discount rate is 10% as this represents the
company’s cost of capital.
The NPV of the project is the sum of the PV of the future net cash flows less the capital
expenditure. That is, $227,447 less $180,000 = $47,447.

5-84
 8-85

The Net Present Value Method

If the Net Present
Value is . . . Then the Project is . . .
Acceptable because it promises
Positive . . . a return greater than the
required rate of return.

Acceptable because it promises

Zero . . . a return equal to the required
rate of return.

Not acceptable because it

Negative . . . promises a return less than the
required rate of return.
9.86 Accounting Rate of Return

• Is the average annual after-tax accounting

profit generated by the investment divided by
the cost of the investment.
• Average annual profit from investment –depn
Investment’s initial cost or outlay
A project has an initial investment outlay of
$500 000 and has net cash flows of $125 000 for
5 years. Assuming that depreciation is $75 000
per year, compute the accounting rate of rate
(ARR).
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc. All rights reserved.
9.87 Accounting Rate of Return

• = 125 000 – 75 000

500 000
= 0.10
Decision criteria
 
Accept a project that meets the company‘s
predetermined average rate of return.

McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc. All rights reserved.

 UNIT 7
PROJECT CLOSURE
 WAYS OF CLOSING A PROJECT
• There are four different ways to close out a
project:
1. Extinction,
2. Addition,
3. Integration, and
4. Starvation.
Termination by Extinction

• The project is stopped.

• It may end because it has been successful and achieved its
goals: the new product has been developed and handed
over to the client; the building has been completed and
accepted by the purchaser; or the software has been
installed and is running.
 Termination by Extinction
• The project may also be stopped because it is unsuccessful or
has been superseded: the new drug failed its efficacy tests;
the yield of the chemical reaction was too low; there are
better/ faster/ cheaper/ prettier alternatives available; or
it will cost too much and take too long to get the desired
performance.
 Termination by Addition
• Some projects are “in-house”, that is, carried out by the
project team for use in the parent organization.
• If a project is a major success it may be terminated by
institutionalizing it as a formal part of the parent
organization.
• Project personnel, property, and equipment are often
simply transferred from the dying project to the newly
born division.
 Termination by Integration
• The property, equipment, material, personnel, and
functions of the project are distributed among the
existing elements of the parent organization.
• The output of the project becomes a standard part of
the operating systems of the parent or client.
• The project may not be viewed as a competitive
meddler but the project personnel being moved into
established units of the parent organization will be so
viewed.
 Termination by Starvation
• This is “slow starvation by budget decrement'
• Budget cuts or decrements are not rare.
• Because they are common, they are sometimes used
to mask a project termination.
• In some firms it is dangerous to admit that one has
championed a failure, and terminating a project that
has not accomplished its goals is an admission of
failure.