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CIMA E2 Project and Relationship Management Passcards 1
CIMA E2 Project and Relationship Management Passcards 1
Management Paper E2
Project and Relationship Management
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First edition July 2014 The contents of this book are intended as a guide and not
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Preface Contents
Welcome to BPP Learning Media’s CIMA Passcards for Management Paper E2 Project and Relationship
Management
They focus on your exam and save you time.
They incorporate diagrams to kickstart your memory.
They follow the overall structure of the BPP Learning Media Study Texts, but BPP Learning Media’s CIMA
Passcards are not just a condensed book. Each card has been separately designed for clear presentation.
Topics are self contained and can be grasped visually.
CIMA Passcards are still just the right size for pockets, briefcases and bags.
Run through the Passcards as often as you can during your final revision period. The day before the exam, try
to go through the Passcards again! You will then be well on your way to passing your exams.
Good luck!
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Preface Contents
Page Page
1a Introduction to strategy – Part A 1 6 Communication, negotiation and conflict 71
1b Introduction to strategy – Part B 11 7 Control and the finance function 81
2 General environment 21 8 Change management 97
3 Competitive environment 33 9a Project management – Part A 105
4 Key concepts in management 41 9b Project management – Part B 117
5 Culture 63 10 The project team 139
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What is strategy?
Incremental/adaptive
Freewheeling opportunism
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Strategy Tactics
A course of action, including the specification of The deployment of resources to execute an agreed
resources required, to meet a specific objective. strategy.
Strategic plan
Statements of long-term goals along with the definition of the strategies and policies which will
ensure achievements of these goals.
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Goals
Stakeholder expectations
Objectives
Quantified measures Position audit
Environmental analysis Strengths and weaknesses
Opportunities and threats
Corporate appraisal Resources, competences
PEST/SLEPT Value chain
5 Forces SWOT analysis Systems structure
Scenarios Gap analysis Portfolio analysis
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Scenarios
Generic strategies To strategic
Product-market vector analysis
Acquisition/growth
Evaluating options: Acceptability – stakeholders
Suitability – mission, strategic intent
Feasibility – resources
Selecting strategy
REVIEW and
Strategic implementation
Manage
stability
Mintzberg says strategy must be crafted
Know the Detect
A purely deliberate strategy hampers learning
business CRAFTING discontinuity
rapidly from experience
STRATEGY
A purely emergent strategy hampers control
Notes
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Introduction to strategy
Part B
Levels of strategy
Positioning approach
Goals and objectives Balanced scorecard
Resource-based
Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
In contrast, the resource-based approach suggests that the environment is too uncertain for this to work and
that competitive advantage comes from the possession of unique resources.
Scarce resources (eg intellectual property, raw materials, brand)
Core competences are those that both out perform competitors and are difficult to imitate. They can be
very specialised.
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Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
Asset specificity
Relationship-specific assets are assets which have little or no application outside of a specific
commercial relationship.
Asset specificity drives vertical integration and thus the growth of organisations.
Possession of vital resources and core capabilities can reduce cost and increase control.
Likewise, contracting for non-core services and supplies can reduce cost and complexity.
Divisional form of organisation can reduce extent of bureaucracy and subversion of mission.
Outsourcing or contracting for non-core services, is beneficial if it will save the company money. A company
should not, however, outsource the resources and competences which give it its competitive advantage.
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Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
Porter grouped the various activities of an A firm’s value chain is connected to what Porter calls a
organisation into a value chain. value system.
FIRM INFRASTRUCTURE
SUPPORT ACTIVITIES
MA
RG
IN
TECHNOLOGY DEVELOPMENT
Distributor/retailer
PROCUREMENT value chains
Organisation’s Customer
INBOUND OUTBOUND MARKETING value value
MA
OPERATIONS SERVICE chain chains
RG
LOGISTICS LOGISTICS & SALES
IN
Supplier
value
PRIMARY ACTIVITIES chains
The margin is the excess the customer is prepared to pay over Using the value chain. A firm can secure competitive
the cost to the firm of obtaining resource inputs and providing advantage in several ways.
value activities. It represents the value created by the value Invent new or better ways to do activities
activities themselves and by the management of the linkages Combine activities in new or better ways
between them. Linkages connect the activities in the value Manage the linkages in its own value chain
chain. The activities affect one another and therefore must be co- Manage the linkages in the value system
ordinated.
Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
All organisations have a reason for existence. A clear statement of purpose is an important input into
management at all levels.
Vision Mission
The strategic thinker’s idea of what the organisation ‘The organisation’s basic function in society’
could be in the future. (Mintzberg)
It must not ignore practical problems or degenerate Includes, typically:
into wishful thinking.
Purpose
Strategic intent Basic strategy eg products
Policies and standards of behaviour
A dream, to stretch and energise the organisation,
to give a sense of direction and coherence to plans. Values and culture
(Hamel and Prahalad) – business principles
– internal relationships
Used to – behaviour
Plan, evaluate and implement.
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Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
They should be: They should balance: They should be consistent across the
Specific Long term considerations organisation so that all pull together
Measurable Short term imperatives
Attainable
Results oriented Where goals are broken down into targets for departments
Time bounded
MBO and individuals.
Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
Hierarchy of objectives
For a commercial organisation, the highest level of objective will always be based on profitability over the
long term, though growth may be regarded as of equal importance.
Kaplan and Norton suggest a balanced scorecard for measuring performance. This is also a valid approach
to setting objectives: business must work towards achievement in four perspectives.
Financial performance Customer satisfaction
Internal systems and methods Innovation and learning
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Established and The transaction The value chain Mission Goals, aims and Implementation
emergent ideas cost approach objectives
Notes
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2: General environment
General environment
Environmental factors
Economic
Social
Technological
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Government policy
Globalisation refers to the growing interdependence of countries worldwide through increased trade, increased
capital flows and the rapid diffusion of technology.
Global trade
of globalisation
Culture in society is as important as organisational New products and services become available
culture in a business New methods of production and service provision
Improved handling of information in sales and
Cultural factors include language, religion, custom, finance
music and literature. TV is a vital aspect in culture. New organisation structures to exploit technology
Business must be particularly aware of cultural New media for communication with customers
change. and within the business (eg Internet)
Porter identifies four determinants of national competitive advantage on an industry basis. He refers to it as the
‘diamond’.
Firm strategy, structure and rivalry
Cultural factors, time horizons, capital
Factor conditions markets and response to recession all help Demand conditions
determine orientation and capability.
Endowments of inputs to Rivalry leads to competitive strength. Home market buyers set
production fundamental parameters
Basic: natural resources, climate, such as market segments,
labour - unsustainable for degree of sophistication,
competitive advantage rate of growth and rate of
Advanced: infrastructure, innovation. Early saturation
technical education, high tech of the home market will
industries - promote competitive encourage a firm to export.
advantage
Related and supporting industries
Success in related industries gives mutual support. Strong home suppliers make the industry more robust.
Rivalry creates supplier specialisations. Clusters of related industries derive strength from their links.
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The economies of Newly Industrialising and Emerging nations (NIEs) have grown significantly in recent
years. These countries are becoming increasingly important in World Politics.
Four significant emerging economies are the BRIC nations, Brazil, Russia, India and China.
BRIC economies
There are four main types of economic system in operation in the world.
Economic systems
Planned economy
Free Market economy
Mixed economy
Transition economy
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Notes
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3: Competitive environment
Competitive
environment
The competitive environment Competitive strategies Competitor analysis Corporate appraisal (SWOT)
Portfolio of products
Industry lifecycle
Accounting for
competitors
Sources of data
Environmental
information and research
Big Data
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The purpose of analysing competitors is to try to predict what they might do, and what they cannot do.
Competitor intelligence systems
Competitor’s goals Assumptions Situation, strategy
What it believes about the industry and capability
Financial targets
Risk assessments Overall capability
Organisational structure Competitor response profile and cost competences
This indicates the competitor’s vulnerability
and the most appropriate ‘battleground’.
Sources of information The management accountant’s
Barriers to entry role
Financial statements Low barriers permit competitors to enter
Customers and suppliers market – potential losses from Analyse relative costs
Products competition may make cost of raising Analyse market share
Former employees barriers worthwhile – eg by brand- Cost structure
Job advertisements building advertising campaign Competitor behaviour
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1 Strategic planning
Information about the environment (PEST)
Internal data (eg profitability, cost of funds, investment requirements)
3 Operational control
Information needed to conduct day-to-day implementation of plans – largely details of individual
transactions
Strategic intelligence
is what a firm needs to know about its environment to enable it to anticipate change and design appropriate
strategies.
is a collection of data
organised to service many Economic Legal data
applications and provides data data Environmental data
for a wide range of uses and
needs Energy
Social data supplier data
Technological Geographical
data data
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Porter says that five forces together determine the long term profit potential of an industry
Theories of leadership
Alternative approach
Managerial behaviour
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Management and subordinate agree measurable objectives for performance that supports the organisation’s mission.
Regular feedback on attainment supports improved performance.
Authority is the right to act in a given context: power confers the ability to act
Management Leadership
Sells The manager still (1) Employees are made aware of the (1) Communications are still largely one-
(persuasive) makes all the reasons for decisions. way. Sub-ordinates might not accept
decisions, but (2) Selling decisions to staff might make the decisions.
believes that them more committed. (2) It does not encourage initiative and
subordinates have to commitment from subordinates.
be motivated to (3) Staff will have a better ideas of what to
accept them in order do when unforeseen events arise in their
to carry them out work because the manager will have
properly. explained his intentions.
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Joins Leader and followers (1) It can provide high motivation and (1) The authority of the manager might be
(democratic) make the decision on commitment from employees. undermined.
the basis of (2) It shares the other advantages of the (2) Decision-making might become a very long
consensus. consultative style (especially where process, and clear decisions might be difficult to
subordinates have expert power). reach.
(3) Subordinates might lack enough experience.
Style of leadership
factors:
Position power is the degree of
formal authority possessed by the 0
manager
Task structure: clear, unambiguous
tasks are easier to control than vague
unstructured ones People-
centred
Leader – subordinate relations: trust
and confidence in the manager ease Very unfavourable 0 Very favourable
his task.
Favourableness of the situation
Discipline
Positive: aid safety and successful completion of tasks.
Negative: sanctions designed to make people choose to behave in a desirable way.
Disciplinary sanctions
Sanctions should be:
Immediate: very difficult if the ACAS procedure is followed
Consistent: subject to mitigating circumstances, an offence should always be treated the same way
Impersonal: no element of personal malice or favour should appear
There should also be advance warning (eg in induction training) so that everyone knows what to expect.
Page 57 4: Key concepts in management
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2 Meeting: employee has right to be accompanied. Manager announces decision and informs employee of right of
appeal.
3 Employee may appeal to more senior, or, at least, different, manager and has right to be accompanied.
Equal opportunities
at work is based on equal access and fair treatment, regardless of gender, race, age, disability, sexual orientation or
religious belief.
The Sex Discrimination Act 1986 and Sex Discrimination and Equal Pay Regulations 1996 outlaw discrimination on grounds of
sex, marital status or sex change.
The Race Relations Act 1996 outlaws discrimination on grounds of colour, race, nationality and ethnicity.
The Race Relations (Amendment) Act 2000 requires larger organisations to draw up plans for achieving racial equality.
The Disability Discrimination Acts 1995 and 2000 protect the disabled against discrimination, though failure to make ‘reasonable
adjustments’ (eg to premises) can be justified on grounds of cost or disruption.
The Employment Rights Act 1996 gives minimum maternity rights.
The Employment Equality (Sexual Orientation) Regulations 2003 protect against discrimination, harassment and victimisation in
employment and training based on sexual orientation.
The Employment Equality (Religion or Belief) Regulations 2003 protect against discrimination, harassment and victimisation on
the grounds of religion or belief.
The Employment Equality (Age) Regulations 2006 prohibit unjustified age discrimination in employment and vocational training.
Practical implications of legislation for employers are set out in Codes of Practice.
Advertising material must not indicate Support from the top is needed.
any discriminatory preference nor may its A policy on equal opportunities is helpful, perhaps
distribution restrict its availability to prepared by a working party with wide
preferred groups. representation.
Application forms and interviews must Monitoring: applications, starters, leavers, transfers,
not ask non-work related questions. promotions and training should be monitored for their
impact on disadvantaged groups.
Selection tests should be culturally non-
specific. Resources will be needed for practical action, which
might include:
Rejection: reasons should be recorded. – Flexible work patterns for women
– Equal opportunities managers
– Awareness training for managers
– Childcare arrangements
– Encouragement of job applications from
members of disadvantaged groups
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5: Culture
Culture
Organisational culture What is it? Culture and structure Culture and excellence
Culture
Culture in an organisation is the sum of the beliefs, assumptions, attitudes, customs and practices to which
people are exposed during their interaction with the organisation. Schein referred to it as ‘The way we do
things round here.’
The organisational structure exists within the wider cultural setting of the society it is part of, since the people
involved are members of both.
Different aspects of an organisation’s culture are manifested in different parts of the organisation. Position in
the hierarchy is a particularly important determinant of sub-cultural values.
McKinsey 7S
STRUCTURE
‘H Structure, strategy and systems
A are made up of facts and rules
R
STRATEGY SYSTEMS D’ Staff have complex concerns and
priorities
SHARED
VALUES
Skills are core competences
‘S
SKILLS STYLE O Style is management’s methods,
F style and assumptions
T’
STAFF Shared values are guiding beliefs
All of the elements are interlinked. If any one variable is altered, the others will be affected.
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Denison
Culture and the environment
Strategic orientation
Internal External
Environmental Stability Consistency – bureaucracy Mission eg a hospital
response
required Change Involvement – focus on motivation Adaptability – organismic?
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Slow feedback
Fast feedback
stamina needed entertainment)
(eg oil exploration)
Cultures may be analysed into four types, according
to 2 criteria: Process Work hard/play
Method, process, hard
Degree of risk-taking required in operations
Speed of feedback of outcomes from decisions detail, status, risk Team spirit, action
management (eg fun (eg IT, any
banks) sales department)
Low risk
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a Power distance. This dimension measures how far superiors are expected to exercise power.
b Uncertainty avoidance. Some cultures prefer clarity and order, whereas others are prepared to accept
novelty.
This affects the willingness of people to change rules, rather than simply obey them.
c Individualism. In some countries individual achievement is what matters. A collectivist culture puts the
interests of the group first.
d ‘Masculinity’. In ‘masculine’ cultures, the roles of the sexes are clearly differentiated. ‘Masculine’ cultures
emphasise possessions, status, and display as opposed to quality of life and concern for others.
Ouichi:Theory Z
Combines the best of US and Japanese cultural styles.
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Power Uncertainty
Group distance avoidance Individualism ‘Masculinity’
Views of conflict
Symptoms of conflict
Successful negotiation
Barriers to effective
communicating
Causes of conflict
Managing conflict
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Noise (interference)
Information, Understanding of
ideas, attitudes, Coded Decoded message and
desired action message Medium message meaning and/or
action required
SENDER RECEIVER
Feedback
(understood?)
Communication in an organisation
Runs vertically, horizontally and diagonallly
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Written forms of communication provide a record of proposals, considerations and actions and can
have the effect of concentrating the minds of both sender and receiver.
Letters: For external communication Notice boards: For mass communication – must
be managed to avoid staleness
Memoranda: For internal communication House journals: To express corporate identity and
report on developments
Questionnaires: To elicit information, especially in Electronic Email and voicemail; but ease of
job and credit applications communications: use can lead to overuse and
misuse
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A negotiation is a discussion between two parties who have different views on how an issue should
be resolved. It differs from consultation in that both parties have a degree of power over the issue
and therefore the outcome must be acceptable to them both.
PREPARATION
Data gathering and analysis; Identifying key issues
Planning strategy and tactics; Preparing the meeting
OPENING
Opening
Presentation of each side’s case
BARGAINING
Identifying common ground
Making concessions: moving together
CLOSING
Final offer
Conclusion
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Vertical conflict
Arises between hierarchical levels, over such matters as work allocation, promotion, recognition and,
particularly, over rewards. This is fertile ground for trade unions.
Horizontal conflict
Between individuals and groups at the same broad level in the organisation.
Differences in goals: Departmental goals must support the corporate mission, and where they appear to be in
conflict with one another must be coordinated by senior management leadership. Note also that individual
objectives must be congruent with departmental and corporate goals.
Personal differences of orientation arise from personality, cultural influences and individual inclination.
Leaders must play to people’s strengths and integrate their efforts.
Task interdependence: Departments rely on one another for the resources and information that make up
workflows. It is possible for one department to disrupt the work performance of another by its inadequate
performance.
Scarcity of resources: Resources are always scarce and department heads compete for them.
Power structures are rarely fixed and some managers will exploit opportunities to encroach on the prerogatives
of others.
Uncertainty: Stable operating conditions allow the development of harmonious, coordinated working practices.
A changing, uncertain environment or an internal programme of change upsets accustomed practices, raises
new problems and gives opportunities for the aggressive.
The reward system must be fair as between staff in different departments.
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Industrial relations
Sharing (compromise)
Conflict between management and labour over benefits and
conditions is still endemic in some countries and some industries.
Disputes have traditionally been tackled by collective bargaining.
(Unassertive)
Avoidance: It may be possible to ignore trivial incidents, though the causes of the conflict may erupt more violently later.
Accomodation: This can be done with the use of exhortation and an emphasis on the need for teamwork.
Dominance: Power can be applied to stamp out the dispute. This can create lingering resentment and hostility.
Compromise: This can work, but splitting the difference can leave both parties unsatisfied. Also, they may exaggerate
their opening positions if they expect to have to compromise.
Integration: It may be possible to confront the issues and seek accommodation of differences by exploring the nature of
the conflict.
Role of the finance function Nature of control Performance management of Internal control systems
the individual
Levels of control
Corporate governance
Mentoring
Types of control
Ouchi has identified 3 types of control:
Market control assigns revenues and costs to profit centres and control is exercised via financial performance. It
works well with autonomous trading units but not for centrally provided services.
Bureaucratic control uses formal structures and procedures. It is impersonal, rational and efficient but relies on
objective measurement. It is less useful where subjective impressions are important (eg where outputs are difficult
to measure).
Cultural or clan control works through shaping values, attitudes and commitment. It is useful for complex,
abstruse or highly specialised work (such as research) where outputs are difficult to measure or to price.
Control system
A major function of organisation
structure is the provision of a Plans and Actual
Comparison On target.
Objectives of performance No corrective
mechanism through which standards performance
with plans/standards action required
control can be exercised. A
feedback or cybernetic control Control action? Control action?
Deviations
system works like this. identified
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Stakeholder relationships
Corporate
plan
Purpose of
appraisal
Job
requirements Employee’s
performance
Job
analysis
Feedback
Appraisal techniques
Overall assessment in narrative form: value depends on quality Behavioural incident methods give examples of behaviour for
of writing and guidance on standards and what to cover. each grade and characteristic.
Grading using numerical or graphical rating scales for specified Results oriented schemes review performance against specific
characteristics. targets previously agreed between appraiser and appraisee.
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Appraisal
is the systematic review and assessment of an employee’s performance, potential and training needs.
Appraisal barriers
Potential for confrontation and hostility based on disagreements on role, performance, objectivity and
presentation.
Inadequate participation by appraisees who see the process as over-judgmental.
Lack of firmness by appraisers who avoid criticism and achieve little.
Bureaucratic, time bound, paper based nature of the appraisal process interferes with its real purpose.
Failure to incorporate appraisal into a wider spectrum of continuing performance management.
Agreed targets become irrelevant as time passes if appraisals are no more frequent than annually.
Legal framework
Legislation governing health and safety at work:
Health and Safety at Work Act 1974
The Management of Health and Safety at Work Regulations 1992
Health and Safety (Consultation with Employees) Regulations 1996
The Workplace (Health, Safety and Welfare) Regulations 1992
The Manual Handling Operations Regulations 1992
The Health and Safety (Display Screen Equipment) Regulations 1992
Working Time Regulations 1998
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Mentoring
is a broader activity, comprising career building
functions, such as sponsorship, coaching and
protection; and psycho-social functions such as
providing a role model, counselling, friendship and
creating a sense of acceptance and belonging.
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Whichever approach is chosen, it will be ineffective if senior managers set a bad example.
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Integrity is more than not telling lies; professional accountants must not be party to anything which is
deceptive or misleading.
Objectivity is founded on fairness and avoiding all forms of bias, prejudice and partiality. There is more on
objectivity in Part A of the code.
Professional competence and due care.
Confidentiality. Employers and clients are entitled to expect that confidential information will not be
revealed without specific permission or unless there is a legal or professional right or duty to do so.
Professional behaviour protects the reputation of the professional and the professional body.
CIMA’s Code of Ethics is based on the International Federation of Accountants (IFAC) Code of Ethics.
Corporate governance is the system by which organisations are directed and controlled. Most countries
have compliance codes on corporate governance.
8: Change management
Change management
Main considerations
Approaches to managing
Process of change Forces facilitating and Change management roles resistance
blocking change
Types of change
Pitfalls of change
management
Different approaches may be appropriate to different stakeholders. Normal management practice will also affect
the style used. It may be advantageous to use more than one style.
A change agent is an individual or group that helps to bring about strategic change in an organisation.
Johnson, Scholes and Whittington examine change agency by considering three distinct groups:
1 Strategic leaders
Five approaches to strategic leadership:
Strategic analysis and design focus
Human assets development focus
Expertise as source of competitive advantage focus
Control by procedures and performance monitoring
Change as continuous process – emphasis on communication and monitoring
2 Middle management
Providers of advice; translation of strategy at local level; implementation and control
3 Outsiders
Bringing a fresh point of view, such as a new chief executive or the use of consultants
A turnaround strategy is required when a business is in terminal decline. It has its own change management
techniques:
Crisis stabilisation – management changes – communication with stakeholders – attention to target markets –
concentration of effort – financial restructuring – prioritisation
In other circumstances, change management levers relate to the cultural web.
Change programmes may be subverted and lead to unintended consequences. This has four implications for
change management.
Monitoring and control are vital.
The existing culture must be understood.
The organisation's people should be involved in the change process.
The extent of the challenge must be recognised.
Notes
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A project is ‘an undertaking that has a beginning A defined beginning and end
and an end, and is carried out to meet established
Resources allocated specifically
goals within cost, schedule and quality objectives.’
Haynes, Project Management Follow a plan towards a clear intended end result
Often cut across organisational lines
Often unique or seldom done
Project management
Integration of all aspects of a project, ensuring that the proper knowledge and resources are available when
and where needed, and above all to ensure that the expected outcome is produced in a timely, cost-effective
manner. The primary function of a project manager is to manage the trade-offs between performance,
timeliness and cost. (CIMA)
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Controlling Executing
Closing
Feasibility studies
Technical feasibility Social feasibility
Requirement for innovation or development? Consider effects on groups and individuals both
Expertise available? inside and outside the organisation and even on
society as a whole.
Non-technological techniques such as marketing?
Features analysis identifies critical features of
requirement so as to guide resource allocation.
Financial feasibility
Normal techniques such as NPV are used.
Environmental concerns Difficulties arise in valuing intangible benefits: this
is particularly a problem in the public and
Mostly about acceptability. voluntary sectors.
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1 Projects are initiated in order to achieve objectives that cannot be attained in any other way.
2 A project’s objective may be referred to as the project requirement: the project specification is a
detailed account of the nature of the project or the outcomes it is intended to deliver.
3 Projects to achieve strategic objectives are strategies and should be assessed using the suitability,
acceptability and feasibility criteria.
Feasibility is particularly important and may be assessed by a feasibility study. The aim is to avoid
4 commitment to projects whose benefits will be outweighed by their overall costs.
PRINCE
PRINCE is a project management system developed by the UK Central Computer and Telecommunications
Agency (now part of the Office of Government Commerce).
The acronym PRINCE stands for PRojects IN Controlled Environments. The latest version of PRINCE is
PRINCE2.
Scaleable system can be used to manage projects of any size and complexity
Defines a clear management structure of roles and responsibilities
Focuses on delivering products rather than on project management processes
Business case is fundamental: continuing viability checked regularly
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PRINCE2 components
Business case: a reasoned account of what is to be achieved and why it will be of benefit; may require
updating as project progresses
Plans: based on products rather than processes; product breakdown structure is used
Controls: normal feedback control is used; project board restricts approval to one step at a time
Risk: analysed, managed and reviewed throughout the project’s life
Quality: built into management, though not a quality management system as such
Change control: manages authorised changes to the project
Configuration management: configuration is a complete specification of what is needed to complete the
project; configuration management controls the processes by which the project’s intended products evolve
Organisation: four layers of management cover all eventualities; layers may be combined for smaller
projects and organisations
PRINCE2 processes
Directing a project: higher aspects of control and decision-making
Starting up a project: short, pre-project; fundamentals such as setting aims
Initiating a project: initial planning, QA and setting of progress and such criteria
Planning: based on product breakdown structure starting with analysis into technical, quality and
management products; tolerances may be established for targets of time, cost and quality
Controlling a stage: project board uses project initiation meeting, mid and end stage assessments,
highlight reports; project team uses checkpoints to control progress
Managing stage boundaries: ensures one stage is complete before the next begins
Managing product delivery: controls the work done by specialists and contractors
Closing a project: checks and reports on success via a project closure meeting
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Corporate or
Projects of strategic significance will be authorised and co-ordinated into the wider strategy by the
programme
strategic apex. This may involve an executive or steering committee.
management
Project Top level of management for an individual project; chaired by the Executive; includes Senior User
board and Senior Technical person.
Project
Responsible for day-to-day project planning, management and control.
manager
Stage/team
Support the project manager and manage work on a project stage or the work of a project team.
managers
The 4D model
Stage in project lifecycle Component Activities
Potential impact
Identify and record risks in a risk register Med L M H
Assess risks and record this assessment
Plan and record risk strategies
Carry out risk management strategies
Review and monitor the success of the risk Low VL L M
management approach.
Low Med High
The development of risk management strategies for risks that fall into the VH (Very High) quadrant should
have priority.
Dealing with risk involves four basic approaches (a combination of these approaches may be used).
Project management
Part B
Project management software Project troubleshooting Management tools and Documentation and reports
techniques
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Gantt charts
A Gantt chart is a horizontal bar chart used to plan the time scale for a project and to estimate the amount
of resources required. The Gantt chart displays the time relationships between tasks in a project. Two lines are
used for each task, one to show the planned time, the other to show the actual time.
An example of a simple Gantt chart, relating to a network server installation project, is shown below.
The chart shows that at the end of the tenth week, Activity 9 is running behind schedule. More resources may
have to be allocated to this activity if the staff accommodation is to be ready in time for the changeover to the
new system.
Activity 4 had not been completed on time, and this has resulted in some disruption to the computer
installation (Activity 6), which may mean further delays in the commencement of Activities 7 and 8.
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3. Select site
6. Install computer
8. Operational tests
Example
Activity Expected time Preceding activity
A 3 – Critical path and float times are
B 5 –
C 2 B
established by the forward and
D 1 A rearward passes through the
E 6 A network.
F 3 D
G 3 C, E
The critical path in the diagram above is AEG. Note the float time of five days for Activity F. Activity F can begin any time between
days 4 and 9.
Activity–on–node presentation
The diagram clearly shows that D and E must follow C.
Network diagrams may also be drawn using activity-on-node
presentation. One way of showing earliest and latest start times for
Suppose that a project includes three activities, C, D and E.
activities is to divide each event node into sections, as
Neither activity D nor E can start until activity C is completed, shown below.
but D and E could be done simultaneously if required.
Task D
This would be represented as follows.
D
C ID number: Duration:
4 6 days
E
An activity within a network is represented by a rectangular box.
(Each box is a node.) Earliest start: Latest start:
Day 4 Day 11
The flow of activities in the diagram should be from left to right.
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250
225
No. of workers
Some
organisations 13
add another bar 12
(or a separate
No. of workers available
The number of workers
line) to the required on the seventh
10
chart showing day is 13. Can we re-
resource number of
schedule the non-critical
8 workers
availability as activities to reduce the
required
shown here. to complete requirement to the
6 scheduled
tasks available level of 10? We
might be able to
4
re-arrange activities so
that we can make use of
2 the workers available from
day 9 onwards.
5 7 10 15 20 Time
(days)
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Project plan
In some organisations what is described here as The project plan should include:
the Project Management Plan would be called Project objectives and how they will be achieved and
the Project Plan. verified
In other organisations, the Project Plan refers How any changes to these procedures are to be controlled
only to the project schedule, usually in the form The management and technical procedures, and
of a network diagram. standards, to be used
The budget and time-scale
The Project Plan is used as a reference tool for Safety, health and environmental policies
managing the project. The plan is used to guide Inherent risks and how they will be managed
both project execution and project control. The contents of the plan will vary depending on the complexity
of the project.
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Progress report
A Progress Report shows the current status of the project, usually in relation to the planned status.
Progress reports
Completion report
The completion report summarises the results of the project, and includes client sign-off. The report should
include a summary of the project outcome.
The completion report will also include provision for any ongoing issues that will need to be addressed after
completion. Such issues would be related to the project, but not part of the project.
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Post-completion audit
The post-completion audit is a formal review of the project that examines the lessons that may be learned and
used for the benefit of future projects.
PMBOK v PRINCE 2
Read ‘Comparing PRINCE 2 with PMBOK’ by R Max Wideman
Six Sigma
D efine
M easure
A nalyse
I mprove
C ontrol
An operating system for measuring and eliminating faults through promoting excellence.
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Common causes of problems The relationship between time, cost and quality can be
on projects shown as a triangle.
TIME
Poor project management ‘Competitive edge’
Conflicting requirements (eg time, cost and project
quality)
Unrealistic deadline
User requirements not established correctly
Low-budget Safety-critical
project project
COST QUALITY
When a project has slipped behind schedule there are a range of options open to the project manager.
Do nothing After considering all options, it may be decided to let things continue as they
are.
Add resources Add people or other resources.
Work smarter Could more efficient methods be used?
Replan A more realistic plan may be required.
Reschedule A complete replan may not be required – it may be possible to change the
phasing of certain deliverables.
Incentives Would incentives result in greater output?
Change the specification If the original project objectives are unrealistic given the time and money
available, it may be necessary to change the specification.
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Notes
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Project stakeholders
Stakeholders are the individuals and organisations who are involved in or may be affected by project activities.
We have already looked at the project manager and will study the project team in the next session.
Project sponsor: is accountable for the resources invested into the project and responsible for the
achievement of the project’s business objectives.
Project Board: the body to which the project manager is accountable for achieving the project objectives.
Project support team: is a term used to designate the personnel working on a project who do not report
to the project manager administratively.
Users: the individual or group that will utilise the end product, process (system), or service produced by
the project.
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Level of interest
Low High
Low A: Minimal effort
B: Keep informed; little direct influence but may
A B influence more powerful stakeholders
C: Treat with care; often passive but capable of moving
Power
to segment D; keep satisfied
Qualitative
Commitment to
organisational goals High Low
Communication between
team members Free and open Mistrust
Job satisfaction High Low
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Team meetings
Meetings are an important mechanism of team communication and collaboration.
Opportunity to review team working Whetten and Cameron give five attributes of
Reinforce team sense as a team effective meetings, classified as five P’s.
Goal reinforcement Purpose
Involvement in decision making by team Participants
members Planning
Informal communcation Process
Perspective
The project team should include people who, between them, can deploy all of the skills and talents needed for
the project.
Resolution techniques
Positive effects of conflict
Work through the problem using the negotiation
Results in better, well thought-out ideas techniques listed above
Forces people to search for new approaches Attempt to establish a compromise
Causes persistent problems to surface and be Try to smooth out any differences
dealt with Emphasise areas of agreement
Forces people to clarify their views If all else fails, the project manager should force the
Causes tension which stimulates interest and creativity issue and make a decision
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Notes