Chapter 1: Projects in Contemporary Organizations

Learning Objectives
1. Explain the three forces of project management.
2. Identify the three objectives of project.
3. Define project based on the lesson.
4. Differentiate program, project, task, work unit, and work package.
5. Describe the life cycle of a project.

Chapter Outline
1.0 The Introduction

 Project management provides an organization with powerful tools that

improve its ability to plan, implement, and control its activities as well as the
ways in which it utilizes its people and resources.
 Project management has emerged because the characteristics of our
contemporary society demand the development of new methods of
management and many forces involved.

I. Forces of Project Management

A. The exponential expansion of human knowledge
B. The growing demand for a broad range of complex,
sophisticated, customized goods and services
C. The evolution of worldwide competitive markets for the
production and consumption of goods and services

II. Three Project Objectives

A. Performance
B. Time
C. Cost

III. The Project Manager

A. The project manager (PM) is
i. Expected to integrate all aspects of the project.
ii. Ensure that the proper knowledge and resources are
available when and where needed.
iii. Ensure that the expected results are produced in a timely,
cost-effective manner.
B. Professionalization of Project Management
i. Complexity of problems facing the project manager
ii. Growth in number of project oriented organizations

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 a. The Project Management Institute (PMI) was
established in 1969
b. By 1990 it had 7,500 members
c. 5 years later, over 17,000 members
d. And by 1998, it had exploded to over 44,000
members
iii. This exponential growth is indicative of the rapid growth in
the use of projects
iv. Also reflects the importance of PMI as a force in the
development of project management as a profession

IV. Trends in Project Management

A. Achieving Strategic Goals- to achieve more strategic goals,
and filtering existing major projects to make sure that their
objectives support the organization’s strategy and mission.
B. Achieving Routine Goals- to use project management to
accomplish routine departmental tasks that would previously
have been handled as a functional effort.
C. Improving Project Effectiveness- efforts are being pursued to
improve the results of project management, whether strategic or
routine
D. Virtual Projects- involve global teams with team members
operating in different countries and different time zones, each
bringing a unique set of talents to the project.
E. Quasi-Projects- the final performance requirements may not be
understood, the time deadline unknown, and/or the budget
undetermined.

V. Recent Changes in Managing Organizations

A. Three revolutionary changes
i. Accelerating replacement of traditional, hierarchical
management by consensual management.
ii. Currently witnessing the adoption of the “systems
approach” (sometimes called “systems engineering”)
iii. Organizations establishing projects as the preferred way
to accomplish the many specific changes that must be
made when the organization attempts to alter its strategy.

1.1 The Definition of a “Project”

 The PMI has defined a project as “A temporary endeavor undertaken to
create a unique product or service”.
 It is sometimes useful to make a distinction between terms such as project,
program, task, and work packages.

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 o Program - an exceptionally large, long-range objective that is
broken down into a set of projects
o Task - set of activities comprising a project
o Work Packages - division of tasks
o Work Units - division of work packages
o Project- is a specific, finite task to be accomplished

I. Importance
A. A project must be important enough in the eyes of senior
management to justify setting up a special organizational unit
outside the routine structure of the organization.
B. The symptoms of lack of importance are numerous and subtle
a. No mention of it by top management
b. Assigning the project to someone of low stature or rank
c. Adding the project to the responsibilities of someone
who is already too overworked.
d. Failing to monitor its progress
e. Failing to see to its resource needs.
II. Performance
A. A project is usually a one-time activity with a well-defined set
of desired end results.
B. The project is complex enough that the subtasks require
careful coordination and control in terms
a. Timing
b. Precedence
c. Cost
d. Performance
C. The project itself must be coordinated with other projects
being carried out by the same parent organization.

III. Life Cycle with a Finite Due Date

A. Projects have life cycles
a. Slow beginning
b. Buildup of size
c. Peak
d. Begin a decline
e. Termination

IV. Interdependencies
A. Projects often interact with other projects being carried out
simultaneously by their parent organization.

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 V. Uniqueness
A. Every project has some elements that are unique
B. No two construction or R & D projects are precisely alike

VI. Resources
A. Projects have limited budgets, both for personnel as well as
other resources.
B. Budget is implied rather than detailed, particularly concerning
personnel, but it is strictly limited.

VII. Conflict
A. PM lives in a world characterized by conflict therefore must be
expert in conflict resolution, but we will see later that there are
helpful types of conflict
B. The members of the project team are in almost constant
conflict for the project’s resources and for leadership roles in
solving project problems.

C. The four parties-at-interest or “stakeholders”

a. Client
b. Parent organization
c. Project team
d. Public

VIII. Non-projects and Quasi-Projects

A. There are non- projects; tasks that are performed over and
over again or a routine while project is a one-time event.
B. No specific task identified, no specific budget given, and no
specific deadline defined is called quasi-projects.

1.2 Why Project Management?

 The basic purpose for initiating a project is to accomplish specific goals.

 The project form of organization allows the manager to be responsive to
o The client and the environment
o Identify and correct problems at an early date
o Make timely decisions about trade-offs between conflicting project
goals
o Ensure that managers do not sub-optimize.

I. Positive Experiences of Companies

A. Better control
B. Better customer relations

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 C. Shorter development times
D. Lower costs
E. Higher quality and reliability
F. Higher profit margins
G. Sharper orientation toward results
H. Better interdepartmental coordination
I. Higher worker morale

II. Negative Experiences of Companies

A. Greater organizational complexity
B. Increased likelihood of organizational policy violations
C. Higher costs
D. More management difficulties
E. Low personnel utilization.
1.3 The Project Life Cycle
 Most projects go through similar stages on the path from origin to
completion.
 The pattern of slow-rapid-slow progress toward the project goal is common.
 Stages of a Conventional Project
o Slow beginning- a manager is selected, the project team and initial
resources are assembled, and the work program is organized
o Buildup of size- work gets under way and momentum quickly builds.
o Peak- real work of the project gets underway this rises to the peak.
o Begin a decline- begins to taper off as the project nears completion.
o Termination- ceasing when evaluation is complete and the project is
terminated.

I. Risks During the Life Cycle

A. There may be considerable uncertainty about our ability to
meet project goals.
B. The uncertainty is seen at the beginning of the project.
C. The uncertainty decreases as the project moves toward
completion.
D. The relationship between time and cost (and performance) is
emphasized.
E. Dealing with the uncertainty surrounding this relationship is a
major responsibility of the PM.

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1.4 The Structure of this Text or Book

 Project begins with the creative idea that launches most projects and ends
with termination of the project.
 Project management actually begins with the initial concept for the project.
 Wise PMs will wish to know the reasons for, and the history behind, the
initiation of their project.
 The book Project Management: A Managerial Approach follows this life
cycle of projects
o Part I - Project Initiation
o Part II - Project Implementation
o Part III - Project Termination

Chapter Summary
● Project management has three forces: expansion of human knowledge,
growing demand for a broad range of complex, sophisticated, customized
goods and services, and evolution of worldwide competitive markets for the
production and consumption of goods and services.
● The three objectives of a project are performance, time, and cost.
● The Project Management Institute (PMI) was established in year 1969.
● Terms such as project, program, task, and work packages have clear
distinction with each other.
● The complexity of project requires control and coordination in terms of timing,
precedence, cost, and performance.
● Projects have stages of life cycle; slow beginning, buildup of size, peak, begin
of decline and termination.
● Interdependencies is when projects are carried out simultaneously by
organization.
● No projects are exactly alike because they have their own uniqueness.
● Budget for resources is often limited.
● Conflicts is innate in projects and project manager must have the skill in conflict
resolution; these conflicts have four-parties of interest which are the
stakeholders: client, parent organization, project team, and public.
● Non-projects are tasks performed as a routine and quasi- projects is when there
is no specific identified tasks, budget, and deadline.
● Uncertainty is seen at the beginning of the project and decreases as the project
moves toward completion.
● This text is organized along the project life cycle concept: first project Initiation,
then project implementation, and last is project termination.

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Assessment

A. Fill in the blanks.

1. __________ is a specific, finite task to be accomplished. It is a temporary

endeavor undertaken to create a unique product or service.
2. One of the forces of project management is exponential _________ of human
knowledge.
3. Three objectives of a project: _____________, time, and cost.
4. __________an exceptionally large, long-range objective that is broken down
into a set of projects.
5. ___________ set of activities comprising a project.

B. Write T if the statement is true, F if it’s false.

1. Interdependencies is when projects are carried out simultaneously by
organization.
2. Uncertainty is seen at the beginning of the project and increases as the project
moves toward completion.
3. Budget for resources is often unlimited.
4. No projects are exactly alike because they have their own uniqueness.
5. The Project Management Institute (PMI) was established in year 1969.