Solution Manual Project Management for Business Engineering and Technology 4th Edition by Nicholas & Steyn.pdf

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CHAPTER ONE: WHAT IS PROJECT MANAGEMENT?
Review Questions
1. The functions are planning, organizing, leadership, control, and change.
Planning is determining what needs to be done and how to do it. It involves setting goals
and finding ways to achieve them within the constraints of available resources and
environmental forces.
Organizing is deciding how the work will be accomplished. It involves (1) hiring,
training, and assembling people into an organization with appropriate authority and
responsibility relationships; (2) creating policies, procedures, reporting patterns, and
communication channels; and (3) acquiring and allocating facilities, materials, and other
resources.
Leadership is directing and motivating people toward objectives. It is the ability to
influence the work performance and behavior of individuals and groups.
Control is tracking costs, schedules, and other performance measures, comparing them to
goals and standards, and taking necessary corrective action. Information systems are used to
collect data and report progress.
Change involves altering work activities to meet goals, or altering the goals themselves to
adapt to changing forces in the environment.
Different managers' jobs carry different responsibilities depending upon the functional
area and managerial level. Some managers devote most of their time to planning and organizing,
others to controlling, others to directing and motivating.
At one time or another, project managers perform all of these functions. At the
beginning, all projects must be planned and organized; goals must be set, work defined,
schedules and budgets prepared, people hired, resources acquired, and everything organized to
begin the work. Then, as the project begins, people must be motivated and directed to work
toward project goals. Throughout the project, work, costs, and schedules must be monitored.
When problems or slippage occur develop the manager must take corrective action. Changes are
always needed to schedules, budgets, work tasks, the work force, or to the goals of the project
itself.
2. The classical viewpoint uses the assumption that there is a set of universal management
principles for planning, organizing, leading, and controlling work. Numerous principles have
been developed to tell managers what they should do. The drawback is that they are based upon
assumptions of predictability and rationality--things seldom found in organizations.
The behavioral viewpoint shifts emphasis from jobs to the human and social aspects of
organizations. It focuses on motivating workers through satisfaction of social needs, or through
group norms and social pressures. It highlights the importance of leadership style, group
dynamics, and social environment to work performance. However, many behaviorist theories
relating satisfaction, morale, and productivity are too simplistic to be of practical use.
Whereas the classical and behavioral viewpoints seek to simplify management through a
set of universal concepts, the systems approach recognizes complexity and causal relationships
in real life situations. It states that before someone can take action, she must first understand the
system she is working with and its relationship with the environment. The systems approach
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suggests ways to clarify problems and identify courses of action. But even this approach is not
completely adequate because it focuses more on quantifiable factors and less on non-quantifiable
factors such as human motivations, emotions, and values. Like the other two, the systems
viewpoint must be supplemented by judgment.
3. The contingency viewpoint recognizes that any one of the three other viewpoints alone
cannot always be depended upon. Rather, it says that all three should be applied independently
or in some combination, depending on the situation. The contingency viewpoint provides
suggestions about what tends to work best, depending on the situation. It says that to be
effective, the manager must be familiar with the three viewpoints, must understand the situation,
the work task, and the people, then choose the most appropriate combination of procedures,
leadership styles, and management functions.
4. Characteristics of a typical project include:
(1) It has a single, definable purpose or end-item, specified in terms of cost, schedule, and
performance requirements. The purpose and requirements differ for every project.
(2) It utilizes skills from different professions and, sometimes, organizations; it involves
technology and interdependencies that introduce new and unique problems.
(3) It is unique and requires that things be done differently than before. It is a one-of-a-kind
activity.
(4) It is unfamiliar. It may encompass new technology and involve elements of uncertainty
and risk.
(5) It is a temporary activity, to be accomplished within a specified time period. Once the
goal is achieved, the project organization is altered or disbanded.
(6) It follows a process of several distinct phases during which tasks, people, organizations,
and resources change from phase to phase.
5. Characteristics of project management:
(1) One person--the project manager--heads the project organization. Unlike functional
managers, who work within the chain of command and whose jobs tend to be more
permanent, the project manager operates independently of the normal chain of
command: when the project ends, so does the project manager's job.
(2) The project manager unifies all efforts to achieve project objectives. Other managers
tend to focus on “pieces” of the effort (their functional specialty) and less on the “big-
picture.”
(3) Several functional areas often perform the work. Work in non-projects is usually
performed within one functional area.
(4) The project manager and project team are responsible for integrating the efforts of the
functional areas working on the project. “Integration” is thus a key element of project
work. Work done within a functional area seldom requires integration since, as one
unit, it is already integrated.
(5) Functional managers are responsible for individual work tasks within the project; the
project manager is responsible for integrating and overseeing the start and completion
of all tasks combined.
(6) The project utilizes resources to produce an end-item at a certain time and cost, while
functional must units try to maintain a constant pool of resources. This causes conflict
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between the project and functional managers over how much of the resources should
be allotted to the project.
(7) A project often has two chains of command--one vertical, one horizontal--wherein
people have to report to both a project manager and a functional manager. In non-
project activities there is typically only one chain of command--vertical--and one
person to report to.
(8) Members of the project team and supporting functional units share decision-making,
accountability, outcomes, and rewards. In non-project work, responsibility and
rewards are confined to people within functional areas.
(9) When a project ends, it is disbanded and people return to their functional units or are
reassigned to new projects. Functional areas are permanent and operate on a
continuous basis.
(10) Projects can originate at different places anywhere in the organization. In non-project
organizations the work of functional areas tends to originate in only certain areas, such
as product development, advanced planning, and so on.
(11) Project management requires support services such as personnel evaluation,
accounting, and information systems. Projects create their own staff to provide these
services, or they rely upon staff departments to provide them.
6. Since projects often involve the efforts of multiple units within and outside the organization,
traditional reliance upon the vertical chain of command for authority and communication is time
consuming and is ineffective. In project organizations a horizontal hierarchy (managers and
workers in different units and at different levels associating directly with each other) is used to
reduce red tape and expedite work. This enables personnel in different units to form highly
integrated project groups.
Given the temporary nature of projects, an organization working on a stream of projects
must be flexible enough to adjust to the shifting requirements of different projects. Project
organizations have flexibility because they are created from the resources needed to best achieve
project goals.
Finally, by having someone in the role of project manager, project management insures
that someone is held responsible and accountable for the project. This emphasis on project goals
instead of functional goals is a major feature distinguishing project and functional management.
7. Elements of project management probably first appeared in the major construction works of
antiquity—temples, fortresses, roads, etc. These techniques were later improved and modified
for usage on other construction projects, such as shipbuilding. The commonality among
construction works is that they involve special organizations of labor, facilities, and material
resources created for the purpose of doing one job.
Early in the 20th Century industrial managers found that techniques used in construction
could also be used for planning and controlling large scale, non-construction product
development jobs. During World War I the Gantt chart--a production scheduling and monitoring
tool--was introduced. Thirty years later, the first “network” display was developed for
describing and planning industrial processes.
Project management as a distinct organizational form emerged during World War II
where, in the urgency to develop and deliver sophisticated weapons and organize massive task
forces, pure project forms of organization were created.

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By the 1950s, the size and complexity of many projects, especially large weapons
systems projects, had increased beyond the ability of existing methods to plan and control them.
To help stem enormous cost and schedule overruns, two new network-based planning and
control methods were developed, PERT and CPM. Advances in computerized data processing
systems made it possible to use these network methods in the management of large-scale
projects. PERT/Cost methods were developed to integrate scheduling and project cost
accounting techniques; in the 1960s these methods came into widespread usage on DOD/NASA
contracts. At about the same time the formal role of project manager began to appear in projects.
Throughout the 1960s, techniques were developed to help plan and manage project
resources. In the 1970s, the concept of “earned value” came into widespread usage. Both led to
better planning, more reliable performance measurement, and improved forecasting of project
cost and completion dates.
The last three decades have witnessed increased computerization of project management.
Today a large variety of project management software programs are available to help plan and
control projects of all sizes.
8. The four most common project manager roles are the project expediter, the project
coordinator, the matrix manager, and the pure project manager.
Project expediters are the project communications center for the general manager. They
are not really managers but serve to unify communications and translate project technical matters
into costs, schedules, and markets. Because the role is limited to funneling information to
executives and making suggestions, it is restricted to small and low risk projects.
Project coordinators are staff leaders. Their purpose is to achieve unity of control over
project activities. They have authority to control project work matters, but no line authority over
workers. Major decisions such as contracting or reallocation of funds require the approval of the
general manager.
Matrix managers achieve unity of direction. They have the same function as the first two
but also have authority to plan, direct, and control project work. The personnel they direct are
located administratively in functional departments. These people report to the matrix mana-ger
in regard to project matters for as long as needed, but otherwise they report to their respective
department managers. Project personnel might be working on several projects at once.
Pure project managers achieve unity of command. The organizations they direct are
comprised of people who report exclusively to them. They are primarily integrators and
generalists rather than technical specialists. They work to balance technical factors with
schedules, costs, resources, and human factors. In the course of a project, they actively deal with
top management, functional managers, vendors, customers, and subcontractors.
Although the last two roles are most in keeping with the concept of project manager, the
other two are widely found. Some organizations restrict the project management function to just
one of these roles, though large organizations like NASA utilize all four.
9. When to use project management.
(1) Magnitude of the effort: when a job requires substantially more people, capital,
equipment, etc. than are usually employed. Undertakings such as facility relocations,
corporate mergers, installing new information systems, or developing and placing new
products on the market are examples.
(2) Unfamiliarity: when the job is different from the ordinary and routine; when the job
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requires that different things be done, that the same things be done differently, or both.
For example, modernizing a plant calls for non-routine efforts such as revising the
facilities layout, modifying and replacing equipment, retraining employees, and altering
work procedures. Project management brings together all functional areas for one-of-
kind undertakings such as this.
(3) Changing environment: the organization exists in highly competitive and dynamic
environments such as computers, electronics, chemicals, biotechnology, aerospace, or
communications. Changing environments present new opportunities and new
challenges. Organizations must be creative, innovative, flexible, and capable of rapid
response. Project management provides the flexibility needed to deal with turbulence,
ambiguity, and new opportunities in the environment.
(4) Interrelatedness: the job requires horizontal relationships between many different areas
to expedite work and reconcile conflicts. Project management links together and
coordinates the efforts of multiple functional areas, outside subcontractors, vendors, and
customers.
(5) Reputation of organization: failure of the job will result in financial ruin, loss of market
share, damaged reputation, or loss of contracts. The project manager, with the
assistance of a support group and project team, can do much to reduce the problems in
large, complex undertakings.
10. The more familiar the undertaking, the more stable the environment, the more standardized
the end-item, and the lower the stake in any one particular output, the less need for project
management. Repetitive operations or mass production of standardized products and agricultural
goods are examples. These are generally more efficiently managed by continuous or lot-size
planning and control procedures because there is certainty in the process and outcome, and
standardized means of production are quite effective. Unlike projects, where every outcome is
unique, repetitive processes do not have to be tailored to fit every unit of output. One-of-a-kind
jobs that are small and involve only one or a few individuals also do not need project
management because they can easily be tracked and coordinated without it. As the number of
people and activities--and the complexity of their interaction--increase, so does the need for
project management.
At some time, all organizations use project approaches. Even in stable, repetitive
industries, small, informal projects are always in progress. Examples include the project
activities listed in question 11 under “ad hoc committees and task forces.” Only when larger or
special undertakings arise--such as company mergers, major equipment installations, or a
company move--is a more-formalized project group formed.
11. In pure project management a complete, self-contained organization is created with all the
necessary functional elements within it. Resources are inherent and do not have to be borrowed.
Pure project management is typical in large-scale construction projects.
In matrix management the organization is created from elements allocated by permanent
functional units. The project team shares resources with other, concurrent projects and with the
functional areas from which they borrow. Matrix management is used in aerospace, electronics,
and systems development projects.
Program management is similar to project management except that the activity (the
“program”) extends over a longer time horizon--five or more years--and may consist of several

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smaller work efforts, or “projects,” coordinated toward program goals. An urban development
program may include several smaller projects such as housing rehabilitation, job skill training,
and small business consulting assistance. Once the product or service is completed, it is up to
program management to insure that it is integrated with other outputs and remains operational for
as long as needed. For example, several contractors might produce a satellite and its booster
rocket, but it is the responsibility of program management to arrange for the rocket launch and
monitoring the satellite so that overall mission goals are achieved.
New venture management is used in consumer-oriented firms for generating products and
markets, particularly where the end product is not well defined. A team is created to find new
products or markets that fit the organization's skills, capabilities, and resources. Once an idea is
defined, the team might design and develop the product, then determine the means for producing,
marketing, and distributing it.
Product management is when a single person is given authority to oversee all aspects of a
product's production scheduling, inventory, pricing, distribution, and sales. The product
manager coordinates and expedites the efforts of manufacturing, distribution, and sales to insure
uninterrupted flow of the product from its production to its delivery to the customer. Like the
project manager, the product manager communicates directly with all levels, functional areas,
customers, and suppliers, and coordinates their efforts so product goals are accomplished.
Task forces or interdepartmental committees are ad hoc committees with one person
specified as project leader. Leaders and members are selected by (and the leader reports directly
to) whomever the project is for--a functional manager, vice president, or the CEO. Leaders are
responsible for expediting and coordinating work and may have authority to assign tasks or to
contract work out. Members of the team are not relieved of other responsibilities and must
divide their efforts between the committee and their other work. Committee assignments include
special studies, surveys, evaluations, audits, cost-reduction efforts, relocation of facilities,
management and organization development programs, and installation of new equipment or
procedures.
12. In commercial projects, the project manager usually guides the project through its entire life
cycle, coordinating the efforts of the project team with functional areas, subcontractors, and
vendors. Once the project is completed, the group is dissolved and the project manager is
without a job. Project managers are thus constantly involved in the process of seeking out
projects and preparing proposals.
In government projects the project manager is often reassigned during the project, which
creates problems for maintaining administrative continuity. Sometimes project managers serve
as program managers; they coordinate multiple, related projects that are components of a larger
system. Though responsible for checking on contractors' progress, they often have little control
over technical matters. Keeping government projects alive is sometimes uncertain since funding
is legislatively appropriated.
In military projects the project managers are military officers. Since their tour of duty is
limited, they often do not oversee a project for its full life cycle. Thus the military must train,
transfer, or promote people with the administrative and technical competence to carry out the
job. Civilians are often employed to provide technical support and managerial continuity.
13. Similarities among the projects and project managers in the examples:
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SpaceShipOne and the X-Prize Competition
This project exemplifies efforts that utilize a short-time goal (X-prize) to help achieve a longer-
term one (develop a new product and technology—a spaceship—for a new market—space
tourism). The competition for the X-prize provided the impetus to launch a project that designer
Burt Rutan had long dreamed about, and to promote the spaceship’s development program to
investors, the result being a funding commitment by a wealthy investor. The project is largely
conducted by a group of designers and engineers in one company, which is responsible for the
design and construction of most of the spaceship and its main subsystems. Only a few main
components, such as the rocket motor, are produced by subcontractors. The is guided by Burt
Rutan, although, as necessary for any project that entails complexity and risk, it managed by a
project manager and—typical of technical projects—a project engineer.
The Development of Product J
Dalian Company exists in a changing, highly competitive industry. It must continuously develop
new ideas to survive. Competitors were working on a substitute for the one product which
accounts for the majority of Dalian’s profits; to retain market share, the company has to develop
its own, improved substitute, and beat the competition.
To encourage the development and marketing of new ideas as soon as possible, the
company created a special department and project manager role (director) for managing and
coordinating development projects. The director is responsible for managing certain kinds of
projects or portions of projects. He facilitates, coordinates, and monitors the efforts of all the
departments involved in his project. He knows the status of the project at all times and relates
this to upper management.
For each product concept, a project team is created of representatives from various
functional departments. The director is similar to a “matrix manager” because he manages
people from different departments (although these people still report to their functional managers
for technical direction). Functional managers make decisions about what is to be done and how,
based on guidelines from upper management. The director is also a “team coordinator” since he
has authority to plan, schedule, and budget project matters, but not to directly command the
members of the team.
Project Management in Small Projects: Delamir Roofing Company
Like most firms in the construction business, each job for Delamir Roofing Company is
somewhat unique and requires assembling a work crew and resources to fit job requirements.
One person, the project manager, has responsibility to see that the job is done well. He
prepares budgets, drafts the proposal, sets up all arrangements for work to begin, selects a work
crew, supervises work and delivery of supplies, maintains budget records, and reports progress to
the home office. He performs the final inspection with the customer and signs-off when the job
is completed.
Improving Auditing Efficiency at CPAone
At the auditing division at CPAone large audits require the expertise of several auditors with

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various specialties. Given the variety of people, skills, and personalities involved, a project
manager is needed to oversee and conduct the audit efficiently.
Every audit begins by assigning the client to a partner. The partner is the “project
director” and is responsible for writing proposals, staffing the audit, delegating tasks, and
scheduling and budgeting the project. The audit team is a pure project team, created anew for
every audit from people with skills best suited to the needs of the audit. The director specifies
the completion date and who is responsible for each task. During the audit the project director
ensures that work adheres to standards and is completed on schedule.
Fundraising Project: Archdiocese of Boston
This project, three-year campaign to raise $30 million, involved three groups: donors, the
Archdiocese Board of Directors, and campaign volunteers. Tasks included identifying,
recruiting, and training volunteers, identifying and contacting potential donors, keeping the
Archdiocese informed of progress.
The project manager was involved from the start: he prepared the original feasibility
study, established a leadership team to recruit and train volunteers, and orgainized the initial
“kick off” meeting. For the rest of the project he handled all procedural and organizational
matters, and convened frequent meeting to review progress and renew the team’s motivation.
Disaster Recovery Projects
Disasters, almost be definition, occur without warning and have scope and consequences that
cannot be completely anticipated. Yet the recovery is very much a project with specific goals
that involve many tasks, which must be accomplished through the coordinated efforts of
numerous people and organizations—many or most whom have never before worked together.
Although each disaster is unique, recovery efforts of all disasters tend to follow a similar
sequence of events such as rescue, immediate care and support, and long-term redevelopment.
Thus, it is possible to plan for disaster recovery at a high-level; only the details change with each
unique recovery effort, hence each effort needs an experienced big-picture person who can
recognize the unique needs posed by the disaster and tailor high-level recovery plans to meet
those needs. In the chaos that often follows a disaster, the recovery effort needs a strong central
management body (i.e., a project or program manager) to set priorities, to centralize
communication and coordinate the effort, and to guarantee effective deployment of resources.
Each disaster recovery involves numerous subprojects, each of which is managed to meet the
goals and constraints of the overall recovery effort.
Project and Program Management in Government: NASA
NASA relies upon industry to build, integrate, and flight-test hardware, but it uses its own in-
house management and technical competence to monitor contractors. Projects call for great
diversity of technical and managerial competency, and project management uses the philosophy
of “participation”--integrating the technical and managerial competence of industry, academia,
and NASA laboratories. NASA uses experts from universities, government laboratories, and its
own field installations to assist contractors in tackling problems. This team approach avoids
delays caused by working across the boundaries which separate government, commercial, and
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military organizations. The concept utilizes teamwork, central control, and decentralized
execution.
All four kinds of project manager, expediter, coordinator, matrix, and pure project, are
found at NASA, but the latter two are the most common. The matrix is preferred for its efficient
use of talent and flexibility. Employees are assigned to the project but remain on the payroll of
their parent organization and are subject to its merit reviews and promotions. For the largest
projects, the pure project form is used. It permits better control, quick location of responsibility,
quick reaction from the project team, and simplifies communication.
A dual system of management responsibility is used. One, the project manager, is the
official at the field installation responsible for executing the project within the guidelines and
controls of NASA headquarters and the field installation. She is responsible for day-to-day
supervision, execution, and completion of projects. Although most workers on the project are
outside the authority of the project manager, they take directions on project matters from the
project manager.
The project manager's counterpart in Washington is the program manager, a senior
NASA staff official responsible for developing and administering headquarters' guidelines and
controls with respect to the project. He argues for resources within headquarters, monitors
project execution, works with organizations participating in the project, relates the project to
NASA's broader goals, and testifies to Congress and the President. On large projects, he might
oversee just one project. These two people, the project and program manager, and the quality of
their relationship determine the success of the project.
CASE 1-1. DISASTER RECOVERY AT MARSHALL FIELD’S
1. The flood response and recovery effort mounted by Marshall Field’s was a complex
undertaking fraught with significant risks and uncertainties. The risk containment and
clean-up processes constituted a project, planning and implementing temporary activities
that began with the goal of protecting employees and custom and concluded with the
successful reopening of a safe, functional store. The project criteria satisfied included the
following:
• The goal of these processes involved achieving a single, definable purpose and was
specified along the three dimensions of project work, namely:
• Performance – ensure the safety of employees and customers before the store re-
opened for business.
• Cost – minimize flood damage to store merchandise and capital investments by
carrying out tasks at a total cost less than that anticipated by inaction.
• Schedule – resume normal operations within one week after the flood.
• The 1992 downtown Chicago flood, unusual in cause, location, scope, and severity,
demanded response and recovery activities that were unique to both the city and its
downtown businesses. The executed tasks will never be exactly repeated, even in the
unfortunate, albeit statistically likely, circumstance of another flooding in the downtown,
central business district. Moreover, the organizational personnel concerned in 1992 will
likely be different.
• Marshall Field’s response and recovery efforts utilized skills and talents from multiple
professions and organizations. Internal activities included establishing a team of

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employees drawn from various appropriate departments along with risk management
experts from the parent company, Dayton Hudson. Additionally external coordination
efforts entailed integrating the disaster relief efforts of a number of city departments, the
Army corps of Engineers, OSHA, and the company’s insurance firm.
• Being a unique situation, participants in the flood response were unfamiliar with planning
and executing the necessary tasks. Planners and front-line personnel faced significant
risks and uncertainties. Some strategic errors were unavoidable. For example, effective
response was delayed until someone realized that efforts to pump out the water in
basements was futile until the tunnel was sealed from the Chicago River’s flow.
• The Marshall Field’s flood response and recovery project was a sequential process that
moved from response efforts to recovery activities through distinct phases: planning for
goal-oriented actions, investigation of problems and evaluation of alternate solutions,
execution of project tasks, and finally, evaluation of the project results in terms of
continued safety and security for employees and customers, as well as minimization of
economic losses.
Large-scale disaster response and recovery efforts such as this fulfill the criteria of
project work due to high levels of complexity and outcome uncertainties. Encountering
catastrophes involve unique and unfamiliar methods, a creative process that begins with
setting a single, definable result, purpose, or end-item that is achieved through temporary
activities managed and implemented by multifunctional, multi-organizational, or even
multi-national teams and experts.
2. Short-term crisis management typically embodies a management system conducive to the
effective implementation of projects. Similar characteristics include the appointment of a
project manager, or crisis leadership team, that operates independently of the normal chain-
of-command, and therefore requires negotiation with functional managers or experts for
support over a limited time. During the crisis or project, numerous support functions such
as procurement, personnel evaluation, accounting, and information systems are established.
After the project is completed, or the crisis is resolved, the team disbands and support
systems assign staff to other tasks. Crisis and project management involves coordinating,
integrating, and controlling cross-functional personnel and other resources towards the
attainment of a goal with performance, cost, and time requirements. Crisis and project
teams share decision-making and accountability, usually along two chains-of-command –
one vertical and functional, one horizontal to meet the project goal, or resolve the crisis.
3. The project leaders, the Dayton Hudson Risk Management team, were delegated with the
responsibility of minimizing risks to corporate stakeholders: owners, employees, customers,
passers-by, neighbors, and the larger Chicago community. In assuming this role, they
worked to protect the economic, social, and health welfare of these stakeholders. Project
team members included representatives from the store’s facilities, security, human resources,
and public relations departments as well as supporting financial, legal, and insurance
services. Personnel from facilities would be responsible for minimizing flood damage to
capital investments and merchandise, and those from security would be responsible for
securing the building during the clean-up efforts. Human resources staff would disseminate
vital information to employees and applicants, and the public relations crew would reassure
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customers and the public that the firm was in control of the situation. Finally, the supporting
financial, legal, and insurance experts provided advice and recommendations to Marshall
Field’s management and the Project Team that would mitigate or contain economic losses.
4. Project management is the preferred system of choice for handling crises like the 1992 flood
due to the unfamiliarity of effectively coordinating vast resources and non-routine activities
to safeguard biological, ecological, and economic systems from further damage, or to even to
reverse damages, on a large scale. The magnitude of such rescues necessitates substantially
more resources than are typically used by one department, one organization, or, in some
cases, one nation. The interrelatedness of response and recovery activities undertaken by
groups that may be working at cross-purposes requires the coordination and leadership of a
strong, centralized project management team. Failure to successfully lead a coordinated,
multi-functional recovery effort eventuates in further losses to highly valuable systems.
Natural or human-caused disturbances to such systems cause instability and present
numerous risks and uncertainties. The chain of interdependence between biological,
ecological, and economic systems becomes volatile. Failure to act creatively, quickly, and
flexibly will result in further loss along the chain. Effective solutions to crises rest upon the
shoulders of the responsible party or parties. Failure to plan and control risks and
uncertainties inherent in disasters will result in financial ruin, loss of market share, damaged
reputation, or loss of stakeholder confidence and support. Project management, undertaken
by multi-functional team members and experts, can do much to reduce the risks and
uncertainties associated with large, complex undertakings.
5. Eliminating the obviously poor choices, students should narrow down their considerations to
a choice between basic project and program. The time span of the Marshall field’s response
and recovery efforts was short, the store was reopened one week after the flood and, within
the year, damaged machinery was repaired and economic recovery tasks for damaged goods
were completed. After management was assured that safe and sanitary conditions had been
restored, the team was disbanded, although certain individuals, departments, and support
services continued to complete risk-reduction tasks. Therefore, the correct answer is basic
project management.
CASE 1-2. SYSTEM IMPLEMENTATION AT SHAH ALAM MEDICAL CENTER
1. The case serves as an excellent example of a basic project with attendant characteristics most
suitably handled by the implementation of a project management system. Instituting a
flexible benefits system at Shah Alam Medical Center entails the installation of new
information technology solution with specific performance requirements and a timetable. The
system must be completed within 10 months, at which time the team will be disbanded.
Although the case skimps on the cost issue, it is reasonable to assume that the Center has
established a budget. Meeting these objectives require that plans and budgets be developed,
and that team members be assembled from several internal functional areas.
2. The Director's technical and project management background makes her well qualified to
lead this multifunctional team towards their shared goal. Also, her acceptance as the project
manager by the team members is a good omen for the team's on-going effectiveness.

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Although some students may note the manager's potential tendency to favor the cost
dimension over performance and time variables, they should also note that the probability of
cost emphasis is mitigated by the appointment of two team leaders -- one from HR and the
other from IS. Granted, selecting a functional-based manager to oversee a multifunctional
team likely possesses some risks. Yet, particularly in smaller, traditional organizations,
selecting a qualified, non-functional manager for project oversight is simply unfeasible.
3. These conflicting instructions to team members may eventually cause confusion and reduce
motivation, unless the project management clearly designates a procedure to follow should
project tasks interfere with functional responsibilities of team members. Project
management's lead in resolving role clashes needs to be supported by organizational
management. The fact that the project manager was given explicit authority over functional
managers and project team members regarding all project-related decisions probably will be
sufficient for enabling quick and effective resolutions of such conflicts.
4. The outside vendor will provide the necessary expertise and resources that are beyond the
core competencies of the contracting organization. The Center had determined that it was
more advantageous to obtain a hardware/software system solution from HB consultants than
to implement alternatives such as temporarily hiring internal experts or forfeiting the
functional responsibilities of current employees. The option of using outside consultants,
however, presents certain difficulties for the project manager. The manager must secure
contractual agreements that protect the Center's economic, functional, and operational well
being. The risks of miscommunication and misinterpretation are higher when cultural and
economic factors, outside the direct control of the client, impinge upon internal systems.
Therefore, the project manager will need to ensure that a communication system is developed
to maximize the external vendors activities toward meeting internal objectives and needs.
Chapter One Test Questions
1. T/F According to the classical viewpoint of management, the best management approach
depends on the situation.
2. T/F Project management is a new form of management that would not have been applicable
to the project of the past.
3. T/F Project management takes on many forms, but common to all of them are a project
leader and a project team.
4. T/F There is no difference between the practices of project management in the government
and project management in the private sector.
5. T/F Using the definition in the textbook, programs tend to be smaller than projects, and a
project may be comprised of several programs.
6. T/F There is virtually no kind of work that could not be managed best using project
management.
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7. T/F If an organization has much at stake in a project, and failure to complete it might result
in financial ruin, then it would be wise to consider use of project management.
8. T/F Overall, there is not much difference between the practices of traditional management
and project management.
9. T/F Whenever work activities are directed at somewhat different or unfamiliar goals that
require the cooperation of several persons or groups, project management is usually
appropriate.
10. The functions of management generally include:
(a) planning, assembly, installation, and testing
(b) planning, organizing, control, and leadership
(c) leadership, supervision, analysis, and design
(d) none of the above
11. Which of the following characteristics tend to define traditional work versus project
situations (specify “T” or “P”):
(a) ___ work units are specialized and work independently
(b) ___ the mix of tasks being done is in constant change
(c) ___ the work environment is stable and unchanging
(d) ___ most communications are vertical (superior-subordinate)
12. Some features of project management are:
(a) a single person heads the project
(b) the work focuses on a specific, often unique goal
(c) the project organization is permanent, regardless of the goal
(d) all of the above
(e) a and b only
13. Project management is generally appropriate:
(a) for most any situation that requires hard work
(b) when the work effort is complex, unique, and uncertain
(c) when the work effort is highly standardized
(d) when a high-quality product is desired
14. Project management represents which view(s) of management:
(a) classical and behavioral
(b) mostly classical, but some behavioral and systems too
(c) mostly systems, but some classical and behavioral too
(d) none of these
Chapter One Test Answers
1. F 2. F 3. T 4. F 5. F 6. F 7. T 8. F

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9. T 10. b 11. T,P,T,T 12. e 13. b 14. c
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