Prefacex xi
1 OVERVIEW 1
1.0 Introduction 1
1.1 Understanding Project Management 2
1.2 Defining Project Success 7
1.3 The Project Manager–Line Manager Interface 8
1.4 Defining the Project Manager’s Role 12
1.5 Defining the Functional Manager’s Role 14
1.6 Defining the Functional Employee’s Role 17
1.7 Defining the Executive’s Role 17
1.8 Working with Executives 18
1.9 The Project Manager as the Planning Agent 19
1.10 Project Champions 20
1.11 The Downside of Project Management 21
1.12 Project-Driven versus Non–Project-Driven Organizations 22
1.13 Marketing in the Project-Driven Organization 24
1.14 Classification of Projects 26
1.15 Location of the Project Manager 27
1.16 Differing Views of Project Management 29
1.17 Concurrent Engineering: A Project Management Approach 30
1.18 Studying Tips for the PMI® Project Management Certification Exam 30
Problems 33
Case Study
Williams Machine Tool Company 35
2 PROJECT MANAGEMENT GROWTH: CONCEPTS AND DEFINITIONS 37
2.0 Introduction 37
2.1 General Systems Management 38
2.2 Project Management: 1945–1960 38
2.3 Project Management: 1960–1985 39
2.4 Project Management: 1985–2009 45
2.5 Resistance to Change 50
2.6 Systems, Programs, and Projects: A Definition 54
2.7 Product versus Project Management: A Definition 57
2.8 Maturity and Excellence: A Definition 58
2.9 Informal Project Management: A Definition 59
2.10 The Many Faces of Success 60
2.11 The Many Faces of Failure 63
2.12 The Stage-Gate Process 66
2.13 Project Life Cycles 68
2.14 Gate Review Meetings (Project Closure) 74
2.15 Project Management Methodologies: A Definition 74
2.16 Organizational Change Management and Corporate Cultures 76
2.17 Project Management Intellectual Property 81
2.18 Systems Thinking 82
2.19 Studying Tips for the PMI® Project Management Certification Exam 85
Problems 88
3 ORGANIZATIONAL STRUCTURES 91
3.0 Introduction 91
3.1 Organizational Work Flow 94
3.2 Traditional (Classical) Organization 95
3.3 Developing Work Integration Positions 98
3.4 Line–Staff Organization (Project Coordinator) 102
3.5 Pure Product (Projectized) Organization 103
3.6 Matrix Organizational Form 106
3.7 Modification of Matrix Structures 113
3.8 The Strong, Weak, Balanced Matrix 117
3.9 Center for Project Management Expertise 117
3.10 Matrix Layering 118
3.11 Selecting the Organizational Form 119
3.12 Structuring the Small Company 125
3.13 Strategic Business Unit (SBU) Project Management 128
3.14 Transitional Management 129
3.15 Studying Tips for the PMI® Project Management Certification Exam 131
Problems 133
Case Study
Jones and Shephard Accountants, Inc. 138
4 ORGANIZING AND STAFFING THE PROJECT OFFICE ANDTEAM 141
4.0 Introduction 141
4.1 The Staffing Environment 142
4.2 Selecting the Project Manager: An Executive Decision 144
4.3 Skill Requirements for Project and Program Managers 148
4.4 Special Cases in Project Manager Selection 154
4.5 Selecting the Wrong Project Manager 154
4.6 Next Generation Project Managers 158
4.7 Duties and Job Descriptions 159
4.8 The Organizational Staffing Process 163
4.9 The Project Office 169
4.10 The Functional Team 174
4.11 The Project Organizational Chart 175
4.12 Special Problems 178
4.13 Selecting the Project Management Implementation Team 180
4.14 Studying Tips for the PMI® Project Management Certification Exam 183
Problems 185
5 MANAGEMENT FUNCTIONS 191
5.0 Introduction 191
5.1 Controlling 193
5.2 Directing 193
5.3 Project Authority 198
5.4 Interpersonal Influences 206
5.5 Barriers to Project Team Development 209
5.6 Suggestions for Handling the Newly Formed Team 212
5.7 Team Building as an Ongoing Process 216
5.8 Dysfunctions of a Team 217
5.9 Leadership in a Project Environment 220
5.10 Life-Cycle Leadership 221
5.11 Organizational Impact 225
5.12 Employee–Manager Problems 227
5.13 Management Pitfalls 230
5.14 Communications 233
5.15 Project Review Meetings 242
5.16 Project Management Bottlenecks 243
5.17 Communication Traps 244
5.18 Proverbs and Laws 245
5.19 Human Behavior Education 248
5.20 Management Policies and Procedures 249
5.21 Studying Tips for the PMI® Project Management Certification Exam 249
Problems 254
Case Studies
The Trophy Project 264
Leadership Effectiveness (A) 266
Leadership Effectiveness (B )271
Motivational Questionnaire 277
6 MANAGEMENT OF?YOUR?TIME AND STRESS 285
6.0 Introduction 285
6.1 Understanding Time Management 286
6.2 Time Robbers 286
6.3 Time Management Forms 288
6.4 Effective Time Management 289
6.5 Stress and Burnout 290
6.6 Studying Tips for the PMI® Project Management Certification Exam 292
Problems 293
Case Study
The Reluctant Workers 294
7 CONFLICTS 295
7.0 Introduction 295
7.1 Objectives 296
7.2 The Conflict Environment 297
7.3 Conflict Resolution 300
7.4 Understanding Superior, Subordinate, and Functional Conflicts 301
7.5 The Management of Conflicts 303
7.6 Conflict Resolution Modes 304
7.7 Studying Tips for the PMI® Project Management Certification Exam 306
Problems 308
Case Studies
Facilities Scheduling at Mayer Manufacturing 311
Telestar International 312
Handling Conflict in Project Management 313
8 SPECIAL TOPICS 319
8.0 Introduction 319
8.1 Performance Measurement 320
8.2 Financial Compensation and Rewards 327
8.3 Critical Issues with Rewarding Project Teams 333
8.4 Effective Project Management in the Small Business Organization 336
8.5 Mega Projects 338
8.6 Morality, Ethics, and the Corporate Culture 339
8.7 Professional Responsibilities 342
8.8 Internal Partnerships 345
8.9 External Partnerships 346
8.10 Training and Education 348
8.11 Integrated Product/Project Teams 350
8.12 Virtual Project Teams 352
8.13 Breakthrough Projects 354
8.14 Studying Tips for the PMI® Project Management Certification Exam 355
Problems 361
9 THE VARIABLES FOR SUCCESS 365
9.0 Introduction 365
9.1 Predicting Project Success 366
9.2 Project Management Effectiveness 370
9.3 Expectations 371
9.4 Lessons Learned 372
9.5 Understanding Best Practices 373
9.6 Studying Tips for the PMI® Project Management Certification Exam 380
Problems 381
10 WORKING WITH EXECUTIVES 383
10.0 Introduction 383
10.1 The Project Sponsor 384
10.2 Handling Disagreements with the Sponsor 393
10.3 The Collective Belief 394
10.4 The Exit Champion 395
10.5 The In-House Representatives 396
10.6 Studying Tips for the PMI® Project Management Certification Exam 397
Problems 398
Case Study
Corwin Corporation 401
11 PLANNING 411
11.0 Introduction 411
11.1 Validating the Assumptions 414
11.2 General Planning 415
11.3 Life-Cycle Phases 418
11.4 Proposal Preparation 421
11.5 Kickoff Meetings 421
11.6 Understanding Participants’ Roles 424
11.7 Project Planning 424
11.8 The Statement of Work 426
11.9 Project Specifications 431
11.10 Milestone Schedules 433
11.11 Work Breakdown Structure 434
11.12 WBS Decomposition Problems 440
11.13 Role of the Executive in Project Selection 444
11.14 Role of the Executive in Planning 449
11.15 The Planning Cycle 449
11.16 Work Planning Authorization 450
11.17 Why Do Plans Fail? 451
11.18 Stopping Projects 452
11.19 Handling Project Phaseouts and Transfers 453
11.20 Detailed Schedules and Charts 454
11.21 Master Production Scheduling 457
11.22 Project Plan 459
11.23 Total Project Planning 464
11.24 The Project Charter 468
11.25 Management Control 469
11.26 The Project Manager–Line Manager Interface 472
11.27 Fast-Tracking 474
11.28 Configuration Management 475
11.29 Enterprise Project Management Methodologies 476
11.30 Project Audits 479
11.31 Studying Tips for the PMI® Project Management Certification Exam 480
Problems 483
12 NETWORK SCHEDULING TECHNIQUES 493
12.0 Introduction 493
12.1 Network Fundamentals 495
12.2 Graphical Evaluation and Review Technique (GERT) 500
12.3 Dependencies 501
12.4 Slack Time 502
12.5 Network Replanning 508
12.6 Estimating Activity Time 512
12.7 Estimating Total Project Time 513
12.8 Total PERT/CPM Planning 514
12.9 Crash Times 516
12.10 PERT/CPM Problem Areas 519
12.11 Alternative PERT/CPM Models 522
12.12 Precedence Networks 523
12.13 Lag 526
12.14 Scheduling Problems 528
12.15 The Myths of Schedule Compression 528
12.16 Understanding Project Management Software 530
12.17 Software Features Offered 530
12.18 Software Classification 532
12.19 Implementation Problems 533
12.20 Critical Chain 534
12.21 Studying Tips for the PMI® Project Management Certification Exam 536
Problems 539
Case Study
Crosby Manufacturing Corporation 552
13 PROJECT GRAPHICS 555
13.0 Introduction 555
13.1 Customer Reporting 556
13.2 Bar (Gantt) Chart 557
13.3 Other Conventional Presentation Techniques 564
13.4 Logic Diagrams/Networks 567
13.5 Studying Tips for the PMI® Project Management Certification Exam 568
Problems 569
14 PRICING AND ESTIMATING 571
14.0 Introduction 571
14.1 Global Pricing Strategies 572
14.2 Types of Estimates 573
14.3 Pricing Process 576
14.4 Organizational Input Requirements 578
14.5 Labor Distributions 580
14.6 Overhead Rates 584
14.7 Materials/Support Costs 586
14.8 Pricing Out the Work 589
14.9 Smoothing Out Department Man-Hours 590
14.10 The Pricing Review Procedure 592
14.11 Systems Pricing 594
14.12 Developing the Supporting/Backup Costs 595
14.13 The Low-Bidder Dilemma 599
14.14 Special Problems 599
14.15 Estimating Pitfalls 600
14.16 Estimating High-Risk Projects 601
14.17 Project Risks 602
14.18 The Disaster of Applying the 10 Percent Solution to Project Estimates 605
14.19 Life-Cycle Costing (LCC) 606
14.20 Logistics Support 613
14.21 Economic Project Selection Criteria: Capital Budgeting 614
14.22 Payback Period 614
14.23 The Time Value of Money 615
14.24 Net Present Value (NPV) 616
14.25 Internal Rate of Return (IRR) 617
14.26 Comparing IRR, NPV, and Payback 618
14.27 Risk Analysis 618
14.28 Capital Rationing 619
14.29 Project Financing 620
14.30 Studying Tips for the PMI® Project Management Certification Exam 622
Problems 624
15 COST CONTROL 629
15.0 Introduction 629
15.1 Understanding Control 633
15.2 The Operating Cycle 636
15.3 Cost Account Codes 637
15.4 Budgets 644
15.5 The Earned Value Measurement System (EVMS) 645
15.6 Variance and Earned Value 647
15.7 The Cost Baseline 666
15.8 Justifying the Costs 668
15.9 The Cost Overrun Dilemma 671
15.10 Recording Material Costs Using Earned Value Measurement 672
15.11 The Material Accounting Criterion 675
15.12 Material Variances: Price and Usage 676
15.13 Summary Variances 677
15.14 Status Reporting 678
15.15 Cost Control Problems 685
15.16 Studying Tips for the PMI® Project Management Certification Exam 686
Problems 689
Case Studies
The Bathtub Period 708
Franklin Electronics 709
Trouble in Paradise 711
16 TRADE-OFF ANALYSIS IN A PROJECT ENVIRONMENT 715
16.0 Introduction 715
16.1 Methodology for Trade-off Analysis 718
16.2 Contracts: Their Influence on Projects 735
16.3 Industry Trade-off Preferences 736
16.4 Conclusion 739
16.5 Studying Tips for the PMI® Project Management Certification Exam 739
17 RISK MANAGEMENT 741
17.0 Introduction 741
17.1 Definition of Risk 743
17.2 Tolerance for Risk 745
17.3 Definition of Risk Management 746
17.4 Certainty, Risk, and Uncertainty 747
17.5 Risk Management Process 753
17.6 Plan Risk Management 753
17.7 Risk Identification 755
17.8 Risk Analysis 761
17.9 Qualitative Risk Analysis 766
17.10 Quantitative Risk Analysis 771
17.11 Probability Distributions and the Monte Carlo Process 772
17.12 Plan Risk Response 782
17.13 Monitoring and Control Risks 788
17.14 Some Implementation Considerations 788
17.15 The Use of Lessons Learned 790
17.16 Dependencies between Risks 793
17.17 The Impact of Risk Handling Measures 798
17.18 Risk and Concurrent Engineering 801
17.19 Studying Tips for the PMI® Project Management Certification Exam 804
Problems 808
Case Studies
Teloxy Engineering (A) 815
Teloxy Engineering (B) 815
18 LEARNING CURVES 817
18.0 Introduction 817
18.1 General Theory 818
18.2 The Learning Curve Concept 818
18.3 Graphic Representation 820
18.4 Key Words Associated with Learning Curves 822
18.5 The Cumulative Average Curve 822
18.6 Sources of Experience 824
18.7 Developing Slope Measures 827
18.8 Unit Costs and Use of Midpoint 828
18.9 Selection of Learning Curves 829
18.10 Follow-on Orders 830
18.11 Manufacturing Breaks 830
18.12 Learning Curve Limitations 832
18.13 Prices and Experience 832
18.14 Competitive Weapon 835
18.15 Studying Tips for the PMI® Project Management Certification Exam 835
Problems 836
19 CONTRACT MANAGEMENT 839
19.0 Introduction 839
19.1 Procurement 840
19.2 Plan Procurement 842
19.3 Conducting the Procurements 845
19.4 Conduct Procurements: Request Seller Responses 847
19.5 Conduct Procurements: Select Sellers 847
19.6 Types of Contracts 851
19.7 Incentive Contracts 855
19.8 Contract Type versus Risk 858
19.9 Contract Administration Cycle 859
19.10 Contract Closure 862
19.11 Using a Checklist 863
19.12 Proposal-Contractual Interaction 864
19.13 Summary 867
19.14 Studying Tips for the PMI® Project Management Certification Exam 868
20 QUALITY MANAGEMENT 873
20.0 Introduction 874
20.1 Definition of Quality 875
20.2 The Quality Movement 877
20.3 Comparison of the Quality Pioneers 880
20.4 The Taguchi Approach 881
20.5 The Malcolm Baldrige National Quality Award 884
20.6 ISO 9000 885
20.7 Quality Management Concepts 887
20.8 The Cost of Quality 890
20.9 The Seven Quality Control Tools 893
20.10 Process Capability (CP) 910
20.11 Acceptance Sampling 912
20.12 Implementing Six Sigma 912
20.13 Lean Six Sigma and DMAIC 914
20.14 Quality Leadership 915
20.15 Responsibility for Quality 916
20.16 Quality Circles 916
20.17 Just-in-Time Manufacturing (JIT) 917
20.18 Total Quality Management (TQM) 919
20.19 Studying Tips for the PMI® Project Management Certification Exam 923
21 Modern developments project Management 927
21.0 Introduction 927
21.1 The Project Management Maturity Model (PMMM) 928
21.2 Developing Effective Procedural Documentation 932
21.3 Project Management Methodologies 936
21.4 Continuous Improvement 937
21.5 Capacity Planning 942
21.6 Competency Models 943
21.7 Managing Multiple Projects 945
21.8 End-of-Phase Review Meetings 947
22 THE BUSINESS OF SCOPE CHANGES 949
22.0 Introduction 949
22.1 Need for Business Knowledge 951
22.2 Timing of Scope Changes 952
22.3 Business Need for a Scope Change 953
22.4 Rationale for Not Approving a Scope Change 954
23 THE?PROJECT?OFFICE 955
23.0 Introduction 955
23.1 Present-Day Project Office 956
23.2 Implementation Risks 957
23.3 Types of Project Offices 958
23.4 Networking Project Management Offices 959
23.5 Project Management Information Systems 959
23.6 Dissemination of Information 961
23.7 Mentoring 962
23.8 Development of Standards and Templates 963
23.9 Project Management Benchmarking 963
23.10 Business Case Development 964
23.11 Customized Training (Related to Project Management) 965
23.12 Managing Stakeholders 966
23.13 Continuous Improvement 967
23.14 Capacity Planning 967
23.15 Risks of Using a Project Office 968
24 Managing Crisis Projects 971
24.0 Introduction 971
24.1 Understanding Crisis Management 971
24.2 Ford versus Firetone 973
24.3 The Air France Concorde Crash 974
24.4 Intel and the Pentium Chip 975
24.5 The Russian Submarine Kursk 975
24.6 The Tylenol Poisonings 976
24.7 Nestlé’s Marketing of Infant Formula 979
24.8 The Space Shuttle Challenger Disaster 981
24.9 The Space Shuttle Columbia Disaster 982
24.10 Victims versus Villains 983
24.11 Life-Cycle Phases 984
24.12 Project Management Implications 985
25 The Rise, Fall, and Resurrection of Iridium: A Project Management Perspective 987
25.0 Introduction 987
25.1 Naming the Project “Iridium” 989
25.2 Obtaining Executive Support 990
25.3 Launching the Venture 990
25.4 The Iridium System 992
25.5 The Terrestial and Space-Based Network 992
25.6 Project Initiation: Developing the Business Case 993
25.7 The “Hidden” Business Case 995
25.8 Risk Management 995
25.9 The Collective Belief 997
25.10 The Exit Champion 997
25.11 Iridium’s Infancy Years 999
25.12 Debt Financing 1001
25.13 The M-Star Project 1002
25.14 A New CEO 1003
25.15 Satellite Launches 1003
25.16 An Initial Public Offering (IPO) 1004
25.17 Signing up Customers 1004
25.18 Iridium’s Rapid Ascent 1005
25.19 Iridium’s Rapid Descent 1007
25.20 The Iridium “Flu” 1012
25.21 Searching for a White Knight 1012
25.22 The Definition of Failure (October, 1999) 1012
25.23 The Satellite Deorbiting Plan 1013
25.24 Iridium Is Rescued for $25 Million 1014
25.25 Epilogue 1015
25.26 Shareholder Lawsuits 1015
25.27 The Bankruptcy Court Ruling 1016
25.28 Autopsy 1016
25.29 Financial Impact of the Bankruptcy 1018
25.30 What Really Went Wrong? 1018
25.31 Lessons Learned 1020
25.32 Conclusion 1023
Appendix A. Solutions to the Project Management Conflict Exercise 1025
Appendix B. Solution to Leadership Exercise 1031
Appendix C. Dorale Products Case Studies 1037
Appendix D. Solution to the Dorale Products Case Studies Answers 1049
Appendix E. Crosslisting of PMBOK® to the Text 1055
Author Index 1061
Subject Index