Chapter 1: Overview

1.0 Introduction

1.1 Understanding Project Management

1.2 Defining Project Success

1.3 Success, Trade-Offs, and Competing Constraints

1.4 The Project Manager–Line Manager Interface

1.5 Defining the Project Manager’s Role

1.6 Defining the Functional Manager’s Role

1.7 Defining the Functional Employee’s Role

1.8 Defining the Executive’s Role

1.9 Working with Executives

1.10 Committee Sponsorship/Governance

1.11 The Project Manager as the Planning Agent

1.12 Project Champions

1.13 The Downside of Project Management

1.14 Project-Driven versus Non–Project-Driven Organizations

1.15 Marketing in the Project-Driven Organization

1.16 Classification of Projects

1.17 Location of the Project Manager

1.18 Differing Views of Project Management

1.19 Public-Sector Project Management

1.20 International Project Management

1.21 Concurrent Engineering: A Project Management Approach

1.22 Added Value

1.23 Studying Tips for the PMI® Project Management Certification Exam




Chapter 2: Project Management Growth: Concepts and Definitions

2.0 Introduction

2.1 General Systems Management

2.2 Project Management: 1945–1960

2.3 Project Management: 1960–1985

2.4 Project Management: 1985–2012

2.5 Resistance to Change

2.6 Systems, Programs, and Projects: A Definition

2.7 Product versus Project Management: A Definition

2.8 Maturity and Excellence: A Definition

2.9 Informal Project Management: A Definition

2.10 The Many Faces of Success

2.11 The Many Faces of Failure

2.12 The Stage-Gate Process

2.13 Project Life Cycles

2.14 Gate Review Meetings (Project Closure)

2.15 Engagement Project Management

2.16 Project Management Methodologies: A Definition

2.17 Enterprise Project Management Methodologies

2.18 Methodologies Can Fail

2.19 Organizational Change Management and Corporate Cultures

2.20 Project Management Intellectual Property

2.21 Systems Thinking

2.22 Studying Tips for the PMI® Project Management Certification Exam




Chapter 3: Organizational Structures

3.0 Introduction

3.1 Organizational Work Flow

3.2 Traditional (Classical) Organization

3.3 Developing Work Integration Positions

3.4 Line-Staff Organization (Project Coordinator)

3.5 Pure Product (Projectized) Organization

3.6 Matrix Organizational Form

3.7 Modification of Matrix Structures

3.8 The Strong, Weak, or Balanced Matrix

3.9 Center for Project Management Expertise

3.10 Matrix Layering

3.11 Selecting the Organizational Form

3.12 Structuring the Small Company

3.13 Strategic Business Unit (SBU) Project Management

3.14 Transitional Management

3.15 Barriers to Implementing Project Management in Emerging Markets

3.16 Seven Fallacies that Delay Project Management Maturity

3.17 Studying Tips for the PMI® Project Management Certification Exam



Chapter 4: Organizing and Staffing The Project Office and Team

4.0 Introduction

4.1 The Staffing Environment

4.2 Selecting the Project Manager: An Executive Decision

4.3 Skill Requirements for Project and Program Managers


4.4 Special Cases in Project Manager Selection

4.5 Selecting the Wrong Project Manager

4.6 Next Generation Project Managers

4.7 Duties and Job Descriptions

4.8 The Organizational Staffing Process

4.9 The Project Office

4.10 The Functional Team

4.11 The Project Organizational Chart

4.12 Special Problems

4.13 Selecting the Project Management Implementation Team

4.14 Mistakes Made by Inexperienced Project Managers

4.15 Studying Tips for the PMI® Project Management Certification Exam



Chapter 5: Management Functions

5.0 Introduction

5.1 Controlling

5.2 Directing

5.3 Project Authority

5.4 Interpersonal Influences

5.5 Barriers to Project Team Development

5.6 Suggestions for Handling the Newly Formed Team

5.7 Team Building as an Ongoing Process

5.8 Dysfunctions of a Team

5.9 Leadership in a Project Environment

5.10 Life-Cycle Leadership

5.11 Value-Based Project Leadership


5.12 Organizational Impact

5.13 Employee–Manager Problems

5.14 Management Pitfalls

5.15 Communications

5.16 Project Review Meetings

5.17 Project Management Bottlenecks

5.18 Cross-Cutting Skills

5.19 Active Listening

5.20 Project Problem-Solving

5.21 Brainstorming

5.22 Project Decision-Making

5.23 Predicting the Outcome of a Decision

5.24 Facilitation

5.25 Handling Negative Team Dynamics

5.26 Communication Traps

5.27 Proverbs and Laws

5.28 Human Behavior Education

5.29 Management Policies and Procedures

5.30 Studying Tips for the PMI® Project Management Certification Exam



Chapter 6: Management Of your time and Stress

6.0 Introduction

6.1 Understanding Time Management

6.2 Time Robbers

6.3 Time Management Forms

6.4 Effective Time Management


6.5 Stress and Burnout

6.6 Studying Tips for the PMI® Project Management Certification Exam



Chapter 7: Conflicts

7.0 Introduction

7.1 Objectives

7.2 The Conflict Environment

7.3 Types of Conflicts

7.4 Conflict Resolution

7.5 Understanding Superior, Subordinate, and Functional Conflicts

7.6 The Management of Conflicts

7.7 Conflict Resolution Modes

7.8 Studying Tips for the PMI® Project Management Certification Exam



Chapter 8: Special Topics

8.0 Introduction

8.1 Performance Measurement

8.2 Financial Compensation and Rewards

8.3 Critical Issues with Rewarding Project Teams

8.4 Effective Project Management in the Small Business Organization

8.5 Mega Projects

8.6 Morality, Ethics, and the Corporate Culture

8.7 Professional Responsibilities

8.8 Internal Partnerships

8.9 External Partnerships


8.10 Training and Education

8.11 Integrated Product/Project Teams

8.12 Virtual Project Teams

8.13 Breakthrough Projects

8.14 Managing Innovation Projects

8.15 Agile Project Management

8.16 Studying Tips for the PMI® Project Management Certification Exam



Chapter 9: The Variables for Success

9.0 Introduction

9.1 Predicting Project Success

9.2 Project Management Effectiveness

9.3 Expectations

9.4 Lessons Learned

9.5 Understanding Best Practices

9.6 Best Practices versus Proven Practices

9.7 Studying Tips for the PMI® Project Management Certification Exam



Chapter 10: Working with Executives

10.0 Introduction

10.1 The Project Sponsor

10.2 Handling Disagreements with the Sponsor

10.3 The Collective Belief

10.4 The Exit Champion

10.5 The In-House Representatives


10.6 Stakeholder Relations Management

10.7 Politics

10.8 Studying Tips for the PMI® Project Management Certification Exam



Chapter 11: Planning

11.0 Introduction

11.1 Validating the Assumptions

11.2 Validating the Objectives

11.3 General Planning

11.4 Life-Cycle Phases

11.5 Proposal Preparation

11.6 Kickoff Meetings

11.7 Understanding Participants’ Roles

11.8 Project Planning

11.9 The Statement of Work

11.10 Project Specifications

11.11 Milestone Schedules

11.12 Work Breakdown Structure

11.13 WBS Decomposition Problems

11.14 Work Breakdown Structure Dictionary

11.15 Role of the Executive in Project Selection

11.16 Role of the Executive in Planning

11.17 The Planning Cycle

11.18 Work Planning Authorization

11.19 Why Do Plans Fail?

11.20 Stopping Projects


11.21 Handling Project Phaseouts and Transfers

11.22 Detailed Schedules and Charts

11.23 Master Production Scheduling

11.24 Project Plan

11.25 Total Project Planning

11.26 The Project Charter

11.27 Project Baselines

11.28 Verification and Validation

11.29 Requirements Traceability Matrix

11.30 Management Control

11.31 The Project Manager–Line Manager Interface

11.32 Fast-Tracking

11.33 Configuration Management

11.34 Enterprise Project Management Methodologies

11.35 Project Audits

11.36 Studying Tips for the PMI® Project Management Certification Exam



Chapter 12: Network Scheduling Techniques

12.0 Introduction

12.1 Network Fundamentals

12.2 Graphical Evaluation and Review Technique (GERT)

12.3 Dependencies

12.4 Slack Time

12.5 Network Replanning

12.6 Estimating Activity Time

12.7 Estimating Total Project Time


12.8 Total PERT/CPM Planning

12.9 Crash Times

12.10 PERT/CPM Problem Areas

12.11 Alternative PERT/CPM Models

12.12 Precedence Networks

12.13 Lag

12.14 Scheduling Problems

12.15 The Myths of Schedule Compression

12.16 Understanding Project Management Software

12.17 Software Features Offered

12.18 Software Classification

12.19 Implementation Problems

12.20 Critical Chain

12.21 Studying Tips for the PMI® Project Management Certification Exam



Chapter 13: Project Graphics

13.0 Introduction

13.1 Customer Reporting

13.2 Bar (Gantt) Chart

13.3 Other Conventional Presentation Techniques

13.4 Logic Diagrams/Networks

13.5 Studying Tips for the PMI® Project Management Certification Exam



Chapter 14: Pricing and Estimating

14.0 Introduction


14.1 Global Pricing Strategies

14.2 Types of Estimates

14.3 Pricing Process

14.4 Organizational Input Requirements

14.5 Labor Distributions

14.6 Overhead Rates

14.7 Materials/Support Costs

14.8 Pricing Out the Work

14.9 Smoothing Out Department Man-Hours

14.10 The Pricing Review Procedure

14.11 Systems Pricing

14.12 Developing the Supporting/Backup Costs

14.13 The Low-Bidder Dilemma

14.14 Special Problems

14.15 Estimating Pitfalls

14.16 Estimating High-Risk Projects

14.17 Project Risks

14.18 The Disaster of Applying the 10 Percent Solution to Project Estimates

14.19 Life-Cycle Costing (LCC)

14.20 Logistics Support

14.21 Economic Project Selection Criteria: Capital Budgeting

14.22 Payback Period

14.23 The Time Value of Money

14.24 Net Present Value (NPV)

14.25 Internal Rate of Return (IRR)

14.26 Comparing IRR, NPV, and Payback

14.27 Risk Analysis


14.28 Capital Rationing

14.29 Project Financing

14.30 Studying Tips for the PMI® Project Management Certification Exam



Chapter 15: Cost Control

15.0 Introduction

15.1 Understanding Control

15.2 The Operating Cycle

15.3 Cost Account Codes

15.4 Budgets

15.5 The Earned Value Measurement System (EVMS)

15.6 Variance and Earned Value

15.7 The Cost Baseline

15.8 Justifying the Costs

15.9 The Cost Overrun Dilemma

15.10 Recording Material Costs Using Earned Value Measurement

15.11 The Material Accounting Criterion

15.12 Material Variances: Price and Usage

15.13 Summary Variances

15.14 Status Reporting

15.15 Cost Control Problems

15.16 Project Management Information Systems

15.17 Enterprise Resource Planning

15.18 Project Metrics

15.19 Key Performance Indicators

15.20 Value-Based Metrics


15.21 Dashboards and Scorecards

15.22 Business Intelligence

15.23 Infographics

15.24 Studying Tips for the PMI® Project Management Certification Exam



Chapter 16: Trade-Off Analysis in a Project Environment

16.0 Introduction

16.1 Methodology for Trade-Off Analysis

16.2 Contracts: Their Influence on Projects

16.3 Industry Trade-Off Preferences

16.4 Conclusion

16.5 Studying Tips for the PMI® Project Management Certification Exam


Chapter 17: Risk Management

17.0 Introduction

17.1 Definition of Risk

17.2 Tolerance for Risk

17.3 Definition of Risk Management

17.4 Certainty, Risk, and Uncertainty

17.5 Risk Management Process

17.6 Plan Risk Management (11.1)

17.7 Risk Identification (11.2)

17.8 Risk Analysis (11.3, 11.4)

17.9 Qualitative Risk Analysis (11.3)

17.10 Quantitative Risk Analysis (11.4)

17.11 Probability Distributions and the Monte Carlo Process


17.12 Plan Risk Response (11.5)

17.13 Monitor and Control Risks (11.6)

17.14 Some Implementation Considerations

17.15 The Use of Lessons Learned

17.16 Dependencies Between Risks

17.17 The Impact of Risk Handling Measures

17.18 Risk and Concurrent Engineering

17.19 Studying Tips for the PMI® Project Management Certification Exam



Chapter 18: Learning Curves

18.0 Introduction

18.1 General Theory

18.2 The Learning Curve Concept

18.3 Graphic Representation

18.4 Key Words Associated with Learning Curves

18.5 The Cumulative Average Curve

18.6 Sources of Experience

18.7 Developing Slope Measures

18.8 Unit Costs and Use of Midpoints

18.9 Selection of Learning Curves

18.10 Follow-On Orders

18.11 Manufacturing Breaks

18.12 Learning Curve Limitations

18.13 Prices and Experience

18.14 Competitive Weapon

18.15 Studying Tips for the PMI® Project Management Certification Exam




Chapter 19: Contract Management

19.0 Introduction

19.1 Procurement

19.2 Plan Procurements

19.3 Conducting the Procurements

19.4 Conduct Procurements: Request Seller Responses

19.5 Conduct Procurements: Select Sellers

19.6 Types of Contracts

19.7 Incentive Contracts

19.8 Contract Type versus Risk

19.9 Contract Administration

19.10 Contract Closure

19.11 Using a Checklist

19.12 Proposal-Contractual Interaction

19.13 Summary

19.14 Studying Tips for the PMI® Project Management Certification Exam


Chapter 20: Quality Management

20.0 Introduction

20.1 Definition of Quality

20.2 The Quality Movement

20.3 Comparison of the Quality Pioneers

20.4 The Taguchi Approach

20.5 The Malcolm Baldrige National Quality Award

20.6 ISO 9000


20.7 Quality Management Concepts

20.8 The Cost of Quality

20.9 The Seven Quality Control Tools

20.10 Process Capability (CP)

20.11 Acceptance Sampling

20.12 Implementing Six Sigma

20.13 Lean Six Sigma and DMAIC

20.14 Quality Leadership

20.15 Responsibility for Quality

20.16 Quality Circles

20.17 Just-In-Time Manufacturing (JIT)

20.18 Total Quality Management (TQM)

20.19 Studying Tips for the PMI® Project Management Certification Exam


Chapter 21: Modern Developments in Project Management

21.0 Introduction

21.1 The Project Management Maturity Model (PMMM)

21.2 Developing Effective Procedural Documentation

21.3 Project Management Methodologies

21.4 Continuous Improvement

21.5 Capacity Planning

21.6 Competency Models

21.7 Managing Multiple Projects

21.8 End-of-Phase Review Meetings

Chapter 22: The Business of Scope Changes

22.0 Introduction

22.1 Need for Business Knowledge


22.2 Timing of Scope Changes

22.3 Business Need for a Scope Change

22.4 Rationale for Not Approving a Scope Change

Chapter 23: The Project Office

23.0 Introduction

23.1 Present-Day Project Office

23.2 Implementation Risks

23.3 Types of Project Offices

23.4 Networking Project Management Offices

23.5 Project Management Information Systems

23.6 Dissemination of Information

23.7 Mentoring

23.8 Development of Standards and Templates

23.9 Project Management Benchmarking

23.10 Business Case Development

23.11 Customized Training (Related to Project Management)

23.12 Managing Stakeholder Relations

23.13 Continuous Improvement

23.14 Capacity Planning

23.15 Risks of Using a Project Office

23.16 Project Portfolio Management

Chapter 24: Managing Crisis Projects

24.0 Introduction

24.1 Understanding Crisis Management

24.2 Ford versus Firestone

24.3 The Air France Concorde Crash

24.4 Intel and the Pentium Chip


24.5 The Russian Submarine Kursk

24.6 The Tylenol Poisonings

24.7 Nestlé’s Marketing of Infant Formula

24.8 The Space Shuttle Challenger Disaster

24.9 The Space Shuttle Columbia Disaster

24.10 Victims Versus Villains

24.11 Life-Cycle Phases

24.12 Project Management Implications

Chapter 25: Future of Project Management

25.0 Changing Times

25.1 Complex Projects

25.2 Complexity Theory

25.3 Scope Creep

25.4 Project Health Checks

25.5 Managing Troubled Projects

Chapter 26: The Rise, Fall, and Resurrection of Iridium: A Project Management Perspective

26.0 Introduction

26.1 Naming the Project “Iridium”

26.2 Obtaining Executive Support

26.3 Launching the Venture

26.4 The Iridium System

26.5 The Terrestrial and Space-Based Network

26.6 Project Initiation: Developing the Business Case

26.7 The “Hidden” Business Case

26.8 Risk Management

26.9 The Collective Belief

26.10 The Exit Champion


26.11 Iridium’s Infancy Years

26.12 Debt Financing

26.13 The M-Star Project

26.14 A New CEO

26.15 Satellite Launches

26.16 An Initial Public Offering (IPO)

26.17 Signing Up Customers

26.18 Iridium’s Rapid Ascent

26.19 Iridium’s Rapid Descent

26.20 The Iridium “Flu”

26.21 Searching for a White Knight

26.22 The Definition of Failure (October, 1999)

26.23 The Satellite Deorbiting Plan

26.24 Iridium is Rescued for $25 Million

26.25 Iridium Begins to Grow

26.26 Shareholder Lawsuits

26.27 The Bankruptcy Court Ruling

26.28 Autopsy

26.29 Financial Impact of the Bankruptcy

26.30 What Really Went Wrong?

26.31 Lessons Learned

26.32 Conclusion

Epilogue (2011)

Appendix A. Solutions to the Project Management Conflict Exercise

Appendix B. Solution to Leadership Exercise

Appendix C. Dorale Products Case Studies

Appendix D. Solutions to the Dorale Products Case Studies


Appendix E. Alignment of the PMBOK® Guide to the Text

Author Index

Subject Index


Dr. Kerzner’s 16 Points to Project Management Maturity

1. Adopt a project management methodology and use it consistently.

2. Implement a philosophy that drives the company toward project management maturity and communicate it to everyone.

3. Commit to developing effective plans at the beginning of each project.

4. Minimize scope changes by committing to realistic objectives.

5. Recognize that cost and schedule management are inseparable.

6. Select the right person as the project manager.

7. Provide executives with project sponsor information, not project management information.

8. Strengthen involvement and support of line management.

9. Focus on deliverables rather than resources.

10. Cultivate effective communication, cooperation, and trust to achieve rapid project management maturity.

11. Share recognition for project success with the entire project team and line management.

12. Eliminate nonproductive meetings.

13. Focus on identifying and solving problems early, quickly, and cost effectively.

14. Measure progress periodically.

15. Use project management software as a tool—not as a substitute for effective planning or interpersonal skills.

16. Institute an all-employee training program with periodic updates based upon documented lessons learned.



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Library of Congress Cataloging-in-Publication Data: Kerzner, Harold.

Project management : a systems approach to planning, scheduling, and controlling / Harold Kerzner, Ph. D. Senior Executive Director for Project Management, the International Institute for Learning, New York, New York. — Eleventh edition.

pages cm

Includes bibliographical references and index.


ISBN 978-1-118-02227-6 (cloth); ISBN 978-1-118-41585-6 (ebk); ISBN 978-1- 118-41855-0 (ebk); ISBN 978-1-118-43357-7 (ebk); ISBN 978-1-118-48322-0

(ebk); ISBN 978-1-118-48323-7 (ebk) 1. Project management. 2. Project management—Case studies. I. Title.

HD69.P75K47 2013





Dr. Herman Krier,

my Friend and Guru,

who taught me well the

meaning of the word “persistence”


Preface Project management has evolved from a management philosophy restricted to a few functional areas and regarded as something nice to have to an enterprise project management system affecting every functional unit of the company. Simply stated, project management has evolved into a business process rather than merely a project management process. More and more companies are now regarding project management as being mandatory for the survival of the firm. Organizations that were opponents of project management are now advocates. Management educators of the past, who preached that project management could not work and would be just another fad, are now staunch supporters. Project management is here to stay. Colleges and universities are now offering graduate degrees in project management.

The text discusses the principles of project management. Students who are interested in advanced topics, such as some of the material in Chapters 21 to 25 of this text, may wish to read one of my other texts, Advanced Project Management: Best Practices in Implementation (New York: Wiley, 2004) and Project Management Best Practices: Achieving Global Excellence, 2nd edition (Hoboken, NJ: Wiley and IIL Publishers, 2010). John Wiley & Sons and the International Institute for Learning also introduced a four-book series on project management best practices, authored by Frank Saladis, Carl Belack, and Harold Kerzner.

This book is addressed not only to those undergraduate and graduate students who wish to improve upon their project management skills but also to those functional managers and upper-level executives who serve as project sponsors and must provide continuous support for projects. During the past several years, management’s knowledge and understanding of project management has matured to the point where almost every company is using project management in one form or another. These companies have come to the realization that project management and productivity are related and that we are now managing our business as though it is a series of projects. Project management coursework is now consuming more of training budgets than ever before.

General reference is provided in the text to engineers. However, the reader should not consider project management as strictly engineering-related. The engineering examples are the result of the fact that project management first appeared in the engineering disciplines, and we should be willing to learn from their mistakes. Project management now resides in every profession, including information systems, health care, consulting, pharmaceutical, banks, and


government agencies. The text can be used for both undergraduate and graduate courses in business,

information systems, and engineering. The structure of the text is based upon my belief that project management is much more behavioral than quantitative since projects are managed by people rather than tools. The first five chapters are part of the basic core of knowledge necessary to understand project management. Chapters 6 through 8 deal with the support functions of managing your time effectively, conflicts, and other special topics. Chapters 9 and 10 describe factors for predicting success and management support. It may seem strange that ten chapters on organizational behavior and structuring are needed prior to the “hard-core” chapters of planning, scheduling, and controlling. These first ten chapters are needed to understand the cultural environment for all projects and systems. These chapters are necessary for the reader to understand the difficulties in achieving cross-functional cooperation on projects where team members are working on multiple projects concurrently and why the people involved, all of whom may have different backgrounds, cannot simply be forged into a cohesive work unit without friction. Chapters 11 through 20 are more of the quantitative chapters on planning, scheduling, cost control, estimating, contracting (and procurement), and quality. The next five chapters are advanced topics and future trends. Chapter 26 is a capstone case study that can be related to almost all of the chapters in the text.

The changes that were made in the eleventh edition include:

A new section on success, trade-offs, and competing constraints A new section on added value A new section on business intelligence A new section on project governance An updated section on processes supporting project management An updated section on the types of project closure A new section on engagement project management A new section on barriers to implementing project management in emerging markets A new section on fallacies in implementing project management A new section on enterprise project management systems A new section on How Project Management Methodologies Can Fail A new section on the future of project management A new section on managing complex projects A new section on managing scope creep A new section on project health checks A new section on how to recover a troubled project


A new section on managing public projects A new section on managing international projects A new section on project politics A new section on twenty common mistakes in project management A new section on managing innovation projects A new section on the differences between best practices and proven practices An updated section on project sponsorship An updated section on culture, teamwork, and trust A New Section on stakeholder relations management A new section on value-based leadership An updated section on validating project assumptions A new section on validating project objectives A new section on the WBS dictionary A new section on validation and verification A new section on project management baselines A new section on the traceability matrix An expansion on WBS core attributes An expansion on using the WBS and WBS dictionary for verification A new section on project management metrics A new section on key performance indicators A new section on value metrics A new section on project management dashboards A new section on portfolio management A new section on complexity theory A new section on project management information systems A new section on enterprise resource planning A new section on project problem solving A new section on brainstorming A new section on project decision-making A new section on determining the impact of a decision A new section on active listening A new section on agile project management A capstone case study which can be used as a review of the entire PMBOK® Guide, 5th edition, domain areas

The text contains more than 25 case studies, more than 125 multiple-choice questions, and nearly 400 discussion questions. There is also a separate book of cases (Project Management Case Studies, fourth edition) that provides additional real-world examples.


This text, the PMBOK® Guide, and the book of cases are ideal as self-study tools for the Project Management Institute’s PMP® Certification exam. Because of this, there are tables of cross references on each chapter’s opening page in the textbook detailing the sections from the book of cases and the Guide to the Project Management Body of Knowledge (PMBOK® Guide) that apply to that chapter’s content. The left-hand margin of the pages in the text has side bars that identify the cross-listing of the material on that page to the appropriate section(s) of the PMBOK® Guide. At the end of most of the chapters is a section on study tips for the PMP® exam, including more than 125 multiple-choice questions.

This textbook is currently used in the college market, in the reference market, and for studying for the PMP® Certification exam. Therefore, to satisfy the needs of all markets, a compromise had to be reached on how much of the text would be aligned to the PMBOK® Guide and how much new material would be included without doubling the size of the text. Some colleges and universities use the textbook to teach project management fundamentals without reference to the PMBOK® Guide. The text does not contain all of the material necessary to support each section of the PMBOK® Guide. Therefore, to study for the PMP® Certification exam, the PMBOK® Guide must also be used together with this text. The text covers material for almost all of the PMBOK® Guide knowledge areas but not necessarily in the depth that appears in the PMBOK® Guide.

An instructor’s manual is available only to college and university faculty members by contacting your local Wiley sales representative or by visiting the Wiley website at This website includes not only the instructor’s manual but also 500 PowerPoint slides that follow the content of the book and help organize and execute classroom instruction and group learning. Access to the instructor’s material can be provided only through John Wiley & Sons, not the author.

One-, two-, and three-day seminars on project management and the PMP® Certification Training using the text are offered by contacting Lori MIlhaven, Executive Vice President, the International Institute for Learning, at 800-325-1533, extension 5121 (email address:

The problems and case studies at the ends of the chapters cover a variety of industries. Almost all of the case studies are real-world situations taken from my consulting practice. Feedback from my colleagues who are using the text has


provided me with fruitful criticism, most of which has been incorporated into the tenth edition.

The majority of the articles on project management that have become classics have been referenced in the textbook throughout the first eleven chapters. These articles were the basis for many of the modern developments in project management and are therefore identified throughout the text.

Many colleagues provided valuable criticism. In particular, I am indebted to those industrial/government training managers whose dedication and commitment to quality project management education and training have led to valuable changes in this and previous editions. In particular, I wish to thank Frank Saladis, PMP®, Senior Consultant and Trainer with the International Institute for Learning, for his constructive comments, recommendations, and assistance with the mapping of the text to the PMBOK® Guide as well as recommended changes to many of the chapters. I am indebted to Dr. Edmund Conrow, PMP®, for a decade of assistance with the preparation of the risk management chapters in all of my texts. I am also indebted to Dr. Rene Rendon for his review and recommendations for changes to the chapter on contract management.

To the management team and employees of the International Institute for Learning, thank you all for 20 years of never-ending encouragement, support, and assistance with all of my project management research and writings.

Harold Kerzner

The International Institute for Learning



Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP ®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 5th Edition, Reference Section for the PMP® Certification Exam

Kombs Engineering Williams Machine Tool Company* Hyten Corporation Macon, Inc. Continental Computer Corporation Jackson Industries

Multiple Choice Exam Integration Management Scope Management Human Resource Management


1.0 INTRODUCTION Executives will be facing increasingly complex challenges during the next decade. These challenges will be the result of high escalation factors for salaries and raw materials, increased union demands, pressure from stockholders, and the possibility of long-term high inflation accompanied by a mild recession and a lack of borrowing power with financial institutions. These environmental conditions have existed before, but not to the degree that they do today.

In the past, executives have attempted to ease the impact of these environmental conditions by embarking on massive cost-reduction programs. The usual results of these programs have been early retirement, layoffs, and a reduction in manpower through attrition. As jobs become vacant, executives pressure line managers to accomplish the same amount of work with fewer resources, either by improving efficiency or by upgrading performance requirements to a higher position on the learning curve. Because people costs are more inflationary than the cost of equipment or facilities, executives are funding more and more capital equipment projects in an attempt to increase or improve productivity without increasing labor.

Unfortunately, executives are somewhat limited in how far they can go to reduce manpower without running a high risk to corporate profitability. Capital equipment projects are not always the answer. Thus, executives have been forced to look elsewhere for the solutions to their problems.

Almost all of today’s executives are in agreement that the solution to the majority of corporate problems involves obtaining better control and use of existing corporate resources, looking internally rather than externally for the solution. As part of the attempt to achieve an internal solution, executives are taking a hard look at the ways corporate activities are managed. Project management is one of the techniques under consideration.

The project management approach is relatively modern. It is characterized by methods of restructuring management and adapting special management techniques, with the purpose of obtaining better control and use of existing resources. Forty years ago project management was confined to U.S. Department of Defense contractors and construction companies. Today, the concept behind project management is being applied in such diverse industries and organizations as defense, construction, pharmaceuticals, chemicals, banking, hospitals, accounting, advertising, law, state and local governments, and the United Nations.

The rapid rate of change in both technology and the marketplace has created enormous strains on existing organizational forms. The traditional structure is highly bureaucratic, and experience has shown that it cannot respond rapidly


enough to a changing environment. Thus, the traditional structure must be replaced by project management, or other temporary management structures that are highly organic and can respond very rapidly as situations develop inside and outside the company.

Project management has long been discussed by corporate executives and academics as one of several workable possibilities for organizational forms of the future that could integrate complex efforts and reduce bureaucracy. The acceptance of project management has not been easy, however. Many executives are not willing to accept change and are inflexible when it comes to adapting to a different environment. The project management approach requires a departure from the traditional business organizational form, which is basically vertical and which emphasizes a strong superior–subordinate relationship.



In order to understand project management, one must begin with the definition of a project. A project can be considered to be any series of activities and tasks that:

PMBOK® Guide, 5th Edition 1.2 What Is a Project?

1.3 What Is Project Management?

Have a specific objective to be completed within certain specifications Have defined start and end dates Have funding limits (if applicable) Consume human and nonhuman resources (i.e., money, people, equipment) Are multifunctional (i.e., cut across several functional lines)

Project management, on the other hand, involves five process groups as identified in the PMBOK® Guide, namely:

Project initiation Selection of the best project given resource limits Recognizing the benefits of the project Preparation of the documents to sanction the project Assigning of the project manager

Project planning Definition of the work requirements Definition of the quality and quantity of work Definition of the resources needed Scheduling the activities Evaluation of the various risks

Project execution Negotiating for the project team members Directing and managing the work Working with the team members to help them improve

Project monitoring and control


Tracking progress Comparing actual outcome to predicted outcome Analyzing variances and impacts Making adjustments

Project closure Verifying that all of the work has been accomplished Contractual closure of the contract Financial closure of the charge numbers Administrative closure of the papework

Successful project management can then be defined as having achieved the project objectives:

Within time Within cost At the desired performance/technology level While utilizing the assigned resources effectively and efficiently Accepted by the customer

The potential benefits from project management are:

Identification of functional responsibilities to ensure that all activities are accounted for, regardless of personnel turnover Minimizing the need for continuous reporting Identification of time limits for scheduling Identification of a methodology for trade-off analysis Measurement of accomplishment against plans Early identification of problems so that corrective action may follow Improved estimating capability for future planning Knowing when objectives cannot be met or will be exceeded

Unfortunately, the benefits cannot be achieved without overcoming obstacles such as:

Project complexity Customer’s special requirements and scope changes Organizational restructuring Project risks Changes in technology Forward planning and pricing

Project management can mean different things to different people. Quite often, people misunderstand the concept because they have ongoing projects within their


company and feel that they are using project management to control these activities. In such a case, the following might be considered an appropriate definition:

Project management is the art of creating the illusion that any outcome is the result of a series of predetermined, deliberate acts when, in fact, it was dumb luck.

Although this might be the way that some companies are running their projects, this is not project management. Project management is designed to make better use of existing resources by getting work to flow horizontally as well as vertically within the company. This approach does not really destroy the vertical, bureaucratic flow of work but simply requires that line organizations talk to one another horizontally so work will be accomplished more smoothly throughout the organization. The vertical flow of work is still the responsibility of the line managers. The horizontal flow of work is the responsibility of the project managers, and their primary effort is to communicate and coordinate activities horizontally between the line organizations.

Figure 1–1 shows how many companies are structured. There are always “class or prestige” gaps between various levels of management. There are also functional gaps between working units of the organization. If we superimpose the management gaps on top of the functional gaps, we find that companies are made up of small operational islands that refuse to communicate with one another for fear that giving up information may strengthen their opponents. The project manager’s responsibility is to get these islands to communicate cross-functionally toward common goals and objectives.

FIGURE 1–1. Why are systems necessary?


PMBOK® Guide, 5th Edition 1.7.2 Project Management Skills

The following would be an overview definition of project management:

Project management is the planning, organizing, directing, and controlling of company resources for a relatively short-term objective that has been established to complete specific goals and objectives. Furthermore, project management utilizes the systems approach to management by having functional personnel (the vertical hierarchy) assigned to a specific project (the horizontal hierarchy).

The above definition requires further comment. Classical management is usually considered to have five functions or principles:

PMBOK® Guide, 5th Edition 2.1.3 Organizational Structures

Planning Organizing Staffing Controlling Directing

You will notice that, in the above definition, the staffing function has been omitted. This was intentional because the project manager does not staff the project. Staffing is a line responsibility. The project manager has the right to request specific resources, but the final decision of what resources will be committed rests with the line managers.

We should also comment on what is meant by a “relatively” short-term project. Not all industries have the same definition for a short-term project. In engineering, the project might be for six months or two years; in construction, three to five years; in nuclear components, ten years; and in insurance, two weeks. Long-term projects, which consume resources full-time, are usually set up as a separate division (if large enough) or simply as a line organization.


Figure 1–2 is a pictorial representation of project management. The objective of the figure is to show that project management is designed to manage or control company resources on a given activity, within time, within cost, and within performance. Time, cost, and performance are the constraints on the project. If the project is to be accomplished for an outside customer, then the project has a fourth constraint: good customer relations. The reader should immediately realize that it is possible to manage a project internally within time, cost, and performance and then alienate the customer to such a degree that no further business will be forthcoming. Executives often select project managers based on who the customer is and what kind of customer relations will be necessary.

FIGURE 1–2. Overview of project management.

Projects exist to produce deliverables. The person ultimately assigned as the project manager may very well be assigned based upon the size, nature, and scope of the deliverables. Deliverables are outputs, or the end result of either the completion of the project or the end of a life-cycle phase of the project. Deliverables are measurable, tangible outputs and can take such form as:

Hardware Deliverables: These are hardware items, such as a table, a prototype, or a piece of equipment. Software Deliverables: These items are similar to hardware deliverables but are usually paper products, such as reports, studies, handouts, or documentation. Some companies do not differentiate between hardware and software deliverables. Interim Deliverables: These items can be either hardware or software deliverables and progressively evolve as the project proceeds. An example might be a series of interim reports leading up to the final report.


Another factor influencing the selection of the project manager would be the stakeholders. Stakeholders are individuals or organizations that can be favorably or unfavorably impacted by the project. As such, project managers must interface with these stakeholders, and many of the stakeholders can exert their influence or pressure over the direction of the project.

Some stakeholders are referred to as “active” or “key” stakeholders that can possess decision-making authority during the execution of the project. Each stakeholder can have his or her own set of objectives, and this could place the project manager in a position of having to balance a variety of stakeholder interests without creating a conflict-of-interest situation for the project manager.

Each company has its own categorization system for identifying stakeholders. A typical system might be:

Organizational stakeholders Executive officers Line managers Employees Unions

Product/market stakeholders Customers Suppliers Local committees Governments (local, state, and federal) General public

Capital market stakeholders Shareholders Creditors Banks


1.2 DEFINING PROJECT SUCCESS In the previous section, we defined project success as the completion of an activity within the constraints of time, cost, and performance. This was the definition used for the past twenty years or so. Today, the definition of project success has been modified to include completion:

PMBOK® Guide, 5th Edition 2.2.3 Project Success

Within the allocated time period Within the budgeted cost At the proper performance or specification level With acceptance by the customer/user With minimum or mutually agreed upon scope changes Without disturbing the main work flow of the organization Without changing the corporate culture

The last three elements require further explanation. Very few projects are completed within the original scope of the project. Scope changes are inevitable and have the potential to destroy not only the morale on a project, but the entire project. Scope changes must be held to a minimum and those that are required must be approved by both the project manager and the customer/user.

Project managers must be willing to manage (and make concessions/trade-offs, if necessary) such that the company’s main work flow is not altered. Most project managers view themselves as self-employed entrepreneurs after project go-ahead, and would like to divorce their project from the operations of the parent organization. This is not always possible. The project manager must be willing to manage within the guidelines, policies, procedures, rules, and directives of the parent organization.

All corporations have corporate cultures, and even though each project may be inherently different, the project manager should not expect his assigned personnel to deviate from cultural norms. If the company has a cultural standard of openness and honesty when dealing with customers, then this cultural value should remain in place for all projects, regardless of who the customer/user is or how strong the project manager’s desire for success is.


As a final note, it should be understood that simply because a project is a success does not mean that the company as a whole is successful in its project management endeavors. Excellence in project management is defined as a continuous stream of successfully managed projects. Any project can be driven to success through formal authority and strong executive meddling. But in order for a continuous stream of successful projects to occur, there must exist a strong corporate commitment to project management, and this commitment must be visible.



Although many projects are completed successfully, at least in the eyes of the stakeholders, the final criteria from which success is measured may be different than the initial criteria because of trade-offs. As an example, the triangle shown in Figure 1–2 is referred to as the triple constraints on a project, namely time, cost, and performance, where performance can be scope, quality, or technology. These are considered to be the primary constraints and are often considered to be the criteria for a project against which success is measured.

Today, we realize that there can be multiple constraints on a project and, rather than use the terminology of the triple constraints, we focus our attention on competing constraints. Sometimes the constraints are referred to as primary and secondary constraints. There may be secondary factors such as risk, customer relations, image, and reputation that may cause us to deviate from our original success criteria of time, cost, and performance. This will be covered later in Section 2.10. These changes can occur any time during the life of a project and can then cause trade-offs in the triple constraints, thus requiring that changes be made to the success criteria. In an ideal situation, we would perform trade-offs on any or all of the competing constraints such that acceptable success criteria would still be met.

As an example, let’s assume that a project was initiated using the success criteria of the triple constraints as shown in Figure 1–3. Part way through the project, the environment changes, a new senior management team is brought in with their own agenda, or a corporate crisis occurs such that the credibility of the corporation is at stake. In such a case, the competing constraints shown in Figure 1–3 can be more important than the original triple constraints. For simplicity’s sake, a triangle was used for the competing constraints in Figure 1–3. However, there can be significantly more than three competing constraints in which some geometric shape other than a triangle might work best.

FIGURE 1–3. Competing constraints.


Secondary factors are also considered to be constraints and may be more important than the primary constraints. For example, years ago, in Disneyland and Disneyworld, the project managers designing and building the attractions at the theme parks had six constraints:

Time Cost Scope Safety Aesthetic value Quality

At Disney, the last three constraints of safety, aesthetic value, and quality were considered locked-in constraints that could not be altered during trade-offs. All trade-offs were made on time, cost, and scope. Some constraints simply cannot change while others may have flexibility.

Not all constraints are equal in importance. For example, in the initiation phase of a project, scope may be the critical factor and all trade-offs are made on time and cost. During the execution phase of the project, time and cost may become more important and then trade-offs will be made on scope. A more detailed discussion of trade-offs can be found in Chapter 16.



We have stated that the project manager must control company resources within time, cost, and performance. Most companies have six resources:

PMBOK® Guide, 5th Edition 1.7.2 Project Management Skills

Money Manpower Equipment Facilities Materials Information/technology

Actually, the project manager does not control any of these resources directly, except perhaps money (i.e., the project budget).1 Resources are controlled by the line managers, functional managers, or, as they are often called, resources managers. Project managers must, therefore, negotiate with line managers for all project resources. When we say that project managers control project resources, we really mean that they control those resources (which are temporarily loaned to them) through line managers.

Today, we have a new breed of project manager. Years ago, virtually all project managers were engineers with advanced degrees. These people had a command of technology rather than merely an understanding of technology. If the line manager believed that the project manager did in fact possess a command of technology, then the line manager would allow the assigned functional employees to take direction from the project manager. The result was that project managers were expected to manage people.

Most project managers today have an understanding of technology rather than a command of technology. As a result, the accountability for the success of the project is now viewed as shared accountability between the project manager and all affected line managers. With shared accountability, the line managers must now have a good understanding of project management, which is why more line


managers are now becoming PMP®S. Project managers are now expected to focus more so on managing the project’s deliverables rather than providing technical direction to the project team. Management of the assigned resources is more often than not a line function.

Another important fact is that project managers are treated as though they are managing part of a business rather than simply a project, and as such are expected to make sound business decisions as well as project decisions. Project managers must understand business principles. In the future, project managers may be expected to become externally certified by PMI® and internally certified by their company on the organization’s business processes.

In recent years, the rapid acceleration of technology has forced the project manager to become more business oriented. According to Hans Thamhain,

The new breed of business leaders must deal effectively with a broad spectrum of contemporary challenges that focus on time-to-market pressures, accelerating technologies, innovation, resource limitations, technical complexities, social and ethical issues, operational dynamics, cost, risks, and technology itself as summarized below:

High task complexities, risks and uncertainties Fast-changing markets, technology, regulations Intense competition, open global markets Resource constraint, tough performance requirements Tight, end-date-driven schedules Total project life-cycle considerations Complex organizations and cross-functional linkages Joint ventures, alliances and partnerships, need for dealing with different organizational cultures and values Complex business processes and stakeholder communities Need for continuous improvements, upgrades and enhancements Need for sophisticated people skills, ability to deal with organizational conflict, power, and politics Increasing impact of IT and e-business2

Dr. Thamhain further believes that there are paradigm shifts in technology- oriented business environments that will affect the business leaders of the future, including project managers. According to Dr. Thamhain, we are shifting from . . .

. . . mostly linear work processes to highly dynamic, organic and integrated management systems


. . . efficiency toward effectiveness

. . . executing projects to enterprise-wide project management

. . . managing information to fully utilizing information technology

. . . managerial control to self-direction and accountability

. . . managing technology as part of a functional speciality to management of technology as a distinct skill set and professional status3

Another example of the need for the project manager to become more actively involved in business aspects has been identified by Gary Heerkens. Heerkens provides several revelations of why business knowledge has become important, a few of which are4:

It really doesn’t matter how well you execute a project, if you’re working on the wrong project! There are times when spending more money on a project could be smart business—even if you exceed the original budget! There are times when spending more money on a project could be smart business—even if the project is delivered after the original deadline! Forcing the project team to agree to an unrealistic deadline may not be very smart, from a business standpoint. A portfolio of projects that all generate a positive cash flow may not represent an organization’s best opportunity for investment.

It should become obvious at this point that successful project management is strongly dependent on:

A good daily working relationship between the project manager and those line managers who directly assign resources to projects The ability of functional employees to report vertically to line managers at the same time that they report horizontally to one or more project managers

These two items become critical. In the first item, functional employees who are assigned to a project manager still take technical direction from their line managers. Second, employees who report to multiple managers will always favor the manager who controls their purse strings. Thus, most project managers appear always to be at the mercy of the line managers.

Classical management has often been defined as a process in which the manager does not necessarily perform things for himself, but accomplishes objectives through others in a group situation. This basic definition also applies to the project manager. In addition, a project manager must help himself. There is nobody else to help him.


If we take a close look at project management, we will see that the project manager actually works for the line managers, not vice versa. Many executives do not realize this. They have a tendency to put a halo around the head of the project manager and give him a bonus at project completion when, in fact, the credit should be shared with the line managers, who are continually pressured to make better use of their resources. The project manager is simply the agent through whom this is accomplished. So why do some companies glorify the project management position?

To illustrate the role of the project manager, consider the time, cost, and performance constraints shown in Figure 1–2. Many functional managers, if left alone, would recognize only the performance constraint: “Just give me another $50,000 and two more months, and I’ll give you the ideal technology.”

The project manager, as part of these communicating, coordinating, and integrating responsibilities, reminds the line managers that there are also time and cost constraints on the project. This is the starting point for better resource control.

Project managers depend on line managers. When the project manager gets in trouble, the only place he can go is to the line manager because additional resources are almost always required to alleviate the problems. When a line manager gets in trouble, he usually goes first to the project manager and requests either additional funding or some type of authorization for scope changes.

To illustrate this working relationship between the project and line managers, consider the following situation:

Project Manager (addressing the line manager): “I have a serious problem. I’m looking at a $150,000 cost overrun on my project and I need your help. I’d like you to do the same amount of work that you are currently scheduled for but in 3,000 fewer man-hours. Since your organization is burdened at $60/hour, this would more than compensate for the cost overrun.”

Line Manager: “Even if I could, why should I? You know that good line managers can always make work expand to meet budget. I’ll look over my manpower curves and let you know tomorrow.”

The following day . . .

Line Manager: “I’ve looked over my manpower curves and I have enough work to keep my people employed. I’ll give you back the 3,000 hours you need, but remember, you owe me one!”

Several months later . . .


Line Manager: “I’ve just seen the planning for your new project that’s supposed to start two months from now. You’ll need two people from my department. There are two employees that I’d like to use on your project. Unfortunately, these two people are available now. If I don’t pick these people up on your charge number right now, some other project might pick them up in the interim period, and they won’t be available when your project starts.”

Project Manager: “What you’re saying is that you want me to let you sandbag against one of my charge numbers, knowing that I really don’t need them.”

Line Manager: “That’s right. I’ll try to find other jobs (and charge numbers) for them to work on temporarily so that your project won’t be completely burdened. Remember, you owe me one.”

Project Manager: “O.K. I know that I owe you one, so I’ll do this for you. Does this make us even?”

Line Manager: “Not at all! But you’re going in the right direction.” When the project management–line management relationship begins to

deteriorate, the project almost always suffers. Executives must promote a good working relationship between line and project management. One of the most common ways of destroying this relationship is by asking, “Who contributes to profits—the line or project manager?” Project managers feel that they control all project profits because they control the budget. The line managers, on the other hand, argue that they must staff with appropriately budgeted-for personnel, supply the resources at the desired time, and supervise performance. Actually, both the vertical and horizontal lines contribute to profits. These types of conflicts can destroy the entire project management system.

The previous examples should indicate that project management is more behavioral than quantitative. Effective project management requires an understanding of:

Quantitative tools and techniques Organizational structures Organizational behavior

Most people understand the quantitative tools for planning, scheduling, and controlling work. It is imperative that project managers understand totally the operations of each line organization. In addition, project managers must understand their own job description, especially where their authority begins and ends. During an in-house seminar on engineering project management, the author asked one of the project engineers to provide a description of his job as a project engineer. During


the discussion that followed, several project managers and line managers said that there was a great deal of overlap between their job descriptions and that of the project engineer.

Organizational behavior is important because the functional employees at the interface position find themselves reporting to more than one boss—a line manager and one project manager for each project they are assigned to. Executives must provide proper training so functional employees can report effectively to multiple managers.



The project manager is responsible for coordinating and integrating activities across multiple, functional lines. The integration activities performed by the project manager include:

PMBOK® Guide, 5th Edition 2.2.1 Stakeholders

Chapter 4 Project Integration Management

Integrating the activities necessary to develop a project plan Integrating the activities necessary to execute the plan Integrating the activities necessary to make changes to the plan

These integrative responsibilities are shown in Figure 1–4 where the project manager must convert the inputs (i.e., resources) into outputs of products, services, and ultimately profits. In order to do this, the project manager needs strong communicative and interpersonal skills, must become familiar with the operations of each line organization, and must have knowledge of the technology being used.

FIGURE 1–4. Integration management.

An executive with a computer manufacturer stated that his company was looking externally for project managers. When asked if he expected candidates to have a command of computer technology, the executive remarked: “You give me an individual who has good communicative skills and interpersonal skills, and I’ll give that individual a job. I can teach people the technology and give them technical


experts to assist them in decision making. But I cannot teach somebody how to work with people.”

The project manager’s job is not an easy one. Project managers may have increasing responsibility, but very little authority. This lack of authority can force them to “negotiate” with upper-level management as well as functional management for control of company resources. They may often be treated as outsiders by the formal organization.

In the project environment, everything seems to revolve about the project manager. Although the project organization is a specialized, task-oriented entity, it cannot exist apart from the traditional structure of the organization. The project manager, therefore, must walk the fence between the two organizations. The term interface management is often used for this role, which can be described as managing relationships:

PMBOK® Guide, 5th Edition Chapter 4 Integration Management

Within the project team Between the project team and the functional organizations Between the project team and senior management Between the project team and the customer’s organization, whether an internal or external organization

To be effective as a project manager, an individual must have management as well as technical skills. Because engineers often consider their careers limited in the functional disciplines, they look toward project management and project engineering as career path opportunities. But becoming a manager entails learning about psychology, human behavior, organizational behavior, interpersonal relations, and communications. MBA programs have come to the rescue of individuals desiring the background to be effective project managers.

In the past, executives motivated and retained qualified personnel primarily with financial incentives. Today other ways are being used, such as a change in title or the promise of more challenging work. Perhaps the lowest turnover rates of any professions in the world are in project management and project engineering. In a project environment, the project managers and project engineers get to see their project through from “birth to death.” Being able to see the fruits of one’s efforts is highly rewarding. A senior project manager in a construction company commented


on why he never accepted a vice presidency that had been offered to him: “I can take my children and grandchildren into ten countries in the world and show them facilities that I have built as the project manager. What do I show my kids as an executive? The size of my office? My bank account? A stockholder’s report?”

The project manager is actually a general manager and gets to know the total operation of the company. In fact, project managers get to know more about the total operation of a company than most executives. That is why project management is often used as a training ground to prepare future general managers who will be capable of filling top management positions.



Assuming that the project and functional managers are not the same person, we can identify a specific role for the functional manager. There are three elements to this role:

PMBOK® Guide, 5th Edition Chapter 9 Human Resources Management

9.1.2 HR Planning: Tools and Techniques

The functional manager has the responsibility to define how the task will be done and where the task will be done (i.e., the technical criteria). The functional manager has the responsibility to provide sufficient resources to accomplish the objective within the project’s constraints (i.e., who will get the job done). The functional manager has the responsibility for the deliverable.

In other words, once the project manager identifies the requirements for the project (i.e., what work has to be done and the constraints), it becomes the line manager’s responsibility to identify the technical criteria. Except perhaps in R&D efforts, the line manager should be the recognized technical expert. If the line manager believes that certain technical portions of the project manager’s requirements are unsound, then the line manager has the right, by virtue of his expertise, to take exception and plead his case to a higher authority.

In Section 1.1 we stated that all resources (including personnel) are controlled by the line manager. The project manager has the right to request specific staff, but the final appointments rest with line managers. It helps if project managers understand the line manager’s problems:

Unlimited work requests (especially during competitive bidding) Predetermined deadlines All requests having a high priority Limited number of resources Limited availability of resources Unscheduled changes in the project plan


Unpredicted lack of progress Unplanned absence of resources Unplanned breakdown of resources Unplanned loss of resources Unplanned turnover of personnel

Only in a very few industries will the line manager be able to identify to the project manager in advance exactly what resources will be available when the project is scheduled to begin. It is not important for the project manager to have the best available resources. Functional managers should not commit to certain people’s availability. Rather, the functional manager should commit to achieving his portion of the deliverables within time, cost, and performance even if he has to use average or below-average personnel. If the project manager is unhappy with the assigned functional resources, then the project manager should closely track that portion of the project. Only if and when the project manager is convinced by the evidence that the assigned resources are unacceptable should he confront the line manager and demand better resources.

The fact that a project manager is assigned does not relieve the line manager of his functional responsibility to perform. If a functional manager assigns resources such that the constraints are not met, then both the project and functional managers will be blamed. One company is even considering evaluating line managers for merit increases and promotion based on how often they have lived up to their commitments to the project managers. Therefore, it is extremely valuable to everyone concerned to have all project commitments made visible to all.

Some companies carry the concept of commitments to extremes. An aircraft components manufacturer has a Commitment Department headed by a second-level manager. The function of the Commitment Department is to track how well the line managers keep their promises to the project managers. The department manager reports directly to the vice president of the division. In this company, line managers are extremely careful and cautious in making commitments, but do everything possible to meet deliverables. This same company has gone so far as to tell both project and line personnel that they run the risk of being discharged from the company for burying a problem rather than bringing the problem to the surface immediately.

In one automotive company, the tension between the project and line managers became so combative that it was having a serious impact on the performance and constraints of the project. The project managers argued that the line managers were not fulfilling their promises whereas the line managers were arguing that the project managers’ requirements were poorly defined. To alleviate the problem, a new form


was created which served as a contractual agreement between the project and the line managers who had to commit to the deliverables. This resulted in “shared accountability” for the project’s deliverables.

Project management is designed to have shared authority and responsibility between the project and line managers. Project managers plan, monitor, and control the project, whereas functional managers perform the work. Table 1–1 shows this shared responsibility. The one exception to Table 1–1 occurs when the project and line managers are the same person. This situation, which happens more often than not, creates a conflict of interest. If a line manager has to assign resources to six projects, one of which is under his direct control, he might save the best resources for his project. In this case, his project will be a success at the expense of all of the other projects. TABLE 1–1. DUAL RESPONSIBILITY

Responsibility Topic Project Manager Line Manager Rewards Give recommendation: Informal Provide rewards: Formal Direction Milestone (summary) Detailed Evaluation Summary Detailed MeasurementSummary Detailed Control Summary Detailed

The exact relationship between project and line managers is of paramount importance in project management where multiple-boss reporting prevails. Table 1–2 shows that the relationship between project and line managers is not always in balance and thus, of course, has a bearing on who exerts more influence over the assigned functional employees. TABLE 1–2. REPORTING RELATIONSHIPS


PMBOK® Guide, 5th Edition 2.1.3 Organizational Structure

PMBOK® Guide, 5th Edition 2.1.3 Organizational Structure



Once the line managers commit to the deliverables, it is the responsibility of the assigned functional employees to achieve the functional deliverables. For years the functional employees were called subordinates. Although this term still exists in textbooks, industry prefers to regard the assigned employees as “associates” rather than subordinates. The reason for this is that in project management the associates can be a higher pay grade than the project manager. The associates can even be a higher pay grade than their functional manager.

In most organizations, the assigned employees report on a “solid” line to their functional manager, even though they may be working on several projects simultaneously. The employees are usually a “dotted” line to the project but solid to their function. This places the employees in the often awkward position of reporting to multiple individuals. This situation is further complicated when the project manager has more technical knowledge than the line manager. This occurs during R&D projects.

The functional employee is expected to accomplish the following activities when assigned to projects:

Accept responsibility for accomplishing the assigned deliverables within the project’s constraints Complete the work at the earliest possible time Periodically inform both the project and line manager of the project’s status Bring problems to the surface quickly for resolution Share information with the rest of the project team



In a project environment there are new expectations of and for the executives, as well as a new interfacing role.5 Executives are expected to interface a project as follows:

In project planning and objective-setting In conflict resolution In priority-setting As project sponsor6

Executives are expected to interface with projects very closely at project initiation and planning, but to remain at a distance during execution unless needed for priority-setting and conflict resolution. One reason why executives “meddle” during project execution is that they are not getting accurate information from the project manager as to project status. If project managers provide executives with meaningful status reports, then the so-called meddling may be reduced or even eliminated.



Success in project management is like a three-legged stool. The first leg is the project manager, the second leg is the line manager, and the third leg is senior management. If any of the three legs fail, then even delicate balancing may not prevent the stool from toppling.

The critical node in project management is the project manager–line manager interface. At this interface, the project and line managers must view each other as equals and be willing to share authority, responsibility, and accountability. In excellently managed companies, project managers do not negotiate for resources but simply ask for the line manager’s commitment to executing his portion of the work within time, cost, and performance. Therefore, in excellent companies, it should not matter who the line manager assigns as long as the line manager lives up to his commitments.

Since the project and line managers are “equals,” senior management involvement is necessary to provide advice and guidance to the project manager, as well as to provide encouragement to the line managers to keep their promises. When executives act in this capacity, they assume the role of project sponsors, as shown in Figure 1–5,7 which also shows that sponsorship need not always be at the executive levels. The exact person appointed as the project sponsor is based on the dollar value of the project, the priority of the project, and who the customer is.

FIGURE 1–5. The project sponsor interface.


The ultimate objective of the project sponsor is to provide behind-the-scenes assistance to project personnel for projects both “internal” to the company, as well as “external,” as shown in Figure 1–5. Projects can still be successful without this commitment and support, as long as all work flows smoothly. But in time of crisis, having a “big brother” available as a possible sounding board will surely help.

PMBOK® Guide, 5th Edition 2.2.1 Project Stakeholders

When an executive is required to act as a project sponsor, then the executive has the responsibility to make effective and timely project decisions. To accomplish this, the executive needs timely, accurate, and complete data for such decisions. Keeping management informed serves this purpose, while the all-too-common practice of “stonewalling” prevents an executive from making effective project decisions.

It is not necessary for project sponsorship to remain exclusively at the executive levels. As companies mature in their understanding and implementation of project management, project sponsorship may be pushed down to middle-level management. Committee sponsorship is also possible.



All projects have the potential of getting into trouble but, in general, project management can work well as long as the project’s requirements do not impose severe pressure upon the project manager and a project sponsor exists as an ally to assist the project manager when trouble does appear. Unfortunately, in today’s chaotic environment, this pressure appears to be increasing because:

Companies are accepting high-risk and highly complex projects as a necessity for survival Customers are demanding low-volume, high-quality products with some degree of customization Project life cycles and new product development times are being compressed Enterprise environmental factors are having a greater impact on project execution Customers and stakeholders want to be more actively involved in the execution of projects Companies are developing strategic partnerships with suppliers, and each supplier can be at a different level of project management maturity Global competition has forced companies to accept projects from customers that are all at a different level of project management maturity and with different reporting requirements

These pressures tend to slow down the decision-making processes at a time when stakeholders want the projects and processes to be accelerated. One person, while acting as the project sponsor, may have neither the time nor capability to address all of these additional issues. The result will be a project slowdown and can occur because of:

The project manager being expected to make decisions in areas where he or she has limited knowledge The project manager hesitating to accept full accountability and ownership for the projects Excessive layers of management being superimposed on top of the project management organization Risk management being pushed up to higher levels in the organization hierarchy resulting in delayed decisions The project manager demonstrating questionable leadership ability on some of


the nontraditional projects

The problems resulting from these pressures may not be able to be resolved, at least easily and in a timely manner, by a single project sponsor. These problems can be resolved using effective project governance. Project governance is actually a framework by which decisions are made. Governance relates to decisions that define expectations, accountability, responsibility, the granting of power, or verifying performance. Governance relates to consistent management, cohesive policies, and processes and decision-making rights for a given area of responsibility. Governance enables efficient and effective decision-making to take place.

Every project can have different governance even if each project uses the same enterprise project management methodology. The governance function can operate as a separate process or as part of project management leadership. Governance is designed not to replace project decision-making but to prevent undesirable decisions from being made.

Historically, governance was provided by a single project sponsor. Today, governance is a committee and can include representatives from each stakeholder’s organization. Table 1-3 shows various governance approaches based upon the type of project team. The membership of the committee can change from project to project and industry to industry. The membership may also vary based upon the number of stakeholders and whether the project is for an internal or external client. On long-term projects, membership can change throughout the project. TABLE 1–3. TYPES OF PROJECT GOVERNANCE

Structure Description Governance Dispersed locally

Team members can be full-or part-time. They are still attached administratively to their functional area.

Usually a single person is acting as the sponsor but may be an internal committee based upon the project’s complexity.

Dispersed geographically

This is a virtual team. The project manager may never see some of the team members. Team members can be full-or part-time.

Usually governance by committee and can include stakeholder membership.

Colocated All of the team members are physically located in close proximity to the project manager. The project manager does not have any responsibility for wage and

Usually a single person acting as the sponsor.


salary administration. Projectized This is similar to a colocated team but

the project manager generally functions as a line manager and may have wage and salary responsibilities.

May be governance by committee based upon the size of the project and the number of strategic partners.

Governance on projects and programs sometimes fails because people confuse project governance with corporate governance. The result is that members of the committee are not sure what their role should be. Some of the major differences include:

Alignment: Corporate governance focuses on how well the portfolio of projects is aligned to and satisfies overall business objectives. Project governance focuses on ways to keep a project on track. Direction: Corporate governance provides strategic direction with a focus on how project success will satisfy corporate objectives. Project governance is more operation direction with decisions based upon the predefined parameters on project scope, time, cost, and functionality. Dashboards: Corporate governance dashboards are based upon financial, marketing, and sales metrics. Project governance dashboards have operations metrics on time, cost, scope, quality, action items, risks, and deliverables. Membership: Corporate governance committees are composed of the seniormost levels of management. Project government membership may include some membership from middle management.

Another reason why failure may occur is when members of the project or program governance group do not understand project or program management. This can lead to micromanagement by the governance committee. There is always the question of what decisions must be made by the governance committee and what decisions the project manager can make. In general, the project manager should have the authority for decisions related to actions necessary to maintain the baselines. Governance committees must have the authority to approve scope changes above a certain dollar value and to make decisions necessary to align the project to corporate objectives and strategy.



The major responsibility of the project manager is planning. If project planning is performed correctly, then it is conceivable that the project manager will work himself out of a job because the project can run itself. This rarely happens, however. Few projects are ever completed without some conflict or trade-offs for the project manager to resolve.

PMBOK® Guide, 5th Edition Chapter 9 Project Human Resources Management

In most cases, the project manager provides overall or summary definitions of the work to be accomplished, but the line managers (the true experts) do the detailed planning. Although project managers cannot control or assign line resources, they must make sure that the resources are adequate and scheduled to satisfy the needs of the project, not vice versa. As the architect of the project plan, the project manager must provide:

Complete task definitions Resource requirement definitions (possibly skill levels) Major timetable milestones Definition of end-item quality and reliability requirements The basis for performance measurement Definition of project success

These factors, if properly established, result in:

Assurance that functional units will understand their total responsibilities toward achieving project needs. Assurance that problems resulting from scheduling and allocation of critical resources are known beforehand. Early identification of problems that may jeopardize successful project completion so that effective corrective action and replanning can be taken to prevent or resolve the problems.

Project managers are responsible for project administration and, therefore, must have the right to establish their own policies, procedures, rules, guidelines, and


directives—provided these policies, guidelines, and so on, conform to overall company policy. Companies with mature project management structures usually have rather loose company guidelines, so project managers have some degree of flexibility in how to control their projects. However, project managers cannot make any promises to a functional employee concerning:

Promotion Grade Salary Bonus Overtime Responsibility Future work assignments

These seven items can be administered by line managers only, but the project manager can have indirect involvement by telling the line manager how well an employee is doing (and putting it in writing), requesting overtime because the project budget will permit it, and offering individuals the opportunity to perform work above their current pay grade. However, such work above pay grade can cause severe managerial headaches if not coordinated with the line manager, because the individual will expect immediate rewards if he performs well.

Establishing project administrative requirements is part of project planning. Executives must either work with the project managers at project initiation or act as resources later. Improper project administrative planning can create a situation that requires:

A continuous revision and/or establishment of company and/or project policies, procedures, and directives A continuous shifting in organizational responsibility and possible unnecessary restructuring A need for staff to acquire new knowledge and skills

If these situations occur simultaneously on several projects, there can be confusion throughout the organization.


1.12 PROJECT CHAMPIONS Corporations encourage employees to think up new ideas that, if approved by the corporation, will generate monetary and nonmonetary rewards for the idea generator. One such reward is naming the individual the “project champion.” Unfortunately, the project champion often becomes the project manager, and, although the idea was technically sound, the project fails.

Table 1–4 provides a comparison between project managers and project champions. It shows that the project champions may become so attached to the technical side of the project that they become derelict in their administrative responsibilities. Perhaps the project champion might function best as a project engineer rather than the project manager. Table 1–4. PROJECT MANAGERS VERSUS PROJECT CHAMPIONS

Project Managers Project Champions Prefer to work in groups Committed to their managerial and technical responsibilities Committed to technology Seek to achieve the objective Are willing to take risks Seek to exceed the objective Think in terms of short time spans Manage people Are committed to and pursue material values

Prefer working individually Committed to the corporation Committed to the profession Are unwilling to take risks; try to test everything Seek what is possible Seek perfection Think in terms of long time spans Manage things Are committed to and pursue intellectual values

This comparison does not mean that technically oriented project managers- champions will fail. Rather, it implies that the selection of the “proper” project manager should be based on all facets of the project.



Project management is often recognized only as a high-salaried, highly challenging position whereby the project manager receives excellent training in general management.

For projects that are done for external sources, the project manager is first viewed as starting out with a pot of gold and then as having to manage the project so that sufficient profits will be made for the stockholders. If the project manager performs well, the project will be successful. But the personal cost may be high for the project manager.

There are severe risks that are not always evident. Some project management positions may require a sixty-hour workweek and extensive time away from home. When a project manager begins to fall in love more with the job than with his family, the result is usually lack of friends, a poor home life, and possibly divorce. During the birth of the missile and space programs, companies estimated that the divorce rate among project managers and project engineers was probably twice the national average. Accepting a project management assignment is not always compatible with raising a young family. Characteristics of the workaholic project manager include:

Every Friday he thinks that there are only two more working days until Monday. At 5:00 P.M. he considers the working day only half over. He has no time to rest or relax. He always takes work home from the office. He takes work with him on vacations.



ORGANIZATIONS On the micro level, virtually all organizations are either marketing-, engineering-, or manufacturing-driven. But on the macro level, organizations are either project-or non–project-driven. The PMBOK® Guide uses the terms project-based and non– project-based, whereas in this text the terms project-driven and non–project- driven or operational-driven are used. In a project-driven organization, such as construction or aerospace, all work is characterized through projects, with each project as a separate cost center having its own profit-and-loss statement. The total profit to the corporation is simply the summation of the profits on all projects. In a project-driven organization, everything centers around the projects.

PMBOK® Guide, 5th Edition 2.0 Organizational Influences

1.5.2 Organizations and Project Management

In the non–project-driven organization, such as low-technology manufacturing, profit and loss are measured on vertical or functional lines. In this type of organization, projects exist merely to support the product lines or functional lines. Priority resources are assigned to the revenue-producing functional line activities rather than the projects.

Project management in a non–project-driven organization is generally more difficult for these reasons:

Projects may be few and far between. Not all projects have the same project management requirements, and therefore they cannot be managed identically. This difficulty results from poor understanding of project management and a reluctance of companies to invest in proper training. Executives do not have sufficient time to manage projects themselves, yet refuse to delegate authority. Projects tend to be delayed because approvals most often follow the vertical


chain of command. As a result, project work stays too long in functional departments. Because project staffing is on a “local” basis, only a portion of the organization understands project management and sees the system in action. There is heavy dependence on subcontractors and outside agencies for project management expertise.

Non–project-driven organizations may also have a steady stream of projects, all of which are usually designed to enhance manufacturing operations. Some projects may be customer-requested, such as:

The introduction of statistical dimensioning concepts to improve process control The introduction of process changes to enhance the final product The introduction of process change concepts to enhance product reliability

If these changes are not identified as specific projects, the result can be:

Poorly defined responsibility areas within the organization Poor communications, both internal and external to the organization Slow implementation A lack of a cost-tracking system for implementation Poorly defined performance criteria

Figure 1–6 shows the tip-of-the-iceberg syndrome, which can occur in all types of organizations but is most common in non–project-driven organizations. On the surface, all we see is a lack of authority for the project manager. But beneath the surface we see the causes; there is excessive meddling due to lack of understanding of project management, which, in turn, resulted from an inability to recognize the need for proper training.

FIGURE 1–6. The tip-of-the-iceberg syndrome for matrix implementation.


In the previous sections we stated that project management could be handled on either a formal or an informal basis. As can be seen from Figure 1–7, informal project management most often appears in non–project-driven organizations. It is doubtful that informal project management would work in a project-driven organization where the project manager has profit-and-loss responsibility.

FIGURE 1–7. Decision-making influence.




Getting new projects is the lifeblood of any project-oriented business. The practices of the project-oriented company are, however, substantially different from traditional product businesses and require highly specialized and disciplined team efforts among marketing, technical, and operating personnel, plus significant customer involvement. Projects are different from products in many respects, especially marketing. Marketing projects requires the ability to identify, pursue, and capture one-of-a-kind business opportunities, and is characterized by:

PMBOK® Guide, 5th Edition 1.4.3 Projects and Strategic Planning

A systematic effort. A systematic approach is usually required to develop a new program lead into an actual contract. The project acquisition effort is often highly integrated with ongoing programs and involves key personnel from both the potential customer and the performing organization. Custom design. While traditional businesses provide standard products and services for a variety of applications and customers, projects are custom- designed items to fit specific requirements of a single-customer community. Project life cycle. Project-oriented businesses have a well-defined beginning and end and are not self-perpetuating. Business must be generated on a project-by-project basis rather than by creating demand for a standard product or service. Marketing phase. Long lead times often exist between the product definition, start-up, and completion phases of a project. Risks. There are risks, especially in the research, design, and production of programs. The program manager not only has to integrate the multidisciplinary tasks and project elements within budget and schedule constraints, but also has to manage inventions and technology while working with a variety of technically oriented prima donnas. The technical capability to perform. Technical ability is critical to the


successful pursuit and acquisition of a new project. In spite of the risks and problems, profits on projects are usually very low in

comparison with commerical business practices. One may wonder why companies pursue project businesses. Clearly, there are many reasons why projects are good business:

Although immediate profits (as a percentage of sales) are usually small, the return on capital investment is often very attractive. Progress payment practices keep inventories and receivables to a minimum and enable companies to undertake projects many times larger in value than the assets of the total company. Once a contract has been secured and is being managed properly, the project may be of relatively low financial risk to the company. The company has little additional selling expenditure and has a predictable market over the life cycle of the project. Project business must be viewed from a broader perspective than motivation for immediate profits. Projects provide an opportunity to develop the company’s technical capabilities and build an experience base for future business growth. Winning one large project often provides attractive growth potential, such as (1) growth with the project via additions and changes; (2) follow-on work; (3) spare parts, maintenance, and training; and (4) being able to compete effectively in the next project phase, such as nurturing a study program into a development contract and finally a production contract.

Customers come in various forms and sizes. For small and medium businesses partic-ularly, it is a challenge to compete for contracts from large industrial or governmental organizations. Although the contract to a firm may be relatively small, it is often subcontracted via a larger organization. Selling to such a diversified heterogeneous customer is a marketing challenge that requires a highly sophisticated and disciplined approach.

The first step in a new business development effort is to define the market to be pursued. The market segment for a new program opportunity is normally in an area of relevant past experience, technical capability, and customer involvement. Good marketers in the program business have to think as product line managers. They have to understand all dimensions of the business and be able to define and pursue market objectives that are consistent with the capabilities of their organizations.

Program businesses operate in an opportunity-driven market. It is a common mistake, however, to believe that these markets are unpredictable and


unmanageable. Market planning and strategizing is important. New project opportunities develop over periods of time, sometimes years for larger projects. These developments must be properly tracked and cultivated to form the bases for management actions such as (1) bid decisions, (2) resource commitment, (3) technical readiness, and (4) effective customer liaison. This strategy of winning new business is supported by systematic, disciplined approaches, which are illustrated in Figure 1–8.

FIGURE 1–8. The phases of winning new contracts in project-oriented businesses.



The principles of project management can be applied to any type of project and to any industry. However, the relative degree of importance of these principles can vary from project to project and industry to industry. Table 1–5 shows a brief comparison of certain industries/projects. TABLE 1–5. CLASSIFICATION OF PROJECTS/CHARACTERISTICS

For those industries that are project-driven, such as aerospace and large construction, the high dollar value of the projects mandates a much more rigorous project management approach. For non–project-driven industries, projects may be managed more informally than formally, especially if no immediate profit is involved. Informal project management is similar to formal project management but paperwork requirements are kept at a minimum.



The success of project management could easily depend on the location of the project manager within the organization. Two questions must be answered:

What salary should the project manager earn? To whom should the project manager report?

Figure 1–9 shows a typical organizational hierarchy (the numbers represent pay grades). Ideally, the project manager should be at the same pay grade as the individuals with whom he must negotiate on a daily basis. Using this criterion, and assuming that the project manager interfaces at the department manager level, the project manager should earn a salary between grades 20 and 25. A project manager earning substantially more or less money than the line manager will usually create conflict. The ultimate reporting location of the project manager (and perhaps his salary) is heavily dependent on whether the organization is project-or non–project- driven, and whether the project manager is responsible for profit or loss.

FIGURE 1–9. Organizational hierarchy.


PMBOK® Guide, 5th Edition 2.0 Organizational Influences

Project managers can end up reporting both high and low in an organization during the life cycle of the project. During the planning phase of the project, the project manager may report high, whereas during implementation, he may report low. Likewise, the positioning of the project manager may be dependent on the risk of the project, the size of the project, or the customer.

Finally, it should be noted that even if the project manager reports low, he should still have the right to interface with top executives during project planning although there may be two or more reporting levels between the project manager and executives. At the opposite end of the spectrum, the project manager should have the right to go directly into the depths of the organization instead of having to follow the chain of command downward, especially during planning. As an example, see Figure 1–10. The project manager had two weeks to plan and price out a small project. Most of the work was to be accomplished within one section.


The project manager was told that all requests for work, even estimating, had to follow the chain of command from the executive down through the section supervisor. By the time the request was received by the section supervisor, twelve of the fourteen days were gone, and only an order-of-magnitude estimate was possible. The lesson to be learned here is:

FIGURE 1–10. The organizational hierarchy: for planning and/or approval?

The chain of command should be used for approving projects, not planning them.

Forcing the project manager to use the chain of command (in either direction) for project planning can result in a great deal of unproductive time and idle time cost.



Many companies, especially those with project-driven organizations, have differing views of project management. Some people view project management as an excellent means to achieving objectives, while others view it as a threat. In project- driven organizations, there are three career paths that lead to executive management:

Through project management Through project engineering Through line management

In project-driven organizations, the fast-track position is in project management, whereas in a non–project-driven organization, it would be line management. Even though line managers support the project management approach, they resent the project manager because of his promotions and top-level visibility. In one construction company, a department manager was told that he had no chance for promotion above his present department manager position unless he went into project management or project engineering where he could get to know the operation of the whole company. A second construction company requires that individuals aspiring to become a department manager first spend a “tour of duty” as an assistant project manager or project engineer.

Executives may dislike project managers because more authority and control must be delegated. However, once executives realize that it is a sound business practice, it becomes important, as shown in the following letter8:

In order to sense and react quickly and to insure rapid decision-making, lines of communication should be the shortest possible between all levels of the organization. People with the most knowledge must be available at the source of the problem, and they must have decision-making authority and responsibility. Meaningful data must be available on a timely basis and the organization must be structured to produce this environment.

In the aerospace industry, it is a serious weakness to be tied to fixed organization charts, plans, and procedures. With regard to organization, we successfully married the project concept of management with a central function concept. What we came up with is an organization within an organization—one to ramrod the day-to-day problems; the other to provide support for existing projects and to anticipate the requirements for future projects.


The project system is essential in getting complicated jobs done well and on time, but it solves only part of the management problem. When you have your nose to the project grindstone, you are often not in a position to see much beyond that project. This is where the central functional organization comes in. My experience has been that you need this central organization to give you depth, flexibility, and perspective. Together, the two parts permit you to see both the woods and the trees.

Initiative is essential at all levels of the organization. We try to press the level of decision to the lowest possible rung of the managerial ladder. This type of decision-making provides motivation and permits recognition for the individual and the group at all levels. It stimulates action and breeds dedication.

With this kind of encouragement, the organization can become a live thing— sensitive to problems and able to move in on them with much more speed and understanding than would be normally expected in a large operation. In this way, we can regroup or reorganize easily as situations dictate and can quickly focus on a “crisis.” In this industry a company must always be able to reorient itself to meet new objectives. In a more staid, old-line organization, frequent reorientation usually accompanied by a corresponding shift of people’s activities, could be most upsetting. However, in the aerospace industry, we must be prepared for change. The entire picture is one of change.



For several decades, public-sector projects were managed by contractors whose primary objective was a profit motive. Many times, contractors would make trade- offs and accompanying decisions just to support the profit motive. At the end of the project, the contractor would provide the public-sector agency with a deliverable, but the contractor would walk away with the project management best practices and lessons learned.

Today, public-sector agencies are requesting the contractor to share with them all project management intellectual property accumulated during the course of the project. Also, more agencies are becoming experienced in project management to the point where the projects are managed with internal personnel rather than contractors.

As more and more government agencies adopt the project management approach, we discover that public-sector projects can be more complex than private-sector projects and more difficult to manage. According to David Wirick9:

THE CHALLENGES OF PUBLIC- SECTOR PROJECT MANAGEMENT Private-sector project managers like to assume that their work is more demanding than projects in the public sector. They assume that their projects are more complex, subject to tougher management oversight, and mandated to move at faster speeds. Although private-sector projects can be tough, in many cases, it is easier to accomplish results in the private sector than in the public sector.

Public-sector projects can be more difficult than many private-sector projects because they:

Operate in an environment of often-conflicting goals and outcome Involve many layers of stakeholders with varied interests Must placate political interests and operate under media scrutiny Are allowed little tolerance for failure


Operate in organizations that often have a difficult time identifying outcome measures and missions Are required to be performed under constraints imposed by administrative rules and often-cumbersome policies and processes that can delay projects and consume project resources Require the cooperation and performance of agencies outside of the project team for purchasing, hiring, and other functions Must make do with existing staff resources more often than private-sector projects because of civil-service protections and hiring systems Are performed in organizations that may not be comfortable or used to directed action and project success Are performed in an environment that may include political adversaries

If these challenges were not tough enough, because of their ability to push the burden of paying for projects to future generations, public-sector projects have a reach deep into the future. That introduces the challenges of serving the needs of stakeholders who are not yet “at the table” and whose interests might be difficult to identify. Some also cite the relative lack of project management maturity in public organizations as a challenge of public-sector projects.

In addition to these complications, public projects are often more complex than those in the private sector. For some projects, the outcome can be defined at the beginning of the project. Construction projects are one example. For other projects, the desired outcome can only be defined as the project progresses. Examples of those are organizational change projects and complex information technology projects. Although the first type of project can be difficult and require detailed planning and implementation, the second type, those whose outcomes are determined over the course of the project, are regarded as more challenging. They require more interaction with stakeholders and more openness to factors outside of the control of the project team.

Because of the multiple stakeholders involved in public-sector projects, the types of projects the public sector engages in, and the difficulty of identifying measurable outcomes in the public sector, more public-sector projects are likely to be of the latter variety and more difficult. Project complexity and tools for managing complexity and chaos will be discussed later in this book.

As a result of the distinguishing characteristics of public-sector organizations, public-sector projects require the management, not only of the


project team, but of an entire community. Little is accomplished in the public sector by lone individuals or even by teams working in isolation. Instead, public-sector projects engage broad groups of stakeholders who not only have a stake in the project but also have a voice and an opportunity to influence outcomes. In public-sector projects, even though the project manager may be ultimately accountable, governance of the project and credit for successes must be shared.

The good news for public-sector project managers is that the community of stakeholders, which may seem to be a burden, can also be an opportunity and a source of resources and support. Many of those stakeholders stand ready to provide help to the project manager as he or she attempts to navigate the constraints affecting the project. Others can be enlisted to support the project, and their authority can make the difference between project success and failure.

THE COMING STORM In addition to the existing challenges of public-sector projects listed previously, some factors will place soon more stress on public-sector organizations and demand even more emphasis on solid project management. Some of the emerging challenges for public-sector organizations will include:

Modest or stagnant economic growth Globalization and the loss of the industrial revenue base and, increasingly, the service-sector revenue base A decline in real wages and pressures for tax reform Private-sector practices that pass the corporate safety net back to individuals, who may then look to government for such essential security mechanisms as health coverage Difficulty in passing on the need for government revenue to taxpayers and a general loss of confidence in government Structural limitations on revenue generation, such as Proposition 13 and property tax indexing The redirection of scarce public revenues to homeland security and defense without the imposition of war taxes The erosion of public-sector income as entitlement programs drain revenues in response to an aging population An age imbalance, with fewer workers in the workforce to support an


expanding number of retirees and children Longer life expectancy, which further burdens entitlement and health programs Increasing costs of health care well beyond the level of inflation Long-delayed investments in our national infrastructure, including roads, bridges and water systems

In combination, these factors constitute a looming storm that will require us to question our assumptions about government operations and services. Doing far more with much less will require new thinking about how government performs its work. It will require more innovation than the development of new services. It will take radical rethinking of what government does and how it goes about getting it done.

WHY DO PUBLIC-SECTOR PROJECTS FAIL? Public-sector projects fail for all of the normal reasons that any project fails. Projects in all sectors of the economy fail because they:

Fail to identify the needs of customers or users of the product or the project Create overly optimistic schedules and fail to anticipate the impact of late deliverables Do not get the resources necessary to complete the project Do not devote enough time to project planning Are subject to changing management priorities Employ technology that does not work as expected Do not get good performance from vendors Get overwhelmed by competing projects and do not apply solid project prioritization Do not adequately identify, analyze, and address project risks Make assumptions that are not validated and agreed to Dissolve in the face of conflict among stakeholders Get overtaken by unexpected events [More will be said in Chapter 14 about the challenges of managing uncertainty and chaos.] Do not apply solid and repeatable project management methods Do not have the benefit of an experienced project manager Do not engage and involve stakeholders throughout the project


Do not identify lessons learned from prior projects Define an overly broad project scope that cannot be well-defined

In addition, public-sector projects can fail for a set of reasons related to the unique character of public-sector projects. In that regard, they:

Run afoul of political processes Lack the necessary resources because of requirements to use existing staff rather than to contract for the right expertise Are constrained by civil-service rules that limit assignment of activities to project staff Lose budget authorization Lose support at the change of administration due to electoral cycles Are overwhelmed by administrative rules and required processes for purchasing and hiring Fail to satisfy oversight agencies Adopt overly conservative approaches due to the contentious nature of the project environment Are victimized by suboptimal vendors who have been selected by purchasing processes that are overly focused on costs or that can be influenced by factors that are not relevant to performance Are compromised by the bias of public-sector managers and staff toward compliance over performance Fail to identify project goals given the wide array of project stakeholders in the public sector and the challenges of identifying public-sector goals and metrics for success



As the world marketplace begins to accept project management and recognizes the need for experienced project managers, more opportunities have become available for people aspiring to become project managers. The need is there and growing. According to Thomas Grisham10:

International business and project management practice have converged in the last 10 years. Organizations are tending toward hiring multitalented people who are self-motivated, intelligent, and willing to take responsibility. Some of the reasons are:

The need for leaner and flatter organizations to reduce cost The need for leadership skills throughout the organizational food chain from top to bottom—lead one day, follow the next, and be comfortable personally in either role The need for knowledge workers throughout the organization Globalization and the need to improve quality while reducing cost Kaizen to keep quality high while reducing cost Diversity

Years ago, companies had three pay grades for project managers; junior project managers, project managers, and senior project managers. Today, we are adding in a fourth pay grade, namely global project managers. Unfortunately, there may be additional skills needed to be a global project manager. Some of the additional skills include managing virtual teams, understanding global cultural differences, working in an environment where politics can dictate many of the decisions, and working under committee governance rather than a single sponsor.



In the past decade, organizations have become more aware of the fact that America’s most formidable weapon is its manufacturing ability, and yet more and more work seems to be departing for Southeast Asia and the Far East. If America and other countries are to remain competitive, then survival may depend on the manufacturing of a quality product and a rapid introduction into the marketplace. Today, companies are under tremendous pressure to rapidly introduce new products because product life cycles are becoming shorter. As a result, organizations no longer have the luxury of performing work in series.

Concurrent or simultaneous engineering is an attempt to accomplish work in parallel rather than in series. This requires that marketing, R&D, engineering, and production are all actively involved in the early project phases and making plans even before the product design has been finalized. This concept of current engineering will accelerate product development, but it does come with serious and potentially costly risks, the largest one being the cost of rework.

Almost everyone agrees that the best way to reduce or minimize risks is for the organization to plan better. Since project management is one of the best methodologies to foster better planning, it is little wonder that more organizations are accepting project management as a way of life.


1.22 ADDED VALUE People often wonder what project managers do with their time once the project plan is created. While it is true that they monitor and control the work being performed, they also look for ways to add value to the project. Added value can be defined as incremental improvements to the deliverable of a project such that performance is improved or a significant business advantage is obtained, and the client is willing to pay for this difference. Looking for added-value opportunities that benefit the client is a good approach whereas looking for “fictitious” added- value opportunities just to increase the cost of the project is bad.

In certain projects, such as in new product development in the pharmaceutical industry, project managers must be aware of opportunities. According to Trevor Brown and Stephen Allport11:

The critical issues facing companies which understand the importance of building customer value into new products is how to incorporate this into the development process and invest appropriately to fully understand the opportunity. In practice, project teams have more opportunity than is generally realized to add, enhance, or diminish value in each of the four perspectives . . . corporate, prescriber, payer and patient. The tools at the project teams” disposal to enhance customer value include challenging and improving established processes, adopting a value-directed approach to the management of development projects, and taking advantage of tried and tested methodologies for understanding product value.

Project managers generally do not take enough time in evaluating opportunities. In such a case, either the scope change is disapproved or the scope change is allowed and suddenly the project is at risk when additional information is discovered. Opportunities must be fully understood.



CERTIFICATION EXAM This section is applicable as a review of the principles or to support an understanding of the knowledge areas and domain groups in the PMBOK® Guide. This chapter addresses some material from the PMBOK® Guide knowledge areas:

Integration Management Scope Management Human Resources Management

Understanding the following principles is beneficial if the reader is using this textbook together with the PMBOK® Guide to study for the PMP® Certification Exam:

Definition of a project Definition of the competing constraints Definition of successful execution of a project Benefits of using project management Responsibility of the project manager in dealing with stakeholders and how stakeholders can affect the outcome of the project Responsibility of the project manager in meeting deliverables The fact that the project manager is ultimately accountable for the success of the project Responsibilities of the line manager during project management staffing and execution Role of the executive sponsor and champion Difference between a project-driven and non–project-driven organization

Be sure to review the appropriate sections of the PMBOK® Guide and the glossary of terms at the end of the PMBOK® Guide.

Some multiple-choice questions are provided in this section as a review of the material. There are other sources for practice review questions that are specific for the PMP® Exam, namely:


Project Management IQ® from the International Institute for Learning ( PMP® Exam Practice Test and Study Guide, by J. LeRoy Ward, PMP, editor PMP® Exam Prep, by Rita Mulcahy Q & As for the PMBOK® Guide, Project Management Institute

The more practice questions reviewed, the better prepared the reader will be for the PMP® Certification Exam.

In Appendix C, there are a series of mini–case studies called Dorale Products that reviews some of the concepts. The minicases can be used as either an introduction to the chapter or as a review of the chapter material. These mini–case studies were placed in Appendix C because they can be used for several chapters in the text. For this chapter, the following are applicable:

Dorale Products (A) [Integration and Scope Management] Dorale Products (B) [Integration and Scope Management]

Answers to the Dorale Products minicases appear in Appendix D.

The following multiple-choice questions will be helpful in reviewing the above principles:

1. The traditional competing constraints on a project are:

A. Time, cost, and profitability

B. Resources required, sponsorship involvement, and funding

C. Time, cost, and quality and/or scope

D. Calendar dates, facilities available, and funding

2. Which of the following is not part of the definition of a project?

A. Repetitive activities

B. Constraints

C. Consumption of resources

D. A well-defined objective

3. Which of the following is usually not part of the criteria for project success?

A. Customer satisfaction

B. Customer acceptance


C. Meeting at least 75 percent of specification requirements.

D. Meeting the triple-constraint requirements

4. Which of the following is generally not a benefit achieved from using project management?

A. Flexibility in the project’s end date

B. Improved risk management

C. Improved estimating

D. Tracking of projects

5. The person responsible for assigning the resources to a project is most often:

A. The project manager

B. The Human Resources Department

C. The line manager

D. The executive sponsor

6. Conflicts between the project and line managers are most often resolved by:

A. The assistant project manager for conflicts

B. The project sponsor

C. The executive steering committee

D. The Human Resources Department

7. Your company does only projects. If the projects performed by your company are for customers external to your company and a profit criterion exists on the project, then your organization is most likely:

A. Project-driven

B. Non–project-driven

C. A hybrid

D. All of the above are possible based upon the size of the profit margin.



2. A

3. C

4. A

5. C

6. B

7. A


PROBLEMS 1–1 In the project environment, cause-and-effect relationships are almost always readily apparent. Good project management will examine the effect in order to better understand the cause and possibly prevent it from occurring again. Below are causes and effects. For each one of the effects, select the possible cause or causes that may have existed to create this situation:


1. Late completion of activities

2. Cost overruns

3. Substandard performance

4. High turnover in project staff

5. High turnover in functional staff

6. Two functional departments performing the same activities on one project


a. Top management not recognizing this activity as a project

b. Too many projects going on at one time

c. Impossible schedule commitments

d. No functional input into the planning phase

e. No one person responsible for the total project

f. Poor control of design changes

g. Poor control of customer changes

h. Poor understanding of the project manager’s job

i. Wrong person assigned as project manager

j. No integrated planning and control

k. Company resources are overcommitted

l. Unrealistic planning and scheduling

m. No project cost accounting ability

n. Conflicting project priorities

o. Poorly organized project office

(This problem has been adapted from Russell D. Archibald, Managing High-Technology Programs and Projects, New York: John Wiley, 1976, p. 10.)

1–2 Because of the individuality of people, there always exist differing views of what management is all about. Below are lists of possible perspectives and a selected group of organizational members. For each individual select the possible ways that this individual might view project management:


1. Upper-level manager

2. Project manager


3. Functional manager

4. Project team member

5. Scientist and consultant


a. A threat to established authority

b. A source for future general managers

c. A cause of unwanted change in ongoing procedures

d. A means to an end

e. A significant market for their services

f. A place to build an empire

g. A necessary evil to traditional management

h. An opportunity for growth and advancement

i. A better way to motivate people toward an objective

j. A source of frustration in authority

k. A way of introducing controlled changes

l. An area of research

m. A vehicle for introducing creativity

n. A means of coordinating functional units

o. A means of deep satisfaction

p. A way of life

1–3 Consider an organization that is composed of upper-level managers, middle-and lower-level managers, and laborers. Which of the groups should have first insight that an organizational restructuring toward project management may be necessary?

1–4 How would you defend the statement that a project manager must help himself?

1–5 Will project management work in all companies? If not, identify those companies in which project management may not be applicable and defend your answers.

1–6 In a project organization, do you think that there might be a conflict in opinions over whether the project managers or functional managers contribute to profits?

1–7 What attributes should a project manager have? Can an individual be trained to become a project manager? If a company were changing over to a project management structure, would it be better to promote and train from within or hire from the outside?

1–8 Do you think that functional managers would make good project managers?

1–9 What types of projects might be more appropriate for functional management rather than project management, and vice versa?

1–10 Do you think that there would be a shift in the relative degree of importance of the following terms in a project management environment as opposed to a traditional management environment?

a. Time management

b. Communications

c. Motivation


1–11 Classical management has often been defined as a process in which the manager does not necessarily perform things for himself, but accomplishes objectives through others in a group situation. Does this definition also apply to project management?

1–12 Which of the following are basic characteristics of project management?

a. Customer problem

b. Responsibility identification

c. Systems approach to decision-making

d. Adaptation to a changing environment

e. Multidisciplinary activity in a finite time duration

f. Horizontal and vertical organizational relationships

1–13 Project managers are usually dedicated and committed to the project. Who should be “looking over the shoulder” of the project manager to make sure that the work and requests are also in the best interest of the company? Does your answer depend on the priority of the project?

1–14 Is project management designed to transfer power from the line managers to the project manager?

1–15 Explain how career paths and career growth can differ between project-driven and non– project-driven organizations. In each organization, is the career path fastest in project management, project engineering, or line management?

1–16 Explain how the following statement can have a bearing on who is ultimately selected as part of the project team:

“There comes a time in the life cycle of all projects when one must shoot the design engineers and begin production.”

1–17 How do you handle a situation where the project manager has become a generalist, but still thinks that he is an expert?


For 85 years, the Williams Machine Tool Company had provided quality products to its clients, becoming the third largest U.S.-based machine tool company by 1990. The company was highly profitable and had an extremely low employee turnover rate. Pay and benefits were excellent.

Between 1980 and 1990, the company’s profits soared to record levels. The company’s success was due to one product line of standard manufacturing machine tools. Williams spent most of its time and effort looking for ways to improve its bread-and-butter product line rather than to develop new products. The product line was so successful that


companies were willing to modify their production lines around these machine tools rather than asking Williams for major modifications to the machine tools.

By 1990, Williams Company was extremely complacent, expecting this phenomenal success with one product line to continue for 20 to 25 more years. The recession of the early 1990s forced management to realign their thinking. Cutbacks in production had decreased the demand for the standard machine tools. More and more customers were asking for either major modifications to the standard machine tools or a completely new product design.

The marketplace was changing and senior management recognized that a new strategic focus was necessary. However, lower-level management and the work force, especially engineering, were strongly resisting a change. The employees, many of them with over 20 years of employment at Williams Company, refused to recognize the need for this change in the belief that the glory days of yore would return at the end of the recession.

By 1995, the recession had been over for at least two years yet Williams Company had no new product lines. Revenue was down, sales for the standard product (with and without modifications) were decreasing, and the employees were still resisting change. Layoffs were imminent.

In 1996, the company was sold to Crock Engineering. Crock had an experienced machine tool division of its own and understood the machine tool business. Williams Company was allowed to operate as a separate entity from 1995 to 1996. By 1996, red ink had appeared on the Williams Company balance sheet. Crock replaced all of the Williams senior managers with its own personnel. Crock then announced to all employees that Williams would become a specialty machine tool manufacturer and that the “good old days” would never return. Customer demand for specialty products had increased threefold in just the last twelve months alone. Crock made it clear that employees who would not support this new direction would be replaced.

The new senior management at Williams Company recognized that 85 years of traditional management had come to an end for a company now committed to specialty products. The company culture was about to


change, spearheaded by project management, concurrent engineering, and total quality management.

Senior management’s commitment to product management was apparent by the time and money spent in educating the employees. Unfortunately, the seasoned 20-year-plus veterans still would not support the new culture. Recognizing the problems, management provided continuous and visible support for project management in addition to hiring a project management consultant to work with the people. The consultant worked with Williams from 1996 to 2001.

From 1996 to 2001, the Williams Division of Crock Engineering experienced losses in 24 consecutive quarters. The quarter ending March 31, 2002, was the first profitable quarter in over six years. Much of the credit was given to the performance and maturity of the project management system. In May 2002, the Williams Division was sold. More than 80% of the employees lost their jobs when the company was relocated over 1,500 miles away.

*Case Study also appears at end of chapter.

1. Here we are assuming that the line manager and project manager are not the same individual. However, the terms line manager and functional manager are used interchangeably throughout the text.

2. H. J. Thamhain, Management of Technology (Hoboken, NJ: Wiley, 2005), pp. 3–4.

3. See note 2; Thamhain; p. 28.

4. G. Heerkens, The Business-Savvy Project Manager (New York: McGraw- Hill, 2006), pp. 4–8.

5. The expectations are discussed in Section 9.3.

6. The role of the project sponsor is discussed in Section 10.1.

7. Section 10.1 describes the role of the project sponsor in more depth.

8. Letter from J. Donald Rath, Vice President of Martin-Marietta Corporation, Denver Division, to J. E. Webb, of NASA, October 18, 1963.

9. D. W. Wirick, Public-Sector Project Management (Wiley, Hoboken, NJ, 2009), pp.8–10, 18–19.

10. T. W. Grisham, International Project Management, (Wiley, Hoboken, NJ,


2010), p. 3.

11. T. J. Brown and S. Allport, “Developing Products with Added Value,” in P. Harpum (Ed.), Portfolio, Program, and Project Management in the Pharmaceutical and Biotechnology Industries (Wiley, Hoboken, NJ, 2010), p. 218.


Project Management Growth: Concepts and Definitions

Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 5th Edition, Reference Section for the PMP® Certification Exam

Goshe Corporation MIS Project Management at First National Bank Cordova Research Group Cortez Plastics L. P. Manning Corporation Project Firecracker Apache Metals, Inc. Haller Specialty

Multiple Choice Exam Integration Management Scope Management


Manufacturing Creating a Methodology*


2.0 INTRODUCTION The growth and acceptance of project management has changed significantly over the past forty years, and these changes are expected to continue well into the twenty-first century, especially in the area of multinational project management. It is interesting to trace the evolution and growth of project management from the early days of systems management to what some people call “modern project management.”

PMBOK® Guide, 5th Edition Chapter 4 Integration Management

The growth of project management can be traced through topics such as roles and responsibilities, organizational structures, delegation of authority and decision- making, and especially corporate profitability. Twenty years ago, companies had the choice of whether or not to accept the project management approach. Today, some companies foolishly think that they still have the choice. Nothing could be further from the truth. The survival of the firm may very well rest upon how well project management is implemented, and how quickly.



Organizational theory and management philosophies have undergone a dramatic change in recent years with the emergence of the project management approach to management. Because project management is an outgrowth of systems management, it is only fitting that the underlying principles of general systems theory be described. Simply stated, general systems theory can be classified as a management approach that attempts to integrate and unify scientific information across many fields of knowledge. Systems theory attempts to solve problems by looking at the total picture, rather than through an analysis of the individual components.

General systems theory has been in existence for more than four decades. Unfortunately, as is often the case with new theory development, the practitioners require years of study and analysis before implementation. General systems theory is still being taught in graduate programs. Today, project management is viewed as applied systems management.

In 1951, Ludwig von Bertalanffy, a biologist, described so-called open systems using anatomy nomenclature. The body’s muscles, skeleton, circulatory system, and so on, were all described as subsystems of the total system (the human being). Dr. von Bertalanffy’s contribution was important in that he identified how specialists in each subsystem could be integrated so as to get a better understanding of the interrelationships, thereby contributing to the overall knowledge of the operations of the system. Thus, the foundation was laid for the evolution and outgrowth of project management.

In 1956, Kenneth Boulding identified the communications problems that can occur during systems integration. Professor Boulding was concerned with the fact that subsystem specialists (i.e., physicists, economists, chemists, sociologists, etc.) have their own languages. He advocated that, in order for successful integration to take place, all subsystem specialists must speak a common language, such as mathematics. Today we use the PMBOK® Guide, the Project Management Body of Knowledge, to satisfy this need for project management.

General systems theory implies the creation of a management technique that is able to cut across many organizational disciplines—finance, manufacturing, engineering, marketing, and so on—while still carrying out the functions of management. This technique has come to be called systems management, project management, or matrix management (the terms are used interchangeably).



During the 1940s, line managers used the concept of over-the-fence management to manage projects. Each line manager, wearing the hat of a project manager, would perform the work necessitated by their line organization, and when completed, would throw the “ball” over the fence in hopes that someone would catch it. Once the ball was thrown over the fence, the line managers would wash their hands of any responsibility for the project because the ball was no longer in their yard. If a project failed, blame was placed on whichever line manager had the ball at that time.

The problem with over-the-fence management was that the customer had no single contact point for questions. The filtering of information wasted precious time for both the customer and the contractor. Customers who wanted firsthand information had to seek out the manager in possession of the ball. For small projects, this was easy. But as projects grew in size and complexity, this became more difficult.

Following World War II, the United States entered into the Cold War. To win a Cold War, one must compete in the arms race and rapidly build weapons of mass destruction. The victor in a Cold War is the one who can retaliate with such force as to obliterate the enemy.

The arms race made it clear that the traditional use of over-the-fence management would not be acceptable to the Department of Defense (DoD) for projects such as the B52 Bomber, the Minuteman Intercontinental Ballistic Missile, and the Polaris Submarine. The government wanted a single point of contact, namely, a project manager who had total accountability through all project phases. The use of project management was then mandated for some of the smaller weapon systems such as jet fighters and tanks. NASA mandated the use of project management for all activities related to the space program.

Projects in the aerospace and defense industries were having cost overruns in excess of 200 to 300%. Blame was erroneously placed upon improper implementation of project management when, in fact, the real problem was the inability to forecast technology. Forecasting technology is extremely difficult for projects that could last ten to twenty years.

By the late 1950s and early 1960s, the aerospace and defense industries were using project management on virtually all projects, and they were pressuring their


suppliers to use it as well. Project management was growing, but at a relatively slow rate except for aerospace and defense.

Because of the vast number of contractors and subcontractors, the government needed standardization, especially in the planning process and the reporting of information. The government established a life-cycle planning and control model and a cost monitoring system, and created a group of project management auditors to make sure that the government’s money was being spent as planned. These practices were to be used on all government programs above a certain dollar value. Private industry viewed these practices as an overmanagement cost and saw no practical value in project management.



The growth of project management has come about more through necessity than through desire. Its slow growth can be attributed mainly to lack of acceptance of the new management techniques necessary for its successful implementation. An inherent fear of the unknown acted as a deterrent for managers.

Between the middle and late 1960s, more executives began searching for new management techniques and organizational structures that could be quickly adapted to a changing environment. The table below identifies two major variables that executives consider with regard to organizational restructuring.

Type of Industry Tasks Environment A Simple Dynamic B Simple Static C ComplexDynamic D ComplexStatic

Almost all type C and most type D industries have project management–related structures. The key variable appears to be task complexity. Companies that have complex tasks and that also operate in a dynamic environment find project management mandatory. Such industries would include aerospace, defense, construction, high-technology engineering, computers, and electronic instrumentation.

Other than aerospace, defense, and construction, the majority of the companies in the 1960s maintained an informal method for managing projects. In informal project management, just as the words imply, the projects were handled on an informal basis whereby the authority of the project manager was minimized. Most projects were handled by functional managers and stayed in one or two functional lines, and formal communications were either unnecessary or handled informally because of the good working relationships between line managers. Many organizations today, such as low-technology manufacturing, have line managers who have been working side by side for ten or more years. In such situations, informal project management may be effective on capital equipment or facility development projects.

By 1970 and again during the early 1980s, more companies departed from informal project management and restructured to formalize the project management process, mainly because the size and complexity of their activities had grown to a point where they were unmanageable within the current structure. Figure 2–1 shows


what happened to one such construction company. The following five questions help determine whether formal project management is necessary:

FIGURE 2–1. Average project size capability for a construction company, 1960– 1984.

Are the jobs complex? Are there dynamic environmental considerations? Are the constraints tight? Are there several activities to be integrated? Are there several functional boundaries to be crossed?

If any of these questions are answered yes, then some form of formalized project management may be necessary. It is possible for formalized project management to exist in only one functional department or division, such as for R&D or perhaps just for certain types of projects. Some companies have successfully implemented both formal and informal project management concurrently, but these companies are few and far between. Today we realize that the last two questions may be the most important.

The moral here is that not all industries need project management, and executives must determine whether there is an actual need before making a commitment. Several industries with simple tasks, whether in a static or a dynamic environment, do not need project management. Manufacturing industries with slowly changing technology do not need project management, unless of course they have a requirement for several special projects, such as capital equipment activities, that could interrupt the normal flow of work in the routine manufacturing operations.


The slow growth rate and acceptance of project management were related to the fact that the limitations of project management were readily apparent, yet the advantages were not completely recognizable. Project management requires organizational restructuring. The question, of course, is “How much restructuring?” Executives have avoided the subject of project management for fear that “revolutionary” changes must be made in the organization. As will be seen in Chapter 3, project management can be achieved with little departure from the existing traditional structure.

Project management restructuring has permitted companies to:

Accomplish tasks that could not be effectively handled by the traditional structure Accomplish onetime activities with minimum disruption of routine business

The second item implies that project management is a “temporary” management structure and, therefore, causes minimum organizational disruption. The major problems identified by those managers who endeavored to adapt to the new system all revolved around conflicts in authority and resources.

Three major problems were identified by Killian1:

Project priorities and competition for talent may interrupt the stability of the organization and interfere with its long-range interests by upsetting the normal business of the functional organization. Long-range planning may suffer as the company gets more involved in meeting schedules and fulfilling the requirements of temporary projects. Shifting people from project to project may disrupt the training of new employees and specialists. This may hinder their growth and development within their fields of specialization.

Another major concern was that project management required upper-level managers to relinquish some of their authority through delegation to the middle managers. In several situations, middle managers soon occupied the power positions, even more so than upper-level managers. Despite these limitations, there were several driving forces behind the project management approach.

As the driving forces overtook the restraining forces, project management began to mature. Executives began to realize that the approach was in the best interest of the company. Project management, if properly implemented, can make it easier for executives to overcome such internal and external obstacles as:

Unstable economy Shortages


Soaring costs Increased complexity Heightened competition Technological changes Societal concerns Consumerism Ecology Quality of work

Project management may not eliminate these problems, but may make it easier for the company to adapt to a changing environment.

If these obstacles are not controlled, the results may be:

Decreased profits Increased manpower needs Cost overruns, schedule delays, and penalty payments occurring earlier and earlier An inability to cope with new technology R&D results too late to benefit existing product lines New products introduced into the marketplace too late Temptation to make hasty decisions that prove to be costly Management insisting on earlier and greater return on investment Greater difficulty in establishing on-target objectives in real time Problems in relating cost to technical performance and scheduling during the execution of the project

Project management became a necessity for many companies as they expanded into multiple product lines, many of which were dissimilar, and organizational complexities grew. This growth can be attributed to:

Technology increasing at an astounding rate More money invested in R&D More information available Shortening of project life cycles

To satisfy the requirements imposed by these four factors, management was “forced” into organizational restructuring; the traditional organizational form that had survived for decades was inadequate for integrating activities across functional “empires.”

By 1970, the environment began to change rapidly. Companies in aerospace, defense, and construction pioneered in implementing project management, and other


industries soon followed, some with great reluctance. NASA and the Department of Defense “forced” subcontractors into accepting project management. The 1970s also brought much more published data on project management. As an example2:

Project teams and task forces will become more common in tackling complexity. There will be more of what some people call temporary management systems as project management systems where the men [and women] who are needed to contribute to the solution meet, make their contribution, and perhaps never become a permanent member of any fixed or permanent management group.

The definition simply states that the purpose of project management is to put together the best possible team to achieve the objective, and, at termination, the team is disbanded. Nowhere in the definition do we see the authority of the project manager or his rank, title, or salary.

Because current organizational structures are unable to accommodate the wide variety of interrelated tasks necessary for successful project completion, the need for project management has become apparent. It is usually first identified by those lower-level and middle managers who find it impossible to control their resources effectively for the diverse activities within their line organization. Quite often middle managers feel the impact of a changing environment more than upper-level executives.

Once the need for change is identified, middle management must convince upper- level management that such a change is actually warranted. If top-level executives cannot recognize the problems with resource control, then project management will not be adopted, at least formally. Informal acceptance, however, is another story.

As project management developed, some essential factors in its successful implementation were recognized. The major factor was the role of the project manager, which became the focal point of integrative responsibility. The need for integrative responsibility was first identified in research and development activities3:

Recently, R&D technology has broken down the boundaries that used to exist between industries. Once-stable markets and distribution channels are now in a state of flux. The industrial environment is turbulent and increasingly hard to predict. Many complex facts about markets, production methods, costs and scientific potentials are related to investment decisions.

All of these factors have combined to produce a king-size managerial headache. There are just too many crucial decisions to have them all processed and resolved through regular line hierarchy at the top of the organization. They must be integrated in some other way.


Providing the project manager with integrative responsibility resulted in:

Total accountability assumed by a single person Project rather than functional dedication A requirement for coordination across functional interfaces Proper utilization of integrated planning and control

Without project management, these four elements have to be accomplished by executives, and it is questionable whether these activities should be part of an executive’s job description. An executive in a Fortune 500 corporation stated that he was spending seventy hours a week acting as an executive and as a project manager, and he did not feel that he was performing either job to the best of his abilities. During a presentation to the staff, the executive stated what he expected of the organization after project management implementation:

Push decision-making down in the organization Eliminate the need for committee solutions Trust the decisions of peers

Those executives who chose to accept project management soon found the advantages of the new technique:

Easy adaptation to an ever-changing environment Ability to handle a multidisciplinary activity within a specified period of time Horizontal as well as vertical work flow Better orientation toward customer problems Easier identification of activity responsibilities A multidisciplinary decision-making process Innovation in organizational design



By the 1990s, companies had begun to realize that implementing project management was a necessity, not a choice. The question was not how to implement project management, but how fast could it be done?

Table 2–1 shows the typical life-cycle phases that an organization goes through to implement project management. In the first phase, the Embryonic Phase, the organization recognizes the apparent need for project management. This recognition normally takes place at the lower and middle levels of management where the project activities actually take place. The executives are then informed of the need and assess the situation. TABLE 2–1. LIFE-CYCLE PHASES FOR PROJECT MANAGEMENT MATURITY

There are six driving forces that lead executives to recognize the need for project management:

Capital projects Customer expectations Competitiveness Executive understanding New project development Efficiency and effectiveness

Manufacturing companies are driven to project management because of large


capital projects or a multitude of simultaneous projects. Executives soon realize the impact on cash flow and that slippages in the schedule could end up idling workers.

Companies that sell products or services, including installation, to their clients must have good project management practices. These companies are usually non– project-driven but function as though they were project-driven. These companies now sell solutions to their customers rather than products. It is almost impossible to sell complete solutions to customers without having superior project management practices because what you are actually selling is your project management expertise.

There are two situations where competitiveness becomes the driving force: internal projects and external (outside customer) projects. Internally, companies get into trouble when the organization realizes that much of the work can be outsourced for less than it would cost to perform the work themselves. Externally, companies get into trouble when they are no longer competitive on price or quality, or simply cannot increase their market share.

Executive understanding is the driving force in those organizations that have a rigid traditional structure that performs routine, repetitive activities. These organizations are quite resistant to change unless driven by the executives. This driving force can exist in conjunction with any of the other driving forces.

New product development is the driving force for those organizations that are heavily invested in R&D activities. Given that only a small percentage of R&D projects ever make it into commercialization where the R&D costs can be recovered, project management becomes a necessity. Project management can also be used as an early warning system that a project should be cancelled.

Efficiency and effectiveness, as driving forces, can exist in conjunction with any other driving forces. Efficiency and effectiveness take on paramount importance for small companies experiencing growing pains. Project management can be used to help such companies remain competitive during periods of growth and to assist in determining capacity constraints.

Because of the interrelatedness of these driving forces, some people contend that the only true driving force is survival. This is illustrated in Figure 2–2. When the company recognizes that survival of the firm is at stake, the implementation of project management becomes easier.

FIGURE 2–2. The components of survival.

Source: Reprinted from H. Kerzner, In Search of Excellence in Project Management. New York: Wiley, 1998, p. 51.


The speed by which companies reach some degree of maturity in project management is most often based upon how important they perceive the driving forces to be. This is illustrated generically in Figure 2–3. Non–project-driven and hybrid organizations move quickly to maturity if increased internal efficiencies and effectiveness are needed. Competitiveness is the slowest path because these types of organizations do not recognize that project management affects their competitive position directly. For project-driven organizations, the path is reversed. Competitiveness is the name of the game and the vehicle used is project management.

FIGURE 2–3. The speed of maturity.

Once the organization perceives the need for project management, it enters the second life-cycle phase of Table 2–1, Executive Acceptance. Project management cannot be implemented rapidly in the near term without executive support. Furthermore, the support must be visible to all.

The third life-cycle phase is Line Management Acceptance. It is highly unlikely that any line manager would actively support the implementation of project


management without first recognizing the same support coming from above. Even minimal line management support will still cause project management to struggle.

The fourth life-cycle phase is the Growth Phase, where the organization becomes committed to the development of the corporate tools for project management. This includes the project management methodology for planning, scheduling, and controlling, as well as selection of the appropriate supporting software. Portions of this phase can begin during earlier phases.

The fifth life-cycle phase is Maturity. In this phase, the organization begins using the tools developed in the previous phase. Here, the organization must be totally dedicated to project management. The organization must develop a reasonable project management curriculum to provide the appropriate training and education in support of the tools, as well as the expected organizational behavior.

PMBOK® Guide, 5th Edition 1.5 Project Management in Operations Management

By the 1990s, companies finally began to recognize the benefits of project management. Table 2–2 shows the benefits of project management and how our view of project management has changed. TABLE 2–2. BENEFITS OF PROJECT MANAGEMENT

Past View Present View Project management will require more people and add to the overhead costs. Profitability may decrease. Project management will increase the amount of scope changes. Project management creates organizational instability and increases conflicts. Project management is really “eye wash” for the customer’s benefit. Project management will

Project management allows us to accomplish more work in less time, with fewer people. Profitability will increase. Project management will provide better control of scope changes. Project management makes the organization more efficient and effective through better organizational behavior principles. Project management will allow us to work more closely with our customers. Project management provides a means for solving problems. All projects will benefit from project management.


create problems. Only large projects need project management. Project management will increase quality problems. Project management will create power and authority problems. Project management focuses on suboptimization by looking at only the project. Project management delivers products to a customer. The cost of project management may make us noncompetitive.

Project management increases quality. Project management will reduce power struggles. Project management allows people to make good company decisions. Project management delivers solutions. Project management will increase our business.

Recognizing that the organization can benefit from the implementation of project management is just the starting point. The question now becomes, “How long will it take us to achieve these benefits?” This can be partially answered from Figure 2–4. In the beginning of the implementation process, there will be added expenses to develop the project management methodology and establish the support systems for planning, scheduling, and control. Eventually, the cost will level off and become pegged. The question mark in Figure 2–4 is the point at which the benefits equal the cost of implementation. This point can be pushed to the left through training and education.

FIGURE 2–4. Project management costs versus benefits.



2.5 RESISTANCE TO CHANGE Why was project management so difficult for companies to accept and implement? The answer is shown in Figure 2–5. Historically, project management resided only in the project-driven sectors of the marketplace. In these sectors, the project managers were given the responsibility for profit and loss, which virtually forced companies to treat project management as a profession.

FIGURE 2–5. Industry classification (by project management utilization).

In the non–project-driven sectors of the marketplace, corporate survival was based upon products and services, rather than upon a continuous stream of projects. Profitability was identified through marketing and sales, with very few projects having an identifiable P&L. As a result, project management in these firms was never viewed as a profession.

In reality, most firms that believed that they were non–project-driven were actually hybrids. Hybrid organizations are typically non–project-driven firms with one or two divisions that are project-driven. Historically, hybrids have functioned as though they were non–project-driven, as shown in Figure 2–5, but today they are functioning like project-driven firms. Why the change? Management has come to the realization that they can most effectively run their organization on a “management by project” basis, and thereby achieve the benefits of both a project management organization and a traditional organization. The rapid growth and acceptance of project management during the last ten years has taken place in the non–project- driven/hybrid sectors. Now, project management is being promoted by marketing, engineering, and production, rather than only by the project-driven departments (see Figure 2–6).


FIGURE 2–6. From hybrid to project-driven.

A second factor contributing to the acceptance of project management was the economy, specifically the recessions of 1979–1983 and 1989–1993. This can be seen from Table 2–3. By the end of the recession of 1979–1983, companies recognized the benefits of using project management but were reluctant to see it implemented. Companies returned to the “status quo” of traditional management. There were no allies or alternative management techniques that were promoting the use of project management. TABLE 2–3. RECESSIONARY EFFECTS

The recession of 1989–1993 finally saw the growth of project management in the non–project-driven sector. This recession was characterized by layoffs in the white collar/management ranks. Allies for project management were appearing and emphasis was being placed upon long-term solutions to problems. Project management was here to stay.

The allies for project management began surfacing in 1985 and continued throughout the recession of 1989–1993. This is seen in Figure 2–7.

FIGURE 2–7. New processes supporting project management.


1985: Companies recognize that they must compete on the basis of quality as well as cost. Companies begin using the principles of project management for the implementation of total quality management (TQM). The first ally for project management surfaces with the “marriage” of project management and TQM. 1990: During the recession of 1989–1993, companies recognize the importance of schedule compression and being the first to market. Advocates of concurrent engineering begin promoting the use of project management to obtain better scheduling techniques. Another ally for project management is born. 1991–1992: Executives realize that project management works best if decision-making and authority are decentralized, but recognize that control can still be achieved at the top by functioning as project sponsors. 1993: As the recession of 1989–1993 comes to an end, companies begin “re- engineering” the organization, which really amounts to elimination of organizational “fat.” The organization is now a “lean and mean” machine. People are asked to do more work in less time and with fewer people; executives recognize that being able to do this is a benefit of project management. 1994: Companies recognize that a good project cost control system (i.e., horizontal accounting) allows for improved estimating and a firmer grasp of


the real cost of doing work and developing products. 1995: Companies recognize that very few projects are completed within the framework of the original objectives without scope changes. Methodologies are created for effective change management. 1996: Companies recognize that risk management involves more than padding an estimate or a schedule. Risk management plans are now included in the project plans. 1997–1998: The recognition of project management as a professional career path mandates the consolidation of project management knowledge and a centrally located project management group. Benchmarking for best practices forces the creation of centers for excellence in project management. 1999: Companies that recognize the importance of concurrent engineering and rapid product development find that it is best to have dedicated resources for the duration of the project. The cost of overmanagement may be negligible compared to risks of undermanagement. More organizations begin to use colocated teams all housed together. 2000: Mergers and acquisitions create more multinational companies. Multinational project management becomes a major challenge. 2001: Corporations are under pressure to achieve maturity as quickly as possible. Project management maturity models help companies reach this goal. 2002: The maturity models for project management provide corporations with a basis to perform strategic planning for project management. Project management is now viewed as a strategic competency for the corporation. 2003: Intranet status reporting comes of age. This is particularly important for multinational corporations that must exchange information quickly. 2004: Intranet reporting provides corporations with information on how resources are being committed and utilized. Corporations develop capacity planning models to learn how much additional work the organization can take on. 2005: The techniques utilized in Six Sigma are being applied to project management, especially for continuous improvement to the project management methodology. This will result in the establishment of categories of Six Sigma applications some of which are nontraditional. 2006: Virtual project teams and virtual project management offices will become more common. The growth of virtual teams relies heavily upon trust, teamwork, cooperation, and effective communication. 2007: The concepts of lean manufacturing will be applied to project management. 2008: Companies will recognize the value of capturing best practices in


project management and creating a best practices library or knowledge repository. 2009: Project management methodologies will include more business processes to support project management. 2010: The undertaking of more complex projects has brought with it additional stakeholders with which the project manager interfaces. Therefore, stakeholder relations management will take on paramount importance. 2011: With additional stakeholders interfacing projects, governance will be performed by a committee rather than just the project sponsor. 2012: The concept of project value as a project management constraint will become just as important as time, cost, quality, and other competing constraints. 2013: Companies will recognize that effective project management requires more information than just time and cost. As such, project managers will be required to develop a long list of metrics for each project.

As project management continues to grow and mature, it will have more allies. In the twenty-first century, second and third world nations will come to recognize the benefits and importance of project management. Worldwide standards for project management will be established.

If a company wishes to achieve excellence in project management, then it must go through a successful implementation process. This is illustrated in Situation 2–1.

Situation 2–1: The aerospace division of a Fortune 500 company had been using project management for more than thirty years. Everyone in the organization had attended courses in the principles of project management. From 1985 to 1994, the division went through a yearly ritual of benchmarking themselves against other aerospace and defense organizations. At the end of the benchmarking period, the staff would hug and kiss one another, believing that they were performing project management as well as could be expected.

In 1995, the picture changed. The company decided to benchmark itself against organizations that were not in the aerospace or defense sector. It soon learned that there were companies that had been using project management for fewer than six years but whose skills at implementation had surpassed the aerospace/defense firms. It was a rude awakening.

Another factor that contributed to resistance to change was senior management’s preference for the status quo. Often this preference was based upon what was in the executives’ best interest rather than the best interest of the organization. It was also common for someone to attend basic project management programs and then


discover that the organization would not allow full implementation of project management, leading to frustration for those in the lower and middle levels of management. Consider Situation 2–2:

Situation 2–2: The largest division of a Fortune 500 company recognized the need for project management. Over a three-year period, 200 people were trained in the basics of project management, and 18 people passed the national certification exam for project management. The company created a project management division and developed a methodology. As project management began to evolve in this division, the project managers quickly realized that the organization would not allow their “illusions of grandeur” to materialize. The executive vice president made it clear that the functional areas, rather than the project management division, would have budgetary control. Project managers would not be empowered with authority or critical decision-making opportunities. Simply stated, the project managers were being treated as expediters and coordinators, rather than real project managers.

Even though project management has been in existence for more than forty years, there are still different views and misconceptions about what it really is. Textbooks on operations research or management science still have chapters entitled “Project Management” that discuss only PERT scheduling techniques. A textbook on organizational design recognized project management as simply another organizational form.

All companies sooner or later understand the basics of project management. But companies that have achieved excellence in project management have done so through successful implementation and execution of processes and methodologies.



In the preceding sections the word “systems” has been used rather loosely. The exact definition of a system depends on the users, environment, and ultimate goal. Business practitioners define a system as:

A group of elements, either human or nonhuman, that is organized and arranged in such a way that the elements can act as a whole toward achieving some common goal or objective.

Systems are collections of interacting subsystems that, if properly organized, can provide a synergistic output. Systems are characterized by their boundaries or interface conditions. For example, if the business firm system were completely isolated from the environmental system, then a closed system would exist, in which case management would have complete control over all system components. If the business system reacts with the environment, then the system is referred to as open. All social systems, for example, are categorized as open systems. Open systems must have permeable boundaries.

If a system is significantly dependent on other systems for its survival, then it is an extended system. Not all open systems are extended systems. Extended systems are ever-changing and can impose great hardships on individuals who desire to work in a regimented atmosphere.

Military and government organizations were the first to attempt to define the boundaries of systems, programs, and projects. Below are two definitions for systems:

Air Force Definition: A composite of equipment, skills, and techniques capable of performing and/or supporting an operational role. A complete system includes related facilities, equipment, material services, and personnel required for its operation to the degree that it can be considered as a self- sufficient unit in its intended operational and/or support environment. NASA Definition: One of the principal functioning entities comprising the project hardware within a project or program. The meaning may vary to suit a particular project or program area. Ordinarily a “system” is the first major subdivision of project work (spacecraft systems, launch vehicle systems).


PMBOK® Guide, 5th Edition 1.4.1 Program Management Definition

Programs can be construed as the necessary first-level elements of a system. Two representative definitions of programs are given below:

Air Force Definition: The integrated, time-phased tasks necessary to accomplish a particular purpose. NASA Definition: A relative series of undertakings that continue over a period of time (normally years) and that are designed to accomplish a broad, scientific or technical goal in the NASA long-range plan (lunar and planetary exploration, manned spacecraft systems).

Programs can be regarded as subsystems. However, programs are generally defined as time-phased efforts, whereas systems exist on a continuous basis.

Projects are also time-phased efforts (much shorter than programs) and are the first level of breakdown of a program. A typical definition would be:

NASA/Air Force Definition: A project is within a program as an undertaking that has a scheduled beginning and end, and that normally involves some primary purpose.

As shown in Table 2–4, the government sector tends to run efforts as programs, headed up by a program manager who hopes that their program will receive government funding year after year. Today, the majority of the industrial sector uses both project and program managers. Throughout this text, I have used the terms project and program management as being the same because they are generally regulated by the same policies, procedures, and guidelines. In general, as will be discussed in Chapter 11, projects are often considered to be the first level of subdivision of a program, and programs are often longer in duration that projects. However, there are many other significant differences, such as: TABLE 2–4. DEFINITION SUMMARY

Level Sector Title System* — — ProgramGovernmentProgram managers Project Industry Project managers

* Definitions, as used here, do not include in-house industrial systems such as


management information systems or shop floor control systems.

Projects may have a single objective whereas programs may have multiple objects with a heavy orientation toward business rather than technical objectives. The length of programs often makes them more susceptible to changing environmental conditions, politics, the economy, business strategy, and interest rates. The possibility for changing economic conditions may play havoc with pricing out long-term programs based upon estimates on forward pricing rates. Functional managers are often reluctant to give up their best workers that are in high demand by committing them to a single program that will run for years. Program governance is conducted by a committee rather than by a single individual, and the membership may change over the life of the program. Program funding may be on a yearly basis and changes in planned funding are based upon existing need, which may change from year to year, and economic conditions. Scope changes may occur more frequently and have a greater impact on the project. Rebaselining and replanning will occur more frequently. Based upon the program’s length, succession planning may be necessary for workers with critical skills. The loss of some workers over the length of the program may be expected because of changing positions, better opportunities in another company, and retirements. Workers may not believe that a long-term assignment on just one program is an opportunity for career advancement.

PMI has certification programs for both project and program managers and does differentiate between the two. There are textbooks written that are dedicated entirely to program management.

Once a group of tasks is selected and considered to be a project, the next step is to define the kinds of project units. There are four categories of projects:

Individual projects: These are short-duration projects normally assigned to a single individual who may be acting as both a project manager and a functional manager. Staff projects: These are projects that can be accomplished by one organizational unit, say a department. A staff or task force is developed from each section involved. This works best if only one functional unit is involved.


Special projects: Often special projects occur that require certain primary functions and/or authority to be assigned temporarily to other individuals or units. This works best for short-duration projects. Long-term projects can lead to severe conflicts under this arrangement. Matrix or aggregate projects: These require input from a large number of functional units and usually control vast resources.

Project management may now be defined as the process of achieving project objectives through the traditional organizational structure and over the specialties of the individuals concerned. Project management is applicable for any ad hoc (unique, onetime, one-of-a-kind) undertaking concerned with a specific end objective. In order to complete a task, a project manager must:

PMBOK® Guide, 5th Edition 1.3 What Is Project Management?

Set objectives Establish plans Organize resources Provide staffing Set up controls Issue directives Motivate personnel Apply innovation for alternative actions Remain flexible

The type of project will often dictate which of these functions a project manager will be required to perform.



Some people mistakenly argue that there is no major difference between a project and a program other than the time duration. Project managers focus on the end date of their project from the day they are assigned as project manager. Program managers usually have a much longer time frame that project managers and never want to see their program come to an end. In the early years of project management with the Department of Defense serving as the primary customer, aerospace and defense project managers were called program managers because the intent was to get follow-on government contracts each year.

PMBOK® Guide, 5th Edition 4.1.1 Inputs to Project Charter Product Scope and Project Scope and Chapter 5 Introduction

But what about the definition of product management or product line management? Product managers function closely like program managers. The product manager wants his or her product to be as long-lived as possible and as profitable as possible. Even when the demand for the product diminishes, the product manager will always look for spin-offs to keep a product alive.

There is also a difference between project and product scope:

Project scope defines the work that must be accomplished to produce a deliverable with specified features or functions. The deliverable can be a product, service, or other result. Product scope defines the features or functions that characterize the deliverable.

Figure 2–8 shows the relationship between project and product management. When the project is in the R&D phase, a project manager is involved. Once the product is developed and introduced into the marketplace, the product manager takes control. In some situations, the project manager can become the product manager. Product and project management can, and do, exist concurrently within companies.

FIGURE 2–8. Organizational chart.


Figure 2–8 shows that product management can operate horizontally as well as vertically. When a product is shown horizontally on the organizational chart, the implication is that the product line is not big enough to control its own resources full-time and therefore shares key functional resources. If the product line were large enough to control its own resources full-time, it would be shown as a separate division or a vertical line on the organization chart.

Also shown in Figure 2–8 is the remarkable fact that the project manager (or project engineer) is reporting to a marketing-type person. The reason is that technically oriented project leaders get too involved with the technical details of the project and lose sight of when and how to “kill” a project. Remember, most technical leaders have been trained in an academic rather than a business environment. Their commitment to success often does not take into account such important parameters as return on investment, profitability, competition, and marketability.

To alleviate these problems, project managers and project engineers, especially on R&D-type projects, are now reporting to marketing so that marketing input will be included in all R&D decisions because of the high costs incurred during R&D. Executives must exercise caution with regard to this structure in which both product and project managers report to the marketing function. The marketing executive


could become the focal point of the entire organization, with the capability of building a very large empire.



Some people contend that maturity and excellence in project management are the same. Unfortunately, this is not the case. Consider the following definition:

Maturity in project management is the implementation of a standard methodology and accompanying processes such that there exists a high likelihood of repeated successes.

This definition is supported by the life-cycle phases shown in Table 2–1. Maturity implies that the proper foundation of tools, techniques, processes, and even culture, exists. When projects come to an end, there is usually a debriefing with senior management to discuss how well the methodology was used and to recommend changes. This debriefing looks at “key performance indicators,” which are shared learning topics, and allows the organization to maximize what it does right and to correct what it did wrong.

The definition of excellence can be stated as:

Organizations excellent in project management are those that create the environment in which there exists a continuous stream of successfully managed projects and where success is measured by what is in the best interest of both the company and the project (i.e., customer).

Excellence goes well beyond maturity. You must have maturity to achieve excellence. Figure 2–9 shows that once the organization completes the first four life-cycle phases in Table 2–1, it may take two years or more to reach some initial levels of maturity. Excellence, if achievable at all, may take an additional five years or more.

FIGURE 2–9. The growth of excellence.


Figure 2–9 also brings out another important fact. During maturity, more successes than failures occur. During excellence, we obtain a continuous stream of successful projects. Yet, even after having achieved excellence, there will still be some failures.

Executives who always make the right decision are not making enough decisions. Likewise, organizations in which all projects are completed successfully are not taking enough risks and are not working on enough projects.

It is unrealistic to believe that all projects will be completed successfully. Some people contend that the only true project failures are the ones from which nothing is learned. Failure can be viewed as success if the failure is identified early enough so that the resources can be reassigned to other more opportunistic activities.



Companies today are managing projects more informally than before. Informal project management does have some degree of formality but emphasizes managing the project with a minimum amount of paperwork. Furthermore, informal project management is based upon guidelines rather than the policies and procedures that are the basis for formal project management. This was shown previously to be a characteristic of a good project management methodology. Informal project management mandates:

Effective communications Effective cooperation Effective teamwork Trust

These four elements are absolutely essential for effective informal project management.

Figure 2–10 shows the evolution of project documentation over the years. As companies become mature in project management, emphasis is on guidelines and checklists. Figure 2–11 shows the critical issues as project management matures toward more informality.

FIGURE 2–10. Evolution of policies, procedures, and guidelines.

Source: Reprinted from H. Kerzner, In Search of Excellence in Project Management. New York: Wiley, 1998, p. 196.


FIGURE 2–11. Maturity path.

As a final note, not all companies have the luxury of using informal project management. Customers often have a strong voice in whether formal or informal project management will be used. Customers are often reluctant to accept a paperless project management system.



Historically, the definition of success has been meeting the customer’s expectations regardless of whether or not the customer is internal or external. Success also includes getting the job done within the constraints of time, cost, and quality. Using this standard definition, success is defined as a point on the time, cost, quality/performance grid. But how many projects, especially those requiring innovation, are accomplished at this point?

Very few projects are ever completed without trade-offs or scope changes on time, cost, and quality. Therefore, success could still occur without exactly hitting this singular point. In this regard, success could be defined as a cube, such as seen in Figure 2–12. The singular point of time, cost, and quality would be a point within the cube, constituting the convergence of the critical success factors (CSFs) for the project.

FIGURE 2–12. Success: point or cube?

Another factor to consider is that there may exist both primary and secondary definitions of success, as shown in Table 2–5. The primary definitions of success are seen through the eyes of the customer. The secondary definitions of success are usually internal benefits. If achieving 86 percent of the specification is acceptable to the customer and follow-on work is received, then the original project might very well be considered a success. TABLE 2–5. SUCCESS FACTORS


Primary Secondary Within time Within cost Within quality limits Accepted by the customer

Follow-on work from this customer Using the customer’s name as a reference on your literature Commercialization of a product With minimum or mutually agreed upon scope changes Without disturbing the main flow of work Without changing the corporate culture Without violating safety requirements Providing efficiency and effectiveness of operations Satisfying OSHA/EPA requirements Maintaining ethical conduct Providing a strategic alignment Maintaining a corporate reputation Maintaining regulatory agency relations

The definition of success can also vary according to who the stakeholder is. For example, each of the following can have his or her own definition of success on a project:

Consumers: safety in its use Employees: guaranteed employment Management: bonuses Stockholders: profitability Government agencies: compliance with federal regulations

It is possible for a project management methodology to identify primary and secondary success factors. This could provide guidance to a project manager for the development of a risk management plan and for deciding which risks are worth taking and which are not.

Critical success factors identify what is necessary to meet the desired deliverables of the customer. We can also look at key performance indicators (KPIs), which measure the quality of the process used to achieve the end results. KPIs are internal measures or metrics that can be reviewed on a periodic basis throughout the life cycle of the project. Typical KPIs include:

Use of the project management methodology Establishment of the control processes


Use of interim metrics Quality of resources assigned versus planned for Client involvement

Key performance indicators answer such questions as: Did we use the methodology correctly? Did we keep management informed, and how frequently? Were the proper resources assigned and were they used effectively? Were there lessons learned that could necessitate updating the methodology or its use? Companies excellent in project management measure success both internally and externally using CSFs and KPIs. Later in this book we will provide a more detailed description of KPIA.



Previously we stated that success might be a cube rather than a point. If we stay within the cube but miss the point, is that a failure? Probably not! The true definition of failure is when the final results are not what were expected, even though the original expectations may or may not have been reasonable. Sometimes customers and even internal executives set performance targets that are totally unrealistic in hopes of achieving 80–90 percent. For simplicity’s sake, let us define failure as unmet expectations.

With unmeetable expectations, failure is virtually assured since we have defined failure as unmet expectations. This is called a planning failure and is the difference between what was planned and what was, in fact, achieved. The second component of failure is poor performance or actual failure. This is the difference between what was achievable and what was actually accomplished.

Perceived failure is the net sum of actual failure and planning failure. Figures 2–13 and 2–14 illustrate the components of perceived failure. In Figure 2–13, project management has planned a level of accomplishment (C) lower than what is achievable given project circumstances and resources (D). This is a classic underplanning situation. Actual accomplishment (B), however, was less than planned.

FIGURE 2–13. Components of failure (pessimistic planning).

FIGURE 2–14. Components of failure (optimistic planning).


A slightly different case is illustrated in Figure 2–14. Here, we have planned to accomplish more than is achievable. Planning failure is again assured even if no actual failure occurs. In both of these situations (overplanning and underplanning), the actual failure is the same, but the perceived failure can vary considerably.

Today, most project management practitioners focus on the planning failure term. If this term can be compressed or even eliminated, then the magnitude of the actual failure, should it occur, would be diminished. A good project management methodology helps to reduce this term. We now believe that the existence of this term is largely due to the project manager’s inability to perform effective risk management. In the 1980s, we believed that the failure of a project was largely a quantitative failure due to:

Ineffective planning Ineffective scheduling Ineffective estimating Ineffective cost control Project objectives being “moving targets”

During the 1990s, we changed our view of failure from being quantitatively oriented to qualitatively oriented. A failure in the 1990s was largely attributed to:

Poor morale Poor motivation Poor human relations Poor productivity No employee commitment No functional commitment Delays in problem solving Too many unresolved policy issues Conflicting priorities between executives, line managers, and project



Although these quantitative and qualitative approaches still hold true to some degree, today we believe that the major component of planning failure is inappropriate or inadequate risk management, or having a project management methodology that does not provide any guidance for risk management.

Sometimes, the risk management component of failure is not readily identified. For example, look at Figure 2–15. The actual performance delivered by the contractor was significantly less than the customer’s expectations. Is the difference due to poor technical ability or a combination of technical inability and poor risk management? Today we believe that it is a combination.

FIGURE 2–15. Risk planning.

When a project is completed, companies perform a lessons-learned review. Sometimes lessons learned are inappropriately labeled and the true reason for the risk event is not known. Figure 2–16 illustrates the relationship between the marketing personnel and technical personnel when undertaking a project to develop a new product. If the project is completed with actual performance being less than customer expectations, is it because of poor risk management by the technical assessment and forecasting personnel or poor marketing risk assessment? The relationship between marketing and technical risk management is not always clear.

FIGURE 2–16. Mitigation strategies available.


Figure 2–16 also shows that opportunities for trade-offs diminish as we get further downstream on the project. There are numerous opportunities for trade-offs prior to establishing the final objectives for the project. In other words, if the project fails, it may be because of the timing when the risks were analyzed.


2.12 THE STAGE-GATE PROCESS When companies recognize the need to begin developing processes for project management, the starting point is normally the stage-gate process. The stage-gate process was created because the traditional organizational structure was designed primarily for top-down, centralized management, control, and communications, all of which were no longer practical for organizations that use project management and horizontal work flow. The stage-gate process eventually evolved into life-cycle phases.

PMBOK® Guide, 5th Edition 2.4 Project Life Cycles

2.1.1 Characteristics of Project Phases

Just as the words imply, the process is composed of stages and gates. Stages are groups of activities that can be performed either in series or parallel based upon the magnitude of the risks the project team can endure. The stages are managed by cross-functional teams. The gates are structured decision points at the end of each stage. Good project management processes usually have no more than six gates. With more than six gates, the project team focuses too much attention on preparing for the gate reviews rather than on the actual management of the project.

Project management is used to manage the stages between the gates, and can shorten the time between the gates. This is a critical success factor if the stage-gate process is to be used for the development and launch of new products. A good corporate methodology for project management will provide checklists, forms, and guidelines to make sure that critical steps are not omitted.

Checklists for gate reviews are critical. Without these checklists, project managers can waste hours preparing gate review reports. Good checklists focus on answering these questions:

Where are we today (i.e., time and cost)? Where will we end up (i.e., time and cost)? What are the present and future risks? What assistance is needed from management?

Project managers are never allowed to function as their own gatekeepers. The gatekeepers are either individuals (i.e., sponsors) or groups of individuals


designated by senior management and empowered to enforce the structured decision-making process. The gatekeepers are authorized to evaluate the performance to date against predetermined criteria and to provide the project team with additional business and technical information.

Gatekeepers must be willing to make decisions. The four most common decisions are:

Proceed to the next gate based upon the original objectives Proceed to the next gate based upon revised objectives Delay making a gate decision until further information is obtained Cancel the project

Sponsors must also have the courage to terminate a project. The purpose of the gates is not only to obtain authorization to proceed, but to identify failure early enough so that resources will not be wasted but will be assigned to more promising activities.

We can now identify the three major benefits of the stage-gate process:

Providing structure to project management Providing possible standardization in planning, scheduling, and control (i.e., forms, checklists, and guidelines) Allowing for a structured decision-making process

Companies embark upon the stage-gate process with good intentions, but there are pitfalls that may disrupt the process. These include:

Assigning gatekeepers and not empowering them to make decisions Assigning gatekeepers who are afraid to terminate a project Denying the project team access to critical information Allowing the project team to focus more on the gates than on the stages

It should be recognized that the stage-gate process is neither an end result nor a self-sufficient methodology. Instead, it is just one of several processes that provide structure to the overall project management methodology.

Today, the stage-gate process appears to have been replaced by life-cycle phases. Although there is some truth in this, the stage-gate process is making a comeback. Since the stage-gate process focuses on decision-making more than life-cycle phases, the stage-gate process is being used as an internal, decision-making tool within each of the life-cycle phases. The advantage is that, while life-cycle phases are the same for every project, the stage-gate process can be custom-designed for each project to facilitate decision-making and risk management. The stage-gate process is now an integral part of project management, whereas previously it was


used primarily for new product development efforts.


2.13 PROJECT LIFE CYCLES Every program, project, or product has certain phases of development known as life-cycle phases. A clear understanding of these phases permits managers and executives to better control resources to achieve goals.

PMBOK® Guide, 5th Edition 2.4 Project Life Cycles

During the past few years, there has been at least partial agreement about the life- cycle phases of a product. They include:

Research and development Market introduction Growth Maturity Deterioration Death

Today, there is no agreement among industries, or even companies within the same industry, about the life-cycle phases of a project. This is understandable because of the complex nature and diversity of projects.

The theoretical definitions of the life-cycle phases of a system can be applied to a project. These phases include:

Conceptual Planning Testing Implementation Closure

The first phase, the conceptual phase, includes the preliminary evaluation of an idea. Most important in this phase is a preliminary analysis of risk and the resulting impact on the time, cost, and performance requirements, together with the potential impact on company resources. The conceptual phase also includes a “first cut” at the feasibility of the effort.

The second phase is the planning phase. It is mainly a refinement of the elements in the conceptual phase and requires a firm identification of the resources required


and the establishment of realistic time, cost, and performance parameters. This phase also includes the initial preparation of documentation necessary to support the system. For a project based on competitive bidding, the conceptual phase would include the decision of whether to bid, and the planning phase would include the development of the total bid package (i.e., time, schedule, cost, and performance).

Because of the amount of estimating involved, analyzing system costs during the conceptual and planning phases is not an easy task. As shown in Figure 2–17, most project or system costs can be broken down into operating (recurring) and implementation (nonrecurring) categories. Implementation costs include onetime expenses such as construction of a new facility, purchasing computer hardware, or detailed planning. Operating costs include recurring expenses such as manpower. The operating costs may be reduced as shown in Figure 2–17 if personnel perform at a higher position on the learning curve. The identification of a learning curve position is vitally important during the planning phase when firm cost positions must be established. Of course, it is not always possible to know what individuals will be available or how soon they will perform at a higher learning curve position.

FIGURE 2–17. System costs.

Once the approximate total cost of the project is determined, a cost-benefit analysis should be conducted (see Figure 2–18) to determine if the estimated value of the information obtained from the system exceeds the cost of obtaining the information. This analysis is often included as part of a feasibility study. There are several situations, such as in competitive bidding, where the feasibility study is actually the conceptual and definition phases. Because of the costs that can be


incurred during these two phases, top-management approval is almost always necessary before the initiation of such a feasibility study.

FIGURE 2–18. Cost–benefit analysis.

The third phase—testing—is predominantly a testing and final standardization effort so that operations can begin. Almost all documentation must be completed in this phase.

The fourth phase is the implementation phase, which integrates the project’s product or services into the existing organization. If the project was developed for establishment of a marketable product, then this phase could include the product life-cycle phases of market introduction, growth, maturity, and a portion of deterioration.

The final phase is closure and includes the reallocation of resources. Consider a company that sells products to consumers. As one product begins the deterioration and death phases of its life cycle (i.e., the divestment phase of a system), new products or projects must be established. Such a company would, therefore, require a continuous stream of projects to survive, as shown in Figure 2–19. As projects A and B begin their decline, new efforts (project C) must be developed for resource reallocation. In the ideal situation these new projects will be established at such a rate that total revenue will increase and company growth will be clearly visible.

FIGURE 2–19. A stream of projects.


The closure phase evaluates the efforts of the total system and serves as input to the conceptual phases for new projects and systems. This final phase also has an impact on other ongoing projects with regard to identifying priorities.

Thus far no attempt has been made to identify the size of a project or system. Large projects generally require full-time staffs, whereas small projects, although they undergo the same system life-cycle phases, may require only part-time people. This implies that an individual can be responsible for multiple projects, possibly with each project existing in a different life-cycle phase. The following questions must be considered in multiproject management:

Are the project objectives the same? For the good of the project? For the good of the company?

Is there a distinction between large and small projects? How do we handle conflicting priorities?

Critical versus critical projects Critical versus noncritical projects Noncritical versus noncritical projects

Later chapters discuss methods of resolving conflicts and establishing priorities.

The phases of a project and those of a product are compared in Figure 2–20. Notice that the life-cycle phases of a product generally do not overlap, whereas the phases of a project can and often do overlap.


FIGURE 2–20. System/product life cycles.

Table 2–6 identifies the various life-cycle phases that are commonly used. Even in mature project management industries such as construction, one could survey ten different construction companies and find ten different definitions for the life-cycle phases. TABLE 2–6. LIFE-CYCLE PHASE DEFINITIONS


The life-cycle phases for computer programming, as listed in Table 2–6, are also shown in Figure 2–21, which illustrates how manpower resources can build up and decline during a project. In Figure 2–21, PMO stands for the present method of operations, and PMO’ will be the “new” present method of operations after conversion. This life cycle would probably be representative of a twelve-month activity. Most executives prefer short data processing life cycles because computer technology changes rapidly. An executive of a major utility commented that his company was having trouble determining how to terminate a computer programming project to improve customer service because, by the time a package is ready for full implementation, an updated version appears on the scene. Should the original project be canceled and a new project begun? The solution appears to lie in establishing short data processing project life-cycle phases, perhaps through segmented implementation.

FIGURE 2–21. Definition of a project life cycle.

Top management is responsible for the periodic review of major projects. This should be accomplished, at a minimum, at the completion of each life-cycle phase.


More companies are preparing procedural manuals for project management and for structuring work using life-cycle phases. There are several reasons for this trend:

Clear delineation of the work to be accomplished in each phase may be possible. Pricing and estimating may be easier if well-structured work definitions exist. Key decision points exist at the end of each life-cycle phase so that incremental funding is possible.

As a final note, the reader should be aware that not all projects can be simply transposed into life-cycle phases (e.g., R&D). It might be possible (even in the same company) for different definitions of life-cycle phases to exist because of schedule length, complexity, or just the difficulty of managing the phases.



Gate review meetings are a form of project closure. Gate review meetings could result in the closure of a life-cycle phase or the closure of the entire project. Gate review meetings must be planned for, and this includes the gathering, analysis, and dissemination of pertinent information. This can be done effectively with the use of forms, templates, and checklists.

There are two forms of closure pertinent to gate review meetings: contractual closure and administrative closure. Contractual closure precedes administrative closure. Contractual closure is the verification and signoff that all deliverables required for this phase have been completed and all action items have been fulfilled. Contractual closure is the responsibility of both the project manager and the contract administrator.

Administrative closure is the updating of all pertinent records required for both the customer and the contractor. Customers are particularly interested in documentation on any as-built or as-installed changes or deviations from the specifications. Also required is an archived trail of all scope changes agreed to during the life of the project. Contractors are interested in archived data that include project records, minutes, memos, newsletters, change management documentation, project acceptance documentation, and the history of audits for lessons learned and continuous improvement.

A subset of administrative closure is financial closure, which is the closing out of all charge numbers for the work completed. Even though contractual closure may have taken place, there may still exist open charge numbers for the repair of defects or to complete archived paperwork. Closure must be planned for, and this includes setting up a timetable and budget. Table 2–7 shows the activities for each type of closure. TABLE 2–7. Forms of Project Closure




Companies have traditionally viewed each customer as a onetime opportunity, and after this customer’s needs were met, emphasis was placed upon finding other customers. This is acceptable as long as there exists a potentially large customer base. Today, project-driven organizations, namely those that survive on the income from a continuous stream of customer-funded projects, are implementing the “engagement project management” approach. With engagement project management, each potential new customer is approached in a way that is similar to an engagement in marriage where the contractor is soliciting a long-term relationship with the customer rather than a onetime opportunity. With this approach, contractors are selling not only deliverables and complete solutions to the client’s business needs but also a willingness to make changes to the way that they manage their projects in order to receive future contracts from this client.

To maintain this level of customer satisfaction and hopefully a long-term relationship, customers are requested to provide input on how the contractor’s project management methodology can be better utilized in the future. Some companies have added into their methodology a life-cycle phase entitled “Customer Satisfaction Management.” This life-cycle phase takes place after administrative closure is completed. The phase involves a meeting between the client and the contractor, and in attendance are the project managers from each organization, the sponsors, selected team members and functional managers, and the sales force. The question that needs to be addressed by the contractor is, “What can we do better on the next project we perform for you?”

While this approach of adding in a life-cycle phase for customer satisfaction management seems plausible, it can create severe problems. Customers can now expect to have a say in the design of the contractor’s EPM methodology. One automotive supplier decided to solicit input from one of the Big Three in Detroit when developing its project management methodology. Although this created goodwill and customer satisfaction with one client, it created a severe problem with other clients that had different requirements and different views of project management. The result was a different project management methodology for each client. How much freedom should a client be given in making recommendations for changes to a contractor’s EPM system? How much say should a customer have in how a contractor manages projects? What happens if this allows customers to begin telling contractors how to do their job? Obviously there are risks to be considered for this level of customer satisfaction.


If the project manager is expected to manage several projects for this client, then the project manager must understand the nature of the client’s business and the environment in which the client does business. This is essential in order to identify and mitigate the risks associated with these projects. Some companies maintain an engagement manager and a project manager for each client. The engagement manager functions like an account executive for that client and may provide the project manager with the needed business information.



DEFINITION Achieving project management excellence, or maturity, is more likely with a repetitive process that can be used on each and every project. This repetitive process is referred to as the project management methodology.

If possible, companies should maintain and support a single methodology for project management. Good methodologies integrate other processes into the project management methodology, as shown in Figure 2–22. Companies have all five of these processes integrated into their project management methodology.

FIGURE 2–22. Integrated processes for the twenty-first century.

During the 1990s, the following processes were integrated into a single methodology:

Project Management: The basic principles of planning, scheduling, and controlling work Total Quality Management: The process of ensuring that the end result will meet the quality expectations of the customer Concurrent Engineering: The process of performing work in parallel rather than series in order to compress the schedule without incurring serious risks Scope Change Control: The process of controlling the configuration of the end result such that value added is provided to the customer Risk Management: The process of identifying, quantifying, and responding to the risks of the project without any material impact on the project’s objectives

In the coming years, companies can be expected to integrate more of their business processes in the project management methodology. This is shown in


Figure 2–23. Managing off of a single methodology lowers cost, reduces resource requirements for support, minimizes paperwork, and eliminates duplicated efforts.

FIGURE 2–23. Integrated processes (past, present, and future).

The characteristics of a good methodology based upon integrated processes include:

A recommended level of detail Use of templates Standardized planning, scheduling, and cost control techniques Standardized reporting format for both in-house and customer use Flexibility for application to all projects Flexibility for rapid improvements Easy for the customer to understand and follow Readily accepted and used throughout the entire company Use of standardized life-cycle phases (which can overlap) and end of phase reviews (Section 2.13) Based upon guidelines rather than policies and procedures (Section 2.9) Based upon a good work ethic

Methodologies do not manage projects; people do. It is the corporate culture that executes the methodology. Senior management must create a corporate culture that supports project management and demonstrates faith in the methodology. If this is done successfully, then the following benefits can be expected:

Faster “time to market” through better control of the project’s scope Lower overall project risk


Better decision-making process Greater customer satisfaction, which leads to increased business More time available for value-added efforts, rather than internal politics and internal competition

One company found that its customers liked its methodology so much and that the projects were so successful, that the relationship between the contractor and the customer improved to the point where the customers began treating the contractor as a partner rather than as a supplier.



METHODOLOGIES As stated previously, a methodology is a series of processes, activities, and tools that are part of a specific discipline, such as project management, and are designed to accomplish a specific objective. When the products, services, or customers have similar requirements and do not require significant customization, companies develop methodologies to provide some degree of consistency in the way that projects are managed. These types of methodologies are often based upon rigid policies and procedures but can be successful. Good methodologies allow us to:

Shorten project schedules Reduce and/or better control costs Prevent unwanted scope changes Plan for better execution Predict results Improve customer relations during project execution Adjust the project during execution to fit changing customer requirements Provide senior management with better visibility of status Standardize execution Capture best practices

As companies become reasonably mature in project management, the policies and procedures are replaced by forms, guidelines, templates, and checklists. This provides more flexibility for the project manager in how to apply the methodology to satisfy a specific customer’s requirements. This leads to a more informal application of the project management methodology.

Today, we refer to this as an informal project management approach which has been somewhat modified and called a framework. A framework is a basic conceptual structure that is used to address an issue, such as a project. It includes a set of assumptions, concepts, templates, values, and processes that provide the project manager with a means for viewing what is needed to satisfy a customer’s requirements. A framework is a skeleton support structure for building the project’s deliverables. Frameworks work well as long as the project’s requirements do not impose severe pressure upon the project manager. Unfortunately, in today’s chaotic environment, this pressure exists and appears to be increasing.


Both frameworks and enterprise project management methodologies can enhance the project planning process as well as provide some degree of standardization and consistency. The International Institute for Learning has created a framework-style methodology which they call a Unified Project Management Methodology (UPMM™) with templates categorized according to the PMBOK® Guide Areas of Knowledge.5 The project manager will select whichever templates are appropriate for that project. In doing this, the resulting methodology is actually a framework designed specifically for a particular project or client. Some typical templates that are part of UPMM™ include:


Project Charter

Project Procedures Document

Project Change Requests Log

Project Status Report

PM Quality Assurance Report

Procurement Management Summary

Project Issues Log

Project Management Plan

Project Performance Report


Project Schedule

Risk Response Plan and Register

Work Breakdown Structure (WBS)

Work Package

Cost Estimates Document

Project Budget

Project Budget Checklist

Human Resources

Project Charter

Work Breakdown Structure (WBS)


Communications Management Plan

Project Organization Chart

Project Team Directory

Responsibility Assignment Matrix (RAM)

Project Management Plan

Project Procedures Document

Kick-Off Meeting Checklist

Project Team Performance Assessment

Project Manager Performance Assessment


Project Procedures Overview

Project Proposal

Communications Management Plan

Procurement Plan

Project Budget

Project Procedures Document

Project Schedule

Responsibility Assignment Matrix (RAM)

Risk Response Plan and Register

Scope Statement

Work Breakdown Structure (WBS)

Project Management Plan

Project Change Requests Log

Project Issues Log

Project Management Plan Changes Log

Project Performance Report

Lessons Learned Document


Project Performance Feedback

Product Acceptance Document

Project Charter

Closing Process Assessment Checklist

Project Archives Report


Project Charter

Scope Statement

Work Breakdown Structure (WBS)

Procurement Plan

Procurement Planning Checklist

Procurement Statement of Work (SOW)

Request for Proposal Document Outline

Project Change Requests Log

Contract Formation Checklist

Procurement Management Summary


Project Charter

Project Procedures Overview

Work Quality Plan

Project Management Plan

Work Breakdown Structure (WBS)

PM Quality Assurance Report

Lessons Learned Document

Project Performance Feedback

Project Team Performance Assessment

PM Process Improvement Document



Procurement Plan

Project Charter

Project Procedures Document

Work Breakdown Structure (WBS)

Risk Response Plan and Register


Project Scope Statement

Work Breakdown Structure (WBS)

Work Package

Project Charter


Activity Duration Estimating Worksheet

Cost Estimates Document

Risk Response Plan and Register Medium

Work Breakdown Structure (WBS)

Work Package

Project Schedule

Project Schedule Review Checklist


2.18 METHODOLOGIES CAN FAIL Most companies today seem to recognize the need for one or more project management methodologies but either create the wrong methodologies or misuse the methodologies that have been created. Many times, companies rush into the development or purchasing of a methodology without any understanding of the need for one other than the fact that their competitors have a methodology. Jason Charvat states6:

Using project management methodologies is a business strategy allowing companies to maximize the project’s value to the organization. The methodologies must evolve and be “tweaked” to accommodate a company’s changing focus or direction. It is almost a mind-set, a way that reshapes entire organizational processes: sales and marketing, product design, planning, deployment, recruitment, finance, and operations support. It presents a radical cultural shift for many organizations. As industries and companies change, so must their methodologies. If not, they’re losing the point.

Methodologies are a set of forms, guidelines, templates, and checklists that can be applied to a specific project or situation. It may not be possible to create a single enterprisewide methodology that can be applied to each and every project. Some companies have been successful doing this, but there are still many companies that successfully maintain more than one methodology. Unless the project manager is capable of tailoring the enterprise project management methodology to his or her needs, perhaps by using a framework approach, more than one methodology may be necessary.

There are several reasons why good intentions often go astray. At the executive levels, methodologies can fail if the executives have a poor understanding of what a methodology is and believe that a methodology is:

A quick fix A silver bullet A temporary solution A cookbook approach for project success7

At the working levels, methodologies can also fail if they:

Are abstract and high level Contain insufficient narratives to support these methodologies Are not functional or do not address crucial areas Ignore the industry standards and best practices


Look impressive but lack real integration into the business Use nonstandard project conventions and terminology Compete for similar resources without addressing this problem Don’t have any performance metrics Take too long to complete because of bureaucracy and administration8

Other reasons why methodologies can lead to project failure include:

The methodology must be followed exactly even if the assumptions and environmental input factors have changed. The methodology focuses on linear thinking. The methodology does not allow for out-of-the-box thinking. The methodology does not allow for value-added changes that are not part of the original requirements. The methodology does not fit the type of project. The methodology uses nonstandard terminology. The methodology is too abstract (rushing to design it). The methodology development team neglects to consider bottlenecks and concerns of the user community. The methodology is too detailed. The methodology takes too long to use. The methodology is too complex for the market, clients, and stakeholders to understand. The methodology does not have sufficient or correct metrics.

Deciding on what type of methodology is not an easy task. There are many factors to consider, such as:

The overall company strategy—how competitive are we as a company? The size of the project team and/or scope to be managed The priority of the project How critical the project is to the company How flexible the methodology and its components are9

Project management methodologies are created around the project management maturity level of the company and the corporate culture. If the company is reasonably mature in project management and has a culture that fosters cooperation, effective communication, teamwork, and trust, then a highly flexible methodology can be created based upon guidelines, forms, checklists, and templates. Project managers can pick and choose the parts of the methodology that are appropriate for a particular client. Organizations that do not possess either of these two


characteristics rely heavily upon methodologies constructed with rigid policies and procedures, thus creating significant paperwork requirements with accompanying cost increases and removing the flexibility that the project manager needs for adapting the methodology to the needs of a specific client.

Jason Charvat describes these two types as light methodologies and heavy methodologies10:

Light Methodologies

Ever-increasing technological complexities, project delays, and changing client requirements brought about a small revolution in the world of development methodologies. A totally new breed of methodology—which is agile, adaptive, and involves the client every part of the way—is starting to emerge. Many of the heavyweight methodologists were resistant to the introduction of these “lightweight” or “agile” methodologies (Fowler 200111). These methodologies use an informal communication style. Unlike heavyweight methodologies, lightweight projects have only a few rules, practices, and documents. Projects are designed and built on face-to-face discussions, meetings, and the flow of information to the clients. The immediate difference of using light methodologies is that they are much less documentation-oriented, usually emphasizing a smaller amount of documentation for the project.

Heavy Methodologies

The traditional project management methodologies (i.e., SDLC approach) are considered bureaucratic or “predictive” in nature and have resulted in many unsuccessful projects. These heavy methodologies are becoming less popular. These methodologies are so laborious that the whole pace of design, development and deployment slows down—and nothing gets done. Project managers tend to predict every milestone because they want to foresee every technical detail (i.e., software code or engineering detail). This leads managers to start demanding many types of specifications, plans, reports, checkpoints, and schedules. Heavy methodologies attempt to plan a large part of a project in great detail over a long span of time. This works well until things start changing, and the project managers inherently try to resist change.

As organizations mature, the focus is on the development of a library of project management forms. Rather than use light or heavy methodologies as described above, the project manager may select those forms that are applicable to his or her project. This approach allows the project manager to possibly custom design a methodology for a particular client. Cynthia Stackpole has prepared a book of forms that project managers can use, and her book is aligned with the PMBOK



Rigid project management methodologies are frequently designed to be self- serving to benefit the parent company rather than the client. Robert Wysocki identifies six weaknesses of linear project management life-cycle methodologies13:

Does not accommodate change very well Costs too much Takes too long before any deliverables are produced Requires complete and detailed plans Must follow a rigid sequence of processes Is not focused on client value

These six weaknesses, the last one in particular, make it clear that clients may suffer from the use of a rigid methodology, especially if value-added opportunities cannot be discovered easily.



CORPORATE CULTURES It has often been said that the most difficult projects to manage are those that involve the management of change. Figure 2–24 shows the four basic inputs needed to develop a project management methodology. Each has a “human” side that may require that people change.

FIGURE 2–24. Methodology inputs.

PMBOK® Guide, 5th Edition Chapter 4 Integration Management

4.5 Integrated Change Control

2.1.1 Organizational Culture

Successful development and implementation of a project management methodology requires:

Identification of the most common reasons for change in project management Identification of the ways to overcome the resistance to change Application of the principles of organizational change management to ensure that the desired project management environment will be created and sustained

For simplicity’s sake, resistance can be classified as professional resistance and


personal resistance to change. Professional resistance occurs when each functional unit as a whole feels threatened by project management. This is shown in Figure 2– 25. Examples include:

FIGURE 2–25. Resistance to change.

Sales: The sales staff’s resistance to change arises from fear that project management will take credit for corporate profits, thus reducing the year-end bonuses for the sales force. Sales personnel fear that project managers may become involved in the sales effort, thus diminishing the power of the sales force. Marketing: Marketing people fear that project managers will end up working so closely with customers that project managers may eventually be given some of the marketing and sales functions. This fear is not without merit because customers often want to communicate with the personnel managing the project rather than those who may disappear after the sale is closed. Finance (and Accounting): These departments fear that project management will require the development of a project accounting system (such as earned value measurement) that will increase the workload in accounting and finance, and that they will have to perform accounting both horizontally (i.e., in projects) and vertically (i.e., in line groups). Procurement: The fear in this group is that a project procurement system will be implemented in parallel with the corporate procurement system, and that the project managers will perform their own procurement, thus bypassing the procurement department. Human Resources Management: The HR department may fear that a project management career path ladder will be created, requiring new training


programs. This will increase their workloads. Manufacturing: Little resistance is found here because, although the manufacturing segment is not project-driven, there are numerous capital installation and maintenance projects which will have required the use of project management. Engineering, R&D, and Information Technology: These departments are almost entirely project-driven with very little resistance to project management.

Getting the support of and partnership with functional management can usually overcome the functional resistance. However, the individual resistance is usually more complex and more difficult to overcome. Individual resistance can stem from:

Potential changes in work habits Potential changes in the social groups Embedded fears Potential changes in the wage and salary administration program

Tables 2–8 through 2–11 show the causes of resistance and possible solutions. Workers tend to seek constancy and often fear that new initiatives will push them outside their comfort zones. Most workers are already pressed for time in their current jobs and fear that new programs will require more time and energy. TABLE 2–8. RESISTANCE: WORK HABITS

Cause of Resistance Ways to Overcome New guidelines/processes Need to share “power” information Creation of a fragmented work environment Need to give up established work patterns (learn new skills) Change in comfort zones

Dictate mandatory conformance from above Create new comfort zones at an acceptable pace Identify tangible/intangible individual benefits


Cause of Resistance Ways to Overcome Unknown new relationships Multiple bosses Multiple, temporary assignments Severing of established ties

Maintain existing relationships Avoid cultural shock Find an acceptable pace for rate of change



Cause of Resistance Ways to Overcome Fear of failure Fear of termination Fear of added workload Fear or dislike of uncertainty/unknowns Fear of embarrassment Fear of a “we/they” organization

Educate workforce on benefits of changes to the individual/corporation Show willingness to admit/accept mistakes Show willingness to pitch in Transform unknowns into opportunities Share information


Causes of Resistance Ways to Overcome Shifts in authority and power Lack of recognition after the changes Unknown rewards and punishment Improper evaluation of personal performance Multiple bosses

Link incentives to change Identify future advancement opportunities/career path

Some companies feel compelled to continually undertake new initiatives, and people may become skeptical of these programs, especially if previous initiatives have not been successful. The worst case scenario is when employees are asked to undertake new initiatives, procedures, and processes that they do not understand.

It is imperative that we understand resistance to change. If individuals are happy with their current environment, there will be resistance to change. But what if people are unhappy? There will still be resistance to change unless (1) people believe that the change is possible, and (2) people believe that they will somehow benefit from the change.

Management is the architect of the change process and must develop the appropriate strategies so the organization can change. This is done best by developing a shared understanding with employees by doing the following:

Explaining the reasons for the change and soliciting feedback Explaining the desired outcomes and rationale Championing the change process Empowering the appropriate individuals to institutionalize the changes


Investing in training necessary to support the changes

For most companies, the change management process will follow the pattern shown in Figure 2–26. Employees initially refuse to admit the need for change. As management begins pursuing the change, the support for the change diminishes and pockets of resistance crop up. Continuous support for the change by management encourages employees to explore the potential opportunities that will result from the change about to take place. Unfortunately, this exploration often causes additional negative information to surface, thus reinforcing the resistance to change. As pressure by management increases, and employees begin to recognize the benefits of the proposed change, support begins to grow.

FIGURE 2–26. Change process.

The ideal purpose of change management is to create a superior culture. There are different types of project management cultures based upon the nature of the business, the amount of trust and cooperation, and the competitive environment. Typical types of cultures include:

Cooperative cultures: These are based upon trust and effective communications, internally and externally. Noncooperative cultures: In these cultures, mistrust prevails. Employees worry more about themselves and their personal interests than what’s best for the team, company, or customer. Competitive cultures: These cultures force project teams to compete with one another for valuable corporate resources. In these cultures, project managers often demand that the employees demonstrate more loyalty to the project than to their line managers. This can be disastrous when employees are working on many projects at the same time. Isolated cultures: These occur when a large organization allows functional units to develop their own project management cultures and can result in a


culture-within-a-culture environment. Fragmented cultures: These occur when part of the team is geographically separated from the rest of the team. Fragmented cultures also occur on multinational projects, where the home office or corporate team may have a strong culture for project management but the foreign team has no sustainable project management culture.

Cooperative cultures thrive on effective communication, trust, and cooperation. Decisions are based upon the best interest of all of the stakeholders. Executive sponsorship is passive, and very few problems go to the executive levels for resolution. Projects are managed informally and with minimal documentation and few meetings. This culture takes years to achieve and functions well during favorable and unfavorable economic conditions.

Noncooperative cultures are reflections of senior management’s inability to cooperate among themselves and with the workforce. Respect is nonexistent. These cultures are not as successful as a cooperative culture.

Competitive cultures can be healthy in the short term, especially if there is abundant work. Long-term effects are usually not favorable. In one instance, an electronics firm regularly bid on projects that required the cooperation of three departments. Management then implemented the unhealthy decision of allowing each of the three departments to bid on every job. The two “losing” departments would be treated as subcontractors.

Management believed that this competitiveness was healthy. Unfortunately, the long-term results were disastrous. The three departments refused to talk to one another and stopped sharing information. In order to get the job done for the price quoted, the departments began outsourcing small amounts of work rather than using the other departments that were more expensive. As more work was outsourced, layoffs occurred. Management then realized the disadvantages of the competitive culture it had fostered.

Executives are the architects of the corporate culture. The culture often reflects the personal whims and aspirations of the seniormost levels of management and how they desire to have the company function. Good cultures can actively support project management whereas poor cultures can act as a hindrance.

As discussed previously, there are several different types of cultures. Some of the facets for an effective project management culture are shown in Figure 2–27.

FIGURE 2–27. Facets of a project management culture.


The critical facets of a good culture are teamwork, trust communications, and cooperation. Some project management practitioners argue that communications and cooperation are the essential ingredients for teamwork and trust. In companies with excellent cultures, teamwork is exhibited by:

Employees and managers sharing ideas with each other and establishing high levels of innovation and creativity in work groups Employees and managers trusting each other and demonstrating loyalty to each other and the company Employees and managers being committed to the work they do and the promises they make Employees and managers sharing information freely Employees and managers consistently being open and honest with each other

When teamwork exists, trust usually follows, and this includes trust among the workers within the company and trust in dealing with clients. When trust occurs between the buyer and the seller, both parties eventually benefit, as shown in Table 2–12. TABLE 2–12. TRUST IN CUSTOMER–CONTRACTOR RELATIONSHIPS

Without Trust With Trust Continuous competitive bidding Long-term contracts, repeat business, single-

and sole-source contract awards


Massive project documentation Minimal documentation Excessive number of customer– contractor team meetings

Minimal number of team meetings

Team meeting with excessive documentation

Team meeting without documentation or minimal documentation

Sponsorship at the executive levels

Sponsorship at lower and middle levels of management



We believe today that we are managing our business by projects. As such, project managers are expected to make business decisions as well as project decisions. This also implies that we must capture not only project-related best practices, but business best practices as well.

For the past decade, whenever we would capture project management best practices, they would be placed in a project management best practices library. But as we capture business best practices, we begin replacing the project management best practices library with a knowledge repository that includes both project management and business-related best practices. This is shown in Figure 2–28.

FIGURE 2–28. Growth of knowledge management.

Another reason for the growth in intellectual property is because of the benchmarking activities that companies are performing, most likely using the project management office. Figure 2–29 shows typical benchmarking activities and the types of information being sought.

FIGURE 2–29. PM benchmarking and knowledge management (KM).



2.21 SYSTEMS THINKING Ultimately, all decisions and policies are made on the basis of judgments; there is no other way, and there never will be. In the end, analysis is but an aid to the judgment and intuition of the decision maker. These principles hold true for project management as well as for systems management.

The systems approach may be defined as a logical and disciplined process of problem-solving. The word process indicates an active ongoing system that is fed by input from its parts.

The systems approach:

Forces review of the relationship of the various subsystems Is a dynamic process that integrates all activities into a meaningful total system Systematically assembles and matches the parts of the system into a unified whole Seeks an optimal solution or strategy in solving a problem

The systems approach to problem-solving has phases of development similar to the life-cycle phases shown in Figure 2–21. These phases are defined as follows:

Translation: Terminology, problem objective, and criteria and constraints are defined and accepted by all participants. Analysis: All possible approaches to or alternatives to the solution of the problem are stated. Trade-off: Selection criteria and constraints are applied to the alternatives to meet the objective. Synthesis: The best solution in reaching the objective of the system is the result of the combination of analysis and trade-off phases.

Other terms essential to the systems approach are:

Objective: The function of the system or the strategy that must be achieved. Requirement: A partial need to satisfy the objective. Alternative: One of the selected ways to implement and satisfy a requirement. Selection criteria: Performance factors used in evaluating the alternatives to select a preferable alternative. Constraint: An absolute factor that describes conditions that the alternatives must meet.

A common error by potential decision makers (those dissatisfied individuals with


authority to act) who base their thinking solely on subjective experience, judgment, and intuition is that they fail to recognize the existence of alternatives. Subjective thinking is inhibited or affected by personal bias.

Objective thinking, on the other hand, is a fundamental characteristic of the systems approach and is exhibited or characterized by emphasis on the tendency to view events, phenomena, and ideas as external and apart from self-consciousness. Objective thinking is unprejudiced.

The systems analysis process, as shown in Figure 2–30, begins with systematic examination and comparison of those alternative actions that are related to the accomplishment of the desired objective. The alternatives are then compared on the basis of the resource costs and the associated benefits. The loop is then completed using feedback to determine how compatible each alternative is with the objectives of the organization.

FIGURE 2–30. The systems approach.


The above analysis can be arranged in steps:

Input data to mental process Analyze data Predict outcomes


Evaluate outcomes and compare alternatives Choose the best alternative Take action Measure results and compare them with predictions

The systems approach is most effective if individuals can be trained to be ready with alternative actions that directly tie in with the prediction of outcomes. The basic tool is the outcome array, which represents the matrix of all possible circumstances. This outcome array can be developed only if the decision maker thinks in terms of the wide scope of possible outcomes. Outcome descriptions force the decision maker to spell out clearly just what he is trying to achieve (i.e., his objectives).

Systems thinking is vital for the success of a project. Project management systems urgently need new ways of strategically viewing, questioning, and analyzing project needs for alternative nontechnical and technical solutions. The ability to analyze the total project, rather than the individual parts, is essential for successful project management.



CERTIFICATION EXAM This section is applicable as a review of the principles to support the knowledge areas and domain groups in the PMBOK® Guide. This chapter addresses:

Integration Management Scope Management Closure

Understanding the following principles is beneficial if the reader is using this text to study for the PMP® Certification Exam:

Brief historical background of project management That, early on, project managers were assigned from engineering Benefits of project management Barriers to project management implementation and how to overcome them Differences between a program and a project What is meant by informal project management How to identify success and failure in project management Project life-cycle phases What is meant by closure to a life-cycle phase or to the entire project What is meant by a project management methodology What is meant by critical success factors (CSFs) and key performance indicators (KPIs)

In Appendix C, the following Dorale Products mini–case studies are applicable:

Dorale Products (A) [Integration and Scope Management] Dorale Products (B) [Integration and Scope Management] Dorale Products (C) [Integration and Scope Management] Dorale Products (D) [Integration and Scope Management] Dorale Products (E) [Integration and Scope Management] Dorale Products (F) [Integration and Scope Management]

The following multiple-choice questions will be helpful in reviewing the principles of this chapter:


1. A structured process for managing a multitude of projects is most commonly referred to as:

A. Project management policies

B. Project management guidelines

C. Industrywide templates

D. A project management methodology

2. The most common terminology for a reusable project management methodology is:

A. Template

B. Concurrent scheduling technique

C. Concurrent planning technique

D. Skeleton framework document

3. The major behavioral issue in getting an organization to accept and use a project management methodology effectively is:

A. Lack of executive sponsorship

B. Multiple boss reporting

C. Inadequate policies and procedures

D. Limited project management applications

4. The major difference between a project and a program is usually: A. The role of the sponsor

B. The role of the line manager

C. The timeframe

D. The specifications

5. Projects that remain almost entirely within one functional area are best managed by the:

A. Project manager

B. Project sponsor

C. Functional manager

D. Assigned functional employees


6. Large projects are managed by: A. The executive sponsor

B. The project or program office for that project

C. The manager of project managers

D. The director of marketing

7. The most common threshold limits on when to use the project management methodology are:

A. The importance of the customer and potential profitability

B. The size of the project (i.e., $) and duration

C. The reporting requirements and position of the sponsor

D. The desires of management and functional boundaries crossed

8. A grouping of projects is called a: A. Program

B. Project template

C. Business template

D. Business plan

9. Project management methodologies often work best if they are structured around:

A. Rigid policies

B. Rigid procedures

C. Minimal forms and checklists

D. Life-cycle phases

10. One way to validate the successful implementation of project management is by looking at the number and magnitude of the conflicts requiring:

A. Executive involvement

B. Customer involvement

C. Line management involvement

D. Project manager involvement

11. Standardization and control are benefits usually attributed to:


A. Laissez-faire management

B. Project management on R&D efforts

C. Use of life cycle-phases

D. An organization with weak executive sponsorship

12. The most difficult decision for an executive sponsor to make at the end-of- phase review meeting is to:

A. Allow the project to proceed to the next phase based upon the original objective

B. Allow the project to proceed to the next phase based upon a revised objective

C. Postpone making a decision until more information is processed

D. Cancel the project

13. Having too many life-cycle phases may be detrimental because: A. Executive sponsors will micromanage.

B. Executive sponsors will become “invisible.”

C. The project manager will spend too much time planning for gate review meetings rather than managing the phases.

D. The project manager will need to develop many different plans for each phase.

14. A project is terminated early because the technology cannot be developed, and the resources are applied to another project that ends up being successful. Which of the following is true concerning the first project?

A. The first project is regarded as a failure.

B. The first project is a success if the termination is done early enough before additional resources are squandered.

C. The first project is a success if the project manager gets promoted.

D. The first project is a failure if the project manager gets reassigned to a less important project.

15. Which of the following would not be regarded as a secondary definition of project success?

A. The customer is unhappy with the deliverable, but follow-on business is


awarded based on effective customer relations.

B. The deliverables are met but OSHA and EPA laws are violated.

C. The customer is displeased with the performance, but you have developed a new technology that could generate many new products.

D. The project’s costs were overrun by 40 percent, but the customer funds an enhancement project.



2. A

3. B

4. C

5. C

6. B

7. B

8. A

9. D

10. A

11. C

12. D

13. C

14. B

15. B


PROBLEMS 2–1 Can the organizational chart of a company be considered as a systems model? If so, what kind of systems model?

2–2 Do you think that someone could be a good systems manager but a poor project manager? What about the reverse situation? State any assumptions that you may have to make.

2–3 Can we consider R&D as a system? If so, under what circumstances?

2–4 For each of the following projects, state whether we are discussing an open, closed, or extended system:

a. A high-technology project

b. New product R&D

c. An on-line computer system for a bank

d. Construction of a chemical plant

e. Developing an in-house cost accounting reporting system

2–5 Can an entire organization be considered as a model? If so, what type?

2–6 Systems can be defined as a combination or interrelationship of subsystems. Does a project have subsystems?

2–7 If a system can, in fact, be broken down into subsystems, what problems can occur during integration?

2–8 How could suboptimization occur during systems thinking and analysis?

2–9 Would a cost-benefit analysis be easier or harder to perform in a traditional or project management organizational structure?

2–10 What impact could the product life cycle have on the selection of the project organizational structure?

2–11 In the development of a system, what criteria should be used to determine where one phase begins and another ends and where overlap can occur?

2–12 Consider the following expression: “Damn the torpedoes: full-speed ahead.” Is it possible that this military philosophy can be applied to project management and lead to project success?

2–13 Can a company be successful at project management without having or using a project management methodology?

2–14 Who determines how many life-cycle phases should be part of a project management methodology?

2–15 As project management matures, would you expect the number of life-cycle phases to increase or decrease?

2–16 Some people believe that the greatest resistance to the changes needed for the implementation of project management occurs at the executives levels. Why is that?

2–17 What would you consider to be possibly the most important factor in reducing the cost of implementing project management?

2–18 Under what conditions can a project be considered as both a success and a failure at the same time?


2–19 Is the goal of a paperless project management system easier to achieve with formal or informal project management?

2–20 Is it possible to attain an informal project management approach without first going through formalized project management?



Background John Compton, The president of the company, expressed his feelings quite bluntly at the executive staff meeting;

We are no longer competitive in the marketplace. Almost all of the Requests for Proposal (RFP) that we want to bid on have a requirement that we must identify in the proposal the project management methodology we will use on the contract should we be awarded the contract. We have no project management methodology. We have just a few templates we use based upon the PMBOK® Guide. All of our competitors have methodologies, but not us.

I have been asking for a methodology to be developed for more than a year now, and all I get are excuses. Some of you are obviously afraid that you might lose power and authority once the methodology is up and running. That may be true, but losing some power and authority is obviously better than losing your job. In six months I want to see a methodology in use on all projects or I will handle the situation myself. I simply cannot believe that my executive staff is afraid to develop a project management methodology.

Critical Issues The executive staff knew this day was inevitable; they had to take the initiative in the implementation of a project management methodology. Last year, a consultant was brought in to conduct a morning three-hour session on the benefits of project management and the value of an enterprise project management methodology (EPM). As part of the session, the consultant explained that the time needed to develop and implement an EPM system can be shortened if the company has a


project management office (PMO) in place to take the lead role. The consultant also explained that whichever executive gets control of the PMO may become more powerful than other executives because he or she now controls all of the project management intellectual property. The executive staff fully understood the implication of this and therefore became reluctant to visibly support project management until they could see how their organization would be affected. In the meantime, project management suffered.

Reluctantly, a PMO was formed reporting to the chief information officer. The PMO was comprised of a handful of experienced project managers that could hopefully take the lead in the development of a methodology. The PMO concluded that there were five steps that had to be done initially. After the five steps were done, the executive committee would receive a final briefing on what had been accomplished. The final briefing would be in addition to the monthly updates and progress reports. The PMO believed that getting executive support and signoffs in a timely manner would be difficult.

The first step that needed to be done was the establishment of the number of life-cycle phases. Some people interviewed wanted ten to twelve life-cycle phases. That meant that there would be ten to twelve gate review meetings and the project managers would spend a great deal of time preparing paperwork for the gate review meetings rather than managing the project. The decision was then made to have no more than six life-cycle phases.

The second step was to decide whether the methodology should be designed around rigid policies and procedures or go the more informal route of using forms, guidelines, checklists, and templates. The PMO felt that project managers needed some degree of freedom in dealing with clients and therefore the more informal approach would work best. Also, clients were asking to have the methodology designed around the client’s business needs and the more informal approach would provide the flexibility to do this.

The third step was to see what could be salvaged from the existing templates and checklists. The company had a few templates and checklists but not all of the project managers used them. The decision was made to develop a standardized set of documents in accordance with the information in the PMBOK® Guide. The project managers


could then select whatever forms, guidelines, templates, and checklists were appropriate for a particular project and client.

The fourth step would be to develop a means for capturing best practices using the EPM system. Clients were now requiring in their RFP that best practices on a project must be captured and shared with the client prior to the closeout of the project. Most of the people in the PMO believed that this could be done using forms or checklists at the final project debriefing meeting.

The fifth step involved education and training. The project managers and functional organizations that would staff the projects would need to be trained in the use of the new methodology. The PMO believed that a one-day training program would suffice and the functional organizations could easily release their people for a one-day training session.

QUESTIONS 1. What can you determine about the corporate culture from the fact that they waited this long to consider the development of an EPM system?

2. Can a PMO accelerate the implementation process?

3. Is it acceptable for the PMO to report to the chief information officer or to someone else?

4. Why is it best to have six or less life-cycle phases in an EPM system?

5. Is it best to design an EPM system around flexible or inflexible elements? Generally, when first developing an EPM system, do companies prefer to use formality or informality in the design?

6. Should an EPM system have the capability of capturing best practices?

1. ©2010 by Harold Kerzner. Reproduced by permission. All rights reserved.

* Case Study appears at end of the chapter.

1. William P. Killian, “Project Management—Future Organizational Concepts,” Marquette Business Review, Vol. 2, 1971, pp. 90–107.


2. Reprinted from the October 17, 1970, issue of BusinessWeek by special permission, © 1970 by McGraw-Hill, Inc., New York, New York 10020. All rights reserved.

3. Reprinted by permission of Harvard Business Review. From Paul R. Lawrence and Jay W. Lorsch, “New Management Job: The Integrator,” Harvard Business Review, November–December 1967, p. 142. Copyright © 1967 by the Harvard Business School Publishing Corporation; all rights reserved.

4. Adapted from Robert D. Gilbreath, Winning at Project Management. New York: Wiley, 1986, pp. 2–6.

5. Unified Project Management Methodology (UPMM™) is a trademark of the International Institute for Learning, Inc., ©2003–2012 by the International Institute for Learning, Inc.; all rights reserved.

6. J. Charvat, Project Management Methodologies (Wiley, Hoboken, NJ), 2003, p. 2.

7. Note 6, p. 4.

8. Note 6, p. 5.

9. Note 6, p. 66.

10. Note 6, pp. 102–104.

11. M. Fowler, The New Methodology, Thought Works, 2001, available at

12. C. Snyder Stackpole, A Project Manager’s Book of Forms (Wiley, Hoboken, NJ, 2009).

13. R. K. Wysocki, Effective Project Management, 5th ed. (Wiley, Hoboken, NJ, 2009), pp. 350–351.


Organizational Structures

Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 5th Edition, Reference Section for the PMP® Certification Exam

Quasar Communications, Inc. Jones and Shephard Accountants, Inc.* Fargo Foods Mohawk National Bank Coronado Communications, Inc.*

The Struggle with Implementation Multiple Choice Exam

Human Resource Management


3.0 INTRODUCTION During the past thirty years there has been a so-called hidden revolution in the introduction and development of new organizational structures. Management has come to realize that organizations must be dynamic in nature; that is, they must be capable of rapid restructuring should environmental conditions so dictate. These environmental factors evolved from the increasing competitiveness of the market, changes in technology, and a requirement for better control of resources for multiproduct firms.

PMBOK® Guide, 5th Edition 2.1.3 Organizational Structure

Chapter 9 Human Resource Management

Much has been written about how to identify and interpret those signs that indicate that a new organizational form may be necessary. According to Grinnell and Apple, there are five general indications that the traditional structure may not be adequate for managing projects1:

Management is satisfied with its technical skills, but projects are not meeting time, cost, and other project requirements. There is a high commitment to getting project work done, but great fluctuations in how well performance specifications are met. Highly talented specialists involved in the project feel exploited and misused. Particular technical groups or individuals constantly blame each other for failure to meet specifications or delivery dates. Projects are on time and to specifications, but groups and individuals aren’t satisfied with the achievement.

Unfortunately, many companies do not realize the necessity for organizational change until it is too late. Management looks externally (i.e., to the environment) rather than internally for solutions to problems. A typical example would be that new product costs are rising while the product life cycle may be decreasing. Should emphasis be placed on lowering costs or developing new products?

If we assume that an organizational system is composed of both human and nonhuman resources, then we must analyze the sociotechnical subsystem whenever organizational changes are being considered. The social system is represented by


the organization’s personnel and their group behavior. The technical system includes the technology, materials, and machines necessary to perform the required tasks.

Behavioralists contend that there is no one best structure to meet the challenges of tomorrow’s organizations. The structure used, however, must be one that optimizes company performance by achieving a balance between the social and the technical requirements.

Organizations can be defined as groups of people who must coordinate their activities in order to meet organizational objectives. The coordination function requires strong communications and a clear understanding of the relationships and interdependencies among people. Organizational structures are dictated by such factors as technology and its rate of change, complexity, resource availability, products and/or services, competition, and decision-making requirements. The reader must keep in mind that there is no such thing as a good or bad organizational structure; there are only appropriate or inappropriate ones.

Even the simplest type of organizational change can induce major conflicts. The creation of a new position, the need for better planning, the lengthening or shortening of the span of control, the need for additional technology (knowledge), and centralization or decentralization can result in major changes in the sociotechnical subsystem.

Organizational restructuring is a compromise between the traditional (classical) and the behavioral schools of thought; management must consider the needs of individuals as well as the needs of the company. Is the organization structured to manage people or to manage work?

There is a wide variety of organizational forms for restructuring management. The exact method depends on the people in the organization, the company’s product lines, and management’s philosophy. A poorly restructured organization can sever communication channels that may have taken months or years to cultivate; cause a restructuring of the informal organization, thus creating new power, status, and political positions; and eliminate job satisfaction and motivational factors to such a degree that complete discontent results.

If the company’s position is very sensitive to the environment, then management may be most concerned with the control task. For an organization with multiple products, each requiring a high degree of engineering and technology, the integration task can become primary. Finally, for situations with strong labor unions and repetitive tasks, external relations can predominate, especially in strong technological and scientific environments where strict government regulations must be adhered to.


In the sections that follow, a variety of organizational forms will be presented. Obviously, it is an impossible task to describe all possible organizational structures. Each form describes how the project management organization evolved from the classical theories of management. Advantages and disadvantages are listed for technology and social systems.

The answers to these questions are not easy. For the most part, they are a matter of the judgment exercised by organizational and behavioral managers.



Organizations are continually restructured to meet the demands imposed by the environment. Restructuring can change the role of individuals in the formal and the informal organization. Many researchers believe that the greatest usefulness of behavioralists lies in their ability to help the informal organization adapt to changes and resolve the resulting conflicts. Unfortunately, behavioralists cannot be totally effective unless they have input into the formal organization as well. Whatever organizational form is finally selected, formal channels must be developed so that each individual has a clear description of the authority, responsibility, and accountability necessary for the work to proceed.

In the discussion of organizational structures, the following definitions will be used:

Authority is the power granted to individuals (possibly by their position) so that they can make final decisions. Responsibility is the obligation incurred by individuals in their roles in the formal organization to effectively perform assignments. Accountability is being answerable for the satisfactory completion of a specific assignment. (Accountability = authority + responsibility.)

Authority and responsibility can be delegated to lower levels in the organization, whereas accountability usually rests with the individual. Yet many executives refuse to delegate and argue that an individual can have total accountability just through responsibility.

Even with these clearly definable divisions of authority, responsibility, and accountability, establishing good relationships between project and functional managers can take a great deal of time, especially during the conversion from a traditional to a project organizational form. Trust is the key to success here. The normal progression in the growth of trust is as follows:

Even though a problem exists, both the project and functional managers deny that any problem exists. When the problem finally surfaces, each manager blames the other. As trust develops, both managers readily admit responsibility for the problems. The project and functional managers meet face-to-face to work out the problem.


The project and functional managers begin to formally and informally anticipate problems.

For each of the organizational structures described in the following sections, advantages and disadvantages are listed. Many of the disadvantages stem from possible conflicts arising from problems in authority, responsibility, and accountability.



The traditional management structure has survived for more than two centuries. However, recent business developments, such as the rapid rate of change in technology and increased stockholder demands, have created strains on existing organizational forms. Fifty years ago companies could survive with only one or two product lines. The classical management organization, as shown in Figure 3–1, was satisfactory for control, and conflicts were minimal.2

FIGURE 3–1. The traditional management structure.

However, with the passing of time, companies found that survival depended on multiple product lines (i.e., diversification) and vigorous integration of technology into the existing organization. As organizations grew and matured, managers found that company activities were not being integrated effectively, and that new conflicts were arising in the well-established formal and informal channels. Managers began searching for more innovative organizational forms that would alleviate these problems.

Before a valid comparison can be made with the newer forms, the advantages and disadvantages of the traditional structure must be shown. Table 3–1 lists the advantages of the traditional organization. As seen in Figure 3–1, the general


manager has all of the functional entities necessary to perform R&D or develop and manufacture a product. All activities are performed within the functional groups and are headed by a department (or, in some cases, a division) head. Each department maintains a strong concentration of technical expertise. Since all projects must flow through the functional departments, each project can benefit from the most advanced technology, thus making this organizational form well suited to mass production. Functional managers can hire a wide variety of specialists and provide them with easily definable paths for career progression. TABLE 3–1. ADVANTAGES OF THE TRADITIONAL (CLASSICAL) ORGANIZATION

Easier budgeting and cost control are possible. Better technical control is possible.

Specialists can be grouped to share knowledge and responsibility. Personnel can be used on many different projects. All projects will benefit from the most advanced technology (better utilization of scarce personnel).

Flexibility in the use of manpower. A broad manpower base to work with. Continuity in the functional disciplines; policies, procedures, and lines of responsibility are easily defined and understandable. Admits mass production activities within established specifications. Good control over personnel, since each employee has one and only one person to report to. Communication channels are vertical and well established. Quick reaction capability exists, but may be dependent upon the priorities of the functional managers.

The functional managers maintain absolute control over the budget. They establish their own budgets, on approval from above, and specify requirements for additional personnel. Because the functional manager has manpower flexibility and a broad base from which to work, most projects are normally completed within cost.

Both the formal and informal organizations are well established, and levels of authority and responsibility are clearly defined. Because each person reports to only one individual, communication channels are well structured. If a structure has this many advantages, then why are we looking for other structures?

For each advantage, there is almost always a corresponding disadvantage (see Table 3–2). The majority of these disadvantages are related to the absence of a strong central authority or individual responsible for the total project. As a result,


integration of activities that cross functional lines becomes difficult, and top-level executives must get involved with the daily routine. Conflicts occur as each functional group struggles for power. Ideas may remain functionally oriented with very little regard for ongoing projects, and the decision-making process will be slow and tedious. TABLE 3–2. DISADVANTAGES OF THE TRADITIONAL (CLASSICAL) ORGANIZATION

No one individual is directly responsible for the total project (i.e., no formal authority; committee solutions). Does not provide the project-oriented emphasis necessary to accomplish the project tasks. Coordination becomes complex, and additional lead time is required for approval of decisions. Decisions normally favor the strongest functional groups. No customer focal point. Response to customer needs is slow. Difficulty in pinpointing responsibility; this is the result of little or no direct project reporting, very little project-oriented planning, and no project authority. Motivation and innovation are decreased. Ideas tend to be functionally oriented with little regard for ongoing projects.

Because there is no customer focal point, all communications must be channeled through upper-level management. Upper-level managers then act in a customer- relations capacity and refer all complex problems down through the vertical chain of command to the functional managers. The response to the customer’s needs therefore becomes a slow and aggravating process.

Projects have a tendency to fall behind schedule in the classical organizational structure. Incredibly large lead times are required. Functional managers attend to those tasks that provide better benefits to themselves and their subordinates first.

With the growth of project management in the late 1960s, executives began to realize that many of the problems were the result of weaknesses in the traditional structure. William Goggin identified the problems that faced Dow Corning3:

Although Dow Corning was a healthy corporation in 1967, it showed difficulties that troubled many of us in top management. These symptoms were, and still are, common ones in U.S. business and have been described countless times in reports, audits, articles and speeches. Our symptoms took such form as:

Executives did not have adequate financial information and control of their


operations. Marketing managers, for example, did not know how much it cost to produce a product. Prices and margins were set by division managers. Cumbersome communications channels existed between key functions, especially manufacturing and marketing. In the face of stiffening competition, the corporation remained too internalized in its thinking and organizational structure. It was insufficiently oriented to the outside world. Lack of communications between divisions not only created the antithesis of a corporate team effort but also was wasteful of a precious resource—people. Long-range corporate planning was sporadic and superficial; this was leading to overstaffing, duplicated effort and inefficiency.



As companies grew in size, more emphasis was placed on multiple ongoing programs with high-technology requirements. Organizational pitfalls soon appeared, especially in the integration of the flow of work. As management discovered that the critical point in any program is the interface between functional units, the new theories of “interface management” developed.

Because of the interfacing problems, management began searching for innovative methods to coordinate the flow of work between functional units without modification to the existing organizational structure. This coordination was achieved through several integrating mechanisms4:

Rules and procedures Planning processes Hierarchical referral Direct contact

By specifying and documenting management policies and procedures, management attempted to eliminate conflicts between functional departments. Management felt that, even though many of the projects were different, the actions required by the functional personnel were repetitive and predictable. The behavior of the individuals should therefore be easily integrated into the flow of work with minimum communication between individuals or functional groups.

Another means of reducing conflicts and minimizing the need for communication was detailed planning. Functional representation would be present at all planning, scheduling, and budget meetings. This method worked best for nonrepetitive tasks and projects.

In the traditional organization, one of the most important responsibilities of upper-level management was the resolution of conflicts through “hierarchical referral.” The continuous conflicts and struggle for power between the functional units consistently required that upper-level personnel resolve those problems resulting from situations that were either nonroutine or unpredictable and for which no policies or procedures existed.

The fourth method is direct contact and interactions by the functional managers. The rules and procedures, as well as the planning process method, were designed to minimize ongoing communications between functional groups. The quantity of conflicts that executives had to resolve forced key personnel to spend a great


percentage of their time as arbitrators, rather than as managers. To alleviate problems of hierarchical referral, upper-level management requested that all conflicts be resolved at the lowest possible levels. This required that functional managers meet face-to-face to resolve conflicts.

In many organizations, these new methods proved ineffective, primarily because there still existed a need for a focal point for the project to ensure that all activities would be properly integrated.

When the need for project managers was acknowledged, the next logical question was where in the organization to place them. Executives preferred to keep project managers low in the organization. After all, if they reported to someone high up, they would have to be paid more and would pose a continuous threat to management.

The first attempt to resolve this problem was to develop project leaders or coordinators within each functional department, as shown in Figure 3–2. Section- level personnel were temporarily assigned as project leaders and would return to their former positions at project termination. This is why the term “project leader” is used rather than “project manager,” as the word “manager” implies a permanent relationship. This arrangement proved effective for coordinating and integrating work within one department, provided that the correct project leader was selected. Some employees considered this position an increase in power and status, and conflicts occurred about whether assignments should be based on experience, seniority, or capability. Furthermore, the project leaders had almost no authority, and section-level managers refused to take directions from them, fearing that the project leaders might be next in line for the department manager’s position.

FIGURE 3–2. Departmental project management.


When the activities required efforts that crossed more than one functional boundary, conflicts arose. The project leader in one department did not have the authority to coordinate activities in any other department. Furthermore, the creation of this new position caused internal conflicts within each department. As a result, many employees refused to become dedicated to project management and were anxious to return to their “secure” jobs. Quite often, especially when cross- functional integration was required, the division manager was forced to act as the project manager. If the employee enjoyed the assignment of project leader, he would try to “stretch out” the project as long as possible.

Even though we have criticized this organizational form, it does not mean that it cannot work. Any organizational form will work if the employees want it to work. As an example, a computer manufacturer has a midwestern division with three departments, as in Figure 3–2, and approximately fourteen people per department. When a project comes in, the division manager determines which department will handle most of the work. Let us say that the work load is 60 percent department X, 30 percent department Y, and 10 percent department Z. Since most of the effort is in department X, the project leader is selected from that department. When the project leader goes into the other two departments to get resources, he will almost always get the resources he wants. This organizational form works in this case because:

The other department managers know that they may have to supply the project leader on the next activity.


There are only three functional boundaries or departments involved (i.e., a small organization).

The next step in the evolution of project management was the task force concept. The rationale behind the task force concept was that integration could be achieved if each functional unit placed a representative on the task force. The group could then jointly solve problems as they occurred, provided that budget limitations were still adhered to. Theoretically, decisions could now be made at the lowest possible levels, thus expediting information and reducing, or even eliminating, delay time.

The task force was composed of both part-time and full-time personnel from each department involved. Daily meetings were held to review activities and discuss potential problems. Functional managers soon found that their task force employees were spending more time in unproductive meetings than in performing functional activities. In addition, the nature of the task force position caused many individuals to shift membership within the informal organization. Many functional managers then placed nonqualified and inexperienced individuals on task forces. The result was that the group soon became ineffective because they either did not have the information necessary to make the decisions, or lacked the authority (delegated by the functional managers) to allocate resources and assign work.

Development of the task force concept was a giant step toward conflict resolution: Work was being accomplished on time, schedules were being maintained, and costs were usually within budget. But integration and coordination were still problems because there were no specified authority relationships or individuals to oversee the entire project through completion. Attempts were made to overcome this by placing various people in charge of the task force: Functional managers, division heads, and even upper-level management had opportunities to direct task forces. However, without formal project authority relationships, task force members remained loyal to their functional organizations, and when conflicts came about between the project and functional organization, the project always suffered.

Although the task force concept was a step in the right direction, the disadvantages strongly outweighed the advantages. A strength of the approach was that it could be established very rapidly and with very little paperwork. Integration, however, was complicated; work flow was difficult to control; and functional support was difficult to obtain because it was almost always strictly controlled by the functional manager. In addition, task forces were found to be grossly ineffective on long-range projects.

The next step in the evolution of work integration was the establishment of liaison departments, particularly in engineering divisions that perform multiple projects


involving a high level of technology (see Figure 3–3). The purpose of the liaison department was to handle transactions between functional units within the (engineering) division. The liaison personnel received their authority through the division head. The liaison department did not actually resolve conflicts. Their prime function was to assure that all departments worked toward the same requirements and goals. Liaison departments are still in existence in many large companies and typically handle engineering changes and design problems.

FIGURE 3–3. Engineering division with liaison department (The Expeditor).

Unfortunately, the liaison department is simply a scaleup of the project coordinator within the department. The authority given to the liaison department extends only to the outer boundaries of the division. If a conflict arose between the manufacturing and engineering divisions, for example, it would still be referred to upper management for resolution. Today, liaison departments are synonymous with project engineering and systems engineering departments, and the individuals in these departments have the authority to span the entire organization.



It soon became obvious that control of a project must be given to personnel whose first loyalty is directed toward the completion of the project. Thus the project management position must not be controlled by the functional managers. Figure 3–4 shows a typical line–staff organization.

FIGURE 3–4. Line–staff organization (Project Coordinator).

Two possible situations can exist with this form of line–staff project control. In the first, the project manager serves only as the focal point for activity control, that is, a center for information. The prime responsibility of the project manager is to keep the division manager informed of the status of the project and to “harass” or attempt to “influence” managers into completing activities on time. Referring to such early project managers, Galbraith stated, “Since these men had no formal authority, they had to resort to their technical competence and their interpersonal skills in order to be effective.”5

The project manager in the first situation maintained monitoring authority only, despite the fact that both he and the functional manager reported to the same individual. Both work assignments and merit reviews were made by the functional managers. Department managers refused to take direction from the project managers because to do so would seem an admission that the project manager was next in


line to be the division manager.

The amount of authority given to the project manager posed serious problems. Almost all upper-level and division managers were from the classical management schools and therefore maintained serious reservations about how much authority to relinquish. Many of these managers considered it a demotion if they had to give up any of their long-established powers.

In the second situation, the project manager is given more authority; using the authority vested in him by the division manager, he can assign work to individuals in the functional organizations. The functional manager, however, still maintains the authority to perform merit reviews, but cannot enforce both professional and organizational standards in the completion of an activity. The individual performing the work is now caught in a web of authority relationships, and additional conflicts develop because functional managers are forced to share their authority with the project manager.

Although this second situation did occur during the early stages of matrix project management, it did not last because:

Upper-level management was not ready to cope with the problems arising from shared authority. Upper-level management was reluctant to relinquish any of its power and authority to project managers. Line–staff project managers who reported to a division head did not have any authority or control over those portions of a project in other divisions; that is, the project manager in the engineering division could not direct activities in the manufacturing division.



The pure product organization, as shown in Figure 3–5, develops as a division within a division. As long as there exists a continuous flow of projects, work is stable and conflicts are at a minimum. The major advantage of this organizational flow is that one individual, the program manager, maintains complete line authority over the entire project. Not only does he assign work, but he also conducts merit reviews. Because each individual reports to only one person, strong communication channels develop that result in a very rapid reaction time.

FIGURE 3–5. Pure product or projectized structure.

In pure product organizations, long lead times became a thing of the past. Trade- off studies could be conducted as fast as time would permit without the need to look at the impact on other projects (unless, of course, identical facilities or equipment were required). Functional managers were able to maintain qualified staffs for new product development without sharing personnel with other programs and projects.

The responsibilities attributed to the project manager were entirely new. First, his authority was now granted by the vice president and general manager. The program manager handled all conflicts, both those within his organization and those


involving other projects. Interface management was conducted at the program manager level. Upper-level management was now able to spend more time on executive decision-making than on conflict arbitration.

The major disadvantage with the pure project form is the cost of maintaining the organization. There is no chance for sharing an individual with another project in order to reduce costs. Personnel are usually attached to these projects long after they are needed because once an employee is given up, the project manager might not be able to get him back. Motivating personnel becomes a problem. At project completion, functional personnel do not “have a home” to return to. Many organizations place these individuals into an overhead labor pool from which selection can be made during new project development. People remaining in the labor pool may be laid off. As each project comes to a close, people become uneasy and often strive to prove their worth to the company by overachieving, a condition that is only temporary. It is very difficult for management to convince key functional personnel that they do, in fact, have career opportunities in this type of organization.

In pure functional (traditional) structures, technologies are well developed, but project schedules often fall behind. In the pure project structure, the fast reaction time keeps activities on schedule, but technology suffers because without strong functional groups, which maintain interactive technical communication, the company’s outlook for meeting the competition may be severely hampered. The engineering department for one project might not communicate with its counterpart on other projects, resulting in duplication of efforts.

The last major disadvantage of this organizational form lies in the control of facilities and equipment. The most frequent conflict occurs when two projects require use of the same piece of equipment or facilities at the same time. Upper- level management must then assign priorities to these projects. This is normally accomplished by defining certain projects as strategic, tactical, or operational—the same definitions usually given to plans.

Tables 3–3 and 3–4 summarize the advantages and disadvantages of this organizational form. TABLE 3–3. ADVANTAGES OF THE PRODUCT ORGANIZATIONAL FORM

Provides complete line authority over the project (i.e., strong control through a single project authority). Participants work directly for the project manager. Unprofitable product lines are easily identified and can be eliminated. Strong communications channels.


Staffs can maintain expertise on a given project without sharing key personnel. Very rapid reaction time is provided. Personnel demonstrate loyalty to the project; better morale with product identification. A focal point develops for out-of-company customer relations. Flexibility in determining time (schedule), cost, and performance trade-offs. Interface management becomes easier as unit size is decreased. Upper-level management maintains more free time for executive decision- making.


Cost of maintaining this form in a multiproduct company would be prohibitive due to duplication of effort, facilities, and personnel; inefficient usage. A tendency to retain personnel on a project long after they are needed. Upper- level management must balance workloads as projects start up and are phased out. Technology suffers because, without strong functional groups, outlook of the future to improve company’s capabilities for new programs would be hampered (i.e., no perpetuation of technology). Control of functional (i.e., organizational) specialists requires top-level coordination. Lack of opportunities for technical interchange between projects. Lack of career continuity and opportunities for project personnel.



The matrix organizational form is an attempt to combine the advantages of the pure functional structure and the product organizational structure. This form is ideally suited for companies, such as construction, that are “project-driven.” Figure 3–6 shows a typical matrix structure. Each project manager reports directly to the vice president and general manager. Since each project represents a potential profit center, the power and authority used by the project manager come directly from the general manager. The project manager has total responsibility and accountability for project success. The functional departments, on the other hand, have functional responsibility to maintain technical excellence on the project. Each functional unit is headed by a department manager whose prime responsibility is to ensure that a unified technical base is maintained and that all available information can be exchanged for each project. Department managers must also keep their people aware of the latest technical accomplishments in the industry.

FIGURE 3–6. Typical matrix structure.


PMBOK® Guide, 5th Edition Matrix Organizational Structures Figures 2–3, 2–4, 2–5

Project management is a “coordinative” function, whereas matrix management is a collaborative function division of project management. In the coordinative or project organization, work is generally assigned to specific people or units who “do their own thing.” In the collaborative or matrix organization, information sharing may be mandatory, and several people may be required for the same piece of work. In a project organization, authority for decision-making and direction rests with the project leader, whereas in a matrix it rests with the team.

Certain ground rules exist for matrix development:

Participants must spend full time on the project; this ensures a degree of loyalty. Horizontal as well as vertical channels must exist for making commitments. There must be quick and effective methods for conflict resolution. There must be good communication channels and free access between managers. All managers must have input into the planning process. Both horizontally and vertically oriented managers must be willing to negotiate for resources. The horizontal line must be permitted to operate as a separate entity except for administrative purposes.

Before describing the advantages and disadvantages of this structure, the organization concepts must be introduced. The basis for the matrix approach is an attempt to create synergism through shared responsibility between project and functional management. Yet this is easier said than done. No two working environments are the same, and, therefore, no two companies will have the same matrix design. The following questions must be answered before a matrix structure can be successful:

If each functional unit is responsible for one aspect of a project, and other parts are conducted elsewhere (possibly subcontracted to other companies), how can a synergistic environment be created? Who decides which element of a project is most important? How can a functional unit (operating in a vertical structure) answer questions and achieve project goals and objectives that are compatible with other


projects? The answers to these questions depend on mutual understanding between the

project and functional managers. Since both individuals maintain some degree of authority, responsibility, and accountability on each project, they must continuously negotiate. Unfortunately, the program manager might only consider what is best for his project (disregarding all others), whereas the functional manager might consider his organization more important than each project.

In order to get the job done, project managers need organizational status and authority. A corporate executive contends that the organization chart shown in Figure 3–6 can be modified to show that the project managers have adequate organizational authority by placing the department manager boxes at the tip of the functional responsibility arrowheads. With this approach, the project managers appear to be higher in the organization than their departmental counterparts but are actually equal in status. Executives who prefer this method must exercise caution because the line and project managers may not feel that there is still a balance of power.

Problem-solving in this environment is fragmented and diffused. The project manager acts as a unifying agent for project control of resources and technology. He must maintain open channels of communication to prevent suboptimization of individual projects.

In many situations, functional managers have the power to make a project manager look good, if they can be motivated to think about what is best for the project. Unfortunately, this is not always accomplished. As stated by Mantell6:

There exists an inevitable tendency for hierarchically arrayed units to seek solutions and to identify problems in terms of scope of duties of particular units rather than looking beyond them. This phenomenon exists without regard for the competence of the executive concerned. It comes about because of authority delegation and functionalism.

The project environment and functional environment cannot be separated; they must interact. The location of the project and functional unit interface is the focal point for all activities.

The functional manager controls departmental resources (i.e., people). This poses a problem because, although the project manager maintains the maximum control (through the line managers) over all resources including cost and personnel, the functional manager must provide staff for the project’s requirements. It is therefore inevitable that conflicts occur between functional and project managers7:


These conflicts revolve about items such as project priority, manpower costs, and the assignment of functional personnel to the project manager. Each project manager will, of course, want the best functional operators assigned to his program. In addition to these problems, the accountability for profit and loss is much more difficult in a matrix organization than in a project organization. Project managers have a tendency to blame overruns on functional managers, stating that the cost of the function was excessive. Whereas functional managers have a tendency to blame excessive costs on project managers with the argument that there were too many changes, more work required than defined initially and other such arguments.

The individual placed at the interface position has two bosses: He must take direction from both the project manager and the functional manager. The merit review and hiring and firing responsibilities still rest with the department manager. Merit reviews are normally made by the functional manager after discussions with the program manager. The functional manager may not have the time to measure the progress of this individual continuously. He must rely on the word of the program manager for merit review and promotion. The interface members generally give loyalty to the person signing their merit review. This poses a problem, especially if conflicting orders are given by the functional and project managers. The simplest solution is for the individual at the interface to ask the functional and project managers to communicate with each other to resolve the problem. This type of situation poses a problem for project managers:

How does a project manager motivate an individual working on a project (either part-time or full-time) so that his loyalties are with the project? How does a project manager convince an individual to perform work according to project direction and specifications when these requests may be in conflict with department policy, especially if the individual feels that his functional boss may not regard him favorably?

There are many advantages to matrix structures, as shown in Table 3–5. Functional units exist primarily to support a project. Because of this, key people can be shared and costs can be minimized. People can be assigned to a variety of challenging problems. Each person, therefore, has a “home” after project completion and a career path. People in these organizations are especially responsive to motivation and end-item identification. Functional managers find it easy to develop and maintain a strong technical base and can, therefore, spend more time on complex problem-solving. Knowledge can be shared for all projects. TABLE 3–5. ADVANTAGES OF A PURE MATRIX ORGANIZATIONAL FORM

The project manager maintains maximum project control (through the line


managers) over all resources, including cost and personnel. Policies and procedures can be set up independently for each project, provided that they do not contradict company policies and procedures. The project manager has the authority to commit company resources, provided that scheduling does not cause conflicts with other projects. Rapid responses are possible to changes, conflict resolution, and project needs (as technology or schedule). The functional organizations exist primarily as support for the project. Each person has a “home” after project completion. People are susceptible to motivation and end-item identification. Each person can be shown a career path. Because key people can be shared, the program cost is minimized. People can work on a variety of problems; that is, better people control is possible. A strong technical base can be developed, and much more time can be devoted to complex problem-solving. Knowledge is available for all projects on an equal basis. Conflicts are minimal, and those requiring hierarchical referrals are more easily resolved. There is a better balance among time, cost, and performance. Rapid development of specialists and generalists occurs. Authority and responsibility are shared. Stress is distributed among the team (and the functional managers).

The matrix structure can provide a rapid response to changes, conflicts, and other project needs. Conflicts are normally minimal, but those requiring resolution are easily resolved using hierarchical referral.

This rapid response is a result of the project manager’s authority to commit company resources, provided that scheduling conflicts with other projects can be eliminated. Furthermore, the project manager has the authority independently to establish his own project policies and procedures, provided that they do not conflict with company policies. This can do away with red tape and permit a better balance among time, cost, and performance.

The matrix structure provides us with the best of two worlds: the traditional structure and the matrix structure. The advantages of the matrix structure eliminate almost all of the disadvantages of the traditional structure. The word “matrix” often brings fear to the hearts of executives because it implies radical change, or at least they think that it does. If we take a close look at Figure 3–6, we can see that the traditional structure is still there. The matrix is simply horizontal lines superimposed over the traditional structure. The horizontal lines will come and go


as projects start up and terminate, but the traditional structure will remain.

Matrix structures are not without their disadvantages, as shown in Table 3–6. The first three elements are due to the horizontal and vertical work flow requirements of a matrix. Actually the flow may even be multidimensional if the project manager has to report to customers or corporate or other personnel in addition to his superior and the functional line managers. TABLE 3–6. DISADVANTAGES OF A PURE MATRIX ORGANIZATIONAL FORM

Multidimensional information flow. Multidimensional work flow. Dual reporting. Continuously changing priorities. Management goals different from project goals. Potential for continuous conflict and conflict resolution. Difficulty in monitoring and control. Company-wide, the organizational structure is not cost-effective because more people than necessary are required, primarily administrative. Each project organization operates independently. Care must be taken that duplication of efforts does not occur. More effort and time are needed initially to define policies and procedures, compared to traditional form. Functional managers may be biased according to their own set of priorities. Balance of power between functional and project organizations must be watched. Balance of time, cost, and performance must be monitored. Although rapid response time is possible for individual problem resolution, the reaction time can become quite slow. Employees and managers are more susceptible to role ambiguity than in traditional form. Conflicts and their resolution may be a continuous process (possibly requiring support of an organizational development specialist). People do not feel that they have any control over their own destiny when continuously reporting to multiple managers.

Most companies believe that if they have enough resources to staff all of the projects that come along, then the company is “overstaffed.” As a result of this philosophy, priorities may change continuously, perhaps even daily. Management’s goals for a project may be drastically different from the project’s goals, especially if executive involvement is lacking during the definition of a project’s requirements


in the planning phase. In a matrix, conflicts and their resolution may be a continuous process, especially if priorities change continuously. Regardless of how mature an organization becomes, there will always exist difficulty in monitoring and control because of the complex, multidirectional work flow. Another disadvantage of the matrix organization is that more administrative personnel are needed to develop policies and procedures, and therefore both direct and indirect administrative costs will increase. In addition, it is impossible to manage projects with a matrix if there are steep horizontal or vertical pyramids for supervision and reporting, because each manager in the pyramid will want to reduce the authority of the managers operating within the matrix. Each project organization operates independently. Duplication of effort can easily occur; for example, two projects might be developing the same cost accounting procedure, or functional personnel may be doing similar R&D efforts on different projects. Both vertical and horizontal communication is a must in a project matrix organization.

One of the advantages of the matrix is a rapid response time for problem resolution. This rapid response generally applies to slow-moving projects where problems occur within each functional unit. On fast-moving projects, the reaction time can become quite slow, especially if the problem spans more than one functional unit. This slow reaction time exists because the functional employees assigned to the project do not have the authority to make decisions, allocate functional resources, or change schedules. Only the line managers have this authority. Therefore, in times of crisis, functional managers must be actively brought into the “big picture” and invited to team meetings.

Middleton has listed four additional undesirable results of matrix organizations, results that can affect company capabilities8:

Project priorities and competition for talent may interrupt the stability of the organization and interfere with its long-range interests by upsetting the traditional business of functional organizations. Long-range plans may suffer as the company gets more involved in meeting schedules and fulfilling the requirements of temporary projects. Shifting people from project to project may disrupt the training of employees and specialists, thereby hindering the growth and development within their fields of specialization. Lessons learned on one project may not be communicated to other projects.

Davis and Lawrence have identified nine additional matrix pathologies9:

Power struggles: The horizontal versus vertical hierarchy. Anarchy: Formation of organizational islands during periods of stress.


Groupitis: Confusing the matrix as being synonymous with group decision making. Collapse during economic crunch: Flourishing during periods of growth and collapsing during lean times. Excessive overhead: How much matrix supervision is actually necessary? Decision strangulation: Too many people involved in decision-making. Sinking: Pushing the matrix down into the depths of the organization. Layering: A matrix within a matrix. Navel gazing: Becoming overly involved in the internal relationships of the organization.

The matrix structure therefore becomes a compromise in an attempt to obtain the best of two worlds. In pure product management, technology suffered because there wasn’t a single group for planning and integration. In the pure functional organization, time and schedule were sacrificed. Matrix project management is an attempt to obtain maximum technology and performance in a cost-effective manner and within time and schedule constraints.

We should note that with proper executive-level planning and control, all of the disadvantages can be eliminated. This is the only organizational form where such control is possible. But companies must resist creating more positions in executive management than are actually necessary as this will drive up overhead rates. However, there is a point where the matrix will become mature and fewer people will be required at the top levels of management.

Previously we identified the necessity for the project manager to be able to establish his own policies, procedures, rules, and guidelines. Obviously, with personnel reporting in two directions and to multiple managers, conflicts over administration can easily occur.

Most practitioners consider the matrix to be a two-dimensional system where each project represents a potential profit center and each functional department represents a cost center. (This interpretation can also create conflict because functional departments may feel that they no longer have an input into corporate profits.) For large corporations with multiple divisions, the matrix is no longer two-dimensional, but multidimensional.

William C. Goggin has described geographical area and space and time as the third and fourth dimensions of the Dow Corning matrix10:

Geographical areas . . . business development varied widely from area to area, and the profit-center and cost-center dimensions could not be carried out everywhere in the same manner. . . . Dow Corning area organizations are


patterned after our major U.S. organizations. Although somewhat autonomous in their operation, they subscribe to the overall corporate objectives, operating guidelines, and planning criteria. During the annual planning cycle, for example, there is a mutual exchange of sales, expense, and profit projections between the functional and business managers headquartered in the United States and the area managers around the world.

Space and time. . . . A fourth dimension of the organization denotes fluidity and movement through time. . . . The multidimensional organization is far from rigid; it is constantly changing. Unlike centralized or decentralized systems that are too often rooted deep in the past, the multidimensional organization is geared toward the future: Long-term planning is an inherent part of its operation.

Goggin then went on to describe the advantages that Dow Corning expected to gain from the multidimensional organization:

Higher profit generation even in an industry (silicones) price-squeezed by competition. (Much of our favorable profit picture seems due to a better overall understanding and practice of expense controls through the company.) Increased competitive ability based on technological innovation and product quality without a sacrifice in profitability. Sound, fast decision-making at all levels in the organization, facilitated by stratified but open channels of communications, and by a totally participative working environment. A healthy and effective balance of authority among the businesses, functions, and areas. Progress in developing short-and long-range planning with the support of all employees. Resource allocations that are proportional to expected results. More stimulating and effective on-the-job training. Accountability that is more closely related to responsibility and authority. Results that are visible and measurable. More top-management time for long-range planning and less need to become involved in day-to-day operations.

Obviously, the matrix structure is the most complex of all organizational forms. Grinnell and Apple define four situations where it is most practical to consider a matrix11:

When complex, short-run products are the organization’s primary output. When a complicated design calls for both innovation and timely completion. When several kinds of sophisticated skills are needed in designing, building,


and testing the products—skills then need constant updating and development. When a rapidly changing marketplace calls for significant changes in products, perhaps between the time they are conceived and delivered.

Matrix implementation requires:

Training in matrix operations Training in how to maintain open communications Training in problem solving Compatible reward systems Role definitions



The matrix can take many forms, but there are basically three common varieties. Each type represents a different degree of authority attributed to the program manager and indirectly identifies the relative size of the company. As an example, in the matrix of Figure 3–6, all program managers report directly to the general manager. This type of arrangement works best for small companies that have few projects and assumes that the general manager has sufficient time to coordinate activities between his project managers. In this type of arrangement, all conflicts between projects are referred to the general manager for resolution.

As companies grow in size and the number of projects, the general manager will find it increasingly difficult to act as the focal point for all projects. A new position must be created, that of director of programs, or manager of programs or projects, who is responsible for all program management. See Figure 3–7.

FIGURE 3–7. Development of a director of project management.

Executives contend that an effective span of control is five to seven people. Does this apply to the director of project management as well? Consider a company that has fifteen projects going on at once. There are three projects over $5 million,


seven are between $1 and $3 million, and five projects are under $700,000. Each project has a full-time project manager. Can all fifteen project managers report to the same person? The company solved this problem by creating a deputy director of project management. All projects over $1 million reported to the director, and all projects under $1 million went to the deputy director. The director’s rationale soon fell by the wayside when he found that the more severe problems that were occupying his time were occurring on projects with a smaller dollar volume, where flexibility in time, cost, and performance was nonexistent and trade-offs were almost impossible. If the project manager is actually a general manager, then the director of project management should be able to supervise effectively more than seven project managers. The desired span of control, of course, will vary from company to company and must take into account:

The demands imposed on the organization by task complexity Available technology The external environment The needs of the organizational membership The types of customers and/or products

As companies expand, it is inevitable that new and more complex conflicts arise. The control of the engineering functions poses such a problem:

Should the project manager have ultimate responsibility for the engineering functions of a project, or should there be a deputy project manager who reports to the director of engineering and controls all technical activity?

Although there are pros and cons for both arrangements, the problem resolved itself in the company mentioned above when projects grew so large that the project manager became unable to handle both the project management and project engineering functions. Then, as shown in Figure 3–8, a chief project engineer was assigned to each project as deputy project manager, but remained functionally assigned to the director of engineering. The project manager was now responsible for time and cost considerations, whereas the project engineer was concerned with technical performance. The project engineer can be either “solid” vertically and “dotted” horizontally, or vice versa. There are also situations where the project engineer may be “solid” in both directions. The decision usually rests with the director of engineering. Of course, in a project where the project engineer would be needed on a part-time basis only, he would be solid vertically and dotted horizontally.

FIGURE 3–8. Placing project engineering in the project office.


Engineering directors usually demand that the project engineer be solid vertically in order to give technical direction. As one director of engineering stated, “Only engineers that report to me will have the authority to give technical direction to other engineers. After all, how else can I be responsible for the technical integrity of the product when direction comes from outside my organization?”

This subdivision of functions is necessary in order to control large projects adequately. However, for small projects, say $100,000 or less, it is quite common on R&D projects for an engineer to serve as the project manager as well as the project engineer. Here, the project manager must have technical expertise, not merely understanding. Furthermore, this individual can still be attached to a functional engineering support unit other than project engineering. As an example, a mechanical engineering department receives a government contract for $75,000 to perform tests on a new material. The proposal is written by an engineer attached to the department. When the contract is awarded, this individual, although not in the project engineering department, can fulfill the role of project manager and project engineer while still reporting to the manager of the mechanical engineering department. This arrangement works best (and is cost-effective) for short-duration projects that cross a minimum number of functional units.

Finally, we must discuss the characteristics of a project engineer. In Figure 3–9, most people would place the project manager to the right of center with stronger


human skills than technical skills, and the project engineer to the left of center with stronger technical skills than human skills. How far from the center point will the project manager and project engineer be? Today, many companies are merging project management and project engineering into one position. This can be seen in Table 3–7. The project manager and project engineer have similar functions above the line but different ones below the line.12 The main reason for separating project management from project engineering is so that the project engineer will remain “solid” to the director of engineering in order to have the full authority to give technical direction to engineering. TABLE 3–7. PROJECT MANAGEMENT COMPARED TO PROJECT ENGINEERING

Project Management Project Engineering Total project planning Cost control Schedule control System specifications Logistics support

Total project planning Cost control Schedule control System specifications Logistics support

Contract control Report preparation and distribution Procurement Identification of reliability and maintainability requirements Staffing Priority scheduling Management information systems

Configuration control Fabrication, testing, and production technical leadership support

FIGURE 3–9. Philosophy of management.



Matrix structures can be strong, weak, or balanced. The strength of the matrix is based upon who has more influence over the daily performance of the workers: project manager or line managers. If the project manager has more influence over the worker, then the matrix structure functions as a strong matrix as seen through the eyes of the project manager. If the line manager has more influence than does the project manager, then the organization functions as a weak matrix as seen by the project manager.

PMBOK® Guide, 5th Edition Matrix Organizational Structures Figures 2–3, 2–4, 2–5

The most common differentiator between a strong and weak matrix is where the command of technology resides: project manager or line managers. If the project manager has a command of technology and is recognized by the line managers and the workers as being a technical expert, then the line managers will allow the workers to take technical direction from the project manager. This will result in a strong matrix structure. Workers will seek solutions to their problems from the project manager first and the line managers second. The reverse is true for a weak matrix. Project managers in a strong matrix generally possess more authority than in a weak matrix.

When a company desires a strong matrix, the project manager is generally promoted from within the organization and may have had assignments in several line functions throughout the organization. In a weak matrix, the company may hire from outside the organization but should at least require that the person selected understand the technology and the industry.



In project-driven companies, the creation of a project management division is readily accepted as a necessity to conduct business. Organizational restructuring can quite often occur based on environmental changes and customer needs. In non– project-driven organizations, employees are less tolerant of organizational change. Power, authority, and turf become important. The implementation of a separate division for project management is extremely difficult. Resistance can become so strong that the entire project management process can suffer.

PMBOK® Guide, 5th Edition 1.4.4 Project Management Office

Recently, non–project-driven companies have created centers for project management expertise. These centers are not necessarily formal line organizations, but more informal committees whose membership may come from each functional unit of the company. The assignment to the center for expertise can be part-time or full-time; it may be only for six months to a year; and it may or may not require the individual to manage projects. Usually, the center for expertise has as its charter:

To develop and update a methodology for project management. The methodology usually advocates informal project management. To act as a facilitator or trainer in conducting project management training programs. To provide project management assistance to any employee who is currently managing projects and requires support in planning, scheduling, and controlling projects. To develop or maintain files on “lessons learned” and to see that this information is made available to all project managers.

Since these centers pose no threat to the power and authority of line managers, support is usually easy to obtain.


3.10 MATRIX LAYERING Matrix layering can be defined as the creation of one matrix within a second matrix. For example, a company can have a total company matrix, and each division or department (i.e., project engineering) can have its own internalized matrix. In the situation of a matrix within a matrix, all matrices are formal operations.

Matrix layering can also be a mix of formal and informal organizations. The formal matrix exists for work flow, but there can also exist an informal matrix for information flow. There are also authority matrices, leadership matrices, reporting matrices, and informal technical direction matrices.

An example of layering would be the multidimensional matrix, shown in Figure 3–10, where each slice represents either time, distance, or geographic area. For example, a New York bank utilizes a multinational matrix to control operations in foreign countries. In this case, each foreign country would represent a different slice of the total matrix.

FIGURE 3–10. The multidimensional matrix.



Project management has matured as an outgrowth of the need to develop and produce complex and/or large projects in the shortest possible time, within anticipated cost, with required reliability and performance, and (when applicable) to realize a profit. Granted that organizations have become so complex that traditional organizational structures and relationships no longer allow for effective management, how can executives determine which organizational form is best, especially since some projects last for only a few weeks or months while others may take years?

PMBOK® Guide, 5th Edition 2.1 Organizational Influences

To answer this question, we must first determine whether the necessary characteristics exist to warrant a project management organizational form. Generally speaking, the project management approach can be effectively applied to a onetime undertaking that is13:

Definable in terms of a specific goal Infrequent, unique, or unfamiliar to the present organization Complex with respect to interdependence of detailed tasks Critical to the company

Once a group of tasks is selected and considered to be a project, the next step is to define the kinds of projects, described in Section 2.5. These include individual, staff, special, and matrix or aggregate projects.

Unfortunately, many companies do not have a clear definition of what a project is. As a result, large project teams are often constructed for small projects when they could be handled more quickly and effectively by some other structural form. All structural forms have their advantages and disadvantages, but the project management approach appears to be the best possible alternative.

The basic factors that influence the selection of a project organizational form are:

Project size


Project length Experience with project management organization Philosophy and visibility of upper-level management Project location Available resources Unique aspects of the project

This last item requires further comment. Project management (especially with a matrix) usually works best for the control of human resources and thus may be more applicable to labor-intensive projects rather than capital-intensive projects. Labor- intensive organizations have formal project management, whereas capital-intensive organizations may use informal project management. Figure 3–11 shows how matrix management was implemented by an electric equipment manufacturer. The company decided to use fragmented matrix management for facility development projects. After observing the success of the fragmented matrix, the executives expanded matrix operations to include interim and ongoing capital equipment projects. The first three levels were easy to implement. The fourth level, ongoing business, was more difficult to convert to matrix because of functional management resistance and the fear of losing authority.

FIGURE 3–11. Matrix development in manufacturing.

Four fundamental parameters must be analyzed when considering implementation of a project organizational form:

Integrating devices Authority structure Influence distribution Information system

Project management is a means of integrating all company efforts, especially research and development, by selecting an appropriate organizational form. Two questions arise when we think of designing the organization to facilitate the work of the integrators14:

Is it better to establish a formal integration department, or simply to set up


integrating positions independent of one another? If individual integrating positions are set up, how should they be related to the larger structure?

Informal integration works best if, and only if, effective collaboration can be achieved between conflicting units. Without any clearly defined authority, the role of the integrator is simply to act as an exchange medium across the interface of two functional units. As the size of the organization increases, formal integration positions must exist, especially in situations where intense conflict can occur (e.g., research and development).

Not all organizations need a pure matrix structure to achieve this integration. Many problems can be solved simply through the chain of command, depending on the size of the organization and the nature of the project. The organization needed to achieve project control can vary in size from one person to several thousand people. The organizational structure needed for effective project control is governed by the desires of top management and project circumstances.

Top management must decide on the authority structure that will control the integration mechanism. The authority structure can range from pure functional authority (traditional management), to product authority (product management), and finally to dual authority (matrix management). This range is shown in Figure 3–12. From a management point of view, organizational forms are often selected based on how much authority top management wishes to delegate or surrender.

FIGURE 3–12. The range of alternatives.

Source: Jay R. Galbraith, “Matrix Organization Designs.” Reprinted with permission from Business Horizons, February 1971 (p. 37). Copyright © 1971 by the Board of Trustees at Indiana University.


Integration of activities across functional boundaries can also be accomplished by influence. Influence includes such factors as participation in budget planning and approval, design changes, location and size of offices, salaries, and so on. Influence can also cut administrative red tape and develop a much more unified informal organization.

Matrix structures are characterized as strong or weak based on the relative influence that the project manager possesses over the assigned functional resources. When the project manager has more “relative influence” over the performance of the assigned resources than does the line manager, the matrix structure is a strong matrix. In this case, the project manager usually has the knowledge to provide technical direction, assign responsibilities, and may even have a strong input into the performance evaluation of the assigned personnel. If the balance of influence tilts in favor of the line manager, then the matrix is referred to as a weak matrix.

Information systems also play an important role. Previously we stated that one of the advantages of several project management structures is the ability to make both rapid and timely decisions with almost immediate response to environmental changes. Information systems are designed to get the right information to the right person at the right time in a cost-effective manner. Organizational functions must facilitate the flow of information through the management network.

Galbraith has described additional factors that can influence organizational selection. These factors are15:


Diversity of product lines Rate of change of the product lines Interdependencies among subunits Level of technology Presence of economies of scale Organizational size

A diversity of project lines requires both top-level and functional managers to maintain knowledge in all areas. Diversity makes it more difficult for managers to make realistic estimates concerning resource allocations and the control of time, cost, schedules, and technology. The systems approach to management requires sufficient information and alternatives to be available so that effective trade-offs can be established. For diversity in a high-technology environment, the organizational choice might, in fact, be a trade-off between the flow of work and the flow of information. Diversity tends toward strong product authority and control.

Many functional organizations consider themselves companies within a company and pride themselves on their independence. This attitude poses a severe problem in trying to develop a synergistic atmosphere. Successful project management requires that functional units recognize the interdependence that must exist in order for technology to be shared and schedule dates to be met. Interdependency is also required in order to develop strong communication channels and coordination.

The use of new technologies poses a serious problem in that technical expertise must be established in all specialties, including engineering, production, material control, and safety. Maintaining technical expertise works best in strong functional disciplines, provided the information is not purchased outside the organization. The main problem, however, is how to communicate this expertise across functional lines. Independent R&D units can be established, as opposed to integrating R&D into each functional department’s routine efforts. Organizational control requirements are much more difficult in high-technology industries with ongoing research and development than with pure production groups.

Economies of scale and size can also affect organizational selection. The economies of scale are most often controlled by the amount of physical resources that a company has available. For example, a company with limited facilities and resources might find it impossible to compete with other companies on production or competitive bidding for larger dollar-volume products. Such a company must rely heavily on maintaining multiple projects (or products), each of low cost or volume, whereas a larger organization may need only three or four projects large enough to sustain the organization. The larger the economies of scale, the more the


organization tends to favor pure functional management.

The size of the organization is important in that it can limit the amount of technical expertise in the economies of scale. While size may have little effect on the organizational structure, it does have a severe impact on the economies of scale. Small companies, for example, cannot maintain large specialist staffs and, therefore, incur a larger cost for lost specialization and lost economies of scale.

Middleton conducted a mail survey of aerospace firms in an attempt to determine how well the companies using project management met their objectives. Forty- seven responses were received. Tables 3–8 and 3–9 identify the results. Middleton stated, “In evaluating the results of the survey, it appears that a company taking the project organization approach can be reasonably certain that it will improve controls and customer (out-of-company) relations, but internal operations will be more complex.”16


Source: Reprinted by permission of Harvard Business Review. An exhibit from “How to Set Up a Project Organization,” by C. J. Middleton, March–April, 1967

(pp. 73–82). Copyright © 1967 by the Harvard Business School Publishing Corporation; all rights reserved.

Advantages Percent of Respondents

• Better control of projects 92% • Better customer relations 80% • Shorter product development time 40% • Lower program costs 30% • Improved quality and reliability 26% • Higher profit margins 24% • Better control over program security 13% Other Benefits • Better project visibility and focus on results • Improved coordination among company divisions doing work on the project • Higher morale and better mission orientation for employees working on the project • Accelerated development of managers due to breadth of project responsibilities



Source: Reprinted by permission of Harvard Business Review. An exhibit from “How to Set Up a Project Organization,” by C. J. Middleton, March–April, 1967

(pp. 73–82). Copyright © 1967 by the Harvard Business School Publishing Corporation; all rights reserved.

Disadvantages Percent of Respondents

• More complex internal operations 51% • Inconsistency in application of company policy 32% • Lower utilization of personnel 13% • Higher program costs 13% • More difficult to manage 13% • Lower profit margins 2% Other Disadvantages • Tendency for functional groups to neglect their job and let the project organization do everything • Too much shifting of personnel from project to project • Duplication of functional skills in project organization

The way in which companies operate their project organization is bound to affect the organization, both during the operation of the project and after the project has been completed and personnel have been disbanded. The overall effects on the company must be looked at from a personnel and cost control standpoint. This will be accomplished, in depth, in later chapters. Although project management is growing, the creation of a project organization does not necessarily ensure that an assigned objective will be accomplished successfully. Furthermore, weaknesses can develop in the areas of maintaining capability and structural changes.

Although the project organization is a specialized, task-oriented entity, it seldom, if ever, exists apart from the traditional structure of the organization. All project management structures overlap the traditional structure. Furthermore, companies can have more than one project organizational form in existence at one time. A major steel product, for example, has a matrix structure for R&D and a product structure elsewhere.

Accepting a project management structure is a giant step from which there may be no return. The company may have to create more management positions without changing the total employment levels. In addition, incorporation of a project organization is almost always accompanied by the upgrading of jobs. In any event,


management must realize that whichever project management structure is selected, a dynamic state of equilibrium will be necessary.



Small and medium companies generally prefer to have the project manager report fairly high up in the chain of command, even though the project manager may be working on a relatively low-priority project. Project managers are usually viewed as less of a threat in small organizations than in the larger ones, thus creating less of a problem if they report high up.

Organizing the small company for projects involves two major questions:

Where should the project manager be placed within the organization? Are the majority of the projects internal or external to the organization?

These two questions are implicitly related. For either large, complex projects or those involving outside customers, project managers generally report to a high level in the organization. For small or internal projects, the project manager reports to a middle-or lower-level manager.

Small and medium companies have been very successful in managing internal projects using departmental project management (see Figure 3–2), especially when only a few functional groups must interface with one another. Quite often, line managers are permitted to wear multiple hats and also act as project managers, thereby reducing the need for hiring additional project managers.

Customers external to the organization are usually favorably impressed if a small company identifies a project manager who is dedicated and committed to their project, even if only on a part-time basis. Thus outside customers, particularly through a competitive bidding environment, respond favorably to a matrix structure, even if the matrix structure is simply eyewash for the customer. For example, consider the matrix structure shown in Figure 3–13. Both large and small companies that operate on a matrix usually develop a separate organizational chart for each customer. Figure 3–13 represents the organizational chart that would be presented to Alpha Company. The Alpha Company project would be identified with bold lines and would be placed immediately below the vice president, regardless of the priority of the project. After all, if you were the Alpha Company customer, would you want your project to appear at the bottom of the list?

FIGURE 3–13. Matrix for a small company.


Figure 3–13 also identifies two other key points that are important to small companies. First, only the name of the Alpha Company project manager, Bob Ray, need be identified. The reason for this is that Bob Ray may also be the project manager for one or more of the other projects, and it is usually not a good practice to let the customer know that Bob Ray will have loyalties split among several projects. Actually, the organization chart shown in Figure 3–13 is for a machine tool company employing 280 people, with five major and thirty minor projects. The company has only two full-time project managers. Bob Ray manages the projects for Alpha, Gamma, and Delta Companies; the Beta Company project has the second full-time project manager; and the IBM project is being managed personally by the vice president of engineering, who happens to be wearing two hats.

The second key point is that small companies generally should not identify the names of functional employees because:

The functional employees are probably part-time. It is usually best in small companies for all communications to be transmitted through the project manager.

Another example of how a simple matrix structure can be used to impress


customers is shown in Figure 3–14. The company identified here actually employs only thirty-eight people. Very small companies normally assign the estimating department to report directly to the president, as shown in Figure 3–14. In addition, the senior engineers, who appear to be acting in the role of project managers, may simply be the department managers for drafting, startup, and/or design engineering. Yet, from an outside customer’s perspective, the company has a dedicated and committed project manager for the project.

FIGURE 3–14. Matrix for a small company.



During the past ten years, large companies have restructured into strategic business units (SBUs). An SBU is a grouping of functional units that have the responsibility for profit (or loss) of part of the organization’s core businesses. Figure 3–15 shows how one of the automotive suppliers restructured into three SBUs; one each for Ford, Chrysler, and General Motors. Each strategic business unit is large enough to maintain its own project and program managers. The executive in charge of the strategic business unit may act as the sponsor for all of the program and project managers within the SBU. The major benefit of these types of project management SBUs is that it allows the SBU to work more closely with the customer. It is a customer-focused organizational structure.

FIGURE 3–15. Strategic business unit project management.

It is possible for some resources to be shared across several SBUs. Manufacturing plants can end up supporting more than one SBU. Also, corporate may provide the resources for cost accounting, human resource management, and training.

A more recent organizational structure, and a more complex one, is shown in Figure 3–16. In this structure, each SBU may end up using the same platform (i.e., powertrain, chassis, and other underneath components). The platform managers are responsible for the design and enhancements of each platform, whereas the SBU program managers must adapt this platform to a new model car. This type of matrix is multidimensional inasmuch as each SBU could already have an internal matrix. Also, each manufacturing plant could be located outside of the continental United States, making this structure a multinational, multidimensional matrix.


FIGURE 3–16. SBU project management using platform management.



Organizational redesign is occurring at a rapid rate because of shorter product life cycles, rapidly changing environments, accelerated development of sophisticated information systems, and increased marketplace competitiveness. Because of these factors, more companies are considering project management organizations as a solution.

Why have some companies been able to implement this change in a short period of time while other companies require years? The answer is that successful implementation requires good transitional management.

Transitional management is the art and science of managing the conversion period from one organizational design to another. Transitional management necessitates an understanding of the new goals, objectives, roles, expectations, and employees’ fears.

A survey was conducted of executives, managers, and employees in thirty-eight companies that had implemented matrix management. Almost all executives felt that the greatest success could be achieved through proper training and education, both during and after transition. In addition to training, executives stated that the following fifteen challenges must be accounted for during transition:

Transfer of power. Some line managers will find it extremely difficult to accept someone else managing their projects, whereas some project managers will find it difficult to give orders to workers who belong to someone else. Trust. The secret to a successful transition without formal executive authority will be trust between line managers, between project managers, and between project and line managers. It takes time for trust to develop. Senior management should encourage it throughout the transition life cycle. Policies and procedures. The establishment of well-accepted policies and procedures is a slow and tedious process. Trying to establish rigid policies and procedures at project initiation will lead to difficulties. Hierarchical consideration. During transition, every attempt should be made to minimize hierarchical considerations that could affect successful organizational maturity. Priority scheduling. Priorities should be established only when needed, not on a continual basis. If priority shifting is continual, confusion and disenchantment will occur.


Personnel problems. During transition there will be personnel problems brought on by moving to new locations, status changes, and new informal organizations. These problems should be addressed on a continual basis. Communications. During transition, new channels of communications should be built but not at the expense of old ones. Transition phases should show employees that communication can be multidirectional, for example, a project manager talking directly to functional employees. Project manager acceptance. Resistance to the project manager position can be controlled through proper training. People tend to resist what they do not understand. Competition. Although some competition is healthy within an organization, it can be detrimental during transition. Competition should not be encouraged at the expense of the total organization. Tools. It is common practice for each line organization to establish its own tools and techniques. During transition, no attempt should be made to force the line organizations to depart from their current practices. Rather, it is better for the project managers to develop tools and techniques that can be integrated with those in the functional groups. Contradicting demands. During transition and after maturity, contradicting demands will be a way of life. When they first occur during transition, they should be handled in a “working atmosphere” rather than a crisis mode. Reporting. If any type of standardization is to be developed, it should be for project status reporting, regardless of the size of the project. Teamwork. Systematic planning with strong functional input will produce teamwork. Using planning groups during transition will not obtain the necessary functional and project commitments. Theory X–Theory Y. During transition, functional employees may soon find themselves managed under either Theory X or Theory Y approaches. People must realize (through training) that this is a way of life in project management, especially during crises. Overmanagement costs. A mistake often made by executives is thinking that projects can be managed with fewer resources. This usually leads to disaster because undermanagement costs may be an order of magnitude greater than overmanagement costs.

Transition to a project-driven matrix organization is not easy. Managers and professionals contemplating such a move should know:

Proper planning and organization of the transition on a life-cycle basis will facilitate a successful change.


Training of the executives, line managers, and employees in project management knowledge, skills, and attitudes is critical to a successful transition and probably will shorten the transition time. Employee involvement and acceptance may be the single most important function during transition. The strongest driving force of success during transition is a demonstration of commitment to and involvement in project management by senior executives. Organizational behavior becomes important during transition. Commitments made by senior executives prior to transition must be preserved during and following transition. Major concessions by senior management will come slowly. Schedule or performance compromises are not acceptable during transition; cost overruns may be acceptable. Conflict among participants increases during transition. If project managers are willing to manage with only implied authority during transition, then the total transition time may be drastically reduced. It is not clear how long transition will take.

Transition from a classical or product organization to a project-driven organization is not easy. With proper understanding, training, demonstrated commitment, and patience, transition will have a good chance for success.




Growth in computer technology and virtual teams has made the world smaller. First world nations are flocking to emerging market nations to get access to the abundance of highly qualified human capital that is relatively inexpensive and want to participate in virtual project management teams. There is no question that there exists an ample supply of talent in these emerging market nations. These talented folks have a reasonable understanding of project management and some consider it an honor to work on virtual project teams.

But working on virtual project management teams may come with headaches. While the relative acceptance of project management appears at the working levels where the team members operate, further up in the hierarchy there might be resistance to the implementation and acceptance of project management. Because of the growth of project management worldwide, many executives openly provide “lip service” to its acceptance yet, behind the scenes, create significant barriers to prevent it from working properly. This creates significant hardships for those portions of the virtual teams in first world nations that must rely upon their other team members for support. The ultimate result might be frustrations stemming from poor information flow, extremely long decision-making processes, poor cost control, and an abundance of external dependencies that elongate schedules beyond the buyer’s contractual dates. In this section, we will typically use the United States as an example of the first world nations.

Barriers to effective project management implementation exist worldwide, not merely in emerging market nations. But in emerging market nations, the barriers are more apparent. For simplicity’s sake, the barriers can be classified into four categories:

Cultural barriers Status and political barriers Project management barriers Other barriers


Culture A culture is a set of beliefs that people follow. Every company could have its own culture. Some companies may even have multiple cultures. Some cultures are strong while others are weak. In some emerging market nations, there exist national cultures that can be so strong that they dictate the corporate cultures. There are numerous factors that can influence the culture of an organization. Only those factors that can have an impact on the implementation and acceptance of project management are discussed here and include:

Bureaucratic centralization of authority in the hands of a few Lack of meaningful or real executive sponsorship Importance of the organizational hierarchy Improper legal laws The potential for corruption

Centralization of Authority Many countries maintain a culture where very few people have the authority to make decisions. Decision-making rests in the hands of a few and it serves as a source of vast power. This factor exists in both privately held companies and governmental organizations. Project management advocates decentralization of authority and decision-making. In many countries, the seniormost level of management will never surrender their authority, power, or right to make decisions to project managers. In these countries an appointment to the senior levels of management is not necessarily based upon performance. Instead, it is based upon age, belonging to the right political party, and personal contacts within the government. The result can be executives that possess little knowledge of their own business and possibly lack the leadership capacity.

Executive Sponsorship Project sponsorship might exist somewhere in the company but most certainly not at the executive levels. There are two reasons for this. First, senior management knows their limitations and may have absolutely no knowledge about the project. Therefore, they could be prone to making serious blunders that could become visible to the people that put them into these power positions. Second, and possibly most important, acting as an executive sponsor on a project that might fail could signal the end of the executive’s political career. Therefore, sponsorship, if it exists at all, may be at a low level in the organizational hierarchy and at a level where people are expendable if the project fails. The result is that project managers end up with sponsors who either cannot or will not help them in time of trouble.


Organizational Hierarchy In the United States, project managers generally have the right to talk to anyone in the company to get information relative to the project. The intent is to get work to flow horizontally as well as vertically. In some emerging market nations, the project manager must follow the chain of command. The organizational hierarchy is sacred. Following the chain of command certainly elongates the decision-making process to the point where the project manager has no idea how long it will take to get access to needed information or for a decision to be made even though a sponsor exists. There is no mature infrastructure in place to support project management. The infrastructure exists to filter bad news from the executive levels and to justify the existence of each functional manager.

In the United States, the “buck” stops at the sponsor. Sponsors have ultimate decision-making authority and are expected to assist the project managers during a crisis. The role of the sponsor is clearly defined and may be described in detail in the enterprise project management methodology. But in some emerging market countries, even the sponsor might not be authorized to make a decision. Some decisions may need to go as high as a government minister. Simply stated, one does not know where and when the decision needs to be made and where it will be made. Also, in the United States reporting bad news ends up in the hands of the project sponsor. In some nations, the news may go as high as government ministers. Therefore, you cannot be sure where project information will end up.

Improper Legal Laws Not all laws in emerging market nations are viewed by other nations as being legal laws. Yet American project managers, partnering with these nations, must abide by these laws. As an example, procurement contracts may be awarded not to the most qualified supplier or to the lowest bidder but instead to any bidder that resides in a city that has a high unemployment level. As another example, some nations have laws that imply that bribes are an acceptable practice when awarding contracts. Some contracts might also be awarded to relatives and friends rather than the best qualified supplier.

Potential for Corruption Corruption can and does exist in some countries and plays havoc on project managers that focus on the competing constraints. Project managers traditionally lay out a plan to meet the objectives and the competing constraints. Project managers also assume that everything will be done systematically and in an orderly manner, which assumes no corruption. But in some nations there are potentially corrupt


individuals or organizations that will do everything possible to stop or slow down the project until they can benefit personally.


Status and Politics Status and politics are prevalent everywhere and can have a negative impact on project management. In some emerging market nations, status and politics actually sabotage project management and prevent it from working correctly. Factors that can affect project management include:

Legal formalities and government constraints Insecurity at the executive levels Status consciousness Social obligations Internal politics Unemployment and poverty Attitude toward workers Inefficiencies Lack of dedication at all levels Lack of honesty

Legal Formalities and Government Constraints Here in the United States we believe that employees that perform poorly can be removed from the project or even be fired. But in some emerging market nations, employees have the right to hold a job even if their performance is substandard. Having a job and a regular paycheck is a luxury. There may be laws that clearly state under what conditions a worker can be fired, if at all.

There are also laws on the use of overtime. Overtime may not be allowed because paying someone to work overtime could eventually end up creating a new social class. Therefore, overtime may not be used as a means to maintain or accelerate a schedule that is in trouble.

Insecurity Executives often feel insecurity more so than the managers beneath them because their positions may be the result of political appointments. As such project managers may be seen as the stars of the future and may be viewed as a threat to executives. Allowing project managers who are working on highly successful projects to make presentations to the seniormost levels of management in the government could be mired. If the project is in trouble, then the project manager may be forced to make the presentation. Executives are afraid of project managers.

Status Consciousness


Corporate officers in emerging market nations are highly status conscious. They have a very real fear that the implementation of project management may force them to lose their status, yet they refuse to function as active project sponsors. Status often is accompanied by fringe benefits such as a company car and other special privileges.

Social Obligations In emerging market nations, social obligations due to religious beliefs (and possibly superstitious beliefs) and politics may be more important than in first world nations. Social obligations are ways of maintaining alliances with those people that have put an executive or a project manager in power. As such, project managers may not be allowed to interface socially with certain groups. This could also be viewed as a threat to project management implementation.

Internal Politics Internal politics exist in every company in the world. Before executives consider throwing their support behind a new approach such as project management, they worry about whether they will become stronger or weaker, have more or less authority, and have a greater or lesser chance for advancement. This is one of the reasons why only a small percentage of emerging market companies have project management offices (PMOs). Whichever executive gets control of the PMO could become more powerful than other executives. In the United States, we have solved this problem by allowing several executives to have their own PMO. But in the emerging markets, this is viewed as excessive headcount.

Unemployment and Government Constraints Virtually all executives understand project management and the accompanying benefits, yet they remain silent rather than visibly showing their support. One of the benefits of project management implementation is that it can make organizations more efficient to the point where fewer resources are needed to perform the required work. This can be a threat to executives because, unless additional business can be found, efficiency can result in downsizing the company, reducing the executive’s power and authority, increasing the unemployment level, and possibly increasing poverty in the community. Therefore, the increased efficiencies of project management may not be looked upon favorably.

Attitude toward Employees In some nations, employees might be viewed as steppingstones to building an


empire. Hiring three below-average workers to do the same work as two average workers is better for empire-building, yet possibly at the expense of the project’s budget and schedule. It is true however that finding adequate human resources may be difficult, but sometimes companies simply do not put forth a good effort in their search. Friends and family members may be hired first regardless of their qualifications. The problem is further complicated when one must find people with project management expertise.

Inefficiencies Previously, we stated that companies might find it difficult to hire highly efficient people in project management. Not all people are efficient. Some people simply are not committed to their work even though they understand project management. Other people may get frustrated when they realize that they do not have the power, authority, or responsibility of their colleagues in first world countries. Sometimes, new hirers that want to be efficient workers are pressured by the culture to remain inefficient or else the individual’s colleagues will be identified as poor workers. Peer pressure exists and can prevent people from demonstrating their true potential.

Lack of Dedication It is hard to get people motivated when they believe they cannot lose their job. People are simply not dedicated to the competing constraints. Some people prefer to see schedules slip because it provides some degree of security for a longer period of time. There is also a lack of dedication for project closure. As a project begins to wind down, employees will begin looking for a home on some other project. They might even leave their current project prematurely, before the work is finished, to guarantee employment elsewhere.

Honesty People working in emerging market countries have a tendency to hide things from fellow workers and project managers, especially bad news, either to keep their prestige or to retain their power and authority. This creates a huge barrier for project managers that rely upon timely information, whether good or bad, in order to manage the project successfully. Delays in reporting could waste valuable time when corrective action could have been taken.


Implementation of Project Management While culture, status, and politics can create barriers for any new management philosophy, there are other barriers that are directly related to project management. These project management implementation barriers include:

Cost of project management implementation Risks of implementation failure Cost of training and training limitations Need for sophistication Lack of closure on projects Work ethic Poor planning

Cost of Implementation There is a cost associated with the implementation of project management. The company must purchase hardware and software, create a project management methodology, and develop project performance reporting techniques. This requires a significant financial expenditure, which the company might not be able to afford, and also requires significant resources to be tied up in implementation for an extended period of time. With limited resources and the fact that the better resources would be required for implementation and removed from ongoing work, companies shy away from project management even though they know the benefits.

Risk of Failure Even if a company is willing to invest the time and money for project management implementation, there is a significant risk that implementation will fail. And even if implementation is successful but projects begin to fail for any number of reasons, blame will be placed upon faulty implementation. Executives may find that their position in the hierarchy is now insecure once they have to explain the time and money expended for no real results. This is why some executives either refuse to accept or visibly support project management.

Training Limitations Implementation of project management is difficult without training programs for the workers. This creates three additional problems. First, how much money must be allocated for training? Second, who will provide the training and what are the credentials of the trainers? Third, can I release people from project work to attend training classes? It is time-consuming and expensive to train people in project


management, whether it is project managers or team members that need to be trained. Adding together the cost of implementation and the cost of training might frighten executives from accepting project management.

Need for Sophistication Project management requires sophistication, not only with the limited technology or tools that may be available but also in the ability of people to work together. This teamwork sophistication is generally lacking in emerging market countries. People may see no benefit in teamwork because others may be able to recognize their lack of competencies and mistakes. They have not been trained to work properly in teams and are not rewarded for their contribution to the team.

Lack of Closure on Projects Employees are often afraid to be attached to the project at closure when lessons learned and best practices are captured. Lessons learned and best practices can be based upon what we did well and what we did poorly. Employees may not want to see anything in writing that indicates that best practices were discovered from their mistakes.

Work Ethic In some nations, the inability to fire people creates a relatively poor work ethic which is contrary to effective project management practices. There is a lack of punctuality in coming to work and attending meetings. When people do show up at meetings, only good news is discussed in a group whereas bad news is discussed one-on-one. Communication skills are weak as is report writing. There is a lack of accountability because accountability means explaining your actions if things go bad.

Poor Planning Poor planning is paramount in emerging market nations. There exists a lack of commitment to the planning process. Because of a lack of standards, perhaps attributed to the poor work ethic, estimating duration, effort, and cost is very difficult. The ultimate result of poor planning is an elongation of the schedule. For workers that are unsure about their next assignment, this can be viewed as job security at least for the short term.


Other Barriers There are other barriers that are too numerous to mention. However, some of the more important ones are shown below. These barriers are not necessarily universal in emerging market nations, and many of these barriers can be overcome.

Currency conversion inefficiencies Inability to receive timely payments Superstitious beliefs Laws against importing and exporting intellectual property Lack of tolerance for the religious beliefs of virtual team partners Risk of sanctions by partners’ governments Use of poor or outdated technologies


Recommendations Although we have painted a rather bleak picture, there are great future opportunities in these nations. Emerging market nations have an abundance of talent that is yet to be fully harvested. The true capabilities of these workers are still unknown. Virtual project management teams might be the starting point for the full implementation of project management.

As project management begins to grow, senior officers will recognize and accept the benefits of project management and see their business base increase. Partnerships and joint ventures using virtual teams will become more prevalent. The barriers that impede successful project management implementation will still exist, but we will begin to excel in how to live and work within the barriers and constraints imposed on the continually emerging virtual teams.

Greater opportunities are seen for the big emerging market economies. They are beginning to see more of the value of project management and have taken strides to expand its use. Some of the rapidly developing economies are even much more aggressive in providing the support needed for breaking many of the barriers addressed above. As more success stories emerge, the various economies will strengthen, become more connected, and start to fully utilize project management for what it really is.



MATURITY All too often, companies embark upon a journey to implement project management only to discover that the path they thought was clear and straightforward is actually filled with obstacles and fallacies. Without sufficient understanding of the looming roadblocks and how to overcome them, an organization may never reach a high level of project management maturity. Their competitors, on the other hand, may require only a few years to implement an organizationwide strategy that predictably and consistently delivers successful projects.

One key obstacle to project management maturity is that implementation activities are often spearheaded by people in positions of authority within an organization. These people often have a poor understanding of project management yet are unwilling to attend training programs, even short ones, to capture a basic understanding of what is required to successfully bring project management implementation to maturity. A second key obstacle is that these same people often make implementation decisions based upon personal interests or hidden agendas. Both obstacles cause project management implementation to suffer.

The fallacies affecting the maturity of a project management implementation do not necessarily prevent project management from occurring. Instead, these mistaken beliefs elongate the implementation time frame and create significant frustration in the project management ranks. The seven most common fallacies are explained below.

Fallacy 1: Our ultimate goal is to implement project management. Wrong goal! The ultimate goal must be the progressive development of project management systems and processes that consistently and predictably result in a continuous stream of successful projects. A successful implementation occurs in the shortest amount of time and causes no disruption to the existing work flow. Anyone can purchase a software package and implement project management piecemeal. But effective project management systems and processes do not necessarily result. And successfully completing one or two projects does not mean that only successfully managed projects will continue.

Additionally, purchasing the greatest project management software in the world cannot and will not replace the necessity of people having to work together in a project management environment. Project management software is not:


A panacea or quick fix to project management issues An alternative for the human side of project management A replacement for the knowledge, skills, and experiences needed to manage projects A substitute for human decision-making A replacement for management attention when needed

The right goal is essential to achieving project management maturity in the shortest time possible.

Fallacy 2: We need to establish a mandatory number of forms, templates, guidelines, and checklists by a certain point in time. Wrong criteria! Project management maturity can be evaluated only by establishing time-based levels of maturity and by using assessment instruments for measurement. While it is true that forms, guidelines, templates, and checklists are necessities, maximizing their number or putting them in place does not equal project management maturity. Many project management practitioners—me included—believe that project management maturity can be accelerated if the focus is on the development of an organizationwide project management methodology that everyone buys into and supports.

Methodologies should be designed to streamline the way the organization handles projects. For example, when a project is completed, the team should be debriefed to capture lessons learned and best practices. The debriefing session often uncovers ways to minimize or combine processes and improve efficiency and effectiveness without increasing costs.

Fallacy 3: We need to purchase project management software to accelerate the maturity process. Wrong approach! Purchasing software just for the sake of having project management software is a bad idea. Too often, decision-makers purchase project management software based upon the bells and whistles that are packaged with it, believing that a larger project management software package can accelerate maturity. Perhaps a $200,000 software package is beneficial for a company building nuclear power plants, but what percentage of projects require elaborate features? Project managers in my seminars readily admit that they use less than 20 percent of the capability of their project management software. They seem to view the software as a scheduling tool rather than as a tool to proactively manage projects.

The goal of software selection must be the benefits to the project and the organization, such as cost reductions through efficiency, effectiveness, standardization, and consistency. A $500 software package can, more often than not, reduce project costs just as effectively as a $200,000 package. What is


unfortunate is that the people who order the software focus more on the number of packaged features than on how much money will be saved by using the software.

Fallacy 4: We need to implement project management in small steps with a small breakthrough project that everyone can track. Wrong method! This works if time is not a constraint. The best bet is to use a large project as the breakthrough project. A successfully managed large project implies that the same processes can work on small projects, whereas the reverse is not necessarily true.

On small breakthrough projects, some people will always argue against the implementation of project management and find numerous examples why it will not work. Using a large project generally comes with less resistance, especially if project execution proceeds smoothly.

There are risks with using a large project as the breakthrough project. If the project gets into trouble or fails because of poorly implemented project management, significant damage to the company can occur. There is a valid argument for starting with small projects, but the author’s preference is larger projects.

Fallacy 5: We need to track and broadcast the results of the breakthrough project. Wrong course of action! Expounding a project’s success benefits only that project rather than the entire company. Illuminating how project management caused a project to succeed benefits the entire organization. People then understand that project management can be used on a multitude of projects.

Fallacy 6: We need executive support. Almost true! We need visible executive support. People can easily differentiate between genuine support and lip service. Executives must walk the talk. They must hold meetings to demonstrate their support of project management and attend various project team meetings. They must maintain an open-door policy for problems that occur during project management implementation.

Fallacy 7: We need a project management course so our workers can become Project Management Professionals (PMPs). Once again, almost true! What we really need is lifelong education in project management. Becoming a PMP is just the starting point. There is life beyond the PMBOK® Guide. Continuous organizationwide project management education is the fastest way to accelerate maturity in project management.

Needless to say, significantly more fallacies than discussed here are out there waiting to block your project management implementation and delay its maturity. What is critical is that your organization implements project management through a well-thought-out plan that receives organizationwide buy-in and support. Fallacies


create unnecessary delays. Identifying and overcoming faulty thinking can help fast- track your organization’s project management maturity.



CERTIFICATION EXAM This section is applicable as a review of the principles to support the knowledge areas and domain groups in the PMBOK® Guide. This chapter addresses:

Human Resources Management Planning

Understanding the following principles is beneficial if the reader is using this text to study for the PMP® Certification Exam:

Different types of organizational structures Advantages and disadvantages of each structure In which structure the project manager possesses the greatest amount of authority In which structure the project manager possesses the least amount of authority Three types of matrix structures

In Appendix C, the following Dorale Products mini–case studies are applicable:

Dorale Products (G) [Human Resources Management] Dorale Products (H) [Human Resources Management] Dorale Products (J) [Human Resources Management] Dorale Products (K) [Human Resources Management]

The following multiple-choice questions will be helpful in reviewing the principles of this chapter:

1. In which organizational form is it most difficult to integrate project activities? A. Classical/traditional

B. Projectized

C. Strong matrix

D. Weak matrix

2. In which organization form would the project manager possess the greatest amount of authority?


A. Classical/traditional

B. Projectized

C. Strong matrix

D. Weak matrix

3. In which organizational form does the project manager often have the least amount of authority?

A. Classical/traditional

B. Projectized

C. Strong matrix

D. Weak matrix

4. In which organizational form is the project manager least likely to share resources with other projects?

A. Classical/traditional

B. Projectized

C. Strong matrix

D. Weak matrix

5. In which organizational form do project managers have the greatest likelihood of possessing reward power and have a wage-and-salary administration function? (The project and line manager are the same person.)

A. Classical/traditional

B. Projectized

C. Strong matrix

D. Weak matrix

6. In which organizational form is the worker in the greatest jeopardy of losing his or her job if the project gets canceled?

A. Classical/traditional

B. Projectized

C. Strong matrix

D. Weak matrix

7. In which type of matrix structure would a project manager most likely have a


command of technology?

A. Strong matrix

B. Balanced matrix

C. Weak matrix

D. Cross-cultural matrix



2. B

3. D

4. B

5. A

6. B

7. A


PROBLEMS 3–1 Much has been written about how to identify and interpret signs that indicate that a new organizational form is needed. Grinnell and Apple have identified five signs in addition to those previously described in Section 3.617:

Management is satisfied with its technical skills, but projects are not meeting time, cost, and other project requirements. There is a high commitment to getting project work done, but great fluctuation in how well performance specifications are met. Highly talented specialists involved in the project feel exploited and misused. Particular technical groups or individuals constantly blame each other for failure to meet specifications or delivery dates. Projects are on time and to specification, but groups and individuals aren’t satisfied with the achievement.

Grinnell and Apple state that there is a good chance that a matrix structure will eliminate or alleviate these problems. Do you agree or disagree? Does your answer depend on the type of project? Give examples or counterexamples to defend your answers.

3–2 One of the most difficult problems facing management is that of how to minimize the transition time between changeover from a purely traditional organizational form to a project organizational form. Managing the changeover is difficult in that management must consistently “provide individual training on teamwork and group problem solving; also, provide the project and functional groups with assignments to help build teamwork.”

3–3 Do you think that personnel working in a project organizational structure should undergo “therapy” sessions or seminars on a regular basis so as to better understand their working environment? If yes, how frequently? Does the frequency depend upon the project organizational form selected, or should they all be treated equally?

3–4 Which organizational form would be best for the following corporate strategies?

a. Developing, manufacturing, and marketing many diverse but interrelated technological products and materials

b. Having market interests that span virtually every major industry

c. Becoming multinational with a rapidly expanding global business

d. Working in a business environment of rapid and drastic change, together with strong competition

3–5 Do you think that documenting relationships is necessary in order to operate effectively in any project organizational structure? How would you relate your answer to a statement made in the previous chapter that each project can set up its own policies, procedures, rules, and directives as long as they conform to company guidelines?

3–6 In general, how could each of the following parameters influence your choice for an organizational structure? Explain your answers in as much depth as possible.

a. The project cost

b. The project schedule

c. The project duration

d. The technology requirements


e. The geographical locations

f. The required working relationships with the customer

3–7 In general, what are the overall advantages and disadvantages of superimposing one organizational form over another?

3–8 In deciding to go to a new organizational form, what impact should the capabilities of the following groups have on your decision?

a. Top management

b. Middle management

c. Lower-level management

3–9 Should a company be willing to accept a project that requires immediate organizational restructuring? If so, what factors should it consider?

3–10 Table 2–6 identifies the different life cycles of programs, projects, systems, and products. For each of the life cycles’ phases, select a project organizational form that you feel would work best. Defend your answer with examples, advantages, and disadvantages.

3–11 A major steel producer in the United States uses a matrix structure for R&D. Once the product is developed, the product organizational structure is used. Are there any advantages to this setup?

3–12 A major American manufacturer of automobile parts has a division that has successfully existed for the past ten years with multiple products, a highly sophisticated R&D section, and a pure traditional structure. The growth rate for the past five years has been 12 percent. Almost all middle and upper-level managers who have worked in this division have received promotions and transfers to either another division or corporate headquarters. According to “the book,” this division has all the prerequisites signifying that they should have a project organizational form of some sort, and yet they are extremely successful without it. Just from the amount of information presented, how can you account for their continued success? What do you think would be the major obstacles in convincing the personnel that a new organizational form would be better? Do you think that continued success can be achieved under the present structure?

3–13 Several authors contend that technology suffers in a pure product organizational form because there is no one group responsible for long-range planning, whereas the pure functional organization tends to sacrifice time and schedule. Do you agree or disagree with this statement? Defend your choice with examples.

3–14 Below are three statements that are often used to describe the environment of a matrix. Do you agree or disagree? Defend your answer.

a. Project management in a matrix allows for fuller utilization of personnel.

b. The project manager and functional manager must agree on priorities.

c. Decision-making in a matrix requires continual trade-offs on time, cost, technical risk, and uncertainty.

3–15 Assume that you have to select a project organizational form for a small company. For each form described in this chapter, discuss the applicability and state the advantages and disadvantages as they apply to this small company. (You may find it necessary to first determine the business base of the small company.)

3–16 How would each person identified below respond to the question, “How many bosses do you have?”

a. Project manager


b. Functional team member

c. Functional manager

(Repeat for each organizational form discussed in this chapter.)

3–17 If a project were large enough to contain its own resources, would a matrix organizational form be acceptable?

3–18 One of the most common reasons for not wanting to adopt a matrix is the excessive administrative costs and accompanying overhead rates. Would you expect the overhead rates to decrease as the matrix matures? (Disregard other factors that can influence the overhead rates, such as business base, growth rate, etc.)

3–19 Which type of organizational structure is best for R&D personnel to keep in touch with other researchers?

3–20 Which type of organizational form fosters teamwork in the best manner?

3–21 Canadian bankers have been using the matrix organizational structure to create “banking general managers” for all levels of a bank. Does the matrix structure readily admit itself to a banking environment in order to create future managers? Can we consider a branch manager as a matrix project manager?

3–22 A major utility company in Cleveland has what is commonly called “fragmented” project management, where each department maintains project managers through staff positions. The project managers occasionally have to integrate activities that involve departments other than their own. Each project normally requires involvement of several people. The company also has product managers operating out of a rather crude project (product) organizational structure. Recently, the product managers and project managers were competing for resources within the same departments.

To complicate matters further, management has put a freeze on hiring. Last week top management identified 120 different projects that could be undertaken. Unfortunately, under the current structure there are not enough staff project managers available to handle these projects. Also, management would like to make better use of the scarce functional resources.

Staff personnel contend that the solution to the above problems is the establishment of a project management division under which there will be a project management department and a product management department. The staff people feel that under this arrangement better utilization of line personnel will be made, and that each project can be run with fewer staff people, thus providing the opportunity for more projects. Do you agree or disagree, and what problems do you foresee?

3–23 Some organizational structures are considered to be “project-driven.” Define what is meant by “project-driven.” Which organizational forms described in this chapter would fall under your definition?

3–24 Are there any advantages to having a single project engineer as opposed to having a committee of key functional employees who report to the director of engineering?

3–25 The major difficulty in the selection of a project organizational form involves placement of the project manager. In the evolutionary process, the project manager started out reporting to a department head and ultimately ended up reporting to a senior executive. In general, what were the major reasons for having the project manager report higher and higher in the organizational structure?

3–26 Ralph is a department manager who is quite concerned about the performance of the people beneath him. After several months of analysis, Ralph has won the acceptance of his superiors for setting up a project management structure in his department. Out of the twenty-three departments


in the company, his will be the only one with formalized project management. Can this situation be successful even though several projects require interfacing with other departments?

3–27 A large electronics corporation has a multimillion dollar project in which 90 percent of the work stays within one division. The division manager wants to be the project manager. Should this be allowed even though there exists a project management division?

3–28 The internal functioning of an organization must consider:

The demands imposed on the organization by task complexity Available technology The external environment The needs of the organizational membership

Considering these facts, should an organization search for the one best way to organize under all conditions? Should managers examine the functioning of an organization relative to its needs, or vice versa?

3–29 Project managers, in order to get the job accomplished, need adequate organizational status and authority. One corporate executive contends that an organizational chart such as that in Figure 3–6 can be modified to show that the project managers have adequate authority by placing the department managers in boxes at the top of the functional responsibility arrowheads. The executive further contends that, with this approach, the project managers appear to be higher in the organization than their departmental counterparts but are actually equal in status. Do you agree or disagree with the executive’s idea? Will there be a proper balance of power between project and department managers with this organizational structure?

3–30 Defend or attack the following two statements concerning the operation of a matrix:

There should be no disruption due to dual accountability. A difference in judgment should not delay work in progress.

3–31 A company has fifteen projects going on at once. Three projects are over $5 million, seven projects are between $1 million and $3 million, and five projects are between $500,000 and $700,000. Each project has a full-time project manager. Just based upon this information, which organizational form would be best? Can all the project managers report to the same person?

3–32 A major insurance company is considering the implementation of project management. The majority of the projects in the company are two weeks in duration, with very few existing beyond one month. Can project management work here?

3–33 The definition of project management in Section 1.9 identifies project teams and task forces. How would you distinguish between a project team and a task force, and what industries and/or projects would be applicable to each?

3–34 Can informal project management work in a structured environment at the same time as formal project management and share the same resources?

3–35 Several people believe that the matrix structure can be multidimensional (as shown in Figure 3–12). Explain the usefulness of such a structure.

3–36 Many companies have informal project management where work flows horizontally, but in an informal manner. What are the characteristics of informal project management? Which types of companies can operate effectively with informal project management?

3–37 Some companies have tried to develop a matrix within a matrix. Is it possible to have a matrix for formal project control and an internal authority matrix, communication matrix, responsibility matrix, or a combination of several of these?

3–38 Is it possible for a matrix to get out of control because of too many small projects, each


competing for the same shared resources? If so, how many projects are too many? How can management control the number of projects? Does your answer depend on whether the organization is project-driven or non–project-driven?

3–39 A government subcontractor operates with a pure specialized product management organizational structure and has four product lines. All employees are required to have a top secret security clearance. The subcontractor’s plant is structured such that each of the four product lines occupies a secured area in the building. Employees wear security badges that give them access to the different areas. Most of the employees are authorized to have access only to their area. Only the executives have access to all four areas. For security reasons, functional employees are not permitted to discuss the product lines with each other.

Many of the projects performed in each of the product lines are identical, and severe duplication of efforts exist. Management is interested in converting over to a matrix structure to minimize the duplication of effort. What problems must be overcome before and during matrix implementation?

3–40 A company has decided to go to full project management utilizing a matrix structure. Can the implementation be done in stages? Can the matrix be partially implemented, say, in one portion of the organization, and then gradually expanded across the rest of the company?

3–41 A company has two major divisions, both housed under the same roof. One division is the aerospace group, where all activities are performed within a formal matrix. The second division is the industrial group, which operates with pure product management, except for the MIS department, which has an informal matrix. If both divisions have to share common corporate resources, what problems can occur?

3–42 Several Fortune 100 corporations have a corporate engineering group that assumes the responsibility of the project management–project engineering function for all major capital projects in all divisions worldwide. Explain how the corporate engineering function should work, as well as its advantages and disadvantages.



By 1990, Jones and Shephard Accountants, Inc. (J&S) was a midsized company and ranked 38th in size by the American Association of Accountants. In order to compete with the larger firms, J&S formed an Information Services Division designed primarily for studies and analyses. By 1995, the Information Services Division (ISD) had fifteen employees.

In 1997, the ISD purchased three largecomputers. With this increased capacity, J&S expanded its services to help satisfy the needs of outside customers. By September 1998, the internal and external workloads had increased to a point where the ISD now employed over fifty people.


The director of the division was very disappointed in the way that activities were being handled. There was no single person assigned to push through a project, and outside customers did not know whom to call to get answers regarding project status. The director found that most of his time was being spent on day-to-day activities such as conflict resolution instead of strategic planning and policy formulation.

The biggest problems facing the director were the two continuous internal projects (called Project X and Project Y, for simplicity) that required month-end data collation and reporting. The director felt that these two projects were important enough to require a full-time project manager on each effort.

In October 1998, corporate management announced that the ISD director would be reassigned on February 1, 1999, and that the announcement of his replacement would not be made until the middle of January. The same week that the announcement was made, two individuals were hired from outside the company to take charge of Project X and Project Y. Exhibit 3–1 shows the organizational structure of the ISD.

Exhibit 3–1. ISD organizational chart

Within the next thirty days, rumors spread throughout the organization about who would become the new director. Most people felt that the


position would be filled from within the division and that the most likely candidates would be the two new project managers. In addition, the associate director was due to retire in December, thus creating two openings.

On January 3, 1999, a confidential meeting was held between the ISD director and the systems manager.

ISD Director: “Corporate has approved my request to promote you to division director. Unfortunately, your job will not be an easy one. You’re going to have to restructure the organization somehow so that our employees will not have as many conflicts as they are now faced with. My secretary is typing up a confidential memo for you explaining my observations on the problems within our division.

“Remember, your promotion should be held in the strictest confidence until the final announcement later this month. I’m telling you this now so that you can begin planning the restructuring. My memo should help you.” (See Exhibit 3–2 for the memo.)

The systems manager read the memo and, after due consideration, decided that some form of matrix would be best. To help him structure the organization properly, an outside consultant was hired to help identify the potential problems with changing over to a matrix. The following problem areas were identified by the consultant:


Exhibit 3–2. Confidential memo From:ISD Director To: Systems Manager Date: January 3, 1999

Congratulations on your promotion to division director. I sincerely hope that your tenure will be productive both personally and for corporate. I have prepared a short list of the major obstacles that you will have to consider when you take over the controls.

1. Both Project X and Project Y managers are highly competent individuals. In the last four or five days, however, they have appeared to create more conflicts for us than we had previously. This could be my fault for not delegating them sufficient authority, or could be a result of the fact that several of our people consider these two individuals as prime candidates for my position. In addition, the operations manager does not like other managers coming into his “empire” and giving direction

2. I’m not sure that we even need an associate director. That decision will be up to you.

3. Corporate has been very displeased with our inability to work with outside customers. You must consider this problem with any organizational structure you choose.

4. The corporate strategic plan for our division contains an increased emphasis on special, internal MIS projects. Corporate wants to limit our external activities for a while until we get our internal affairs in order.

5. I made the mistake of changing our organizational structure on a day-to-day basis. Perhaps it would have been better to design a structure that could satisfy advanced needs, especially one that we can grow into.

1. The operations manager controls more than 50 percent of the people resources. You might want to break up his empire. This will have to be done very carefully.


2. The secretary pool is placed too high in the organization.

3. The supervisors who now report to the associate director will have to be reassigned lower in the organization if the associate director’s position is abolished.

4. One of the major problem areas will be trying to convince corporate management that their change will be beneficial. You’ll have to convince them that this change can be accomplished without having to increase division manpower.

5. You might wish to set up a separate department or a separate project for customer relations.

6. Introducing your employees to the matrix will be a problem. Each employee will look at the change differently. Most people have the tendency of looking first at the shift in the balance of power—have I gained or have I lost power and status?

The systems manager evaluated the consultant’s comments and then prepared a list of questions to ask the consultant at their next meeting:

1. What should the new organizational structure look like? Where should I put each person, specifically the managers?

2. When should I announce the new organizational change? Should it be at the same time as my appointment or at a later date?

3. Should I invite any of my people to provide input to the organizational restructuring? Can this be used as a technique to ease power plays?

4. Should I provide inside or outside seminars to train my people for the new organizational structure? How soon should they be held?


Background Coronado Communications, Inc. (CCI) was a midsized consulting company with corporate headquarters in New York City and satellite divisions in more than twenty-five of the largest cities in the United States. CCI was primarily a consulting company for large and small firms that wished to improve their communication systems, including


computer hardware and networking systems. Each of the twenty-five divisions serviced its own geographical areas. Whenever a request for proposal was sent to CCI, corporate decided which satellite office would bid on the job.

In 2009, Fred Morse took over as president and CEO of CCI. Although CCI was successful and won a good portion of its contracts through competitive bidding, Morse felt that CCI could win more contracts if he created a climate of internal competition. Prior to Morse coming on board as the CEO, CCI corporate would decide which satellite office would bid on the job. Morse decided that any and all CCI branches could bid on each and every contract. This process meant that each satellite office would be competing with other satellite offices.

Competitive System In the past, CCI encouraged the satellite office that would be bidding on the job to use internal resources whenever possible. If the office in Chicago were bidding on a contract and were awarded the contract, then the Chicago office could use resources from the Boston office to fulfill the contract. The workers in the Boston office would then bill the Chicago office a fully loaded or fully burdened hourly rate, but excluding profits. All profits would be shown on the financial statement of the office that won the contract. This technique fostered cooperation between the satellite offices because the Chicago office would get credit for all profits and the Boston office would be able to keep some of its employees on direct charges against contracts rather than on overhead account if they were between jobs.

With the new competitive system, Boston would have the right to charge Chicago a profit for each hour worked, and the profit on these hours would be credited to Boston’s financial statement. In effect, Chicago would be treating Boston as though it were a contractor hired by Chicago. If Chicago felt that it could get resources at a cheaper rate by hiring resources from outside CCI, then it was allowed to do so.

The bonus system also changed. In the past, bonuses were paid out equally to each satellite office based upon the total profitability to CCI. Now, the bonuses paid to each satellite office would be based entirely upon the profitability of each satellite office. Salary increases would also be heavily biased toward individual satellite office profitability.


Over the years, the company had developed an outstanding enterprise project management methodology with a proven record of success. Now, each satellite office was still asked to use the methodology but could make its own modifications to satisfy its customer base.

Two Years Later The following facts appeared after using the new competitive system for two years:

The gross revenue to the corporation had increased by 40 percent but the profit margin was only 9 percent, down from the 15 percent prior to the implementation of the new competitive system. Satellite offices were lowering their profit margins in order to win new business. Most satellite offices were outsourcing some of their work to low- cost suppliers rather than using available resources from other satellite offices. Some of the satellite offices had to lay off some of their talented people because of lack of work. Employees were asking for transfers to those satellite offices where greater opportunities existed. The cooperative working relationships that once existed between satellite offices was now a competitive relationship with hoarding of information and lack of communications. There was no longer a uniform process in place for promotions and awards; everything was based upon yearly satellite office profitability. Each satellite office created its own project management methodology. The modifications were designed to reduce paperwork and lower the overall cost of using the methodology. Clients that had become accustomed to seeing the old methodology were somewhat unhappy with the changes because less information was being presented to the clients during status review meetings. The clients were also unhappy that updates and changes to the methodology were not being made as fast as necessary, and CCI appeared to be getting further behind in project management capability.



1. Could you have anticipated that these results would have occurred?

2. What happened to the corporate culture?

3. Can project management practices be improved with a major repair to the corporate culture?

4. Is it realistic to expect each satellite office to have its own project management methodology? What happens when two or more satellite offices must work together?

5. Can CCI be fixed? If so, what would you do and how long do you estimate it would take to make the repairs?

* Revised 2007.

1. ©2010 by Harold Kerzner. Reproduced by permission. All rights reserved.

* Case Study also appears at end of chapter.

1. S. K. Grinnell and H. P. Apple, “When Two Bosses Are Better Than One,” Machine Design, January 1975, pp. 84–87.

2. Many authors refer to classical organizations as pure functional organizations. This can be seen from Figure 3–1. Also note that the department level is below the division level. In some organizations these titles are reversed.

3. Reprinted by permission of Harvard Business Review. From William C. Goggin, “How the Multidimensional Structure Works at Dow Corning,” Harvard Business Review, January–February 1974, p. 54. Copyright © 1973 by the Harvard Business School Publishing Corporation; all rights reserved.

4. Jay R. Galbraith, “Matrix Organization Designs.” Reprinted with permission from Business Horizons, February 1971, pp. 29–40. Copyright © 1971 by the Board of Trustees at Indiana University. Galbraith defines a fifth mechanism, liaison departments, that will be discussed later in this section.

5. Jay R. Galbraith, “Matrix Organization Designs.” Business Horizons, February 1971, pp. 29–40.

6. Leroy H. Mantell, “The Systems Approach and Good Management.” Reprinted with permission from Business Horizons, October 1972 (p. 50). Copyright © 1972 by the Board of Trustees at Indiana University.

7. William P. Killian, “Project Management—Future Organizational Concepts,” Marquette Business Review, Vol. 2, 1971, pp. 90–107.

8. Reprinted by permission of Harvard Business Review. From C. J. Middleton,


“How to Set Up a Project Organization,” Harvard Business Review, March–April 1967. Copyright © 1967 by the Harvard Business School Publishing Corporation; all rights reserved.

9. Stanley M. Davis and Paul R. Lawrence, Matrix (adapted from pp. 129–144), © 1977. Adapted by permission of Pearson Education, Inc., Upper Saddle River, NJ.

10. Reprinted by permission of Harvard Business Review. From William C. Goggin, “How the Multidimensional Structure Works at Dow Corning,” Harvard Business Review, January–February 1974, pp. 56–57. Copyright © 1973 by the Harvard Business School Publishing Corporation; all rights reserved.

11. S. K. Grinnell and H. P. Apple, “When Two Bosses Are Better Than One,” Machine Design, January 1975, pp. 84–87.

12. Procurement, reliability, and maintainability may fall under the responsibility of the project engineer in some companies.

13. John M. Stewart, “Making Project Management Work.” Reprinted with permission from Business Horizons, Fall 1965 (p. 54). Copyright © 1964 by the Board of Trustees at Indiana University.

14. William P. Killian, “Project Management—Future Organizational Concepts,” Marquette Business Review, Vol. 2, 1971, pp. 90–107.

15. Jay R. Galbraith, “Matrix Organization Designs.” Reprinted with permission from Business Horizons, February 1971, pp. 29–40. Copyright © 1971 by the Board of Trustees at Indiana University.

16. Reprinted with permission of Harvard Business Review. From C. J. Middleton, “How to Set Up a Project Organization,” Harvard Business Review, March–April 1967, pp. 73–82. Copyright © 1967 by the Harvard Business School Publishing Corporation; all rights reserved.

17. See note 11.


Organizing and Staffing the Project Office and Team

Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 5th Edition, Reference Section for the PMP® Certification Exam

Government Project Management Falls Engineering White Manufacturing Martig Construction Company Ducor Chemical The Carlson Project

The Bad Apple Multiple Choice Exam

Human Resource Management


4.0 INTRODUCTION Successful project management, regardless of the organizational structure, is only as good as the individuals and leaders who are managing the key functions. Project management is not a one-person operation; it requires a group of individuals dedicated to the achievement of a specific goal. Project management includes:

PMBOK® Guide, 5th Edition Chapter 9 Human Resource Management

A project manager An assistant project manager A project (home) office A project team

Generally, project office personnel are assigned full-time to the project and work out of the project office, whereas the project team members work out of the functional units and may spend only a small percentage of their time on the project. Normally, project office personnel report directly to the project manager, but they may still be solid to their line function just for administrative control. A project office usually is not required on small projects, and sometimes the project can be accomplished by just one person who may fill all of the project office positions.

Before the staffing function begins, five basic questions are usually considered:

What are the requirements for an individual to become a successful project manager? Who should be a member of the project team? Who should be a member of the project office? What problems can occur during recruiting activities? What can happen downstream to cause the loss of key team members?

On the surface, these questions may not seem especially complex. But when we apply them to a project environment (which is by definition a “temporary” situation) where a constant stream of projects is necessary for corporate growth, the staffing problems become complex, especially if the organization is understaffed.



To understand the problems that occur during staffing, we must first investigate the characteristics of project management, including the project environment, the project management process, and the project manager.

PMBOK® Guide, 5th Edition 9.1 Plan Human Resource Management

Two major kinds of problems are related to the project environment: personnel performance problems and personnel policy problems. Performance is difficult for many individuals in the project environment because it represents a change in the way of doing business. Individuals, regardless of how competent they are, find it difficult to adapt continually to a changing situation in which they report to multiple managers.

On the other hand, many individuals thrive on temporary assignments because it gives them a “chance for glory.” Unfortunately, some employees might consider the chance for glory more important than the project. For example, an employee may pay no attention to the instructions of the project manager and instead perform the task his own way. In this situation, the employee wants only to be recognized as an achiever and really does not care if the project is a success or failure, as long as he still has a functional home to return to where he will be identified as an achiever with good ideas.

The second major performance problem lies in the project–functional interface, where an individual suddenly finds himself reporting to two bosses, the functional manager and the project manager. If the functional manager and the project manager are in agreement about the work to be accomplished, then performance may not be hampered. But if conflicting directions are received, then the individual may let his performance suffer because of his compromising position. In this case, the employee will “bend” in the direction of the manager who controls his purse strings.

Personnel policy problems can create havoc in an organization, especially if the “grass is greener” in a project environment than in the functional environment. Functional organizations normally specify grades and salaries for employees.


Project offices, on the other hand, have no such requirements and can promote and pay according to achievement. The difficulty here is that one can distinguish between employees in grades 7, 8, 9, 10, and 11 in a line organization, whereas for a project manager the distinction might appear only in the size of the project or the amount of responsibility. Bonuses are also easier to obtain in the project office but may create conflict and jealousy between the horizontal and vertical elements.

Because each project is different, the project management process allows each project to have its own policies, procedures, rules, and standards, provided they fall within broad company guidelines. Each project must be recognized as a project by top management so that the project manager has the delegated authority necessary to enforce the policies, procedures, rules, and standards.

Project management is successful only if the project manager and his team are totally dedicated to the successful completion of the project. This requires each team member of the project team and office to have a good understanding of the fundamental project requirements, which include:

Customer liaison Project direction Project planning Project control Project evaluation Project reporting

Ultimately, the person with the greatest influence during the staffing phase is the project manager. The personal attributes and abilities of project managers will either attract or deter highly desirable individuals. Basic characteristics include:

Honesty and integrity Understanding of personnel problems Understanding of project technology Business management competence

Management principles Communications

Alertness and quickness Versatility Energy and toughness Decision-making ability Ability to evaluate risk and uncertainty

Project managers must exhibit honesty and integrity to foster an atmosphere of trust. They should not make impossible promises, such as immediate promotions for


everyone if a follow-on contract is received. Also, on temporarily assigned activities, such as a project, managers cannot wait for personnel to iron out their own problems because time, cost, and performance requirements will not be satisfied.

Project managers should have both business management and technical expertise. They must understand the fundamental principles of management, especially those involving the rapid development of temporary communication channels. Project managers must understand the technical implications of a problem, since they are ultimately responsible for all decision-making. However, many good technically oriented managers have failed because they have become too involved with the technical side of the project rather than the management side. There are strong arguments for having a project manager who has more than just an understanding of the necessary technology.

Because a project has a relatively short time duration, decision-making must be rapid and effective. Managers must be alert and quick in their ability to perceive “red flags” that can eventually lead to serious problems. They must demonstrate their versatility and toughness in order to keep subordinates dedicated to goal accomplishment. Executives must realize that the project manager’s objectives during staffing are to:

Acquire the best available assets and try to improve them Provide a good working environment for all personnel Make sure that all resources are applied effectively and efficiently so that all constraints are met, if possible



DECISION Probably the most difficult decision facing upper-level management is the selection of project managers. Some managers work best on long-duration projects where decision-making can be slow; others may thrive on short-duration projects that can result in a constant-pressure environment. A director was asked whom he would choose for a key project manager position—an individual who had been a project manager on previous programs in which there were severe problems and cost overruns, or a new aggressive individual who might have the capability to be a good project manager but had never had the opportunity. The director responded that he would go with the seasoned veteran assuming that the previous mistakes would not be made again. The argument here is that the project manager must learn from his own mistakes so they will not be made again. The new individual is apt to make the same mistakes the veteran made. However, this may limit career path opportunities for younger personnel. Stewart has commented on the importance of experience1:

PMBOK® Guide, 5th Edition 9.2 Acquire Project Team Interpersonal Skills

Though the project manager’s previous experience is apt to have been confined to a single functional area of business, he must be able to function on the project as a kind of general manager in miniature. He must not only keep track of what is happening but also play the crucial role of advocate for the project. Even for a seasoned manager, this task is not likely to be easy. Hence, it is important to assign an individual whose administrative abilities and skills in personal relations have been convincingly demonstrated under fire.

The selection process for project managers is not easy. Five basic questions must be considered:

What are the internal and external sources?


How do we select? How do we provide career development in project management? How can we develop project management skills? How do we evaluate project management performance?

Project management cannot succeed unless a good project manager is at the controls. It is far more likely that project managers will succeed if it is obvious to the subordinates that the general manager has appointed them. Usually, a brief memo to the line managers will suffice. The major responsibilities of the project manager include:

To produce the end-item with the available resources and within the constraints of time, cost, and performance/technology To meet contractual profit objectives To make all required decisions whether they be for alternatives or termination To act as the customer (external) and upper-level and functional management (internal) communications focal point To “negotiate” with all functional disciplines for accomplishment of the necessary work packages within the constraints of time, cost, and performance/technology To resolve all conflicts

If these responsibilities were applied to the total organization, they might reflect the job description of the general manager. This analogy between project and general managers is one of the reasons why future general managers are asked to perform functions that are implied, rather than spelled out, in the job description. As an example, you are the project manager on a high-technology project. As the project winds down, an executive asks you to write a paper so that he can present it at a technical meeting in Tokyo. His name will appear first on the paper. Should this be a part of your job? As this author sees it, you really don’t have much of a choice.

In order for project managers to fulfill their responsibilities successfully, they are constantly required to demonstrate their skills in interface, resource, and planning and control management. These implicit responsibilities are shown below:

Interface Management Product interfaces

Performance of parts or subsections Physical connection of parts or subsections

Project interfaces Customer Management (functional and upper-level)


Change of responsibilities Information flow Material interfaces (inventory control)

Resource Management Time (schedule) Manpower Money Facilities Equipment Material Information/technology

Planning and Control Management Increased equipment utilization Increased performance efficiency Reduced risks Identification of alternatives to problems Identification of alternative resolutions to conflicts

Consider the following advertisement for a facilities planning and development project manager (adapted from The New York Times, January 2, 1972):

Personable, well-educated, literate individual with college degree in Engineering to work for a small firm. Long hours, no fringe benefits, no security, little chance for advancement are among the inducements offered. Job requires wide knowledge and experience in manufacturing, materials, construction techniques, economics, management and mathematics. Competence in the use of the spoken and written English is required. Must be willing to suffer personal indignities from clients, professional derision from peers in the more conventional jobs, and slanderous insults from colleagues.

Job involves frequent extended trips to inaccessible locations throughout the world, manual labor and extreme frustration from the lack of data on which to base decisions.

Applicant must be willing to risk personal and professional future on decisions based upon inadequate information and complete lack of control over acceptance of recommendations by clients. Responsibilities for the work are unclear and little or no guidance is offered. Authority commensurate with responsibility is not provided either by the firm or its clients.

Applicant should send resume, list of publications, references and other supporting documentation to. . . .


Fortunately, these types of job descriptions are very rare today.

Finding the person with the right qualifications is not an easy task because the selection of project managers is based more on personal characteristics than on the job description. In Section 4.1 a brief outline of desired characteristics was presented. Russell Archibald defines a broader range of desired personal characteristics2:

Flexibility and adaptability Preference for significant initiative and leadership Aggressiveness, confidence, persuasiveness, verbal fluency Ambition, activity, forcefulness Effectiveness as a communicator and integrator Broad scope of personal interests Poise, enthusiasm, imagination, spontaneity Able to balance technical solutions with time, cost, and human factors Well organized and disciplined A generalist rather than a specialist Able and willing to devote most of his time to planning and controlling Able to identify problems Willing to make decisions Able to maintain proper balance in the use of time

PMBOK® Guide, 5th Edition 9.3 Develop Project Team

This ideal project manager would probably have doctorates in engineering, business, and psychology, and experience with ten different companies in a variety of project office positions, and would be about twenty-five years old. Good project managers in industry today would probably be lucky to have 70 to 80 percent of these characteristics. The best project managers are willing and able to identify their own shortcomings and know when to ask for help.

The difficulty in staffing, especially for project managers or assistant project managers, is in determining what questions to ask during an interview to see if an individual has the necessary or desired characteristics. Individuals may be qualified to be promoted vertically but not horizontally. An individual with poor communication skills and interpersonal skills can be promoted to a line management slot because of his technical expertise, but this same individual is not


qualified for project management promotion. One of the best ways to interview is to read each element of the job description

to the potential candidate. Many individuals want a career path in project management but are totally unaware of what the project manager’s duties are.

So far we have discussed the personal characteristics of the project manager. There are also job-related questions to consider, such as:

Are feasibility and economic analyses necessary? Is complex technical expertise required? If so, is it within the individual’s capabilities? If the individual is lacking expertise, will there be sufficient backup strength in the line organizations? Is this the company’s or the individual’s first exposure to this type of project and/or client? If so, what are the risks to be considered? What is the priority for this project, and what are the risks? With whom must the project manager interface, both inside and outside the organization?

Most good project managers know how to perform feasibility studies and cost- benefit analyses. Sometimes these studies create organizational conflict. A major utility company begins each computer project with a feasibility study in which a cost-benefit analysis is performed. The project managers, all of whom report to a project management division, perform the study themselves without any direct functional support. The functional managers argue that the results are grossly inaccurate because the functional experts are not involved. The project managers, on the other hand, argue that they never have sufficient time or money to perform a complete analysis. Some companies resolve this by having a special group perform these studies.

Most companies would prefer to find project managers from within. Unfortunately, this is easier said than done.

There are also good reasons for recruiting from outside the company. A new project manager hired from the outside would be less likely to have strong informal ties to any one line organization and thus could be impartial. Some companies further require that the individual spend an apprenticeship period of twelve to eighteen months in a line organization to find out how the company functions, to become acquainted with the people, and to understand the company’s policies and procedures.

One of the most important but often least understood characteristics of good project managers is the ability to know their own strengths and weaknesses and


those of their employees. Managers must understand that in order for employees to perform efficiently:

They must know what they are supposed to do. They must have a clear understanding of authority and its limits. They must know what their relationship with other people is. They should know what constitutes a job well done in terms of specific results. They should know where and when they are falling short. They must be made aware of what can and should be done to correct unsatisfactory results. They must feel that their superior has an interest in them as individuals. They must feel that their superior believes in them and wants them to succeed.



MANAGERS Managing complex programs represents a challenge requiring skills in team building, leadership, conflict resolution, technical expertise, planning, organization, entrepreneurship, administration, management support, and the allocation of resources. This section examines these skills relative to program management effectiveness. A key factor to good program performance is the program manager’s ability to integrate personnel from many disciplines into an effective work team.

PMBOK® Guide, 5th Edition Chapter 9 Human Resources Management Interpersonal Skills

1.4.1 Program Management

To get results, the program manager must relate to (1) the people to be managed, (2) the task to be done, (3) the tools available, (4) the organizational structure, and (5) the organizational environment, including the customer community.

With an understanding of the interaction of corporate organization and behavior elements, the manager can build an environment conducive to the working team’s needs. The internal and external forces that impinge on the organization of the project must be reconciled to mutual goals. Thus the program manager must be both socially and technically aware to understand how the organization functions and how these functions will affect the program organization of the particular job to be done. In addition, the program manager must understand the culture and value system of the organization he is working with. Effective program management is directly related to proficiency in these ten skills:

Team building Leadership Conflict resolution Technical expertise Planning


Organization Entrepreneurship Administration Management support Resource allocation

It is important that the personal management style underlying these skills facilitate the integration of multidisciplinary program resources for synergistic operation. The days of the manager who gets by with technical expertise alone or pure administrative skills are gone.


Team-Building Skills Building the program team is one of the prime responsibilities of the program manager. Team building involves a whole spectrum of management skills required to identify, commit, and integrate the various task groups from the traditional functional organization into a single program management system.

To be effective, the program manager must provide an atmosphere conducive to teamwork. He must nurture a climate with the following characteristics:

Team members committed to the program Good interpersonal relations and team spirit The necessary expertise and resources Clearly defined goals and program objectives Involved and supportive top management Good program leadership Open communication among team members and support organizations A low degree of detrimental interpersonal and intergroup conflict

Three major considerations are involved in all of the above factors: (1) effective communications, (2) sincere interest in the professional growth of team members, and (3) commitment to the project.


Leadership Skills A prerequisite for program success is the program manager’s ability to lead the team within a relatively unstructured environment. It involves dealing effectively with managers and supporting personnel across functional lines and the ability to collect and filter relevant data for decision-making in a dynamic environment. It involves the ability to integrate individual demands, requirements, and limitations into decisions and to resolve intergroup conflicts.

As with a general manager, quality leadership depends heavily on the program manager’s personal experience and credibility within the organization. An effective management style might be characterized this way:

Clear project leadership and direction Assistance in problem-solving Facilitating the integration of new members into the team Ability to handle interpersonal conflict Facilitating group decisions Capability to plan and elicit commitments Ability to communicate clearly Presentation of the team to higher management Ability to balance technical solutions against economic and human factors

The personal traits desirable and supportive of the above skills are:

Project management experience Flexibility and change orientation Innovative thinking Initiative and enthusiasm Charisma and persuasiveness Organization and discipline


Conflict Resolution Skills Conflict is fundamental to complex task management. Understanding the determinants of conflicts is important to the program manager’s ability to deal with conflicts effectively. When conflict becomes dysfunctional, it often results in poor program decision-making, lengthy delays over issues, and a disruption of the team’s efforts, all negative influences to program performance. However, conflict can be beneficial when it produces involvement and new information and enhances the competitive spirit.

To successfully resolve conflict and improve overall program performance, program managers must:

Understand interaction of the organizational and behavioral elements in order to build an environment conducive to their team’s motivational needs. This will enhance active participation and minimize unproductive conflict. Communicate effectively with all organizational levels regarding both project objectives and decisions. Regularly scheduled status review meetings can be an important communication vehicle. Recognize the determinants of conflict and their timing in the project life cycle. Effective project planning, contingency planning, securing of commitments, and involving top management can help to avoid or minimize many conflicts before they impede project performance.

The accomplished manager needs a “sixth sense” to indicate when conflict is desirable, what kind of conflict will be useful, and how much conflict is optimal for a given situation. In the final analysis, he has the sole responsibility for his program and how conflict will contribute to its success or failure.


Technical Skills The program manager rarely has all the technical, administrative, and marketing expertise needed to direct the program single-handedly. It is essential, however, for the program manager to understand the technology, the markets, and the environment of the business. Without this understanding, the consequences of local decisions on the total program, the potential growth ramifications, and relationships to other business opportunities cannot be foreseen by the manager. Further technical expertise is necessary to evaluate technical concepts and solutions, to communicate effectively in technical terms with the project team, and to assess risks and make trade-offs between cost, schedule, and technical issues. This is why in complex problem-solving situations so many project managers must have an engineering background.

Technical expertise is composed of an understanding of the:

Technology involved Engineering tools and techniques employed Specific markets, their customers, and requirements Product applications Technological trends and evolutions Relationship among supporting technologies People who are part of the technical community

The technical expertise required for effective management of engineering programs is normally developed through progressive growth in engineering or supportive project assignments in a specific technology area. Frequently, the project begins with an exploratory phase leading into a proposal. This is normally an excellent testing ground for the future program manager. It also allows top management to judge the new candidate’s capacity for managing the technological innovations and integration of solutions.


Planning Skills Planning skills are helpful for any undertaking; they are absolutely essential for the successful management of large complex programs. The project plan is the road map that defines how to get from the start to the final results.

Program planning is an ongoing activity at all organizational levels. However, the preparation of a project summary plan, prior to project start, is the responsibility of the program manager. Effective project planning requires particular skills far beyond writing a document with schedules and budgets. It requires communication and information processing skills to define the actual resource requirements and administrative support necessary. It requires the ability to negotiate the necessary resources and commitments from key personnel in various support organizations with little or no formal authority.

Effective planning requires skills in the areas of:

Information processing Communication Resource negotiations Securing commitments Incremental and modular planning Assuring measurable milestones Facilitating top management involvement

In addition, the program manager must assure that the plan remains a viable document. Changes in project scope and depth are inevitable. The plan should reflect necessary changes through formal revisions and should be the guiding document throughout the life cycle of the program. An obsolete or irrelevant plan is useless.

Finally, program managers need to be aware that planning can be overdone. If not controlled, planning can become an end in itself and a poor substitute for innovative work. It is the responsibility of the program manager to build flexibility into the plan and police it against misuse.


Organizational Skills The program manager must be a social architect; that is, he must understand how the organization works and how to work with the organization. Organizational skills are particularly important during project formation and startup when the program manager is integrating people from many different disciplines into an effective work team. It requires defining the reporting relationships, responsibilities, lines of control, and information needs. A good program plan and a task matrix are useful organizational tools. In addition, the organizational effort is facilitated by clearly defined program objectives, open communication channels, good program leadership, and senior management support.


Entrepreneurial Skills The program manager also needs a general management perspective. For example, economic considerations affect the organization’s financial performance, but objectives often are much broader than profits. Customer satisfaction, future growth, cultivation of related market activities, and minimum organizational disruptions of other programs might be equally important goals. The effective program manager is concerned with all these issues.

Entrepreneurial skills are developed through actual experience. However, formal MBA-type training, special seminars, and cross-functional training programs can help to develop the entrepreneurial skills needed by program managers.


Administrative Skills Administrative skills are essential. The program manager must be experienced in planning, staffing, budgeting, scheduling, and other control techniques. In dealing with technical personnel, the problem is seldom to make people understand administrative techniques such as budgeting and scheduling, but to impress on them that costs and schedules are just as important as elegant technical solutions.

Particularly on larger programs, managers rarely have all the administrative skills required. While it is important that program managers understand the company’s operating procedures and available tools, it is often necessary for the program manager to free himself from administrative details regardless of his ability to handle them. He has to delegate considerable administrative tasks to support groups or hire a project administrator.

Some helpful tools for the manager in the administration of his program include: (1) the meeting, (2) the report, (3) the review, and (4) budget and schedule controls. Program managers must be thoroughly familiar with these available tools and know how to use them effectively.


Management Support Building Skills The program manager is surrounded by a myriad of organizations that either support him or control his activities. An understanding of these interfaces is important to program managers as it enhances their ability to build favorable relationships with senior management. Project organizations are shared-power systems with personnel of many diverse interests and “ways of doing things.” Only a strong leader backed by senior management can prevent the development of unfavorable biases.

Four key variables influence the project manager’s ability to create favorable relationships with senior management: (1) his ongoing credibility, (2) the visibility of his program, (3) the priority of his program relative to other organizational undertakings, and (4) his own accessibility.


Resource Allocation Skills A program organization has many bosses. Functional lines often shield support organizations from direct financial control by the project office. Once a task has been authorized, it is often impossible to control the personnel assignments, priorities, and indirect manpower costs. In addition, profit accountability is difficult owing to the interdependencies of various support departments and the often changing work scope and contents.

Effective and detailed program planning may facilitate commitment and reinforce control. Part of the plan is the “Statement of Work,” which establishes a basis for resource allocation. It is also important to work out specific agreements with all key contributors and their superiors on the tasks to be performed and the associated budgets and schedules. Measurable milestones are not only important for hardware components, but also for the “invisible” program components such as systems and software tasks. Ideally, these commitments on specs, schedules, and budgets should be established through involvement by key personnel in the early phases of project formation, such as the proposal phase. This is the time when requirements are still flexible, and trade-offs among performance, schedule, and budget parameters are possible. Further, this is normally the time when the competitive spirit among potential contributors is highest, often leading to a more cohesive and challenging work plan.



Thus far we have assumed that the project is large enough for a full-time project manager to be appointed. This is not always the case. There are four major problem areas in staffing projects:

Part-time versus full-time assignments Several projects assigned to one project manager Projects assigned to functional managers The project manager role retained by the general manager

The first problem is generally related to the size of the project. If the project is small (in time duration or cost), a part-time project manager may be selected. Many executives have fallen into the trap of letting line personnel act as part-time project managers while still performing line functions. If the employee has a conflict between what is best for the project and what is best for his line organization, the project will suffer. It is only natural that the employee will favor the place the salary increases come from.

It is a common practice for one project manager to control several projects, especially if they are either related or similar. Problems come about when the projects have drastically different priorities. The low-priority efforts will be neglected.

If the project is a high-technology effort that requires specialization and can be performed by one department, then it is not unusual for the line manager to take on a dual role and act as project manager as well. This can be difficult to do, especially if the project manager is required to establish the priorities for the work under his supervision. The line manager may keep the best resources for the project, regardless of the priority. Then that project will be a success at the expense of every other project he must supply resources to.

Probably the worst situation is that in which an executive fills the role of project manager for a particular effort. The executive may not have the time necessary for total dedication to the achievement of the project. He cannot make effective decisions as a project manager while still discharging normal duties. Additionally, the executive may hoard the best resources for his project.



Even though executives know the personal characteristics and traits that project managers should possess, and even though job descriptions are often clearly defined, management may still select the wrong person because they base their decision on the following criteria.


Maturity Some executives consider gray hair to be a sure indication of maturity, but this is not the type of maturity needed for project management. Maturity in project management generally comes from exposure to several types of projects in a variety of project office positions. In aerospace and defense, it is possible for a project manager to manage the same type of project for ten years or more. When placed on a new project, the individual may try to force personnel and project requirements to adhere to the same policies and procedures that existed on the ten-year project. The project manager may know only one way of managing projects.


Hard-Nosed Tactics Applying hard-nosed tactics to subordinates can be very demoralizing. Project managers must give people sufficient freedom to get the job done, without providing continuous supervision and direction. A line employee who is given “freedom” by his line manager but suddenly finds himself closely supervised by the project manager will be very unhappy.

Line managers, because of their ability to control an employee’s salary, need only one leadership style and can force the employees to adapt. The project manager, on the other hand, cannot control salaries and must have a wide variety of leadership styles. The project manager must adapt a leadership style to the project employees, whereas the reverse is true in the line organization.


Availability Executives should not assign individuals as project managers simply because of availability. People have a tendency to cringe when you suggest that project managers be switched halfway through a project. For example, manager X is halfway through his project. Manager Y is waiting for an assignment. A new project comes up, and the executive switches managers X and Y. There are several reasons for this. The most important phase of a project is planning, and, if it is accomplished correctly, the project could conceivably run itself. Therefore, manager Y should be able to handle manager X’s project.

There are several other reasons why this switch may be necessary. The new project may have a higher priority and require a more experienced manager. Second, not all project managers are equal, especially when it comes to planning. When an executive finds a project manager who demonstrates extraordinary talents at planning, there is a natural tendency for the executive to want this project manager to plan all projects.


Technical Expertise Executives quite often promote technical line managers without realizing the consequences. Technical specialists may not be able to divorce themselves from the technical side of the house and become project managers rather than project doers. There are also strong reasons to promote technical specialists to project managers. These people often:

Have better relationships with fellow researchers Can prevent duplication of effort Can foster teamwork Have progressed up through the technical ranks Are knowledgeable in many technical fields Understand the meaning of profitability and general management philosophy Are interested in training and teaching Understand how to work with perfectionists

Promoting an employee to project management because of his technical expertise may be acceptable if, and only if, the project requires this expertise and technical direction, as in R&D efforts. For projects in which a “generalist” is acceptable as a project manager, there may be a great danger in assigning highly technical personnel. According to Wilemon and Cicero3:

The greater the project manager’s technical expertise, the higher the propensity that he will overly involve himself in the technical details of the project. The greater the project manager’s difficulty in delegating technical task responsibilities, the more likely it is that he will overinvolve himself in the technical details of the project. (Depending upon his expertise to do so.) The greater the project manager’s interest in the technical details of the project, the more likely it is that he will defend the project manager’s role as one of a technical specialist. The lower the project manager’s technical expertise, the more likely it is that he will overstress the nontechnical project functions (administrative functions).


Customer Orientation Executives quite often place individuals as project managers simply to satisfy a customer request. Being able to communicate with the customer does not guarantee project success, however. If the choice of project manager is simply a concession to the customer, then the executive must insist on providing a strong supporting team.


New Exposure Executives run the risk of project failure if an individual is appointed project manager simply to gain exposure to project management. An executive of a utility company wanted to rotate his line personnel into project management for twelve to eighteen months and then return them to the line organization where they would be more well-rounded individuals and better understand the working relationship between project management and line management. There are two major problems with this. First, the individual may become technically obsolete after eighteen months in project management. Second, and more important, individuals who get a taste of project management will generally not want to return to the line organization.


Company Exposure The mere fact that individuals have worked in a variety of divisions does not guarantee that they will make good project managers. Their working in a variety of divisions may indicate that they couldn’t hold any one job. In that case, they have reached their true level of incompetency, and putting them into project management will only maximize the damage they can do to the company. Some executives contend that the best way to train a project manager is by rotation through the various functional disciplines for two weeks to a month in each organization. Other executives maintain that this is useless because the individual cannot learn anything in so short a period of time.

Tables 4–1 and 4–2 identify current thinking on methods for training project managers. TABLE 4–1. METHODS AND TECHNIQUES FOR DEVELOPING PROJECT MANAGERS

I. Experiential training/on-the-job

Working with experienced professional leader

Working with project team member

Assigning a variety of project management responsibilities, consecutively

Job rotation

Formal on-the-job training

Supporting multifunctional activities

Customer liaison activities

II. Conceptual training/schooling

Courses, seminars, workshops

Simulations, games, cases

Group exercises

Hands-on exercises in using project management techniques

Professional meetings

Conventions, symposia

Readings, books, trade journals, professional magazines

III. Organizational development


Formally established and recognized project management function

Proper project organization

Project support systems

Project charter

Project management directives, policies, and procedures


Company Management Say Project Managers Can Be Trained in a Combination of Ways: Experiential learning, on-the-job 60% Formal education and special courses 20% Professional activities, seminars 10% Readings 10%

Finally, there are three special points to consider:

Individuals should not be promoted to project management simply because they are at the top of their pay grade. Project managers should be promoted and paid based on performance, not on the number of people supervised. It is not necessary for the project manager to be the highest ranking or salaried individual on the project team with the rationale that sufficient “clout” is needed.



The skills needed to be an effective, twenty-first century project manager have changed from those needed during the 1980s. Historically, only engineers were given the opportunity to become project managers. The belief was that the project manager had to have a command of technology in order to make all of the technical decisions. As projects became larger and more complex, it became obvious that project managers might need simply an understanding rather than a command of technology. The true technical expertise would reside with the line managers, except for special situations such as R&D project management.

As project management began to grow and mature, the project manager was converted from a technical manager to a business manager. The primary skills needed to be an effective project manager in the twenty-first century are:

Knowledge of the business Risk management Integration skills

The critical skill is risk management. However, to perform risk management effectively, a sound knowledge of the business is required. Figure 4–1 shows the changes in project management skills needed between 1985 and 2010.

FIGURE 4–1. Project management skills.

As projects become larger, the complexities of integration management become more pronounced. Figure 4–2 illustrates the importance of integration management. In 1985, project managers spent most of their time planning and replanning with their team. This was necessary because the project manager was the technical expert. Today, line managers are the technical experts and perform the majority of


the planning and replanning within their line. The project manager’s efforts are now heavily oriented toward integration of the function plans into a total project plan. Some people contend that, with the increased risks and complexities of integration management, the project manager of the future will become an expert in damage control.

FIGURE 4–2. How do project managers spend their time?



Since projects, environments, and organizations differ from company to company as well as project to project, it is not unusual for companies to struggle to provide reasonable job descriptions of the project manager and associated personnel. Below is a simple list identifying the duties of a project manager in the construction industry4:

Planning Become completely familiar with all contract documents Develop the basic plan for executing and controlling the project Direct the preparation of project procedures Direct the preparation of the project budget Direct the preparation of the project schedule Direct the preparation of basic project design criteria and general specifications Direct the preparation of the plan for organizing, executing, and controlling field construction activities Review plans and procedures periodically and institute changes if necessary

Organizing Develop organization chart for project Review project position descriptions, outlining duties, responsibilities, and restrictions for key project supervisors Participate in the selection of key project supervisors Develop project manpower requirements Continually review project organization and recommend changes in organizational structure and personnel, if necessary

Directing Direct all work on the project that is required to meet contract obligations Develop and maintain a system for decision-making within the project team whereby decisions are made at the proper level Promote the growth of key project supervisors Establish objectives for project manager and performance goals for key project supervisors Foster and develop a spirit of project team effort


Assist in resolution of differences or problems between departments or groups on assigned projects Anticipate and avoid or minimize potential problems by maintaining current knowledge of overall project status Develop clear written strategy guidelines for all major problems with clear definitions of responsibilities and restraints

Controlling Monitor project activities for compliance with company purpose and philosophy and general corporate policies Interpret, communicate, and require compliance with the contract, the approved plan, project procedures, and directives of the client Maintain personal control of adherence to contract warranty and guarantee provisions Closely monitor project activities for conformity to contract scope provisions. Establish change notice procedure to evaluate and communicate scope changes See that the plans for controlling and reporting on costs, schedule, and quality are effectively utilized Maintain effective communications with the client and all groups performing project work

A more detailed job description of a construction project manager (for a utility company) appears below:

Duties Under minimum supervision establishes the priorities for and directs the efforts of personnel (including their consultants or contractors) involved or to be involved on project controlled tasks to provide required achievement of an integrated approved set of technical, manpower, cost, and schedule requirements.

1. Directs the development of initial and revised detailed task descriptions and forecasts of their associated technical, manpower, cost, and schedule requirements for tasks assigned to the Division.

2. Directs the regular integration of initial and revised task forecasts into Divisional technical, manpower, cost, and schedule reports and initiates the approval cycle for the reports.

3. Reviews conflicting inter-and extra-divisional task recommendations or actions that may occur from initial task description and forecast development until final task completion and directs uniform methods for their resolution.


4. Evaluates available and planned additions to Division manpower resources, including their tasks applications, against integrated technical and manpower reports and initiates actions to assure that Division manpower resources needs are met by the most economical mix of available qualified consultant and contractor personnel.

5. Evaluates Divisional cost and schedule reports in light of new tasks and changes in existing tasks and initiates actions to assure that increases or decreases in task cost and schedule are acceptable and are appropriately approved.

6. Prioritizes, adjusts, and directs the efforts of Division personnel (including their consultants and contractors) resource allocations as necessary to both assure the scheduled achievement of state and federal regulatory commitments and maintain Divisional adherence to integrated manpower, cost, and schedule reports.

7. Regularly reports the results of Divisional manpower, cost, and schedule evaluations to higher management.

8. Regularly directs the development and issue of individual task and integrated Project programs reports.

9. Recommends new or revised Division strategies, goals, and objectives in light of anticipated long-term manpower and budget needs.

10. Directly supervises project personnel in the regular preparation and issue of individual task descriptions and their associated forecasts, integrated Division manpower, cost, and schedule reports, and both task and Project progress reports.

11. Establishes basic organizational and personnel qualification requirements for Division (including their consultants or contractors) performance on tasks.

12. Establishes the requirements for, directs the development of, and approves control programs to standardize methods used for controlling similar types of activities in the Project and in other Division Departments.

13. Establishes the requirements for, directs the development of, and approves administrative and technical training programs for Divisional personnel.

14. Approves recommendations for the placement of services or material purchase orders by Division personnel and assures that the cost and schedule data associated with such orders is consistent with approved integrated cost


and schedule reports.

15. Promotes harmonious relations among Division organizations involved with Project tasks.

16. Exercises other duties related to Divisional project controls as assigned by the project manager.

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1. A Bachelor of Science Degree in Engineering or a Business Degree with a minor in Engineering or Science from an accredited four (4) year college or university.

2. a) (For Engineering Graduate) Ten (10) or more years of Engineering and Construction experience including a minimum of five (5) years of supervisory experience and two (2) years of management and electric utility experience.

b) (For Business Graduate) Ten (10) or more years of management experience including a minimum of five (5) years of supervisory experience in an engineering and construction related management area and two (2) years of experience as the manager or assistant manager of major engineering and construction related projects and two (2) recent years of electric utility experience.

3. Working knowledge of state and federal regulations and requirements that apply to major design and construction projects such as fossil and nuclear power stations.

4. Demonstrated ability to develop high level management control programs.

5. Experience related to computer processing of cost and schedule information.

6. Registered Professional Engineer and membership in appropriate management and technical societies is desirable (but not necessary).

7.5 At least four (4) years of experience as a staff management member in an operating nuclear power station or in an engineering support on-or off-site capacity.


8.5 Detailed knowledge of federal licensing requirement for nuclear power stations.

9.5 Reasonably effective public speaker.

Because of the potential overlapping nature of job descriptions in a project management environment, some companies try to define responsibilities for each project management position, as shown in Table 4–3. TABLE 4–3. PROJECT MANAGEMENT POSITIONS AND RESPONSIBILITIES

Project Management Position

Typical Responsibility Skill Requirements

Project Administrator Project Coordinator Technical Assistant

Coordinating and integrating of subsystem tasks. Assisting in determining technical and manpower requirements, schedules, and budgets. Measuring and analyzing project performance regarding technical progress, schedules, and budgets.

Planning Coordinating Analyzing Understanding the organization

Task Manager Project Engineer Assistant Project Manager

Same as above, but stronger role in establishing and maintaining project requirements. Conducting trade-offs. Directing the technical implementation according to established schedules and budgets.

Technical expertise Assessing trade- offs Managing task implementation Leading task specialists

Project Manager Program Manager

Same as above, but stronger role in project planning and controlling. Coordinating and negotiating requirements between sponsor and performing organizations. Bid proposal development and pricing. Establishing project organization and staffing. Overall leadership toward implementing project plan. Project profit. New business development.

Overall program leadership Team building Resolving conflict Managing multidisciplinary tasks Planning and allocating resources Interfacing with customers/sponsors


Executive Program Manager

Title reserved for very large programs relative to host organization. Responsibilities same as above. Focus is on directing overall program toward desired business results. Customer liaison. Profit performance. New business development. Organizational development.

Business leadership Managing overall program businesses Building program organizations Developing personnel Developing new business

Director of Programs V.P. Program Development

Responsible for managing multiprogram businesses via various project organizations, each led by a project manager. Focus is on business planning and development, profit performance, technology development, establishing policies and procedures, program management guidelines, personnel development, organizational development.

Leadership Strategic planning Directing and managing program businesses Building organizations Selecting and developing key personnel Identifying and developing new business



Staffing the project organization can become a long and tedious effort, especially on large and complex engineering projects. Three major questions must be answered:

PMBOK® Guide, 5th Edition Chapter 9 Human Resources Management

9.2 Acquire Project Team

What people resources are required? Where will the people come from? What type of project organizational structure will be best?

To determine the people resources required, the types of individuals (possibly job descriptions) must be decided on, as well as how many individuals from each job category are necessary and when these individuals will be needed.

Consider the following situation: As a project manager, you have an activity that requires three separate tasks, all performed within the same line organization. The line manager promises you the best available resources right now for the first task but cannot make any commitments beyond that. The line manager may have only below-average workers available for the second and third tasks. However, the line manager is willing to make a deal with you. He can give you an employee who can do the work but will only give an average performance. If you accept the average employee, the line manager will guarantee that the employee will be available to you for all three tasks. How important is continuity to you? There is no clearly definable answer to this question. Some people will always want the best resources and are willing to fight for them, whereas others prefer continuity and dislike seeing new people coming and going. The author prefers continuity, provided that the assigned employee has the ability to do the up-front planning needed during the first task. The danger in selecting the best employee is that a higher-priority project may come along, and you will lose the employee; or if the employee is an exceptional worker, he may simply be promoted off your project.

Sometimes, a project manager may have to make concessions to get the right


people. For example, during the seventh, eighth, and ninth months of your project you need two individuals with special qualifications. The functional manager says that they will be available two months earlier, and that if you don’t pick them up then, there will be no guarantee of their availability during the seventh month. Obviously, the line manager is pressuring you, and you may have to give in. There is also the situation in which the line manager says that he’ll have to borrow people from another department in order to fulfill his commitments for your project. You may have to live with this situation, but be very careful—these employees will be working at a low level on the learning curve, and overtime will not necessarily resolve the problem. You must expect mistakes here.

Line managers often place new employees on projects so they can be upgraded. Project managers often resent this and immediately go to top management for help. If a line manager says that he can do the work with lower-level people, then the project manager must believe the line manager. After all, the line manager, not the assigned employees, makes the commitment to do the work, and it is the line manager’s neck that is stuck out.

Mutual trust between project and line managers is crucial, especially during staffing sessions. Once a project manager has developed a good working relationship with employees, the project manager would like to keep those individuals assigned to his activities. There is nothing wrong with a project manager requesting the same administrative and/or technical staff as before. Line managers realize this and usually agree to it.

There must also be mutual trust between the project managers themselves. Project managers must work as a team, recognize each other’s needs, and be willing to make decisions that are in the best interest of the company.

Once the resources are defined, the next question must be whether staffing will be from within the existing organization or from outside sources, such as new hires or consultants. Outside consultants are advisable if, and only if, internal manpower resources are being fully utilized on other programs, or if the company does not possess the required project skills. The answer to this question will indicate which organizational form is best for achievement of the objectives. The form might be a matrix, product, or staff project management structure.

Not all companies permit a variety of project organizational forms to exist within the main company structure. Those that do, however, consider the basic questions of classical management before making a decision. These include:

How is labor specialized? What should the span of management be?

How much planning is required?


Are authority relationships delegated and understood? Are there established performance standards? What is the rate of change of the job requirements?

Should we have a horizontal or vertical organization? What are the economics? What are the morale implications?

Do we need a unity-of-command position?

As in any organization, the subordinates can make the superior look good in the performance of his duties. Unfortunately, the project environment is symbolized by temporary assignments in which the main effort put forth by the project manager is to motivate his (temporary) subordinates toward project dedication and to make them fully understand that:

Teamwork is vital for success. Esprit de corps contributes to success. Conflicts can occur between project and functional tiers. Communication is essential for success. Conflicting orders may be given by the:

Project manager Functional manager Upper-level manager

Unsuccessful performance may result in transfer or dismissal from the project as well as disciplinary action.

Earlier we stated that a project operates as a separate entity but remains attached to the company through company administration policies and procedures. Although project managers can establish their own policies, procedures, and rules, the criteria for promotion must be based on company standards. Project managers should be careful about making commitments they can’t keep. After unkept promises on previous projects, a project manager will find it very difficult to get top-quality personnel to volunteer for another project. Even if top management orders key individuals to be assigned to his project, they will always be skeptical about any promises that he may make.

Selecting the project manager is only one-third of the staffing problem. The next step, selecting the project office personnel and team members, can be a time- consuming chore. The project office consists of personnel who are usually assigned as full-time members of the project. The evaluation process should include active project team members, functional team members available for promotion or transfer, and outside applicants.


Upon completion of the evaluation process, the project manager meets with upper-level management. This coordination is required to assure that:

All assignments fall within current policies on rank, salary, and promotion. The individuals selected can work well with both the project manager (formal reporting) and upper-level management (informal reporting). The individuals selected have good working relationships with the functional personnel.

Good project office personnel usually have experience with several types of projects and are self-disciplined.

The third and final step in the staffing of the project office is a meeting between the project manager, upper-level management, and the project manager on whose project the requested individuals are currently assigned. Project managers are very reluctant to give up qualified personnel to other projects, but unfortunately, this procedure is a way of life in a project environment. Upper-level management attends these meetings to show all negotiating parties that top management is concerned with maintaining the best possible mix of individuals from available resources and to help resolve staffing conflicts. Staffing from within is a negotiation process in which upper-level management establishes the ground rules and priorities.

The selected individuals are then notified of the anticipated change and asked their opinions. If individuals have strong resentment to being transferred or reassigned, alternate personnel may be selected to avoid potential problems.

Figure 4–3 shows the typical staffing pattern as a function of time. There is a manpower buildup in the early phases and a manpower decline in the later stages. This means that the project manager should bring people on board as needed and release them as early as possible.

FIGURE 4–3. Staffing pattern versus time.


There are several psychological approaches that the project manager can use during the recruitment and staffing process. Consider the following:

Line managers often receive no visibility or credit for a job well done. Be willing to introduce line managers to the customer. Be sure to show people how they can benefit by working for you or on your project. Any promises made during recruitment should be documented. The functional organization will remember them long after your project terminates. As strange as it may seem, the project manager should encourage conflicts to take place during recruiting and staffing. These conflicts should be brought to the surface and resolved. It is better for conflicts to be resolved during the initial planning stages than to have major confrontations later.

It is unfortunate that recruiting and retaining good personnel are more difficult in a project organizational structure than in a purely traditional one. Clayton Reeser identifies nine potential problems that can exist in project organizations6:

Personnel connected with project forms of organization suffer more anxieties about possible loss of employment than members of functional organizations. Individuals temporarily assigned to matrix organizations are more frustrated by authority ambiguity than permanent members of functional organizations. Personnel connected with project forms of organization that are nearing their phase-out are more frustrated by what they perceive to be “make work” assignments than members of functional organizations. Personnel connected with project forms of organization feel more frustrated


because of lack of formal procedures and role definitions than members of functional organizations. Personnel connected with project forms of organization worry more about being set back in their careers than members of functional organizations. Personnel connected with project forms of organization feel less loyal to their organization than members of functional organizations. Personnel connected with project forms of organization have more anxieties in feeling that there is no one concerned about their personal development than members of functional organizations. Permanent members of project forms of organization are more frustrated by multiple levels of management than members of functional organizations. Frustrations caused by conflict are perceived more seriously by personnel connected with project forms of organization than members of functional organizations.

Employees are more likely to be motivated to working on a project if the employee had been given the right to accept or refuse the assignment. Although employees usually do not refuse assignments, there is still the question of how much permissiveness should be given to the worker. The following would be a listing or possible degrees of permissiveness:

The line manager (or project manager) explains the project to the worker and the worker has the right to refuse the assignment. The worker does not need to explain the reason for refusing the assignment and the refusal does not limit the worker’s opportunity for advancement or assignment to other project teams. With this degree of permissiveness, the worker has the right to refuse the assignment but must provide a reason for the refusal. The reason could be due to personal or career preference considerations such as having to travel, relocation, health reasons, possibly too much overtime involved, simply not an assignment that is viewed as enhancing the individual’s career, or the employee wants an assignment on some other project. With this degree of permissiveness, the worker has no choice but to accept the assignment. Only an emergency would be considered as a valid reason for refusing the assignment. In this case, refusing the assignment might be damaging to the employee’s career.

Grinnell and Apple have identified four additional major problems associated with staffing7:

People trained in single line-of-command organizations find it hard to serve more than one boss.


People may give lip service to teamwork, but not really know how to develop and maintain a good working team. Project and functional managers sometimes tend to compete rather than cooperate with each other. Individuals must learn to do more “managing” of themselves.

Thus far we have discussed staffing the project. Unfortunately, there are also situations in which employees must be terminated from the project because of:

Nonacceptance of rules, policies, and procedures Nonacceptance of established formal authority Professionalism being more important to them than company loyalty Focusing on technical aspects at the expense of the budget and schedule Incompetence

There are three possible solutions for working with incompetent personnel. First, the project manager can provide an on-the-spot appraisal of the employee. This includes identification of weaknesses, corrective action to be taken, and threat of punishment if the situation continues. A second solution is reassignment of the employee to less critical activities. This solution is usually not preferred by project managers. The third and most frequent solution is the removal of the employee.

Although project managers can get project office people (who report to the project manager) removed directly, the removal of a line employee is an indirect process and must be accomplished through the line manager. The removal of the line employee should be made to look like a transfer; otherwise the project manager will be branded as an individual who fires people.

Executives must be ready to cope with the staffing problems that can occur in a project environment. C. Ray Gullett has summarized these major problems8:

Staffing levels are more variable in a project environment. Performance evaluation is more complex and more subject to error in a matrix form of organization. Wage and salary grades are more difficult to maintain under a matrix form of organization. Job descriptions are often of less value. Training and development are more complex and at the same time more necessary under a project form of organization. Morale problems are potentially greater in a matrix organization.


4.9 THE PROJECT OFFICE The project team is a combination of the project office and functional employees as shown in Figure 4–4. Although the figure identifies the project office personnel as assistant project managers, some employees may not have any such title. The advantage of such a title is that it entitles the employee to speak directly to the customer. For example, the project engineer might also be called the assistant project manager for engineering. The title is important because when the assistant project manager speaks to the customer, he represents the company, whereas the functional employee represents himself.

FIGURE 4–4. Project organization.

PMBOK® Guide, 5th Edition 1.4.4 Project Management Office

The project office is an organization developed to support the project manager in carrying out his duties. Project office personnel must have the same dedication toward the project as the project manager and must have good working relationships with both the project and functional managers. The responsibilities of the project office include:

Acting as the focal point of information for both in-house control and customer reporting Controlling time, cost, and performance to adhere to contractual requirements Ensuring that all work required is documented and distributed to all key


personnel Ensuring that all work performed is both authorized and funded by contractual documentation

The major responsibility of the project manager and the project office personnel is the integration of work across the functional lines of the organization. Functional units, such as engineering, R&D, and manufacturing, together with extra-company subcontractors, must work toward the same specifications, designs, and even objectives. The lack of proper integration of these functional units is the most common cause of project failure. The team members must be dedicated to all activities required for project success, not just their own functional responsibilities. The problems resulting from lack of integration can best be solved by full-time membership and participation of project office personnel. Not all team members are part of the project office. Functional representatives, performing at the interface position, also act as integrators but at a closer position to where the work is finally accomplished (i.e., the line organization).

One of the biggest challenges facing project managers is determining the size of the project office. The optimal size is determined by a trade-off between the maximum number of members necessary to assure compliance with requirements and the maximum number for keeping the total administrative costs under control. Membership is determined by factors such as project size, internal support requirements, type of project (i.e., R&D, qualification, production), level of technical competency required, and customer support requirements. Membership size is also influenced by how strategic management views the project to be. There is a tendency to enlarge project offices if the project is considered strategic, especially if follow-on work is possible.

On large projects, and even on some smaller efforts, it is often impossible to achieve project success without permanently assigned personnel. The four major activities of the project office, shown below, indicate the need for using full-time people:

Integration of activities In-house and out-of-house communication Scheduling with risk and uncertainty Effective control

These four activities require continuous monitoring by trained project personnel. The training of good project office members may take weeks or even months, and can extend beyond the time allocated for a project. Because key personnel are always in demand, project managers should ask themselves and upper-level management one pivotal question when attempting to staff the project office:


Are there any projects downstream that could cause me to lose key members of my team?

If the answer to this question is yes, then it might benefit the project to have the second-or third-choice person selected for the position or even to staff the position on a part-time basis. Another alternative, of course, would be to assign the key members to activities that are not so important and that can be readily performed by replacement personnel. This, however, is impractical because such personnel will not be employed efficiently.

Program managers would like nothing better than to have all of their key personnel assigned full-time for the duration of the program. Unfortunately, this is undesirable, if not impossible, for many projects because9:

Skills required by the project vary considerably as the project matures through each of its life-cycle phases. Building up large permanently assigned project offices for each project inevitably causes duplication of certain skills (often those in short supply), carrying of people who are not needed on a full-time basis or for a long period, and personnel difficulties in reassignment. The project manager may be diverted from his primary task and become the project engineer, for example, in addition to his duties of supervision, administration, and dealing with the personnel problems of a large office rather than concentrating on managing all aspects of the project itself. Professionally trained people often prefer to work within a group devoted to their professional area, with permanent management having qualifications in the same field, rather than becoming isolated from their specialty peers by being assigned to a project staff. Projects are subject to sudden shifts in priority or even to cancellation, and full-time members of a project office are thus exposed to potentially serious threats to their job security; this often causes a reluctance on the part of some people to accept a project assignment.

All of these factors favor keeping the full-time project office as small as possible and dependent on established functional departments and specialized staffs. The approach places great emphasis on the planning and control procedures used on the project. On the other hand, there are valid reasons for assigning particular people of various specialties to the project office. These specialties usually include:

Systems analysis and engineering (or equivalent technical discipline) and product quality and configuration control, if the product requires such an effort Project planning, scheduling, control, and administrative support


Many times a project office is staffed by promotion of functional specialists. This situation is quite common to engineering firms with a high percentage of technical employees, but is not without problems.

In professional firms, personnel are generally promoted to management on the basis of their professional or technical competence rather than their managerial ability. While this practice may be unavoidable, it does tend to promote men with insufficient knowledge of management techniques and creates a frustrating environment for the professional down the line.10

There is an unfortunate tendency for executives to create an environment where line employees feel that the “grass is greener” in project management and project engineering than in the line organization. How should an executive handle a situation where line specialists continually apply for transfer to project management? One solution is the development of a dual ladder system, with a pay scale called “consultant.” This particular company created the consultant position because:

There were several technical specialists who were worth more money to the company but who refused to accept a management position to get it. Technical specialists could not be paid more money than line managers.

Promoting technical specialists to a management slot simply to give them more money can:

Create a poor line manager Turn a specialist into a generalist Leave a large technical gap in the line organization

Line managers often argue that they cannot perform their managerial duties and control these “prima donnas” who earn more money and have a higher pay grade than the line managers. That is faulty reasoning. Every time the consultants do something well, it reflects on the entire line organization, not merely on themselves.

The concept of having functional employees with a higher pay grade than the line manager can also be applied to the horizontal project. It is possible for a junior project manager suddenly to find that the line managers have a higher pay grade than the project manager. It is also possible for assistant project managers (as project engineers) to have a higher pay grade than the project manager. Project management is designed to put together the best mix of people to achieve the objective. If this best mix requires that a grade 7 report to a grade 9 (on a “temporary” project), then so be it. Executives should not let salaries, and pay grades, stand in the way of constructing a good project organization.


Another major concern is the relationship that exists between project office personnel and functional managers. In many organizations, membership in the project office is considered to be more important than in the functional department. Functional members have a tendency to resent an individual who has just been promoted out of a functional department and into project management. Killian has described ways of resolving potential conflicts11:

It must be kept in mind that veteran functional managers cannot be expected to accept direction readily from some lesser executive who is suddenly labelled a Project Manager. Management can avoid this problem by:

Selecting a man who already has a high position of responsibility or placing him high enough in the organization. Assigning him a title as important-sounding as those of functional managers. Supporting him in his dealings with functional managers.

If the Project Manager is expected to exercise project control over the functional departments, then he must report to the same level as the departments, or higher.

Executives can severely hinder project managers by limiting their authority to select and organize (when necessary) a project office and team. According to Cleland12:

His [project manager’s] staff should be qualified to provide personal administrative and technical support. He should have sufficient authority to increase or decrease his staff as necessary throughout the life of the project. The authorization should include selective augmentation for varying periods of time from the supporting functional areas.

Many executives have a misconception concerning the makeup and usefulness of the project office. People who work in the project office should be individuals whose first concern is project management, not the enhancement of their technical expertise. It is almost impossible for individuals to perform for any extended period of time in the project office without becoming cross-trained in a second or third project office function. For example, the project manager for cost could acquire enough expertise eventually to act as the assistant to the assistant project manager for procurement. This technique of project office cross-training is an excellent mechanism for creating good project managers.

We have mentioned two important facts concerning the project management staffing process:

The individual who aspires to become a project manager must be willing to give up technical expertise and become a generalist.


Individuals can be qualified to be promoted vertically but not horizontally.

Once an employee has demonstrated the necessary attributes to be a good project manager, there are three ways the individual can become a project manager or part of the project office. The executive can:

Promote the individual in salary and grade and transfer him into project management. Laterally transfer the individual into project management without any salary or grade increase. If, after three to six months, the employee demonstrates that he can perform, he will receive an appropriate salary and grade increase. Give the employee a small salary increase without any grade increase or a grade increase without any salary increase, with the stipulation that additional awards will be forthcoming after the observation period, assuming that the employee can handle the position.

Many executives believe in the philosophy that once an individual enters the world of project management, there are only two places to go: up in the organization or out the door. If an individual is given a promotion and pay increase and is placed in project management and fails, his salary may not be compatible with that of his previous line organization, and now there is no place for him to go. Most executives, and employees, prefer the second method because it actually provides some protection for the employee.

Many companies don’t realize until it is too late that promotions to project management may be based on a different set of criteria from promotions to line management. Promotions on the horizontal line are strongly based on communicative skills, whereas line management promotions are based on technical skills.


4.10 THE FUNCTIONAL TEAM The project team consists of the project manager, the project office (whose members may or may not report directly to the project manager), and the functional or interface members (who must report horizontally as well as vertically for information flow). Functional team members are often shown on organizational charts as project office team members. This is normally done to satisfy customer requirements.

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2.3 Project Team Definition

Upper-level management can have an input into the selection process for functional team members but should not take an active role unless the project and functional managers cannot agree. Functional management must be represented at all staffing meetings because functional staffing is directly dependent on project requirements and because:

Functional managers generally have more expertise and can identify high-risk areas. Functional managers must develop a positive attitude toward project success. This is best achieved by inviting their participation in the early activities of the planning phase.

Functional team members are not always full-time. They can be full-time or part- time for either the duration of the project or only specific phases.

The selection process for both the functional team member and the project office must include evaluation of any special requirements. The most common special requirements develop from:

Changes in technical specifications Special customer requests Organizational restructuring because of deviations from existing policies Compatibility with the customer’s project office

A typical project office may include between ten and thirty members, whereas the total project team may be in excess of a hundred people, causing information to be


shared slowly. For large projects, it is desirable to have a full-time functional representative from each major division or department assigned permanently to the project, and perhaps even to the project office. Such representation might include:

Program management Project engineering Engineering operations Manufacturing operations Procurement Quality control Cost accounting Publications Marketing Sales

Both the project manager and team members must understand fully the responsibilities and functions of each other team member so that total integration can be achieved rapidly and effectively. On high-technology programs the chief project engineer assumes the role of deputy project manager. Project managers must understand the problems that the line managers have when selecting and assigning the project staff. Line managers try to staff with people who understand the need for teamwork.

When employees are attached to a project, the project manager must identify the “star” employees. These are the employees who are vital for the success of the project and who can either make or break the project manager. Most of the time, star employees are found in the line organization, not the project office.

As a final point, project managers can assign line employees added responsibilities within the scope of the project. If the added responsibilities can result in upgrading, then the project manager should consult with the line manager before such situations are initiated. Quite often, line managers (or even personnel representatives) send “check” people into the projects to verify that employees are performing at their proper pay grade. This is very important when working with blue-collar workers who, by union contractual agreements, must be paid at the grade level at which they are performing.

Also, project managers must be willing to surrender resources when they are no longer required. If the project manager constantly cries wolf in a situation where a problem really does not exist, the line manager will simply pull away the resources (this is the line manager’s right), and a deteriorating working relationship will result.



One of the first requirements of the project startup phase is to develop the organizational chart for the project and determine its relationship to the parent organizational structure. Figure 4–5 shows, in abbreviated form, the six major programs at Dalton Corporation. Our concern is with the Midas Program. Although the Midas Program may have the lowest priority of the six programs, it is placed at the top, and in boldface, to give the impression that it is the top priority. This type of representation usually makes the client or customer feel that his program is important to the contractor.

FIGURE 4–5. Dalton Corporation.


The employees shown in Figure 4–5 may be part-time or full-time, depending upon the project’s requirements. Perturbations on Figure 4–5 might include one employee’s name identified on two or more vertical positions (i.e., the project engineer on two projects) or the same name in two horizontal boxes (i.e., for a small project, the same person could be the project manager and project engineer). Remember, this type of chart is for the customer’s benefit and may not show the true “dotted/solid” reporting relationships in the company.

The next step is to show the program office structure, as illustrated in Figure 4–6. Note that the chief of operations and the chief engineer have dual reporting responsibility; they report directly to the program manager and indirectly to the directors. Again, this may be just for the customer’s benefit with the real reporting


structure being reversed. Beneath the chief engineer, there are three positions. Although these positions appear as solid lines, they might actually be dotted lines. For example, Ed White might be working only part-time on the Midas Program but is still shown on the chart as a permanent program office member. Jean Flood, under contracts, might be spending only ten hours per week on the Midas Program.

FIGURE 4–6. Midas Program office.

If the function of two positions on the organizational chart takes place at different times, then both positions may be shown as manned by the same person. For example, Ed White may have his name under both engineering design and engineering testing if the two activities are far enough apart that he can perform them independently.

The people shown in the project office organizational chart, whether full-time or part-time, may not be physically sitting in the project office. For full-time, long- term assignments, as in construction projects, the employees may be physically sitting side by side, whereas for part-time assignments, it may be imperative for them to sit in their functional group. Remember, these types of charts may simply be eyewash for the customer.

Most customers realize that the top-quality personnel may be shared with other programs and projects. Project manning charts, such as the one shown in Figure 4–


7, can be used for this purpose. These manning charts are also helpful in preparing the management volume of proposals to show the customer that key personnel will be readily available on his project.

FIGURE 4–7. Project engineering department manning for the Midas Program.


4.12 SPECIAL PROBLEMS There are always special problems that influence the organizational staffing process. For example, the department shown in Figure 4–8 has a departmental matrix. All activities stay within the department. Project X and project Y are managed by line employees who have been temporarily assigned to the projects, whereas project Z is headed by supervisor B. The department’s activities involve high-technology engineering as well as R&D.

FIGURE 4–8. The training problem.

The biggest problem facing the department managers is that of training their new employees. The training process requires nine to twelve months. The employees become familiar with the functioning of all three sections, and only after training is an employee assigned to one of the sections. Line managers claim that they do not have sufficient time to supervise training. As a result, the department manager in the example found staff person C to be the most competent person to supervise training. A special department training project was set up, as shown in Figure 4–8.


Figure 4–9 shows a utility company that has three full-time project managers controlling three projects, all of which cut across the central division. Unfortunately, the three full-time project managers cannot get sufficient resources from the central division because the line managers are also acting as divisional project managers and saving the best resources for their own projects.

FIGURE 4–9. Utility service organization.

The obvious solution to the problem is that the central division line managers not be permitted to wear two hats. Instead, one full-time project manager can be added to the left division to manage all three central division projects. It is usually best for all project managers to report to the same division for priority setting and conflict resolution.

Line managers have a tendency to feel demoted when they are suddenly told that they can no longer wear two hats. For example, Mr. Adams was a department manager with thirty years of experience in a company. For the last several years, he had worn two hats and acted as both project manager and functional manager on a variety of projects. He was regarded as an expert in his field. The company


decided to incorporate formal project management and established a project management department. Mr. Bell, a thirty-year-old employee with three years of experience with the company, was assigned as the project manager. In order to staff his project, Bell asked Adams for Mr. Cane (Bell’s friend) to be assigned to the project as the functional representative. Cane had been with the company for two years. Adams agreed to the request and informed Cane of his new assignment, closing with the remarks, “This project is yours all the way. I don’t want to have anything to do with it. I’ll be busy with paperwork as a result of the new organizational structure. Just send me a memo once in a while telling me what’s happening.”

During the project kickoff meeting, it became obvious to everyone that the only person with the necessary expertise was Adams. Without his support, the duration of the project could be expected to double.

The real problem here was that Adams wanted to feel important and needed, and was hoping that the project manager would come to him asking for his assistance. The project manager correctly analyzed the situation but refused to ask for the line manager’s help. Instead, the project manager asked an executive to step in and force the line manager to help. The line manager gave his help, but with great reluctance. Today, the line manager provides poor support to the projects that come across his line organization.



IMPLEMENTATION TEAM The implementation of project management within an organization requires strong executive support and an implementation team that is dedicated to making project management work. Selecting the wrong team players can either lengthen the implementation process or reduce employee morale. Some employees may play destructive roles on a project team. These roles, which undermine project management implementation, are shown in Figure 4–10 and described below:

FIGURE 4–10. Roles people play that undermine project management implementation.

PMBOK® Guide, 5th Edition Chapter 9 Human Resources Management

9.2 Acquire Project Team

The aggressor Criticizes everybody and everything on project management Deflates the status and ego of other team members Always acts aggressively


The dominator Always tries to take over Professes to know everything about project management Tries to manipulate people Will challenge those in charge for leadership role

The devil’s advocate Finds fault in all areas of project management Refuses to support project management unless threatened Acts more of a devil than an advocate

The topic jumper Must be the first one with a new idea/approach to project management Constantly changes topics Cannot focus on ideas for a long time unless it is his/her idea Tries to keep project management implementation as an action item forever

The recognition seeker Always argues in favor of his/her own ideas Always demonstrates status consciousness Volunteers to become the project manager if status is recognized Likes to hear himself/herself talk Likes to boast rather than provide meaningful information

The withdrawer Is afraid to be criticized Will not participate openly unless threatened May withhold information May be shy

The blocker Likes to criticize Rejects the views of others Cites unrelated examples and personal experiences Has multiple reasons why project management will not work

These types of people should not be assigned to project management implementation teams. The types of people who should be assigned to implementation teams are shown in Figure 4–11 and described below. Their roles are indicated by their words:

FIGURE 4–11. Roles people play that support project management implementation.


The initiators “Is there a chance that this might work?” “Let’s try this.”

The information seekers “Have we tried anything like this before?” “Do we know other companies where this has worked?” “Can we get this information?”

The information givers “Other companies found that . . .” “The literature says that . . .” “Benchmarking studies indicate that . . .”

The encouragers “Your idea has a lot of merit.” “The idea is workable, but we may have to make small changes.” “What you said will really help us.”

The clarifiers “Are we saying that . . . ?” “Let me state in my own words what I’m hearing from the team.” “Let’s see if we can put this into perspective.”

The harmonizers “We sort of agree, don’t we?” “Your ideas and mine are close together.” “Aren’t we saying the same thing?”

The consensus takers “Let’s see if the team is in agreement.” “Let’s take a vote on this.” “Let’s see how the rest of the group feels about this.”


The gate keepers “Who has not given us their opinions on this yet?” “Should we keep our options open?” “Are we prepared to make a decision or recommendation, or is there additional information to be reviewed?”



MANAGERS We are all prone to making mistakes as a project manager or team member. You’ve read the PMBOK® Guide several times, taken the certification exam for project managers, and passed, and you are now a PMP®. Yet you still persist in making mistakes. Project managers are not infallible. Most project management training courses, even those focusing on the PMBOK® Guide, stress “generally accepted best practices.” What is not taught are discussions on what not to do as a project manager.

The list below shows twenty of the most common mistakes that young or inexperienced project managers make. Obviously there are more than twenty mistakes, and many of these may be unique to specific industries. However, the list is a good starting point for understanding why many project managers get into trouble because of their own doing.13

Believing that excessive detail is needed to be an effective leader Pretending to know more than you actually do, thus alienating the true subject matter experts Trying to impress people by preparing an ambitious schedule that line managers may find difficulty in supporting Having an overreliance on repeatable processes that lack flexibility Ignoring problems in the belief that they will go away Failing to share accountability for success and failure with functional managers Gold-plating the deliverables by adding in unnecessary functionality Failing to understand what stakeholders and sponsors want to hear Not fully understanding requirements Refusing to ask for help Ignoring problems that are the responsibility of the project manager to resolve Believing in saviors and miracles rather than effective leadership Trying to motivate by making promises that cannot be kept Failing to see dependencies between your project and other company projects Refusing to tell the client that they are wrong Continuously reminding everyone who’s the boss


Failing to understand the effects on the project resulting from internal and external politics Unwilling to say “no” Unable to determine which battles are worth fighting and when



CERTIFICATION EXAM This section is applicable as a review of the principles to support the knowledge areas and domain groups in the PMBOK® Guide. This chapter addresses:

Human Resources Management Planning Project Staffing

Understanding the following principles is beneficial if the reader is using this text to study for the PMP® Certification Exam:

What is meant by a project team Staffing process and environment Role of the line manager in staffing Role of the executive in staffing Skills needed to be a project manager That the project manager is responsible for helping the team members grow and learn while working on the project

In Appendix C, the following Dorale Products mini–case studies are applicable:

Dorale Products (G) [Human Resources Management] Dorale Products (H) [Human Resources Management] Dorale Products (I) [Human Resources Management] Dorale Products (J) [Human Resources Management] Dorale Products (K) [Human Resources Management]

The following multiple-choice questions will be helpful in reviewing the principles of this chapter:

1. During project staffing, the primary role of senior management is in the selection of the:

A. Project manager

B. Assistant project managers

C. Functional team


D. Executives do not get involved in staffing.

2. During project staffing, the primary role of line management is: A. Approving the selection of the project manager

B. Approving the selection of assistant project managers

C. Assigning functional resources based upon who is available

D. Assigning functional resources based upon availability and the skill set needed

3. A project manager is far more likely to succeed if it is obvious to everyone that:

A. The project manager has a command of technology.

B. The project manager is a higher pay grade than everyone else on the team.

C. The project manager is over 45 years of age.

D. Executive management has officially appointed the project manager.

4. Most people believe that the best way to train someone in project management is through:

A. On-the-job training

B. University seminars

C. Graduate degrees in project management

D. Professional seminars and meeting

5. In staffing negotiations with the line manager, you identify a work package that requires a skill set of a grade 7 worker. The line manager informs you that he will assign a grade 6 and a grade 8 worker. You should:

A. Refuse to accept the grade 6 because you are not responsible for training

B. Ask for two different people

C. Ask the sponsor to interfere

D. Be happy! You have two workers.

6. You priced out a project at 1000 hours assuming a grade 7 employee would be assigned. The line manager assigns a grade 9 employee. This will result in a significant cost overrun. The project manager should:

A. Reschedule the start date of the project based upon the availability of a


grade 7

B. Ask the sponsor for a higher priority for your project

C. Reduce the scope of the project

D. See if the grade 9 can do the job in less time

7. As a project begins to wind down, the project manager should: A. Release all nonessential personnel so that they can be assigned to other projects

B. Wait until the project is officially completed before releasing anyone

C. Wait until the line manager officially requests that the people be released

D. Talk to other project managers to see who wants your people



2. D

3. D

4. A

5. D

6. D

7. A


PROBLEMS 4–1 From S. K. Grinnell and H. P. Apple (“When Two Bosses Are Better Than One,” Machine Design, January 1975, pp. 84–87):

People trained in single-line-of-command organizations find it hard to serve more than one boss. People may give lip service to teamwork, but not really know how to develop and maintain a good working team. Project and functional managers sometimes tend to compete rather than cooperate with each other. Individuals must learn to do more “managing” of themselves.

The authors identify the above four major problems associated with staffing. Discuss each problem and identify the type of individual most likely to be involved (i.e., engineer, contract administrator, cost accountant, etc.) and in which organizational form this problem would be most apt to occur.

4–2 David Cleland (“Why Project Management?” Reprinted from Business Horizons, Winter 1964, p. 85. Copyright © 1964 by the Foundation for the School of Business at Indiana University. Used with permission) made the following remarks:

His [project manager’s] staff should be qualified to provide personal administrative and technical support. He should have sufficient authority to increase or decrease his staff as necessary throughout the life of the project. This authorization should include selective augmentation for varying periods of time from the supporting functional areas.

Do you agree or disagree with these statements? Should the type of project or type of organization play a dominant role in your answer?

4–3 The contractor’s project office is often structured to be compatible with the customer’s project office, sometimes on a one-to-one basis. Some customers view the contractor’s project organization merely as an extension of their own company. Below are three statements concerning this relationship. Are these statements true or false? Defend your answers.

There must exist mutual trust between the customer and contractor together with a close day- to-day working relationship. The project manager and the customer must agree on the hierarchy of decision that each must make, either independently or jointly. (Which decisions can each make independently or jointly?) Both the customer and contractor’s project personnel must be willing to make decisions as fast as possible.

4–4 C. Ray Gullett (“Personnel Management in the Project Organization,” Personnel Administration/Public Personnel Review, November–December 1972, pp. 17–22) has identified five personnel problems. How would you, as a project manager, cope with each problem?

Staffing levels are more variable in a project environment. Performance evaluation is more complex and more subject to error in a matrix form of organization. Wage and salary grades are more difficult to maintain under a matrix form of organization. Job descriptions are often of less value. Training and development are more complex and at the same time more necessary under a project form of organization. Morale problems are potentially greater in a matrix organization.

4–5 Some people believe that a project manager functions, in some respects, like a physician. Is there any validity in this?


4–6 Paul is a project manager for an effort that requires twelve months. During the seventh, eighth, and ninth months he needs two individuals with special qualifications. The functional manager has promised that these individuals will be available two months before they are needed. If Paul does not assign them to his project at that time, they will be assigned elsewhere and he will have to do with whomever will be available later. What should Paul do? Do you have to make any assumptions in order to defend your answer?

4–7 Some of the strongest reasons for promoting functional engineers to project engineers are:

Better relationships with fellow researchers Better prevention of duplication of effort Better fostering of teamwork

These reasons are usually applied to R&D situations. Could they also be applied to product life- cycle phases other than R&D?

4–8 The following have been given as qualifications for a successful advanced-technology project manager:

Career has progressed up through the technical ranks Knowledgeable in many engineering fields Understands general management philosophy and the meaning of profitability Interested in training and teaching his superiors Understands how to work with perfectionists

Can these same qualifications be modified for non-R&D project management? If so, how?

4–9 W. J. Taylor and T. F. Watling (Successful Project Management, London: Business Books, 1972, p. 32) state:

It is often the case, therefore, that the Project Manager is more noted for his management technique expertise, his ability to “get things done” and his ability to “get on with people” than for his sheer technical prowess. However, it can be dangerous to minimize this latter talent when choosing Project Managers dependent upon project type and size. The Project Manager should preferably be an expert either in the field of the project task or a subject allied to it.

How dangerous can it be if this latter talent is minimized? Will it be dangerous under all circumstances?

4–10 Frank Boone is the most knowledgeable piping engineer in the company. For five years, the company has turned down his application for transfer to project engineering and project management stating that he is too valuable to the company in his current position. If you were a project manager, would you want this individual as part of your functional team? How should an organization cope with this situation?

4–11 Tom Weeks is manager of the insulation group. During a recent group meeting, Tom commented, “The company is in trouble. As you know, we’re bidding on three programs right now. If we win just one of them, we can probably maintain our current work level. If, by some slim chance, we were to win all three, you’ll all be managers tomorrow.” The company won all three programs, but the insulation group did not hire anyone, and there were no promotions. What would you, as a project manager on one of the new projects, expect your working relations to be with the insulation group?

4–12 You are a project engineer on a high-technology program. As the project begins to wind down, your boss asks you to write a paper so that he can present it at a technical meeting. His name goes first on the paper. Should this be part of your job? How do you feel about this situation?

4–13 Research has indicated that the matrix structure is often confusing because it requires multiple roles for people, with resulting confusion about these roles (Keith Davis, Human


Relations at Work , New York: McGraw-Hill, 1967, pp. 296–297). Unfortunately, not all program managers, project managers, and project engineers possess the necessary skills to operate in this environment. Stuckenbruck has stated, “The path to success is strewn with the bodies of project managers who were originally functional line managers and then went into project management” (Linn Stuckenbruck, “The Effective Project Manager,” Project Management Quarterly, Vol. VII, No. 1, March 1976, pp. 26–27). What do you feel is the major cause for this downfall of the functional manager?

4–14 For each of the organizational forms shown below, who determines what resources are needed, when they are needed, and how they will be employed? Who has the authority and responsibility to mobilize these resources?

a. Traditional organization

b. Matrix organization

c. Product line organization

d. Line/staff project organization

4–15 Do you agree or disagree that project organizational forms encourage peer-to-peer communications and dynamic problem-solving?

4–16 The XYZ Company operates on a traditional structure. The company has just received a contract to develop a new product line for a special group of customers. The company has decided to pull out selected personnel from the functional departments and set up a single product organizational structure to operate in parallel with the functional departments.

a. Set up the organizational chart.

b. Do you think this setup can work? Does your answer depend on how many years this situation must exist?

4–17 You are the project engineer on a program similar to one that you directed previously. Should you attempt to obtain the same administrative and/or technical staff that you had before?

4–18 A person assigned to your project is performing unsatisfactorily. What should you do? Will it make a difference if he is in the project office or a functional employee?

4–19 You have been assigned to the project office as an assistant project engineer. You are to report to the chief project engineer who reports formally to the project manager and informally to the vice president of engineering. You have never worked with this chief project engineer before. During the execution of the project, it becomes obvious to you that the chief project engineer is making decisions that do not appear to be in the best interest of the project. What should you do about this?

4–20 Should individuals be promoted to project management because they are at the top of their functional pay grade?

4–21 Should one functional department be permitted to “borrow” (on a temporary basis) people from another functional department in order to fulfill project manning requirements? Should this be permitted if overtime is involved?

4–22 Should a project manager be paid for performance or for the number of people he supervises?

4–23 Should a project manager try to upgrade his personnel?

4–24 Why should a functional manager assign his best people to you on a long-term project?

4–25 A coal company has adopted the philosophy that the project manager for new mine startup


projects will be the individual who will eventually become the mine superintendent. The coal company believes that this type of “ownership” philosophy is good. Do you agree?

4–26 Can a project manager be considered as a “hired gun”?

4–27 Manufacturing organizations are using project management/project engineering strictly to give new employees exposure to total company operations. After working on one or two projects, each approximately one to two years in duration, the employee is transferred to line management for his career path and opportunities for advancement. Can a situation such as this, where there is no career path in either project management or project engineering, work successfully? Could there be any detrimental effects on the projects?

4–28 Can a project manager create dedication and a true winning spirit and still be hated by all?

4–29 Can anyone be trained to be a project manager?

4–30 A power and light company has part-time project management in which an individual acts as both a project manager and a functional employee at the same time. The utility company claims that this process prevents an employee from becoming “technically obsolete,” and that when the employee returns to full-time functional duties, he is a more well-rounded individual. Do you agree or disagree? What are the arrangement’s advantages and disadvantages?

4–31 Some industries consider the major criterion for promotion and advancement to be gray hair and/or baldness. Is this type of maturity advantageous?

4–32 In Figure 4–8 we showed that Al Tandy and Don Davis (as well as other project office personnel) reported directly to the project manager and indirectly to functional management. Could this situation be reversed, with the project office personnel reporting indirectly to the project manager and directly to functional management?

4–33 Most organizations have “star” people who are usually identified as those individuals who are the key to success. How does a project manager identify these people? Can they be in the project office, or must they be functional employees or managers?

4–34 Considering your own industry, what job-related or employee-related factors would you wish to know before selecting someone to be a project manager or a project engineer on an effort valued at:

a. $30,000?

b. $300,000?

c. $3,000,000?

d. $30,000,000?

4–35 One of the major controversies in project management occurs over whether the project manager needs a command of technology in order to be effective. Consider the following situation:

You are the project manager on a research and development project. Marketing informs you that they have found a customer for your product and that you must make major modifications to satisfy the customer’s requirements. The engineering functional managers tell you that these modifications are impossible. Can a project manager without a command of technology make a viable decision as to whether to risk additional funds and support marketing, or should he believe the functional managers, and tell marketing that the modifications are impossible? How can a project manager, either with or without a command of technology, tell whether the functional managers are giving him an optimistic or a pessimistic opinion?

4–36 As a functional employee, you demonstrate that you have exceptionally good writing skills. You are then promoted to the position of special staff assistant to the division manager and told that


you are to assume full responsibility for all proposal work that must flow through your division. How do you feel about this? Is it a promotion? Where can you go from here?

4–37 Government policymakers content that only high-ranking individuals (high GS grades) can be project managers because a good project manager needs sufficient “clout” to make the project go. In government, the project manager is generally the highest grade on the project team. How can problems of pay grade be overcome? Is the government’s policy effective?

4–38 A major utility company is worried about the project manager’s upgrading functional employees. On an eight-month project that employs four hundred full-time project employees, the department managers have set up “check” people whose responsibility is to see that functional employees do not have unauthorized (i.e., not approved by the functional manager) work assignments above their current grade level. Can this system work? What if the work is at a position below their grade level?

4–39 A major utility company begins each computer project with a feasibility study in which a cost-benefit analysis is performed. The project managers, all of whom report to a project management division, perform the feasibility study themselves without any functional support. The functional personnel argue that the feasibility study is inaccurate because the functional “experts” are not involved. The project managers, on the other hand, stipulate that they never have sufficient time or money to involve the functional personnel. Can this situation be resolved?

4–40 How would you go about training individuals within your company or industry to be good project managers? What assumptions are you making?

4–41 Should project teams be allowed to evolve by themselves?

4–42 At what point or phase in the life cycle of a project should a project manager be appointed?

4–43 Top management generally has two schools of thought concerning project management. One school states that the project manager should be used as a means for coordinating activities that cut across several functional departments. The second school states that the project management position should be used as a means of creating future general managers. Which school of thought is correct?

4–44 Some executives feel that personnel working in a project office should be cross-trained in several assistant project management functions. What do you think about this?

4–45 A company has a policy that employees wishing to be project managers must first spend one to one-and-a-half years in the functional employee side of the house so that they can get to know the employees and company policy. What do you think about this?

4–46 Your project has grown to a point where there now exist openings for three full-time assistant project managers. Unfortunately, there are no experienced assistant project managers available. You are told by upper-level management that you will fill these three positions by promotions from within. Where in the organization should you look? During an interview, what questions should you ask potential candidates? Is it possible that you could find candidates who are qualified to be promoted vertically but not horizontally?

4–47 A functional employee has demonstrated the necessary attributes of a potentially successful project manager. Top management can:

Promote the individual in salary and grade and transfer him into project management. Laterally transfer the employee into project management without any salary or grade increase. If, after three to six months, the employee demonstrates that he can perform, he will receive an appropriate salary and grade increase. Give the employee either a grade increase without any salary increase, or a small salary increase without any grade increase, under the stipulation that additional awards will be given at


the end of the observation period, assuming that the employee can handle the position.

If you were in top management, which method would you prefer? If you dislike the above three choices, develop your own alternative. What are the advantages and disadvantages of each choice? For each choice, discuss the ramifications if the employee cannot handle the project management position.

1. John M. Stewart, “Making Project Management Work.” Reprinted with permission from Business Horizons, Fall 1965, p. 63. Copyright © 1965 by the Board of Trustees at Indiana University.

2. Russell D. Archibald, Managing High-Technology Programs and Projects (New York: Wiley, 1976), p. 55. Copyright © 1976 by John Wiley & Sons, Inc. Reprinted by permission of the publisher.

3. D. L. Wilemon and J. P. Cicero, “The Project Manager—Anomalies and Ambiguities,” Academy of Management Journal, Vol. 13, 1970, pp. 269–282.

4. Source unknown.

5. Qualifications 7 through 9 apply only for Nuclear Project Directors.

6. Clayton Reeser, “Some Potential Human Problems of the Project Form of Organization,” Academy of Management Journal, Vol. XII, 1969, pp. 462–466.

7. S. K. Grinnell and H. P. Apple, “When Two Bosses Are Better Than One,” Machine Design, January 1975, pp. 84–87.

8. C. Ray Gullett, “Personnel Management in the Project Organization,” Personnel Administration/Public Personnel Review, November–December 1972, pp. 17–22.

9. Russell D. Archibald, Managing High-Technology Programs and Projects (New York: Wiley, 1976), p. 82. Copyright © 1976 by John Wiley & Sons, Inc. Reprinted by permission of the publisher.

10. William P. Killian, “Project Management—Future Organizational Concept,” Marquette Business Review, 1971, pp. 90–107.

11. William P. Killian, “Project Management—Future Organizational Concept,” Marquette Business Review, 1971, pp. 90–107.

12. David I. Cleland, “Why Project Management?” Reprinted with permission from Business Horizons, Winter 1964, p. 85. Copyright © 1964 by the Board of Trustees at Indiana University.

13. For additional information, see H. Kerzner, “Twenty Common Mistakes Made by Inexperienced Project Managers,”

356, ©2012 by the International Institute for Learning, New York City. Reproduced by permission.


Management Functions

Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 5th Edition, Reference Section for the PMP® Certification Exam

Wynn Computer Equipment (WCE) The Trophy Project* Communication Failures McRoy Aerospace* The Poor Worker* The Prima Donna* The Team Meeting

The Communication Problem Meetings, Meetings, and Meetings The Empowerment Problem Project Management Psychology Multiple Choice Exam Crossword Puzzle on Human Resource Management Crossword Puzzle on Communications Management

Human Resource Management Communications Management


5.0 INTRODUCTION As we have stated, the project manager measures his success by how well he can negotiate with both upper-level and functional management for the resources necessary to achieve the project objective. Moreover, the project manager may have a great deal of delegated authority but very little power. Hence, the managerial skills he requires for successful performance may be drastically different from those of his functional management counterparts.

PMBOK® Guide, 5th Edition 1.7.2 Project Management Skills

1.4.4 Role of the PMO

The difficult aspect of the project management environment is that individuals at the project–functional interface must report to two bosses. Functional managers and project managers, by virtue of their different authority levels and responsibilities, treat their people in different fashions depending on their “management school” philosophies. There are generally five management schools, as described below:

The classical/traditional school: Management is the process of getting things done (i.e., achieving objectives) by working both with and through people operating in organized groups. Emphasis is placed on the end-item or objective, with little regard for the people involved. The empirical school: Managerial capabilities can be developed by studying the experiences of other managers, whether or not the situations are similar. The behavioral school: Two classrooms are considered within this school. First, we have the human relations classroom in which we emphasize the interpersonal relationship between individuals and their work. The second classroom includes the social system of the individual. Management is considered to be a system of cultural relationships involving social change. The decision theory school: Management is a rational approach to decision making using a system of mathematical models and processes, such as operations research and management science. The management systems school: Management is the development of a systems model, characterized by input, processing, and output, and directly identifies the flow of resources (money, equipment, facilities, personnel, information, and material) necessary to obtain some objective by either


maximizing or minimizing some objective function. The management systems school also includes contingency theory, which stresses that each situation is unique and must be optimized separately within the constraints of the system.

In a project environment, functional managers are generally practitioners of the first three schools of management, whereas project managers utilize the last two. This imposes hardships on both the project managers and functional representatives. The project manager must motivate functional representatives toward project dedication on the horizontal line using management systems theory and quantitative tools, often with little regard for the employee. After all, the employee might be assigned for a very short-term effort, whereas the end-item is the most important objective. The functional manager, however, expresses more concern for the individual needs of the employee using the traditional or behavioral schools of management.

Modern practitioners still tend to identify management responsibilities and skills in terms of the principles and functions developed in the early management schools, namely:

Planning Organizing Staffing Controlling Directing

Although these management functions have generally been applied to traditional management structures, they have recently been redefined for temporary management positions. Their fundamental meanings remain the same, but the applications are different.


5.1 CONTROLLING Controlling is a three-step process of measuring progress toward an objective, evaluating what remains to be done, and taking the necessary corrective action to achieve or exceed the objectives. These three steps—measuring, evaluating, and correcting—are defined as follows:

Measuring: determining through formal and informal reports the degree to which progress toward objectives is being made. Evaluating: determining cause of and possible ways to act on significant deviations from planned performance. Correcting: taking control action to correct an unfavorable trend or to take advantage of an unusually favorable trend.

The project manager is responsible for ensuring the accomplishment of group and organizational goals and objectives. To effect this, he must have a thorough knowledge of standards and cost control policies and procedures so that a comparison is possible between operating results and preestablished standards. The project manager must then take the necessary corrective actions. Later chapters provide a more in-depth analysis of control, especially the cost control function.

In Chapter 1, we stated that project managers must understand organizational behavior in order to be effective and must have strong interpersonal skills. This is especially important during the controlling function. Line managers may have the luxury of time to build up relationships with each of their workers. But for a project manager time is a constraint, and it is not always easy to predict how well or how poorly an individual will interact with a group, especially if the project manager has never worked with this employee previously. Understanding the physiological and social behavior of how people perform in a group cannot happen overnight.


5.2 DIRECTING Directing is the implementing and carrying out (through others) of those approved plans that are necessary to achieve or exceed objectives. Directing involves such steps as:

Staffing: seeing that a qualified person is selected for each position. Training: teaching individuals and groups how to fulfill their duties and responsibilities. Supervising: giving others day-to-day instruction, guidance, and discipline as required so that they can fulfill their duties and responsibilities. Delegating: assigning work, responsibility, and authority so others can make maximum utilization of their abilities. Motivating: encouraging others to perform by fulfilling or appealing to their needs. Counseling: holding private discussions with another about how he might do better work, solve a personal problem, or realize his ambitions. Coordinating: seeing that activities are carried out in relation to their importance and with a minimum of conflict.

Directing subordinates is not an easy task because of both the short time duration of the project and the fact that employees might still be assigned to a functional manager while temporarily assigned to your effort. The luxury of getting to “know” one’s subordinates may not be possible in a project environment.

Project managers must be decisive and move forward rapidly whenever directives are necessary. It is better to decide an issue and be 10 percent wrong than it is to wait for the last 10 percent of a problem’s input and cause a schedule delay and improper use of resources. Directives are most effective when the KISS (keep it simple, stupid) rule is applied. Directives should be written with one simple and clear objective so that subordinates can work effectively and get things done right the first time. Orders must be issued in a manner that expects immediate compliance. Whether people will obey an order depends mainly on the amount of respect they have for you. Therefore, never issue an order that you cannot enforce. Oral orders and directives should be disguised as suggestions or requests. The requestor should ask the receiver to repeat the oral orders so that there is no misunderstanding.

Project managers must understand human behavior in order to motivate people toward successful accomplishment of project objectives. Douglas McGregor advocated that most workers can be categorized according to two theories.1 The


first, often referred to as Theory X, assumes that the average worker is inherently lazy and requires supervision. Theory X further assumes that:

PMBOK® Guide, 5th Edition Chapter 9 Human Resources Management

9.4 Manage the Team

The average worker dislikes work and avoids work whenever possible. To induce adequate effort, the supervisor must threaten punishment and exercise careful supervision. The average worker avoids increased responsibility and seeks to be directed.

The manager who accepts Theory X normally exercises authoritarian-type control over workers and allows little participation during decision-making. Theory X employees generally favor lack of responsibility, especially in decision-making.

According to Theory Y, employees are willing to get the job done without constant supervision. Theory Y further assumes that:

The average worker wants to be active and finds the physical and mental effort on the job satisfying. Greatest results come from willing participation, which will tend to produce self-direction toward goals without coercion and control. The average worker seeks opportunity for personal improvement and self- respect.

The manager who accepts Theory Y normally advocates participation and a management–employee relationship. However, in working with professionals, especially engineers, special care must be exercised because these individuals often pride themselves on their ability to find a better way to achieve the end result regardless of cost. If this happens, project managers must become authoritarian leaders and treat Theory Y employees as though they are Theory X.

William Ouchi has identified a Theory Z that emphasizes the Japanese cultural values and the behavior of the Japanese workers.2 According to Theory Z, there exist significant differences between the Japanese and American cultures and how the workers are treated. The Japanese focus on lifetime employment whereas the Americans look at short-term employment. The Japanese focus on collective decision-making such as in quality circles whereas Americans focus on individual


decision-making. The Japanese emphasize informal administrative control whereas the Americans lean toward a more formal control. Japanese companies place workers on nonspecialized career paths with slow evaluation and promotion whereas Americans prefer specialized career path opportunities with rapid evaluation and promotion. Finally, Japanese managers have more of an interest in the personal life of their workers than do American managers.

PMBOK® Guide, 5th Edition Chapter 9 Human Resources Management

9.3 Develop the Team

Many psychologists have established the existence of a prioritized hierarchy of needs that motivate individuals toward satisfactory performance. Maslow was the first to identify these needs.3 Maslow’s hierarchy of needs is shown in Figure 5–1. The first level is that of the basic or physiological needs, namely, food, water, clothing, shelter, sleep, and sexual satisfaction. Simply speaking, human primal desire to satisfy these basic needs motivates him to do a good job.

FIGURE 5–1. Maslow’s hierarchy of needs.

After an employee has fulfilled his physiological needs, he turns to the next lower need, safety. Safety needs include economic security and protection from harm, disease, and violence. Safety can also include security. It is important that project managers realize this because these managers may find that as a project nears termination, functional employees are more interested in finding a new role for themselves than in giving their best to the current situation.

The next level contains the social needs, including love, belonging, togetherness, approval, and group membership. At this level, the informal organization plays a dominant role. Many people refuse promotions to project management (as project managers, project office personnel, or functional representatives) because they fear


that they will lose their “membership” in the informal organization. This problem can occur even on short-duration projects. In a project environment, project managers generally do not belong to any informal organization and, therefore, tend to look outside the organization to fulfill this need. Project managers consider authority and funding to be very important in gaining project support. Functional personnel, however, prefer friendship and work assignments. In other words, the project manager can use the project itself as a means of helping fulfill the third level for the line employees (i.e., team spirit).

The two lowest needs are esteem and self-actualization. The esteem need includes self-esteem (self-respect), reputation, the esteem of others, recognition, and self-confidence. Highly technical professionals are often not happy unless esteem needs are fulfilled. For example, many engineers strive to publish and invent as a means of satisfying these needs. These individuals often refuse promotions to project management because they believe that they cannot satisfy esteem needs in this position. Being called a project manager does not carry as much importance as being considered an expert in one’s field by one’s peers. The lowest need is self-actualization and includes doing what one can do best, desiring to utilize one’s potential, full realization of one’s potential, constant self- development, and a desire to be truly creative. Many good project managers find this level to be the most important and consider each new project as a challenge by which they can achieve self-actualization.

Frederick Herzberg and his associates conducted motivational research studies.4 Herzberg concluded that Maslow’s lower three levels (physiological, safety, and social needs) were hygiene factors that were either satisfied or dissatisfied. The only real motivational factors were the self-esteem and self-actualization needs. Herzberg believed that the physiological needs were hygiene factors and were extremely short-term needs. Self-esteem and self-actualization were more long- term needs and could be increased through job rotation, which includes job enrichment.

Another motivational technique can be related to the concept of expectancy theory (also referred to as the immature–mature organization), which was developed by the behaviorist Chris Argyris. Expectancy theory says that when the needs of the organization and the needs of the individual are congruent, both parties benefit and motivation increases. When there is incongruence between the needs of the individual and the needs of the organization, the individual will experience:

Frustration Psychological failure Short-term perspectives



Project managers must motivate temporarily assigned individuals by appealing to their desires to fulfill the lowest two levels, but not by making promises that cannot be met. Project managers must motivate by providing:

A feeling of pride or satisfaction for one’s ego Security of opportunity Security of approval Security of advancement, if possible Security of promotion, if possible Security of recognition A means for doing a better job, not a means to keep a job

Understanding professional needs is an important factor in helping people realize their true potential. Such needs include:

Interesting and challenging work Professionally stimulating work environment Professional growth Overall leadership (ability to lead) Tangible rewards Technical expertise (within the team) Management assistance in problem-solving Clearly defined objectives Proper management control Job security Senior management support Good interpersonal relations Proper planning Clear role definition Open communications A minimum of changes

Motivating employees so that they feel secure on the job is not easy, especially since a project has a finite lifetime. Specific methods for producing security in a project environment include:

Letting people know why they are where they are Making individuals feel that they belong where they are Placing individuals in positions for which they are properly trained Letting employees know how their efforts fit into the big picture


Since project managers cannot motivate by promising material gains, they must appeal to each person’s pride. The guidelines for proper motivation are:

Adopt a positive attitude Do not criticize management Do not make promises that cannot be kept Circulate customer reports Give each person the attention he requires

There are several ways of motivating project personnel. Some effective ways include:

Giving assignments that provide challenges Clearly defining performance expectations Giving proper criticism as well as credit Giving honest appraisals Providing a good working atmosphere Developing a team attitude Providing a proper direction (even if Theory Y)


5.3 PROJECT AUTHORITY Project management structures create a web of relationships that can cause chaos in the delegation of authority and the internal authority structure. Four questions must be considered in describing project authority:

PMBOK® Guide, 5th Edition 9.1.3 Human Resource Planning

What is project authority? What is power, and how is it achieved? How much project authority should be granted to the project manager? Who settles project authority interface problems?

One form of the project manager’s authority can be defined as the legal or rightful power to command, act, or direct the activities of others. Authority can be delegated from one’s superiors. Power, on the other hand, is granted to an individual by his subordinates and is a measure of their respect for him. A manager’s authority is a combination of his power and influence such that subordinates, peers, and associates willingly accept his judgment.

In the traditional structure, the power spectrum is realized through the hierarchy, whereas in the project structure, power comes from credibility, expertise, or being a sound decision-maker.

Authority is the key to the project management process. The project manager must manage across functional and organizational lines by bringing together activities required to accomplish the objectives of a specific project. Project authority provides the way of thinking required to unify all organizational activities toward accomplishment of the project regardless of where they are located. The project manager who fails to build and maintain his alliances will soon find opposition or indifference to his project requirements.

The amount of authority granted to the project manager varies according to project size, management philosophy, and management interpretation of potential conflicts with functional managers.

Generally speaking, a project manager should have more authority than his responsibility calls for, the exact amount of authority usually depending on the amount of risk that the project manager must take. The greater the risk, the greater


the amount of authority. A good project manager knows where his authority ends and does not hold an employee responsible for duties that he (the project manager) does not have the authority to enforce. Some projects are directed by project managers who have only monitoring authority. These project managers are referred to as influence project managers.

Failure to establish authority relationships can result in:

Poor communication channels Misleading information Antagonism, especially from the informal organization Poor working relationships with superiors, subordinates, peers, and associates Surprises for the customer

The following are the most common sources of power and authority problems in a project environment:

Poorly documented or no formal authority Power and authority perceived incorrectly Dual accountability of personnel Two bosses (who often disagree) The project organization encouraging individualism Subordinate relations stronger than peer or superior relationships Shifting of personnel loyalties from vertical to horizontal lines Group decision-making based on the strongest group Ability to influence or administer rewards and punishment Sharing resources among several projects

The project manager does not have unilateral authority in the project effort. He frequently negotiates with the functional manager. The project manager has the authority to determine the “when” and “what” of the project activities, whereas the functional manager has the authority to determine “how the support will be given.” The project manager accomplishes his objectives by working with personnel who are largely professional. For professional personnel, project leadership must include explaining the rationale of the effort as well as the more obvious functions of planning, organizing, directing, and controlling.

Certain ground rules exist for authority control through negotiations:

Negotiations should take place at the lowest level of interaction. Definition of the problem must be the first priority:

The issue


The impact The alternative The recommendations

Higher-level authority should be used if, and only if, agreement cannot be reached.

The critical stage of any project is planning. This includes more than just planning the activities to be accomplished; it also includes the planning and establishment of the authority relationships that must exist for the duration of the project. Because the project management environment is an ever-changing one, each project establishes its own policies and procedures, a situation that can ultimately result in a variety of authority relationships. It is therefore possible for functional personnel to have different responsibilities on different projects, even if the tasks are the same.

During the planning phase the project team develops a responsibility assignment matrix (RAM) that contains such elements as:

General management responsibility Operations management responsibility Specialized responsibility Who must be consulted Who may be consulted Who must be notified Who must approve

The responsibility matrix is often referred to as a linear responsibility chart (LRC) or responsibility assignment matrix (RAM). Linear responsibility charts identify the participants, and to what degree an activity will be performed or a decision will be made. The LRC attempts to clarify the authority relationships that can exist when functional units share common work.

Figure 5–2 shows a typical linear responsibility chart. The rows, which indicate the activities, responsibilities, or functions required, can be all of the tasks in the work breakdown structure. The columns identify either positions, titles, or the people themselves. If the chart will be given to an outside customer, then only the titles should appear, or the customer will call the employees directly without going through the project manager. The symbols indicate the degrees of authority or responsibility existing between the rows and columns.

FIGURE 5–2. Linear responsibility chart (responsibility assignment matrix).


Another example of an LRC is shown in Figure 5–3. In this case, the LRC is used to describe how internal and external communications should take place. This type of chart can be used to eliminate communications conflicts. Consider a customer who is unhappy about having all of his information filtered through the project manager and requests that his line people be permitted to talk to your line people on a one-on-one basis. You may have no choice but to permit this, but you should make sure that the customer understands that:

FIGURE 5–3. Communications responsibility matrix.*


Functional employees cannot make commitments for additional work or resources. Functional employees give their own opinion and not that of the company. Company policy comes through the project office.

Figures 5–4 and 5–5 are examples of modified LRCs. Figure 5–4 is used to show the distribution of data items, and Figure 5–5 identifies the skills distribution in the project office.

FIGURE 5–4. Data distribution matrix.


FIGURE 5–5. Personal skills matrix.


PMBOK® Guide, 5th Edition 9.1.2 Human Resource Planning Tools and Techniques

The responsibility matrix attempts to answer such questions as: “Who has


signature authority?” “Who must be notified?” “Who can make the decision?” The questions can only be answered by clear definitions of authority, responsibility, and accountability:

Authority is the right of an individual to make the necessary decisions required to achieve his objectives or responsibilities. Responsibility is the assignment for completion of a specific event or activity. Accountability is the acceptance of success or failure.

The linear responsibility chart, although a valuable tool for management, does have a weakness in that it does not describe how people interact within the program. The LRC must be considered with the organization for a full understanding of how interactions between individuals and organizations take place.

Linear responsibility charts can result from customer-imposed requirements above and beyond normal operations. For example, the customer may require as part of its quality control that a specific engineer supervise and approve all testing of a certain item or that another individual approve all data released to the customer over and above program office approval. Such customer requirements necessitate LRCs and can cause disruptions and conflicts within an organization.

Several key factors affect the delegation of authority and responsibility, both from upper-level management to project management and from project management to functional management. These key factors include:

The maturity of the project management function The size, nature, and business base of the company The size and nature of the project The life cycle of the project The capabilities of management at all levels

Once agreement has been reached as to the project manager’s authority and responsibility, the results must be documented to clearly delineate his role in regard to:

His focal position Conflict between the project manager and functional managers Influence to cut across functional and organizational lines Participation in major management and technical decisions Collaboration in staffing the project Control over allocation and expenditure of funds Selection of subcontractors


Rights in resolving conflicts Voice in maintaining integrity of the project team Establishment of project plans Providing a cost-effective information system for control Providing leadership in preparing operational requirements Maintaining prime customer liaison and contact Promoting technological and managerial improvements Establishment of project organization for the duration Cutting red tape

Perhaps the best way to document the project manager’s authority is through the project charter, which is one of the three methods, shown in Figure 5–6, by which project managers attain authority. Documenting the project manager’s authority is necessary because:

FIGURE 5–6. Types of project authority.

All interfacing must be kept as simple as possible. The project manager must have the authority to “force” functional managers to depart from existing standards and possibly incur risk. The project manager must gain authority over those elements of a program that are not under his control. This is normally achieved by earning the respect of the individuals concerned. The project manager should not attempt to fully describe the exact authority and responsibilities of his project office personnel or team members. Instead, he should encourage problem-solving rather than role definition.



There exist a variety of relationships (although they are not always clearly definable) between power and authority. These relationships are usually measured by “relative” decision power as a function of the authority structure, and are strongly dependent on the project organizational form.

PMBOK® Guide, 5th Edition 9.1.2 Human Resource Planning Tools and Techniques

Consider the following statements made by project managers:

“I’ve had good working relations with department X. They like me and I like them. I can usually push through anything ahead of schedule.” “I know it’s contrary to department policy, but the test must be conducted according to these criteria or else the results will be meaningless” (remark made to a team member by a research scientist who was temporarily promoted to project management for an advanced state-of-the-art effort).

Project managers are generally known for having a lot of delegated authority but very little formal power. They must, therefore, get jobs done through the use of interpersonal influences. There are five such interpersonal influences:

Legitimate power: the ability to gain support because project personnel perceive the project manager as being officially empowered to issue orders. Reward power: the ability to gain support because project personnel perceive the project manager as capable of directly or indirectly dispensing valued organizational rewards (i.e., salary, promotion, bonus, future work assignments). Penalty power: the ability to gain support because the project personnel perceive the project manager as capable of directly or indirectly dispensing penalties that they wish to avoid. Penalty power usually derives from the same source as reward power, with one being a necessary condition for the other. Expert power: the ability to gain support because personnel perceive the project manager as possessing special knowledge or expertise (that functional personnel consider as important).


Referent power: the ability to gain support because project personnel feel personally attracted to the project manager or his project.

Expert and referent power are examples of personal power that comes from the personal qualities or characteristics to which team members are attracted. Legitimate, reward, and penalty power are often referred to as examples of position power, which is directly related to one’s position within the organization. Line managers generally possess a great amount of position power. But in a project environment, position power may be difficult to achieve. According to Magenau and Pinto5:

Within the arena of project management, the whole issue of position power becomes more problematic. Project managers in many organizations operate outside the standard functional hierarchy. While that position allows them a certain freedom of action without direct oversight, it has some important concomitant disadvantages, particularly as they pertain to positional power. First, because cross-functional relationships between the project manager and other functional departments can be ill-defined, project managers discover rather quickly that they have little or no legitimate power to simply force their decisions through the organizational system. Functional departments usually do not have to recognize the rights of the project managers to interfere with functional responsibilities; consequently, novice project managers hoping to rely on positional power to implement their projects are quickly disabused.

As a second problem with the use of positional power, in many organizations, project managers have minimal authority to reward team members who, because they are temporary subordinates, maintain direct ties and loyalties to their functional departments. In fact, project managers may not even have the opportunity to complete a performance evaluation on these temporary team members. Likewise, for similar reasons, project managers may have minimal authority to punish inappropriate behavior. Therefore, they may discover that they have the ability to neither offer the carrot nor threaten the stick. As a result, in addition to positional power, it is often necessary that effective project managers seek to develop their personal power bases.

The following six situations are examples of referent power (the first two are also reward power):

The employee might be able to get personal favors from the project manager. The employee feels that the project manager is a winner and the rewards will be passed down to the employee. The employee and the project manager have strong ties, such as the same


foursome for golf. The employee likes the project manager’s manner of treating people. The employee wants identification with a specific product or product line. The employee has personal problems and believes that he can get empathy or understanding from the project manager.

Like relative power, interpersonal influences can be identified with various project organizational forms as to their relative value. This is shown in Figure 5–7.

FIGURE 5–7. The range of alternatives.

Source: Jay R. Galbraith, “Matrix Organization Designs.” Reprinted with permission from Business Horizons, February 1971, p. 37. Copyright © 1971 by the Board of Trustees at Indiana University.

For any temporary management structure to be effective, there must exist a rational balance of power between functional and project management. Unfortunately, a balance of equal power is often impossible to obtain because each project is inherently different from others, and the project managers possess different leadership abilities.

Achievement of this balance is a never-ending challenge for management. If time and cost constraints on a project cannot be met, the project influence in decision- making increases, as can be seen in Figure 5–8. If the technology or performance constraints need reappraisal, then the functional influence in decision-making will



FIGURE 5–8. Team-building outcomes.

Regardless of how much authority and power a project manager develops over the course of the project, the ultimate factor in his ability to get the job done is usually his leadership style. Developing bonds of trust, friendship, and respect with the functional workers can promote success.



Most people within project-driven and non–project-driven organizations have differing views of project management. Table 5–1 compares the project and functional viewpoints of project management. These differing views can create severe barriers to successful project management operations. TABLE 5–1. COMPARISON OF THE FUNCTIONAL AND THE PROJECT VIEWPOINTS

Source: David I. Cleland, “Project Management,” in David I. Cleland and William R. King, eds., Systems Organizations, Analysis, Management: A Book of Readings (New York: McGraw-Hill, Inc., 1969), pp. 281–290. © 1969 by McGraw-Hill Inc.

Reprinted with permission of the publisher.

Phenomena Project Viewpoint Functional Viewpoint Line–staff organizational dichotomy

Vestiges of the hierarchical model remain: the line functions are placed in a support position. A web of authority and responsibility exists.

Line functions have direct responsibility for accomplishing the objectives; line commands, and staff advises.

Scalar principle

Elements of the vertical chain exist, but prime emphasis is placed on horizontal and diagonal work flow. Important business is conducted as the legitimacy of the task requires.

The chain of authority relationships is from superior to subordinate throughout the organization. Central, crucial, and important business is conducted up and down the vertical hierarchy.

Superior– subordinate relationship

Peer-to-peer, manager-to-technical expert, associate-to-associate, etc., relationships are used to conduct much of the salient business.

This is the most important relationship; if kept healthy, success will follow. All important business is conducted through a pyramiding structure of superiors and subordinates

Organizational objectives

Management of a project becomes a joint venture of many relatively independent organizations. Thus, the objective becomes multilateral.

Organizational objectives are sought by the parent unit (an assembly of suborganizations) working within its


environment. The objective is unilateral.

Unity of direction

The project manager manages across functional and organizational lines to accomplish a common interorganizational objective.

The general manager acts as the one head for a group of activities having the same plan.

Parity of authority and responsibility

Considerable opportunity exists for the project manager’s responsibility to exceed his authority. Support people are often responsible to other managers (functional) for pay, performance reports, promotions, etc.

Consistent with functional management; the integrity of the superior–subordinate relationship is maintained through functional authority and advisory staff services.

Time duration The project (and hence the organization) is finite in duration.

Tends to perpetuate itself to provide continuing facilitative support.

PMBOK® Guide, 5th Edition 9.3 Develop Project Team

The understanding of barriers to project team building can help in developing an environment conducive to effective teamwork. The following barriers are typical for many project environments.

Differing outlooks, priorities, and interests. A major barrier exists when team members have professional objectives and interests that are different from the project objectives. These problems are compounded when the team relies on support organizations that have different interests and priorities.

Role conflicts. Team development efforts are thwarted when role conflicts exist among the team members, such as ambiguity over who does what within the project team and in external support groups.

Project objectives/outcomes not clear. Unclear project objectives frequently lead to conflict, ambiguities, and power struggles. It becomes difficult, if not impossible, to define roles and responsibilities clearly.

Dynamic project environments. Many projects operate in a continual state of change. For example, senior management may keep changing the project scope,


objectives, and resource base. In other situations, regulatory changes or client demands can drastically affect the internal operations of a project team.

Competition over team leadership. Project leaders frequently indicated that this barrier most likely occurs in the early phases of a project or if the project runs into severe problems. Obviously, such cases of leadership challenge can result in barriers to team building. Frequently, these challenges are covert challenges to the project leader’s ability.

Lack of team definition and structure. Many senior managers complain that teamwork is severely impaired because it lacks clearly defined task responsibilities and reporting structures. We find this situation is most prevalent in dynamic, organizationally unstructured work environments such as computer systems and R&D projects. A common pattern is that a support department is charged with a task but no one leader is clearly delegated the responsibility. As a consequence, some personnel are working on the project but are not entirely clear on the extent of their responsibilities. In other cases, problems result when a project is supported by several departments without interdisciplinary coordination.

Team personnel selection. This barrier develops when personnel feel unfairly treated or threatened during the staffing of a project. In some cases, project personnel are assigned to a team by functional managers, and the project manager has little or no input into the selection process. This can impede team development efforts, especially when the project leader is given available personnel versus the best, hand-picked team members. The assignment of “available personnel” can result in several problems (e.g., low motivation levels, discontent, and uncommitted team members). We’ve found, as a rule, that the more power the project leader has over the selection of his team members, and the more negotiated agreement there is over the assigned task, the more likely it is that team-building efforts will be fruitful.

Credibility of project leader. Team-building efforts are hampered when the project leader suffers from poor credibility within the team or from other managers. In such cases, team members are often reluctant to make a commitment to the project or the leader. Credibility problems may come from poor managerial skills, poor technical judgments, or lack of experience relevant to the project.

Lack of team member commitment. Lack of commitment can have several sources. For example, the team members having professional interests elsewhere, the feeling of insecurity that is associated with projects, the unclear nature of the rewards that may be forthcoming upon successful completion, and intense interpersonal conflicts within the team can all lead to lack of commitment.


Lack of team member commitment may result from suspicious attitudes existing between the project leader and a functional support manager, or between two team members from two warring functional departments. Finally, low commitment levels are likely to occur when a “star” on a team “demands” too much effort from other team members or too much attention from the team leader. One team leader put it this way: “A lot of teams have their prima donnas and you learn to live and function with them. They can be critical to overall success. But some stars can be so demanding on everyone that they’ll kill the team’s motivation.”

Communication problems. Not surprisingly, poor communication is a major enemy to effective team development. Poor communication exists on four major levels: problems of communication among team members, between the project leader and the team members, between the project team and top management, and between the project leaders and the client. Often the problem is caused by team members simply not keeping others informed on key project developments. Yet the “whys” of poor communication patterns are far more difficult to determine. The problem can result from low motivation levels, poor morale, or carelessness. It was also discovered that poor communication patterns between the team and support groups result in severe team-building problems, as does poor communication with the client. Poor communication practices often lead to unclear objectives and poor project control, coordination, and work flow.

Lack of senior management support. Project leaders often indicate that senior management support and commitment is unclear and subject to waxing and waning over the project life cycle. This behavior can result in an uneasy feeling among team members and lead to low levels of enthusiasm and project commitment. Two other common problems are that senior management often does not help set the right environment for the project team at the outset, nor do they give the team timely feedback on their performance and activities during the life of the project.

Project managers who are successfully performing their role not only recognize these barriers but also know when in the project life cycle they are most likely to occur. Moreover, these managers take preventive actions and usually foster a work environment that is conducive to effective teamwork. The effective team builder is usually a social architect who understands the interaction of organizational and behavior variables and can foster a climate of active participation and minimal conflict. This requires carefully developed skills in leadership, administration, organization, and technical expertise on the project. However, besides the delicately balanced management skills, the project manager’s sensitivity to the basic issues underlying each barrier can help to increase success in developing an effective project team. Specific suggestions for team building are advanced in Table 5–2.



Barrier Suggestions for Effectively Managing Barriers (How to Minimize or Eliminate Barriers)

Differing outlooks, priorities, interests, and judgments of team members

Make effort early in the project life cycle to discover these conflicting differences. Fully explain the scope of the project and the rewards that may be forthcoming on successful project completion. Sell “team” concept and explain responsibilities. Try to blend individual interests with the overall project objectives.

Role conflicts As early in a project as feasible, ask team members where they see themselves fitting into the project. Determine how the overall project can best be divided into subsystems and subtasks (e.g., the work breakdown structure). Assign/negotiate roles. Conduct regular status review meetings to keep team informed on progress and watch for unanticipated role conflicts over the project’s life.

Project objectives/outcomes not clear

Assure that all parties understand the overall and interdisciplinary project objectives. Clear and frequent communication with senior management and the client becomes critically important. Status review meetings can be used for feedback. Finally, a proper team name can help to reinforce the project objectives.

Dynamic project environments

The major challenge is to stabilize external influences. First, key project personnel must work out an agreement on the principal project direction and “sell” this direction to the total team. Also educate senior management and the customer on the detrimental consequences of unwarranted change. It is critically important to forecast the “environment” within which the project will be developed. Develop contingency plans.

Competition over team leadership

Senior management must help establish the project manager’s leadership role. On the other hand, the project manager needs to fulfill the leadership expectations of team members. Clear role and responsibility definition often minimizes competition over leadership.

Lack of team definition and

Project leaders need to sell the team concept to senior management as well as to their team members. Regular


structure meetings with the team will reinforce the team notion as will clearly defined tasks, roles, and responsibilities. Also, visibility in memos and other forms of written media as well as senior management and client participation can unify the team.

Project personnel selection

Attempt to negotiate the project assignments with potential team members. Clearly discuss with potential team members the importance of the project, their role in it, what rewards might result on completion, and the general “rules of the road” of project management. Finally, if team members remain uninterested in the project, then replacement should be considered.

Credibility of project leader

Credibility of the project leader among team members is crucial. It grows with the image of a sound decision-maker in both general management and relevant technical expertise. Credibility can be enhanced by the project leader’s relationship to other key managers who support the team’s efforts.

Lack of team member commitment

Try to determine lack of team member commitment early in the life of the project and attempt to change possible negative views toward the project. Often, insecurity is a major reason for the lack of commitment; try to determine why insecurity exists, then work on reducing the team members’ fears. Conflicts with other team members may be another reason for lack of commitment. It is important for the project leader to intervene and mediate the conflict quickly. Finally, if a team member’s professional interests lie elsewhere, the project leader should examine ways to satisfy part of the team member’s interests or consider replacement.

Communication problems

The project leader should devote considerable time communicating with individual team members about their needs and concerns. In addition, the leader should provide a vehicle for timely sessions to encourage communications among the individual team contributors. Tools for enhancing communications are status meetings, reviews, schedules, reporting system, and colocation. Similarly, the project leader should establish regular and thorough communications with the client and senior management. Emphasis is placed on


written and oral communications with key issues and agreements in writing.

Lack of senior management support

Senior management support is an absolute necessity for dealing effectively with interface groups and proper resource commitment. Therefore, a major goal for project leaders is to maintain the continued interest and commitment of senior management in their projects. We suggest that senior management become an integral part of project reviews. Equally important, it is critical for senior management to provide the proper environment for the project to function effectively. Here the project leader needs to tell management at the onset of the program what resources are needed. The project manager’s relationship with senior management and ability to develop senior management support is critically affected by his own credibility and the visibility and priority of his project.



FORMED TEAM A major problem faced by many project leaders is managing the anxiety that usually develops when a new team is formed. The anxiety experienced by team members is normal and predictable, but is a barrier to getting the team quickly focused on the task.

This anxiety may come from several sources. For example, if the team members have never worked with the project leader, they may be concerned about his leadership style. Some team members may be concerned about the nature of the project and whether it will match their professional interests and capabilities, or help or hinder their career aspirations. Further, team members can be highly anxious about life-style/work-style disruptions. As one project manager remarked, “Moving a team member’s desk from one side of the room to the other can sometimes be just about as traumatic as moving someone from Chicago to Manila.”

Another common concern among newly formed teams is whether there will be an equitable distribution of the workload among team members and whether each member is capable of pulling his own weight. In some newly formed teams, members not only must do their own work, but also must train other team members. Within reason this is bearable, but when it becomes excessive, anxiety increases.

Certain steps taken early in the life of a team can minimize the above problems. First, we recommend that the project leader talk with each team member one-to-one about the following:

1. What the objectives are for the project.

2. Who will be involved and why.

3. The importance of the project to the overall organization or work unit.

4. Why the team member was selected and assigned to the project. What role he will perform.

5. What rewards might be forthcoming if the project is successfully completed.

6. What problems and constraints are likely to be encountered.

7. The rules of the road that will be followed in managing the project (e.g., regular status review meetings).


8. What suggestions the team member has for achieving success.

9. What the professional interests of the team member are.

10. What challenge the project will present to individual members and the entire team.

11. Why the team concept is so important to project management success and how it should work.

Dealing with these anxieties and helping team members feel that they are an integral part of the team can yield rich dividends. First, as noted in Figure 5–8, team members are more likely to openly share their ideas and approaches. Second, it is more likely that the team will be able to develop effective decision-making processes. Third, the team is likely to develop more effective project control procedures, including those traditionally used to monitor project performance (PERT/CPM, networking, work breakdown structures, etc.) and those in which team members give feedback to each other regarding performance.



While proper attention to team building is critical during early phases of a project, it is a never-ending process. The project manager is continually monitoring team functioning and performance to see what corrective action may be needed to prevent or correct various team problems. Several barometers (summarized in Table 5–3) provide good clues of potential team dysfunctioning. First, noticeable changes in performance levels for the team and/or for individual team members should always be investigated. Such changes can be symptomatic of more serious problems (e.g., conflict, lack of work integration, communication problems, and unclear objectives). Second, the project leader and team members must be aware of the changing energy levels of team members. These changes, too, may signal more serious problems or that the team is tired and stressed. Sometimes changing the work pace or taking time off can reenergize team members. Third, verbal and nonverbal clues from team members may be a source of information on team functioning. It is important to hear the needs and concerns of team members (verbal clues) and to observe how they act in carrying out their responsibilities (nonverbal clues). Finally, detrimental behavior of one team member toward another can be a signal that a problem within the team warrants attention. TABLE 5–3. EFFECTIVENESS–INEFFECTIVENESS INDICATORS

The Effective Team’s Likely Characteristics

The Ineffective Team’s Likely Characteristics

High performance and task efficiency Innovative/creative behavior Commitment Professional objectives of team members coincident with project requirements Team members highly interdependent, interface effectively Capacity for conflict resolution, but conflict encouraged when it can lead to beneficial results Effective communication

Low performance Low commitment to project objectives Unclear project objectives and fluid commitment levels from key participants Unproductive gamesmanship, manipulation of others, hidden feelings, conflict avoidance at all costs Confusion, conflict, inefficiency Subtle sabotage, fear, disinterest, or foot-dragging Cliques, collusion, isolation of


High trust levels Results orientation Interest in membership High energy levels and enthusiasm High morale Change orientation

members Lethargy/unresponsiveness

We highly recommend that project leaders hold regular meetings to evaluate overall team performance and deal with team functioning problems. The focus of these meetings can be directed toward “what we are doing well as a team” and “what areas need our team’s attention.” This approach often brings positive surprises in that the total team is informed of progress in diverse project areas (e.g., a breakthrough in technology development, a subsystem schedule met ahead of the original target, or a positive change in the client’s behavior toward the project). After the positive issues have been discussed the review session should focus on actual or potential problem areas. The meeting leader should ask each team member for his observations and then open the discussion to ascertain how significant the problems really are. Assumptions should, of course, be separated from the facts of each situation. Next, assignments should be agreed on for best handling these problems. Finally, a plan for problem follow-up should be developed. The process should result in better overall performance and promote a feeling of team participation and high morale.


5.8 DYSFUNCTIONS OF A TEAM In a pure line organization, line managers may have the luxury of “time” to build up relationships with their subordinates and provide slow guidance on how the employees should function on teams. But in a project environment, time is a constraint, and the project manager must act or react quickly to get the desired teamwork.

Understanding the dysfunctions of a team, and being able to correct the problems quickly, is essential in a project environment. Patrick Lencioni has authored a best- selling text describing the five most common dysfunctions of a team. In his text, he describes the five dysfunctions as6:

Absence of trust Fear of conflict Lack of commitment Avoidance of accountability Inattention to results

In his text, he identifies the differences between the teams that have these dysfunctions and those that do not possess them:

Members of a team with an absence of trust . . . Conceal their weakness and mistakes from one another Hesitate to ask for help or provide constructive feedback Hesitate to offer help outside their own area of responsibility Jump to conclusions about intentions and aptitudes of others without attempting to clarify them Failing to recognize and tap into another’s skills and experiences Waste time and energy managing their behaviors for effect Hold grudges Dread meetings and find reasons to avoid spending time together

Members of trusting teams . . . Admit weaknesses and mistakes Ask for help Accept questions and input about their areas of responsibility Give one another the benefit of the doubt before arriving at a negative conclusion Take risks in offering feedback and assistance Appreciate and tap into one another’s skills and experiences Focus time and energy on important issues, not politics


Offer and accept apologies without hesitation Look forward to meetings and their opportunities to work as a group

Teams that fear conflict . . . Have boring meetings Create environments where back-channel politics and personal attacks thrive Ignore controversial topics that are critical to team success Fail to tap into all the opinions and perspectives of team members Waste time and energy with posturing and interpersonal risk management

Teams that engage in conflict . . . Have lively, interesting meetings Extract and exploit the ideas of all team members Solve real problems quickly Minimize politics Put critical topics on the table for discussion

A team that fails to commit . . . Creates ambiguity among the team about direction and priorities Watches windows and opportunities closly due to excessive analysis and unnecessary delay Breeds lack of confidence and fear of failure Revisits discussions and decisions again and again Encourages second-guessing among team members

A team that commits . . . Creates clarity around direction and priorities Aligns the entire team around common objectives Develops an ability to learn from mistakes Takes advantage of opportunities before competitors do Moves forward without hesitation Changes direction without hesitation or guilt

A team that avoids accountability . . . Creates resentment among team members who have different standards or performance Encourages mediocrity Misses deadlines and key deliverables Places an undue burden on the team leader as the sole source of discipline

A team that holds one another accountable . . . Ensures that poor performers feel pressure to improve Identifies potential problems quickly by questioning one another’s


approaches without hesitation Establishes respect among team members who are held to the same high standards Avoids excessive bureaucracy around performance management and corrective action

A team that is not focused on results . . . Stagnates/fails to grow Rarely defeats competitors Loses achievement-oriented employees Encourages team members to focus on their own careers and individual goals Is easily distracted

A team that focuses on collective results . . . Retains achievement-oriented employees Minimizes individualistic behavior Enjoys success and suffers failure acutely Benefits from individuals who subjugate their own goals/interests for the good of the team Avoids distractions

Another item that can lead to dysfunctional behavior among team members is when the project manager and team do not have the same shared values. According to Kouzes and Posner7:

Shared values are the foundations for building productive and genuine working relationships. Although credible leaders honor the diversity of their many constituencies, they also stress their common values. Leaders build on agreement. They don’t try to get everyone to be in accord on everything — this goal is unrealistic, perhaps even impossible. Moreover, to achieve it would negate the very advantages of diversity. But to take a first step, and then a second, and then a third, people must have some common core of understanding. After all, if there’s no agreement about values, then what exactly is the leader — and everyone else — going to model? If disagreements over fundamental values continue, the result is intense conflict, false expectations, and diminished capacity.

Kouzes and Posner also show, through their own research, that shared values can make a difference:

They foster strong feelings of personal effectiveness They promote high levels of company loyalty


They facilitate consensus about key organizational goals and stakeholders They encourage ethical behavior They promote strong norms about working hard and caring They reduce levels of job stress and tension They foster pride in the company They facilitate understanding about job expectations They foster teamwork and esprit de corps



Leadership can be defined as a style of behavior designed to integrate both the organizational requirements and one’s personal interests into the pursuit of some objective. All managers have some sort of leadership responsibility. If time permits, successful leadership techniques and practices can be developed.

Leadership is composed of several complex elements, the three most common being:

The person leading The people being led The situation (i.e., the project environment)

Project managers are often selected or not selected because of their leadership styles. The most common reason for not selecting an individual is his inability to balance the technical and managerial project functions. Wilemon and Cicero have defined four characteristics of this type of situation8:

The greater the project manager’s technical expertise, the higher his propensity to overinvolve himself in the technical details of the project. The greater the project manager’s difficulty in delegating technical task responsibilities, the more likely it is that he will overinvolve himself in the technical details of the project (depending on his ability to do so). The greater the project manager’s interest in the technical details of the project, the more likely it is that he will defend the project manager’s role as one of a technical specialist. The lower the project manager’s technical expertise, the more likely it is that he will overstress the nontechnical project functions (administrative functions).

There have been several surveys to determine what leadership techniques are best. The following are the results of a survey by Richard Hodgetts9:

Human relations–oriented leadership techniques “The project manager must make all the team members feel that their efforts are important and have a direct effect on the outcome of the program.” “The project manager must educate the team concerning what is to be


done and how important its role is.” “Provide credit to project participants.” “Project members must be given recognition and prestige of appointment.” “Make the team members feel and believe that they play a vital part in the success (or failure) of the team.” “By working extremely closely with my team I believe that one can win a project loyalty while to a large extent minimizing the frequency of authority-gap problems.” “I believe that a great motivation can be created just by knowing the people in a personal sense. I know many of the line people better than their own supervisor does. In addition, I try to make them understand that they are an indispensable part of the team.” “I would consider the most important technique in overcoming the authority-gap to be understanding as much as possible the needs of the individuals with whom you are dealing and over whom you have no direct authority.”

Formal authority–oriented leadership techniques “Point out how great the loss will be if cooperation is not forthcoming.” “Put all authority in functional statements.” “Apply pressure beginning with a tactful approach and minimum application warranted by the situation and then increasing it.” “Threaten to precipitate high-level intervention and do it if necessary.” “Convince the members that what is good for the company is good for them.” “Place authority on full-time assigned people in the operating division to get the necessity work done.” “Maintain control over expenditures.” “Utilize implicit threat of going to general management for resolution.” “It is most important that the team members recognize that the project manager has the charter to direct the project.”


5.10 LIFE-CYCLE LEADERSHIP In the opinion of the author, Hersey and Blanchard developed the best model for analyzing leadership in a project management environment. Over the years the model has been expanded by Paul Hersey and is shown in Figure 5–9 as the Situational Leadership® Model. The model contends that there are four basic leadership styles and that to use them most effectively entails matching the most appropriate leadership style to the readiness of the follower. Readiness is defined as job-related experience, willingness to accept job responsibility, and desire to achieve. It’s about not only doing a good job but also wanting to do a good job. Most importantly though is the concept that this is a situational model. This is critical because it means that the same person can be more ready to perform one task than they are to do another and that the style a leader uses will have to change accordingly to be the most effective and successful at influencing the desired behaviors in that person.

FIGURE 5–9. Expanded situational leadership model. Copyright © 2006. Reprinted with permission of the Center for Leadership Studies, Escondido, CA, All rights reserved.


PMBOK® Guide, 5th Edition 9.3 Develop Project Team

Referring to Figure 5–9, suppose that a subordinate was not performing a certain task and showed through his or her behavior every indication of not wanting to (R1). According to the model, the leadership style that has the highest probability of successfully and effectively getting that person to perform is one that involves high amounts of structured task behavior that could be generally described as directive in nature (S1). This would entail telling a subordinate who, what, when, where, and how to go about performing the particular task. It would also be appropriate in this style to acknowledge steps taken in the right direction as far as performance is concerned, but this type of relationship behavior must match the magnitude of the steps being taken or the subordinate may be left with the false impression that his or her current level of performance is in fact acceptable. Some


have gone so far as to equate this “telling” leadership style with the purely task- orientated behavior of an autocratic approach where the leader’s main concern is the accomplishment of objective, often with very little concern for the employees or their feelings. An autocratic leader by his or her nature is very forceful and relies heavily on his or her own abilities and judgment often at the expense of other people’s opinions. Note, however, in Figure 5–10 that the bell curve in the model does not go all the way to zero, indicating some relationship behavior present in this style that increases appropriately as the level of performance does.

FIGURE 5–10. A breakdown in communications. (Source unknown)

As shown in Figure 5–9, suppose that an employee was beginning to perform the task in question but wasn’t yet doing so at a sustained and acceptable level even though he or she really seemed to want to do a good job (R2). The leadership style with the highest probability of successfully and effectively influencing the desired behavior from this employee rests in quadrant S2. This employee needs everything from the leader. The employee needs structure to keep him or her on track and support not only to build the foundations of trust that help him or her continue to develop but also to give the big picture of how personal actions contribute to the success of the team. This is where the leader shares the “why” behind the behaviors in which he or she is asking the subordinate to engage.

At some point, one would hope that subordinates would begin performing the task in question at a sustained and acceptable level (R3). When this takes place, the follower is no longer in need of being told who, what, when, where and how to do the task but rather seeks autonomy and freedom as a reward for their good performance. They desire more of a collegial relationship with their superior that


reflects the fact that they have arrived, but they will also be insecure about completely letting go of the involvement from the leader that made them feel so secure in the past. For a leader, the appropriate style for this readiness level would be S3. It would entail engaging in relationship behavior that gets followes to admit from their own mouths that they are indeed performing at a sustained and acceptable level and that they don’t really need the leader to be so intricately involved in the process. For some this step occurs quickly, for others, they never make the leap. They must learn to have confidence in themselves and their abilities, and the leader’s job at this point is to help with that process through the use of relationship behaviors that avoid making those followers feel more insecure. This means that the followers must trust the leader, and they can earn that trust by doing things like taking calculated risks that not only allow the followers small wins but also allows them to learn from their mistakes without being beaten up for them. It’s a fine line the leader walks. They must be supportive without being an enabler.

Some leaders are blessed with followers who not only perform at a high and sustained level but are totally and rightfully confident about their ability to do so (R4). In such an instance, the appropriate leadership style rests in quadrant S4. It involves leadership behaviors such as monitoring and observing, which are characterized by low amounts of task and relationship-oriented behaviors. The leader is kept informed of both the good and bad in a timely manner from a person at this readiness level but is not the decision-maker. Responsibility lies with the subordinate who takes ownership of their actions and expects the leader to spend his or her energy obtaining resources for them and protecting or shielding them from other influences in the organization that could impede their performance.

Let’s see where some common leadership style descriptors fall within the model.

Democratic or Participative Leadership: This leadership style encourages workers to communicate with one another and get involved with decision- making either by himself or herself or with assistance of the project manager. A great deal of authority is delegated to the team members, and they are encouraged to take an active role in the management of the project. The leadership style is often found in quadrant S3 with some spill over as the manager becomes less involved in the process into quadrant S4. Laissez-Faire Leadership: With the leadership style, the project manger turns things over to the workers. This can feel like abandonment to the subordinates if they are not both performing at a high level and willing to do so. The project manager may make an occasional appearance with this style just to see how things are going, but for the main part there is no active involvement by the project manager. This leadership style is found in quadrant S4.


Autocratic Leadership: With this leadership style, the project manager focuses very heavily upon the task, with little concern for the workers. With autocratic leadership, all authority is in the hands of the project manager and the project manager has the final say in any and all decisions. This leadership style is found in quadrant S1.

This type of situational approach to leadership is extremely important to project managers because it implies that effective leadership must be both dynamic and flexible rather than static and rigid. Effective leaders recognize that when it comes to human behavior, there is no one best way that fits all circumstances. They need both task and relationship behavior to be able to be their most effective. Thankfully, it doesn’t have to be a perfect match to work. Sometimes close is good enough, and sometimes a project manager’s followers are willing to let them demonstrate a less than appropriate style because that manager has taken the time to earn their trust or perhaps even warned them of the necessity of going there when a crisis occurs. Just be wary of “living” in this mode because it may be the leader causing the crisis and the only fire needing to be put out could end up being the leader.

In pure project management, the situation is even more complex. It is not enough to have a different leadership style for each team member. Remember that any one person is more ready to do some tasks than others. For example, they may be really good at training others but detest and avoid report writing. That person’s leader will have to use a different style depending on which task they are asking their follower to perform. To illustrate this graphically, the quadrants in Figure 5–9 should be three-dimensional, with the third axis being the life cycle phase of the project. In other words, the leadership is dependent not only on the situation, but also on the life-cycle phase of the project.



The importance of value has had a significant impact on the leadership style of today’s project managers. Historically, project management leadership was perceived as the inevitable conflict between individual values and organizational values. Today, companies are looking for ways to get employees to align their personal values with the organization’s values. In doing so, companies have created cultures that support project management and many of the cultures are driven by a change in perceived values.

Several books have been written on this subject and the best one, in this author’s opinion, is Balancing Individual and Organizational Values by Ken Hultman and Bill Gellerman.10 Table 5–4, adapted from Hultman and Gellerman, shows how our concept of value has changed over the years.11 If you look closely at the items in Table 5–4, you can see that the changing values affect more than just individual versus organization values. Instead, it is more likely to be a conflict of four groups, namely the project manager, the project team, the parent organization, and the stakeholders. The needs of each group might be: TABLE 5–4. Changing Values

Moving Away From: Ineffective Values Moving Toward: Effective Values Mistrust Trust Job descriptions Competency models Power and authority Teamwork Internal focus Stakeholder focus Security Taking risks Conformity Innovation Predictability Flexibility Internal competition Internal collaboration Reactive management Proactive management Bureaucracy Boundaryless Traditional education Lifelong education Hierarchical leadership Multidirectional leadership Tactical thinking Strategic thinking Compliance Commitment


Meeting standards Continuous improvements

Project manager: Accomplishment of objectives Demonstration of creativity Demonstration of innovation

Team members: Achievement Advancement Ambition Credentials Recognition

Organization Continuous improvement Learning Quality Strategic focus Morality and ethics Profitability Recognition and image

Stakeholders Organizational stakeholders: job security Product/market stakeholders: quality performance and product usefulness Capital markets: financial growth

There are several reasons why the role of the project manager and the accompanying leadership style has changed. Some reasons are:

We are now managing our business as though it is a series of projects. Project management is now viewed as a full-time profession. Project managers are now viewed as both business managers and project managers and are expected to make decisions in both areas. The value of a project is measured more so in business terms rather than solely technical terms. Project management is now being applied to parts of the business that traditionally haven’t used project management.

This last bullet requires further comment. Project management works well for the “traditional” type of project, which includes:

The time duration is six to eighteen months. The assumptions are not expected to change over the duration of the project.


Technology is known and will not change over the duration of the project. People that start on the project will remain through to completion. The statement of work is reasonably well-defined.

Unfortunately, the newer types of projects are more nontraditional and have the following characteristics:

The time duration is several years. The assumptions can and will change over the duration of the project. Technology will change over the duration of the project. People that approved the project may not be there at completion. The statement of work is ill-defined and subject to numerous changes.

The nontraditional types of projects have made it clear why traditional project management must change. There are there areas that necessitate changes:

New projects have become: Highly complex and with greater acceptance of risks that may not be fully understood during project approval More uncertain in the outcomes of the projects and with no guarantee of value at the end Pressed for speed-to-market irrespective of the risks

The statement of work (SOW) is: Not always well-defined especially on long-term projects Based upon possibly flawed, irrational, or unrealistic assumptions Inconsiderate of unknown and rapidly changing economic and environmental conditions Based upon a stationary rather than moving target for final value

The management cost and control systems [enterprise project management methodologies (EPM)] focus on:

An ideal situation (as in the PMBOK® Guide) Theories rather than the understanding of the workflow Inflexible processes Periodically reporting time at completion and cost at completion but not value (or benefits) at completion Project continuation rather than canceling projects with limited or no value

Over the years, we have taken several small steps to plan for the use of project management on nontraditional projects. This included:

Project managers are provided with more business knowledge and are


allowed to provide an input during the project selection process. Because of the above item, project managers are brought on board the project at the beginning of the initiation phase rather than the end of the initiation phase. Projects managers now seem to have more of an understanding of technology rather than a command of technology.


5.12 ORGANIZATIONAL IMPACT In most companies, whether or not project-oriented, the impact of management emphasis on the organization is well known. In the project environment there also exists a definite impact due to leadership emphasis. The leadership emphasis is best seen by employee contributions, organizational order, employee performance, and the project manager’s performance:

Contributions from People A good project manager encourages active cooperation and responsible participation. The result is that both good and bad information is contributed freely. A poor project manager maintains an atmosphere of passive resistance with only responsive participation. This results in information being withheld.

Organizational Order A good project manager develops policy and encourages acceptance. A low price is paid for contributions. A poor project manager goes beyond policies and attempts to develop procedures and measurements. A high price is normally paid for contributions.

Employee Performance A good project manager keeps people informed and satisfied (if possible) by aligning motives with objectives. Positive thinking and cooperation are encouraged. A good project manager is willing to give more responsibility to those willing to accept it. A poor project manager keeps people uninformed, frustrated, defensive, and negative. Motives are aligned with incentives rather than objectives. The poor project manager develops a “stay out of trouble” atmosphere.

Performance of the Project Manager A good project manager assumes that employee misunderstandings can and will occur, and therefore blames himself. A good project manager constantly attempts to improve and be more communicative. He relies heavily on moral persuasion. A poor project manager assumes that employees are unwilling to cooperate and therefore blames subordinates. The poor project manager demands more through authoritarian attitudes and relies heavily on material incentives.

Management emphasis also impacts the organization. The following four


categories show this management emphasis resulting for both good and poor project management:

Management Problem-Solving A good project manager performs his own problem-solving at the level for which he is responsible through delegation of problem-solving responsibilities. A poor project manager will do subordinate problem-solving in known areas. For areas that he does not know, he requires that his approval be given prior to idea implementation.

Organizational Order A good project manager develops, maintains, and uses a single integrated management system in which authority and responsibility are delegated to the subordinates. In addition, he knows that occasional slippages and overruns will occur, and simply tries to minimize their effect. A poor project manager delegates as little authority and responsibility as possible, and runs the risk of continual slippages and overruns. A poor project manager maintains two management information systems: one informal system for himself and one formal (eyewash) system simply to impress his superiors.

Performance of People A good project manager finds that subordinates willingly accept responsibility, are decisive in attitude toward the project, and are satisfied. A poor project manager finds that his subordinates are reluctant to accept responsibility, are indecisive in their actions, and seem frustrated.

Performance of the Project Manager A good project manager assumes that his key people can “run the show.” He exhibits confidence in those individuals working in areas in which he has no expertise, and exhibits patience with people working in areas where he has a familiarity. A good project manager is never too busy to help his people solve personal or professional problems. A poor project manager considers himself indispensable, is overcautious with work performed in unfamiliar areas, and becomes overly interested in work he knows. A poor project manager is always tied up in meetings.



The two major problem areas in the project environment are the “who has what authority and responsibility” question, and the resulting conflicts associated with the individual at the project–functional interface. Almost all project problems in some way or another involve these two major areas. Other problem areas found in the project environment include:

The pyramidal structure Superior–subordinate relationships Departmentalization Scalar chain of command Organizational chain of command Power and authority Planning goals and objectives Decision-making Reward and punishment Span of control

The two most common employee problems involve the assignment and resulting evaluation processes. Personnel assignments were discussed in Chapter 4. In summary:

People should be assigned to tasks commensurate with their skills. Whenever possible, the same person should be assigned to related tasks. The most critical tasks should be assigned to the most responsible people.

The evaluation process in a project environment is difficult for an employee at the functional–project interface, especially if hostilities develop between the functional and project managers. In this situation, the interfacing employee almost always suffers owing to a poor rating by either the project manager or his supervisor. Unless the employee continually keeps his superior abreast of his performance and achievements, the supervisor must rely solely on the input (often flawed) received from project office personnel.

Three additional questions must be answered with regard to employee evaluation:

Of what value are job descriptions? How do we maintain wage and salary grades?


Who provides training and development, especially under conditions where variable manloading can exist?

If each project is, in fact, different from all others, then it becomes an almost impossible task to develop accurate job descriptions. In many cases, wage and salary grades are functions of a unit manning document that specifies the number, type, and grade of all employees required on a given project. Although this might be a necessity in order to control costs, it also is difficult to achieve because variable manloading changes project priorities. Variable manloading creates several difficulties for project managers, especially if new employees are included. Project managers like to have seasoned veterans assigned to their activities because there generally does not exist sufficient time for proper and close supervision of the training and development of new employees. Functional managers, however, contend that the training has to be accomplished on someone’s project, and sooner or later all project managers must come to this realization.

On the manager level, the two most common problems involve personal values and conflicts. Personal values are often attributed to the “changing of the guard.” New managers have a different sense of values from that of the older, more experienced managers. Miner identifies some of these personal values attributed to new managers12:

Less trust, especially of people in positions of authority. Increased feelings of being controlled by external forces and events, and thus belief that they cannot control their own destinies. This is a kind of change that makes for less initiation of one’s own activities and a greater likelihood of responding in terms of external pressures. There is a sense of powerlessness, although not necessarily a decreased desire for power. Less authoritarian and more negative attitudes toward persons holding positions of power. More independence, often to the point of rebelliousness and defiance. More freedom, less control in expressing feelings, impulses, and emotions. Greater inclination to live in the present and to let the future take care of itself. More self-indulgence. Moral values that are relative to the situation, less absolute, and less tied to formal religion. A strong and increasing identification with their peer and age groups, with the youth culture. Greater social concern and greater desire to help the less fortunate. More negative attitude toward business, the management role in particular. A professional position is clearly preferred to managing.


A desire to contribute less to an employing organization and to receive more from the organization.

Previously, we defined one of the attributes of a project manager as liking risks. Unfortunately, the amount of risk that today’s managers are willing to accept varies not only with their personal values but also with the impact of current economic conditions and top management philosophies. If top management views a specific project as vital for the growth of the company, then the project manager may be directed to assume virtually no risks during the execution of the project. In this case the project manager may attempt to pass all responsibility to higher or lower management claiming that “his hands are tied.” Wilemon and Cicero identify problems with risk identification13:

The project manager’s anxiety over project risk varies in relation to his willingness to accept final responsibility for the technical success of his project. Some project managers may be willing to accept full responsibility for the success or failure of their projects. Others, by contrast, may be more willing to share responsibility and risk with their superiors. The greater the length of stay in project management, the greater the tendency for project managers to remain in administrative positions within an organization. The degree of anxiety over professional obsolescence varies with the length of time the project manager spends in project management positions.

The amount of risk that managers will accept also varies with age and experience. Older, more experienced managers tend to take few risks, whereas the younger, more aggressive managers may adopt a risk-lover policy in hopes of achieving a name for themselves.

Conflicts exist at the project–functional interface regardless of how hard we attempt to structure the work. According to Cleland and King, this interface can be defined by the following relationships14:

Project Manager What is to be done? When will the task be done? Why will the task be done? How much money is available to do the task? How well has the total project been done?

Functional Manager Who will do the task?


Where will the task be done? How will the task be done? How well has the functional input been integrated into the project?

The result of these differing views is inevitable conflict between the functional and project manager, as described by William Killian15:

The conflicts revolve about items such as project priority, manpower costs, and the assignment of functional personnel to the project manager. Each project manager will, of course, want the best functional operators assigned to his project. In addition to these problems, the accountability for profit and loss is much more difficult in a matrix organization than in a project organization. Project managers have a tendency to blame overruns on functional managers, stating that the cost of the function was excessive. Whereas functional managers have a tendency to blame excessive costs on project managers with the argument that there were too many changes, more work required than defined initially, and other such arguments.

Major conflicts can also arise during problem resolution sessions because the time constraints imposed on the project often prevent both parties from taking a logical approach. One of the major causes of prolonged problem-solving is a lack of pertinent information. The following information should be reported by the project manager16:

The problem The cause The expected impact on schedule, budget, profit, or other pertinent area The action taken or recommended and the results expected of that action What top management can do to help


5.14 MANAGEMENT PITFALLS The project environment offers numerous opportunities for project managers and team members to get into trouble. Common types of management pitfalls are:

Lack of self-control (knowing oneself) Activity traps Managing versus doing People versus task skills Ineffective communications Time management Management bottlenecks

Knowing oneself, especially one’s capabilities, strengths, and weaknesses, is the first step toward successful project management. Too often, managers will assume that they are jacks-of-all-trades, will “bite off more than they can chew,” and then find that insufficient time exists for training additional personnel.

The following lines illustrate self-concept:

Four Men It chanced upon a winter’s night

Safe sheltered from the weather.

The board was spread for only one,

Yet four men dined together.

There sat the man I meant to be

In glory, spurred and booted.

And close beside him, to the right

The man I am reputed.

The man I think myself to be

His seat was occupying

Hard by the man I really am

To hold his own was trying.

And all beneath one roof we met

Yet none called his fellow brother


No sign of recognition passed

They knew not one another.

Author unknown Activity traps result when the means become the end, rather than the means to

achieve the end. The most common activity traps are team meetings, customer– technical interchange meetings, and the development of special schedules and charts that cannot be used for customer reporting but are used to inform upper-level management of project status. Sign-off documents are another activity trap and managers must evaluate whether all this paperwork is worth the effort.

We previously defined a characteristic of poor leadership as the inability to obtain a balance between management functions and technical functions. This can easily develop into an activity trap where the individual becomes a doer rather than a manager. Unfortunately, there often exists a very fine line between managing and doing. As an example, consider a project manager who was asked by one of his technical people to make a telephone call to assist him in solving a problem. Simply making the phone call is doing work that should be done by the project team members or even the functional manager. However, if the person being called requires that someone in absolute authority be included in the conversation, then this can be considered managing instead of doing.

There are several other cases where one must become a doer in order to be an effective manager and command the loyalty and respect of subordinates. Assume a special situation where you must schedule subordinates to work overtime on holidays or weekends. By showing up at the plant during these times, just to make a brief appearance, you can create a better working atmosphere and understanding with the subordinates.

Another major pitfall is the decision to utilize either people skills or task skills. Is it better to utilize subordinates with whom you can obtain a good working relationship or to employ highly skilled people simply to get the job done? Obviously, the project manager would like nothing better than to have the best of both worlds, but this is not always possible. Consider the following situations:

There is a task that will take three weeks to complete. John has worked for you before, but not on such a task as this. John, however, understands how to work with you. Paul is very competent but likes to work alone. He can get the job done within constraints. Should you employ people or task skills? (Would your answer change if the task were three months instead of three weeks?) There exist three tasks, each one requiring two months of work. Richard has the necessary people skills to handle all three tasks, but he will not be able to


do so as efficiently as a technical specialist. The alternate choice is to utilize three technical specialists.

Based on the amount of information given, the author prefers task skills so as not to hinder the time or performance constraints on the project. Generally speaking, for long-duration projects that require constant communications with the customer, it might be better to have permanently assigned employees who can perform a variety of tasks. Customers dislike seeing a steady stream of new faces.

It is often said that a good project manager must be willing to work sixty to eighty hours a week to get the job done. This might be true if he is continually fighting fires or if budgeting constraints prevent employing additional staff. The major reason, however, is the result of ineffective time management. Prime examples might include the continuous flow of paperwork, unnecessary meetings, unnecessary phone calls, and acting as a tour guide for visitors.

To be effective, the project manager must establish time management rules and then ask himself four questions:

What am I doing that I don’t have to be doing at all? What am I doing that can be done better by someone else? What am I doing that could be done sufficiently well by someone else? Am I establishing the right priorities for my activities?

Rules for time management Conduct a time analysis (time log) Plan solid blocks for important things Classify your activities Establish priorities Establish opportunity cost on activities Train your system (boss, subordinate, peers) Practice delegation Practice calculated neglect Practice management by exception Focus on opportunities—not on problems


5.15 COMMUNICATIONS Effective project communications ensure that we get the right information to the right person at the right time and in a cost-effective manner. Proper communication is vital to the success of a project. Typical definitions of effective communication include:

PMBOK® Guide, 5th Edition Chapter 10 Project Communications Management

An exchange of information An act or instance of transmitting information A verbal or written message A technique for expressing ideas effectively A process by which meanings are exchanged between individuals through a common system of symbols

The communications environment can be regarded as a network of channels. Most channels are two-way channels. The number of two-way channels, N, can be calculated from the formula

In this formula, X represents the number of people communicating with each other. For example, if four people are communicating (i.e., X = 4), then there are six two- way channels.

When a breakdown in communications occurs, disaster follows, as Figure 5–10 demonstrates.

Figures 5–11 and 5–12 show typical communications patterns. Some people consider Figure 5–11 “politically incorrect” because project managers should not be identified as talking “down” to people. Most project managers communicate laterally, whereas line managers communicate vertically downward to subordinates. Figure 5–13 shows the complete communication model. The screens or barriers are from one’s perception, personality, attitudes, emotions, and prejudices.

FIGURE 5–11. Communication channels.


Source: D. I. Cleland and H. Kerzner, Engineering Team Management (Melbourne, Florida: Krieger, 1986), p. 39.

FIGURE 5–12. Customer communications.

Source: D. I. Cleland and H. Kerzner, Engineering Team Management (Melbourne, Florida: Krieger, 1986), p. 64.

FIGURE 5–13. Total communication process.

Source: D. I. Cleland and H. Kerzner, Engineering Team Management (Melbourne, Florida: Krieger, 1986), p. 46.


PMBOK® Guide, 5th Edition Figure 10–4 Basic Communication Model

Perception barriers occur because individuals can view the same message in different ways. Factors influencing perception include the individual’s level of education and region of experience. Perception problems can be minimized by using words that have precise meaning. Personality and interests, such as the likes and dislikes of individuals, affect communications. People tend to listen carefully to topics of interest but turn a deaf ear to unfamiliar or boring topics. Attitudes, emotions, and prejudices warp our sense of interpretation. Individuals who are fearful or have strong love or hate emotions will tend to protect themselves by distorting the communication process. Strong emotions rob individuals of their ability to comprehend.

Typical barriers that affect the encoding process include:

Communication goals Communication skills

PMBOK® Guide, 5th Edition 10.2 Plan Communications Management


PMBOK® Guide, 5th Edition 10.2 Plan Communication Management

Frame of reference Sender credibility

PMBOK® Guide, 5th Edition 10.1.3 Communications Management Plan

Needs Personality and interests Interpersonal sensitivity

PMBOK® Guide, 5th Edition Figure 10–4 Basic Communication Model

Attitude, emotion, and self-interest Position and status Assumptions (about receivers) Existing relationships with receivers

Typical barriers that affect the decoding process include:

Evaluative tendency Preconceived ideas Communication skills Frame of reference Needs Personality and interest Attitudes, emotion, and self-interest Position and status Assumptions about sender Existing relationship with sender


Lack of responsive feedback Selective listening

The receiving of information can be affected by the way the information is received. The most common ways include:

Hearing activity Reading skills Visual activity Tactile sensitivity Olfactory sensitivity Extrasensory perception

The communications environment is controlled by both the internal and external forces, which can act either individually or collectively. These forces can either assist or restrict the attainment of project objectives.

Typical internal factors include:

Power games Withholding information Management by memo Reactive emotional behavior Mixed messages Indirect communications Stereotyping Transmitting partial information Blocking or selective perception

Typical external factors include:

The business environment The political environment The economic climate Regulatory agencies The technical state-of-the-art

The communications environment is also affected by:

Logistics/geographic separation Personal contact requirements Group meetings Telephone Correspondence (frequency and quantity)


Electronic mail

Noise tends to distort or destroy the information within the message. Noise results from our own personality screens, which dictate the way we present the message, and perception screens, which may cause us to “perceive” what we thought was said. Noise therefore can cause ambiguity:

Ambiguity causes us to hear what we want to hear. Ambiguity causes us to hear what the group wants. Ambiguity causes us to relate to past experiences without being discriminatory.

In a project environment, a project manager may very well spend 90 percent or more of his or her time communicating. Typical functional applications include:

Providing project direction Decision-making Authorizing work Directing activities Negotiating Reporting (including briefings)

Attending meetings Overall project management Marketing and selling Public relations Records management

Minutes Memos/letters/newsletters Reports Specifications Contract documents

Project managers are required to provide briefings for both internal and external customers. Visual aids can greatly enhance a presentation. Their advantages include:

PMBOK® Guide, 5th Edition 10.2 Manage Communications

Enlivening a presentation, which helps to capture and hold the interest of an


audience. Adding a visual dimension to an auditory one, which permits an audience to perceive a message through two separate senses, thereby strengthening the learning process. Spelling out unfamiliar words by presenting pictures, diagrams, or objects, and by portraying relations graphically, which helps in introducing material that is difficult or new. Remaining in view much longer than oral statements can hang in the air, which can serve the same purpose as repetition in acquainting an audience with the unfamiliar and bringing back listeners who stray from the presentation.

Meetings can be classified according to their frequency of occurrence:

The daily meeting where people work together on the same project with a common objective and reach decisions informally by general agreement. The weekly or monthly meeting where members work on different but parallel projects and where there is a certain competitive element and greater likelihood that the chairman will make the final decision himself or herself. The irregular, occasional, or special-project meeting, composed of people whose normal work does not bring them into contact and whose work has little or no relationship to that of the others. They are united only by the project the meeting exists to promote and motivated by the desire that the project succeed. Though actual voting is uncommon, every member effectively has a veto.

There are three types of written media used in organizations:

Individually oriented media: These include letters, memos, and reports. Legally oriented media: These include contracts, agreements, proposals, policies, directives, guidelines, and procedures.

PMBOK® Guide, 5th Edition 10.2 Manage Communications

Organizationally oriented media: These include manuals, forms, and brochures.

Because of the time spent in a communications mode, the project manager may very well have as his or her responsibility the process of communications management. Communications management is the formal or informal process of


conducting or supervising the exchange of information either upward, downward, laterally or diagonally. There appears to be a direct correlation between the project manager’s ability to manage the communications process and project performance.

The communications process is more than simply conveying a message; it is also a source for control. Proper communications let the employees in on the act because employees need to know and understand. Communication must convey both information and motivation. The problem, therefore, is how to communicate. Below are six simple steps:

Think through what you wish to accomplish. Determine the way you will communicate. Appeal to the interest of those affected. Give playback on ways others communicate to you. Get playback on what you communicate. Test effectiveness through reliance on others to carry out your instructions.

Knowing how to communicate does not guarantee that a clear message will be generated. There are techniques that can be used to improve communications. These techniques include:

Obtaining feedback, possibly in more than one form Establishing multiple communications channels Using face-to-face communications if possible Determining how sensitive the receiver is to your communications Being aware of symbolic meaning such as expressions on people’s faces Communicating at the proper time Reinforcing words with actions Using a simple language Using redundancy (i.e., saying it two different ways) whenever possible

With every effort to communicate there are always barriers. The barriers include:

Receiver hearing what he wants to hear. This results from people doing the same job so long that they no longer listen. Sender and receiver having different perceptions. This is vitally important in interpreting contractual requirements, statements of work, and proposal information requests. Receiver evaluating the source before accepting the communications. Receiver ignoring conflicting information and doing as he pleases. Words meaning different things to different people. Communicators ignoring nonverbal cues. Receiver being emotionally upset.


The scalar chain of command can also become a barrier with regard to in-house communications. The project manager must have the authority to go to the general manager or counterpart to communicate effectively. Otherwise, filters can develop and distort the final message.

Three important conclusions can be drawn about communications techniques and barriers:

Don’t ssume that the message you sent will be received in the form you sent it.

PMBOK® Guide, 5th Edition Chapter 10 Communications Management

The swiftest and most effective communications take place among people with common points of view. The manager who fosters good relationships with his associates will have little difficulty in communicating with them. Communications must be established early in the project.

In a project environment, communications are often filtered. There are several reasons for the filtering of upward communications:

Unpleasantness for the sender Receiver cannot obtain information from any other source To embarrass a superior Lack of mobility or status for the sender Insecurity Mistrust

Communication is also listening. Good project managers must be willing to listen to their employees, both professionally and personally. The advantages of listening properly are that:

Subordinates know you are sincerely interested You obtain feedback Employee acceptance is fostered.

The successful manager must be willing to listen to an individual’s story from beginning to end, without interruptions, and to see the problem through the eyes of the subordinate. Finally, before making a decision, the manager should ask the subordinate for his solutions to the problem.

Project managers should ask themselves four questions:


Do I make it easy for employees to talk to me? Am I sympathetic to their problems? Do I attempt to improve human relations? Do I make an extra effort to remember names and faces?

The project manager’s communication skills and personality screen often dictates the communication style. Typical communication styles include:

PMBOK® Guide, 5th Edition Chapter 10 Communications Management

Authoritarian: gives expectations and specific guidance Promotional: cultivates team spirit Facilitating: gives guidance as required, noninterfering Conciliatory: friendly and agreeable, builds compatible team Judicial: uses sound judgment Ethical: honest, fair, by the book Secretive: not open or outgoing (to project detriment) Disruptive: breaks apart unity of group, agitator Intimidating: “tough guy,” can lower morale Combative: eager to fight or be disagreeable

Team meetings are often used to exchange valuable and necessary information. The following are general guides for conducting more effective meetings:

PMBOK® Guide, 5th Edition Chapter 10 Information Management Systems

Start on time. If you wait for people, you reward tardy behavior. Develop agenda “objectives.” Generate a list and proceed; avoid getting hung up on the order of topics. Conduct one piece of business at a time. Allow each member to contribute in his own way. Support, challenge, and counter; view differences as helpful; dig for reasons or views.


Silence does not always mean agreement. Seek opinions: “What’s your opinion on this, Peggy?” Be ready to confront the verbal member: “Okay, we’ve heard from Mike on this matter; now how about some other views?” Test for readiness to make a decision. Make the decision. Test for commitment to the decision. Assign roles and responsibilities (only after decision-making). Agree on follow-up or accountability dates. Indicate the next step for this group. Set the time and place for the next meeting. End on time. Ask yourself if the meeting was necessary.

Many times, company policies and procedures can be established for the development of communications channels. Table 5–5 illustrates such communications guidelines. TABLE 5–5. COMMUNICATIONS POLICY

Program Manager Functional Manager Relationship The program manager utilizes existing authorized communications media to the maximum extent rather than create new ones.

Communications up, down, and laterally are essential elements to the success of programs in a multiprogram organization, and to the morale and motivation of supporting functional organizations. In principle, communication from the program manager should be channeled through the program team member to functional managers.

Approves program plans, subdivided work description,

Assures his organization’s compliance with all such program direction received.

Program definition must be within the scope of the contract as


and/or work authorizations, and schedules defining specific program requirements.

expressed in the program plan and work breakdown structure.

Signs correspondence that provides program direction to functional organizations. Signs correspondence addressed to the customer that pertains to the program except that which has been expressly assigned by the general manager, the function organizations, or higher management in accordance with division policy.

Assures his organization’s compliance with all such program direction received. Functional manager provides the program manager with copies of all “Program” correspondence released by his organization that may affect program performance. Ensures that the program manager is aware of correspondence with unusual content, on an exception basis, through the cognizant program team member or directly if such action is warranted by the gravity of the situation.

In the program manager’s absence, the signature authority is transferred upward to his reporting superior unless an acting program manager has been designated. Signature authority for correspondence will be consistent with established division policy.

Reports program results and accomplishments to the customer and to the general manager, keeping them informed of significant problems and events.

Participates in program reviews, being aware of and prepared in matters related to his functional specialty. Keeps his line or staff management and cognizant program team member informed of significant problems and events relating to any program in which his personnel are involved.

Status reporting is the responsibility of functional specialists. The program manager utilizes the specialist organizations. The specialists retain their own channels to the general manager but must keep the program manager informed.



Project review meetings are necessary to show that progress is being made on a project. There are three types of review meetings:

Project team review meetings Executive management review meetings Customer project review meetings

Most projects have weekly, bimonthly, or monthly meetings in order to keep the project manager and his team informed about the project’s status. These meetings are flexible and should be called only if they will benefit the team.

Executive management has the right to require monthly status review meetings. However, if the project manager believes that other meeting dates are better (because they occur at a point where progress can be identified), then he should request them.

Customer review meetings are often the most critical and most inflexibly scheduled. Project managers must allow time to prepare handouts and literature well in advance of the meeting.



Poor communications can easily produce communications bottlenecks. The most common bottleneck occurs when all communications between the customer and the parent organization must flow through the project office. Requiring that all information pass through the project office may be necessary but slows reaction times. Regardless of the qualifications of the project office members, the client always fears that the information he receives will be “filtered” prior to disclosure.

Customers not only like firsthand information, but also prefer that their technical specialists be able to communicate directly with the parent organization’s technical specialists. Many project managers dislike this arrangement, for they fear that the technical specialists may say or do something contrary to project strategy or thinking. These fears can be allayed by telling the customer that this situation will be permitted if, and only if, the customer realizes that the remarks made by the technical specialists do not, in any way, shape, or form, reflect the position of the project office or company.

For long-duration projects the customer may require that the contractor have an established customer representative office in the contractor’s facilities. The idea behind this is sound in that all information to the customer must flow through the customer’s project office at the contractor’s facility. This creates a problem in that it attempts to sever direct communications channels between the customer and contractor project managers. The result is the establishment of a local project office to satisfy contractual requirements, while actual communications go from customer to contractor as though the local project office did not exist. This creates an antagonistic local customer project office.

Another bottleneck occurs when the customer’s project manager considers himself to be in a higher position than the contractor’s project manager and, therefore, seeks some higher authority with which to communicate. Project managers who seek status can often jeopardize the success of the project by creating rigid communications channels.

Figure 5–14 identifies why communications bottlenecks such as these occur. There almost always exist a minimum of two paths for communications flow to and from the customer, which can cause confusion.

FIGURE 5–14. Information flow pattern from contractor program office.



5.18 CROSS-CUTTING SKILLS Whenever we discuss leadership and motivation, everyone seems to understand that these skills are needed in every life-cycle phase of a project and every domain area of the PMBOK® Guide. Skills that are needed throughout the project are referred to as cross-cutting skills. Some skills are used throughout every life-cycle phase or domain area whereas others may be used sporadically. Typical cross-cutting skills include:

Active listening Brainstorming ideas Communication Conflict resolution Cultural sensitivity Data-gathering techniques Facilitation techniques Information management including knowledge repositories Leadership Motivation techniques Negotiating Presentation skills Prioritization techniques Problem solving Relationship management Stakeholder identification and impact analysis

Several of these skills have been discussed previously in this chapter. Most of the other cross-cutting skills will be discussed in later sections of this chapter and other chapters.


5.19 ACTIVE LISTENING Part of good communication skills is effective or active listening. Improper listening can result in miscommunication, numerous and costly mistakes, having to repeat work, schedule delays, and the creation of a poor working environment. The result of poor listening is often more team meetings than originally thought and an abundance of action items. This can happen in any of the domain areas of the PMBOK® Guide.

According to Wikipedia, the free encyclopedia: Active listening is a communication technique that requires the listener to understand, interpret, and evaluate what (s)he hears. The ability to listen actively can improve personal relationships through reducing conflicts, strengthening cooperation, and fostering understanding.

When interacting, people often are not listening attentively. They may be distracted, thinking about other things, or thinking about what they are going to say next (the latter case is particularly true in conflict situations or disagreements). Active listening is a structured way of listening and responding to others, focusing attention on the speaker. Suspending one’s own frame of reference, suspending judgment and avoiding other internal mental activities are important to fully attend to the speaker.

Active listening involves more than just listening to the words that the speaker says. It also involves reading body language. Sometimes, the person’s body language provides the listener with a much more accurate understanding of the intent of the message.

All elements of communication, including active listening, may be affected by barriers that can impede the flow of conversation. Such barriers include distractions, trigger words, poor choice of vocabulary, and limited attention span. Listening barriers may be psychological (e.g., emotions) or physical (e.g., noise and visual distraction). Cultural differences, including speakers’ accents, vocabulary, and misunderstandings due to cultural assumptions, often obstruct the listening process. Frequently, the listener’s personal interpretations, attitudes, biases, and prejudices lead to ineffective communication.

Although we often talk about the listener when we discuss active listening barriers, it should be noted that sometimes the barriers to active listening are created by the speaker. This can occur when the speaker continuously changes subjects, uses words and expressions that confuse the listener, distracts the listener with improper or unnecessary body language, and neglects to solicit feedback as to


whether the listener truly understood the message.

Typical active listening barriers created by the speaker include: Creating a communications environment where excessive note-taking is required such that the listener never gets to digest the material or see the body language Allowing constant interruptions to take place which can lead to conflicts and arguments or allowing the interruptions to get the actual subject of the communications way off track Allowing people to cut you off, change subjects, and/or defend their positions Allowing for competitive interruptions Speaking in an environment where there may be excessive noise or distractions Talking without pauses or talking too fast Neglecting to paraphrase or summarize critical points Failing to solicit feedback by asking the right questions Answering questions with responses that are slightly off

Typical active listening barriers created by the listener include:

Looking at distractions rather than focusing on the speaker Letting your mind wander and looking off in the distance rather than staying focused Failing to ask for clarification of information that you do not understand Multitasking; doing some task, such as reading, while the speaker is presenting his or her message Not trying to see the information through the eyes of the speaker Allowing your emotions to cloud your thinking and listening Being anxious for your turn to speak Being anxious for the meeting to be over

Active listening barriers can be overcome. According to Wikipedia, the free encyclopedia: To use the active listening technique to improve interpersonal communication, one puts personal emotions aside during the conversation, asks questions and paraphrases back to the speaker to clarify understanding, and one also tries to overcome all types of environment distractions. Don’t judge or argue prematurely. Furthermore, the listener considers the speaker’s background, both cultural and personal, to benefit as much as possible from the communication process. Eye contact and appropriate body languages are also helpful. It is important to focus on what the speaker is saying; at times you might come across certain key words which will certainly help you understand the speaker. The stress


and intonation will also keep you active and away from distractions. Taking notes on the message will aid in retention.

Some techniques for active listening effectiveness might include:

Always face the speaker. Maintain eye contact. Look at the speaker’s body language. Minimize distractions, whether internal or external. Focus on what the speaker is saying without evaluating the message or defending your position. Keep an open mind on what is being discussed and try to empathize with the speaker even if you disagree. Do not interrupt the speaker even though you have a different position.



When we have problems and make decisions in our personal lives, we usually adopt a “let’s live with it” attitude. If the decision is wrong, we may try to change the decision. But in a project environment, changing a decision is more complicated and there may be a significant cost associated with the change. Some project decisions are irreversible. But there’s one thing we know for sure in a business environment; anybody that always makes the right decision probably isn’t making enough decisions. Expecting to always make the right decision is wishful thinking.

Problem-solving and decision-making go hand in hand. Problem-solving involves understanding the problem, gathering the facts, and developing alternatives. Decisions are made when we select the appropriate alternative. There is a strong argument that decision-making is also needed and used as part of identifying the problem and developing alternatives.

Today, there seems to be an abundance of information available to everyone. We all seem to suffer from information overload thanks to advances in information system technologies. Our main problem is being able to discern what information is critical to understand the problem. For simplicity’s sake, information can be broken down into primary and secondary information. Primary information is information that is readily available to us. This is information that we can directly access from our desktop or laptop. Information that is company sensitive or considered as proprietary information may be password protected but still accessible. Secondary information is information that must be collected from someone else.

Even with information overload, project managers generally do not have all of the information they need to solve a problem and make a timely decision. This is largely due to the complexity of our projects as well as the complexity of the problems that need to be resolved. We generally rely upon a problem-solving team to provide us with the secondary information. The secondary information is often more critical for decision-making than the primary information. Many times the secondary information is controlled by the subject matter experts, and they must tell us what information is directly pertinent to this problem.

Constraints play havoc with both the problem-solving and the decision-making processes. The time constraint probably has the greatest impact on decision- making. Time is not a luxury. The decision may have to be made even though the project manager has only partial information and may not fully comprehend the problem. Making decisions with complete information is usually not a luxury that


the project team will possess. And to make matters worse, we often have little knowledge on what the impact of the decisions will be.

To understand problem-solving, we must first understand what is meant by a problem. A problem is a deviation between an actual and desired situation. It is an obstacle, impediment, difficulty or challenge, or any situation that invites resolution, the resolution of which is recognized as a solution or contribution toward a known purpose or goal. The problem could be to add something that is currently absent but desired, to remove something that is potentially bad, or to correct something that is not performing as expected. Therefore, problems can be formulated in a positive or negative manner. Problems are formulated in a positive manner if the problem is to determine how to take advantage of an opportunity.

We tend to identify alternatives as being good or bad choices. If the decision- maker has all of the alternatives labeled as good or bad, then the job of the decision-maker or project manager would be easy. Unfortunately, a problem implies that there exists doubt or uncertainty or else a problem would not exist. This uncertainty can happen on all projects and therefore makes it difficult to classify all alternatives as only good or bad.

Problems imply that some alternatives exist. Problems that have no alternatives are called open problems. Not all problems can be solved or should be solved. There are projects that may need to be created to solve problems that require compliance to government regulations. For these projects, which are almost always very costly, all of the alternatives are often considered as poor choices. When forced to comply, we select the best of the worst. But more often than not, we leave them as open problems until the very last minute hoping the problem will be forgotten or disappear.

Companies encourage all project team members to bring forth all problems quickly. The quicker the problem is exposed, the more time is available for finding a solution, the more alternatives are usually available, and the greater the number of resources that can assist in the solution. Unfortunately, some people simply may not want to identify the problem with the hope that they can resolve it by themselves before anyone finds out about it. This is true for people that may have been involved in creating the problem. Reasons for this include:

Damage to one’s reputation and image Damage to one’s career Loss of employment Ability to solve the problem using their own ideas rather than the ideas of others Dislike asking for help from others


Distrust of the solution that others might choose Fear of antagonism from colleagues and team members Preference to working alone rather than in a team

In such cases, people try to solve the problem by themselves, in secret, before anyone finds out about the problem. In reality, the problem is often hard to hide. Sometimes the entire problem-solving team is in collusion in hiding the problem. Unfortunately, problem-solving sessions clearly identify that a problem exists and this alone could make it difficult to hide a problem. It is easier for one person to try to solve a problem secretly than an entire team. There are several reasons for the team wanting the problem to be resolved quietly:

The client and/or the stakeholders may overreact to the problem and dictate the solution. The client and/or stakeholders may overreact to the problem and remove financial support. The client may cancel the project. Problem resolution requires the discussion of proprietary or classified information. Open identification of the problem may cause people to be fired. Open identification of the problem may cause damage to your company’s image and reputation. Open identification of the problem can result in potential lawsuits. The cause of the problem is unknown. The problem can be resolved quickly without any impact on the competing constraints and the deliverables.

There are numerous techniques available for data-gathering. The selection of the technique is based upon the information being sought out, the timing of the information, who will provide the information, the criticality of the information, and the type of decisions that the information must support. Each technique comes with strengths and weaknesses. Some data-gathering techniques can be done quickly. Table 5–6 illustrates some of the most commonly used techniques.17 For the most part, data-gathering techniques are time-consuming. Using just one technique may not suffice. It may be necessary to use several techniques in order to capture all of the required data. TABLE 5–6. Strengths and Risks of Various Techniques

Method Strenth Risks Root-cause analysis

Looks for root cause rather than just symptoms

Highly systematic Iterative process


Designed to prevent recurrence of the problem Provides in-depth analysis of the problem

Very time-consuming

Facilitated group sessions

Excellent for cross-functional processes Detailed requirements can be documented and verified immediately

Use of untrained facilitators can lead to a negative response from users The time and cost of the planning and/or executing sessions can be high

Resolves issues with an impartial facilitator

Panels of experts

Selection of the best of the best in people Good when there is no one correct solution

Personalities can influence decisions Too much defense of one’s own position

Interviews Best if one-on-one sessions Allows for follow-up interviews if necessary Interviewees usually speak freely

Relationship between interviewer and interviewee may hide the truth People may be afraid that the truth will be held against them

Surveys Can be formal or informal Responses are usually honest People will defend their positions

Often difficult to get enough people to respond Expensive to design a questionnaire Statistical reliability may be necessary

Observations Specific and complete descriptions of actions are provided Effective when routine activities are difficult to describe

Documenting and videotaping may be time-consuming and expensive Confusing or conflicting information must be clarified Can lead to misinterpretation of what is observed

Requirements reuse

Requirements are quickly generated and refined Redundant efforts are reduced Client satisfaction is enhanced by previous proof Quality is increased

Requires a significant investment for developing archives, maintenance, and library functions May violate intellectual property rights Similarity of an archived


Reinventing the wheel is minimized

requirement to a new requirement may be misunderstood

Business process diagramming

Excellent for cross-functional processes Visual communication through process diagrams Verification of “what is” and “what is not”

Implementation of improvement is dependent on an organization being open to changes Good facilitation, data-gathering, and interpretation are required Time-consuming

Prototypes Innovated ideas can be generated Users clarify what they want Users identify requirements that may be missed Client focused Stimulates thought processes

Client may want to implement the prototype Difficult to know when to stop Specialized skills are required Absence of documentation

Use case scenarios

The state of the system is described before the client first interacts with that system Complete scenarios are used to describe state of systems The normal flow of events and/or exceptions is revealed Improved client satisfaction and design

Newness has resulted in some inconsistencies Information may still be missing from scenario description Long interaction is required Training is expensive

Review of performance data

Available from archives Data are usually reliable for the situation at hand

May not describe how the data were collected Data may be outdated

Effective data-gathering requires an understanding of what questions to ask. While it is true that the questions will be predicated upon the type of problem, typical questions might include:

Are there any other resources or subject matter experts that can help us with this problem? How many problems do we have? Are there hidden problems that are below the surface? What is the extent of the problem? Is the problem getting worse, getting better, or remaining stable? Did this problem exist previously?


Can the problem be quantified? Can we determine the severity of the problem? What physical evidence exists to identify the problem? Who identified the problem? To whom was it first reported? Is there an action plan to collect additional information? Do we have the right team members addressing this problem?

Project personnel pride themselves on being rational thinkers. Rational thinkers prefer an analytical approach to data-gathering, problem-solving, and decision- making using sequential steps. There are several steps a company can choose from when setting up a structured approach:

Recognizing the problem Understanding the problem Gathering the data Understanding the environmental impacts Understanding the assumptions Understanding the constraints Understanding the boundaries on the problem and the solution Convening the problem-solving team if not already done Generating alternatives Redefining the assumptions and constraints Evaluating the trade-offs Evaluating the impact of the solution Selecting the best option Getting approval of the option Implementation of the alternative Monitoring and control of the solution

Most companies perform all of these steps, but all of the steps may not be clearly defined as part of the company’s approach. Also, many of the steps may be done in parallel rather than sequentially.

We generally believe that most problems are real and need to be resolved. But that is not always the case. Some problems are created based upon the personalities of the individuals. Some people create problems unnecessarily as long as they can somehow benefit, perhaps by being the only person capable of solving the problem. Some examples include:

Resolution of the problem will get you more power. Resolution of the problem will get you more authority.


Resolution of the problem will diminish the power and authority of others. You are the only one with the capability to resolve the problem and it will improve your image and reputation. You will be regarded as a creating thinker. It will look good on your resume. It will look good during performance reviews. It will guarantee you employment.

Problems are not resolved in a vacuum. Meetings are needed and the hard part is to determine who should attend. If people are not involved in the problem or the problem is unrelated to the work they do, then having them attend these meetings may be a waste of their time. This holds true for some of the team members as well. As an example, if the problem is with procurement, then it may not be necessary for the drafting personnel to be in attendance.

For simplicity’s sake, we shall consider just two types of meetings: problem- solving and decision-making. The purpose of the problem-solving meeting is to obtain a clear understanding of the problem, collect the necessary data, and develop a list of workable alternatives accompanies by recommendations. More than one meeting will probably be required.

Sending out an agenda is important. The agenda should include a problem statement which clearly explains why the meeting is being called. If people know about the problem in advance, they will have a chance to think about the problem and bring the necessary information, thus reducing some of the time needed for data-gathering. It is also possible that the information gathered will identify that the real problem is quite different from what was consider to be the problem at first.

It is essential that subject matter experts familiar with the problem be in attendance. These subject matter experts may not be part of the original project team but may be brought in just to resolve this problem. The subject matter experts may also be contractors hired in to assist with the problem. The people brought in for the identification of the problem and data-gathering usually remain for the development of the alternatives. But there are situations where additional people may participate just for the evaluation of alternatives.

The decision-making meeting can be different from the problem-solving meeting. In general, all of the participants that were involved in the problem-solving meeting will most likely be in attendance in the decision-making meeting but there may be a significant number of other participants. Project team members should have the ability to resolve problems but not all of the team members have the authority to make decisions for their functional units. It is normally a good idea at the initiation of the project for the project manager to determine which team members possess


this authority and which do not. Team members that do not possess decision-making authority will still be allowed to attend the decision-making sessions but may need to be accompanied by their respective functional managers when decisions are required and voting takes place.

Stakeholder attendance is virtually mandatory at the decision-making meetings. The people making the decisions must have the authority to commit resources to the solution of the problem. The commitment could involve additional funding or the assignment of subject matter experts and higher pay grade employees.

Project managers are responsible for the implementation of the solution. Therefore, the project manager must have the authority to obtain the resources needed for a timely solution to the problem.

Team meetings that involve problem-solving and decision-making often get people to act in an irrational manner, especially if the outcome of the meeting can have a negative impact on them personally. This is particularly true for people that are closely identified with the cause of the problem. You may also be inviting people you have never worked with previously and you have no idea how they will react to the problem or the solution.

A major part of problem-solving and ultimately the decision-making involves the identification and analysis of a finite set of alternatives described in terms of some evaluative criteria. These criteria may be benefit or cost in nature or the criteria could simply be the adherence to the cost, schedule, and scope baselines of the project. Then the problem might be to rank these alternatives in terms of how attractive they are to the decision-maker(s) when all the criteria are considered simultaneously. Another goal might be to just find the best alternative or to determine the relative total priority of each alternative.

The number of alternatives is often limited by the constraints imposed upon the project. For example, if the schedule is exceeding the baseline schedule, then the project manager may have five alternatives: overtime, performing some work in parallel rather than in series, adding more resources to the project, outsourcing some of the work to a lower cost supplier, or reducing the scope of the project. Each alternative will be accompanied by advantages and disadvantages. If the goal is to lower the costs, then there may be only one viable alternative, namely reducing the scope.

There are several variables that must be considered when identifying and selecting alternatives. The variables are usually project-specific and based upon the size, nature, and complexity of the problem. However, we can identify a list of core variables that usually apply to the identification and evaluation of most alternatives:


Cost: There is a cost associated with each alternative. This includes not only the cost of implementing the alternative but also the financial impact on the remaining work on the project. Schedule: Implementing an alternative takes time. If the implementation time is too long or cannot be done in parallel with the other project work, then there may be a significant impact on the end date of the project. Quality: Care must be taken that the speed to resolve a problem does not result in a degradation of quality in the project’s deliverables. Resources: Implementing a solution requires resources. The problem is that the people needed with the necessary skills may not be available. Feasibility: Some alternatives may seem plausible on paper but may be unfeasible when needed to be implemented. Feasibility or complexity of the alternative must be considered. Otherwise, you could make the problem worse. Risks: Some alternatives expose the company to increased risks. These may be future risks (or even opportunities) that will appear well after the project is completed.

We must also look at the features that make up the alternatives. Many times there are several features that can be included in each of the alternatives and we may have a choice on whether to include these features. Part of understanding the boundary conditions is to know the importance of each feature. The features can be classified as:

Must have: Any alternative that does not include this feature should be discarded. Should have: These are features that in most situations should be included in the alternatives that are being considered. Failure to consider these could result in a degradation of performance. Some of these features may be omitted if including them results in unfavorable consequences when trying to satisfy the competing constraints. Might have: These are usually add-ons to enhance performance but not necessarily part of the project’s requirements. These are nice-to-have items but not a necessity when deciding upon a final solution. Might-have features are often characterized as bells and whistles that are part of gold-plating efforts.

After looking at the variables and evaluating all of the alternatives, the conclusion may be that none of the alternatives are acceptable. In this case, the project manager may be forced to select the “best of the worst.” As an example, consider a utility that must comply with standards imposed by the Environmental


Protection Agency. In this case, the company is quite unhappy with all of the alternatives. But, by law, the problem must be resolved and one of the alternatives must be selected.

It is possible that after evaluating the alternatives the best approach might just be a combination of alternatives. This is referred to as a hybrid alternative. Alternative A might be a high risk but a low cost of implementation. Alternative B might be a low risk but a high cost of implementation. By combining alternatives A and B, we may be able to come up with a hybrid alternative with an acceptable cost and risk factor.

Sometimes, creativity is needed to develop alternatives. Not all people are creative even if they are at the top of their pay grade. People can do the same repetitive task for so long that they are considered as subject matter experts. They can rise to the top of their pay grade based upon experience and years of service. But that alone does not mean that they have creativity skills. Most people think that they are creative when, in fact, they are not. Companies also do not often provide their workers training in creative thinking.

In a project environment, creativity is the ability to use one’s imagination to come up with new and original ideas or things to meet requirements and/or solve problems. People are assigned to project teams based upon experience. It is impossible for the project manager, and sometimes even the functional managers, to know whether these people have the creativity skills needed to solve problems that can arise during a project. Unless you have worked with these people previously, it is difficult to know if people have imagination, inspiration, ingenuity, inventiveness, vision, and resourcefulness, all being common characteristics of creativity.

Creativity is the ability to think up ideas to produce something new through imaginative skills, whether a new solution to a problem or a new method or device. Innovation is the ability to solve the problem by converting the idea into reality, whether it is a product, service, or any form of deliverable for the client. Innovation goes beyond creative thinking. Creativity and innovation do not necessarily go hand in hand. Any problem-solving team can come up with creative solutions that cannot be implemented. Any engineering team can design a product (or a modification to a product) that manufacturing cannot build.

Innovation is more than simply turning an idea into reality. It is a process that creates value. Clients are paying for something of value. Whatever solution is arrived at must be recognized by the client as possessing value. The best of all possibilities is when the real value can be somehow shared between the client’s needs and your company’s strategy. The final alternative selected might increase or


decrease the value of the end deliverables, as seen by the client, but there must always be some recognizable value in the solution selected.

Because of constraints and limitations, some solutions to a problem may necessitate a reduction in value compared to the original requirements of the project. This is referred to as negative innovation. In such cases, innovation for a solution that reduces value can have a negative or destructive effect upon the team. People could see negative innovation as damage to their reputation and career.

If the innovation risks are too great, the project team may recommend some form of open innovation. Open innovation is a partnership with those outside your company by sharing the risks and rewards of the outcome. Many companies have creative ideas for solving problems but lack the innovative talent to implement a solution. Partnerships and joint ventures may be the final solution.

Sometimes, we start out projects with the best of intentions and later discover that some problem has occurred that could result in the cancellation of the project. Rather than cancel the project outright, the solution might be to downsize the project and readjust our innovation attempts. Factors that can lead to a readjustment in innovation include:

The market for the deliverable has shrunk. The deliverable will be overpriced and demand will not be there. The technical breakthrough cannot be achieved in a timely manner. There is a loss of faith and enthusiasm by the team and they no longer believe this solution is workable. There is possible loss of interest by top management and the client. There are insurmountable technical obstacles. There is a significant decrease in the likelihood of success.

If these factors exist, then it is entirely possible that another alternative must be selected in order to salvage the project. As long as the client is willing to accept a possible reduction in final value, the project may be allowed to continue.

There are four types of innovation. Each type comes with advantages:

Add-ons, enhancements, product/quality improvements, and cost reduction efforts: This type of innovation may be able to be accomplished quickly and with the existing resources in the company. The intent is to solve a problem and add incremental value to the end result. Radical breakthrough in technology: This type of innovation has risks. You may not be able to determine when the breakthrough will be made and the accompanying cost. Even if the breakthrough can be made, there is no guarantee that the client will receive added value from this solution. If the


breakthrough cannot be made, the client may still be happy with the partial solution. This type of innovation may require the skills of only one or two people. New family members: This is the creation of new products and may require a technological breakthrough. Totally complex system or platform (next-generation projects): This is the solution with the greatest risk. If the complex system cannot be developed, then the project will probably be considered a total loss. A large number of highly talented resources are needed for this form of innovation.

Some people have blockages that prevent them from being creative. These blockages include:

Not understanding the problem well enough and attacking the wrong problem Making assessments and decisions too quickly Taking the first idea that is acceptable to the team Having a team that considers you an outsider Having a team that refuses to support any of your ideas Having a team that has no faith in your ability to be part of the team

These roadblocks do not necessarily apply only to problem-solving that requires innovation. The solutions to some problems simply do not require innovation.


5.21 BRAINSTORMING Throughout the life of any project, the team will be tested on their ability to find the best possible solution to a problem within the imposed limitations and boundaries. This could occur in the planning phase of the project where we must come up with the best possible plan or it could happen in any later phases where problems arise and the best solution must be found. These are situations where brainstorming techniques may not be appropriate. Most people seem to have heard about brainstorming but very few have been part of brainstorming teams. Although we normally discuss brainstorming as a means for identifying alternative solutions to a problem, brainstorming can also be used for root-cause identification of the problem.

There are four basic rules in brainstorming. These rules are intended to stimulate idea generation and increase overall creativity of the group while minimizing the inhibitions people may have about working in groups.

Focus on quantity: This rule focuses on the maximization of possible ideas, both good and bad. The assumption made is that the greater the number of ideas, the greater the chance of finding the optimal solution to a problem. Withhold criticism: In brainstorming, criticism of ideas creates conflict and wastes valuable time needed to generate the maximum number of ideas. When people see ideas being criticized, they tend to withhold their own ideas to avoid being criticized. Criticism should take place but after the brainstorming session is completed. Typical brainstorming sessions last about an hour or less. Welcome unusual ideas: All ideas should be encouraged, whether good or bad. People must be encouraged to think “out of the box” and this may generate new perspectives and a new way of thinking. Sometimes, what appears as a radical solution initially may be the best possible solution in the end. Combine and improve ideas: The best possible solution may be a combination of ideas. New ideas should be encouraged from the combination of ideas already presented.

There are several critical steps that must occur for brainstorming to be successful. The following has been adapted from Wikipedia, the free encyclopedia:

Set the problem: Before a brainstorming session begins, it is critical to define the problem. The problem must be clear, not too big, and captured in a specific question. If the problem is too big, the facilitator should break it into


smaller components, each with its own question. Create a background memo: The background memo is the invitation and informational letter for the participants, containing the session name, problem, time, date, and place. The problem is described in the form of a question, and some example ideas are given. The memo is sent to the participants well in advance, so that they can think about the problem beforehand. Select participants: The facilitator composes the brainstorming panel, consisting of the participants and an idea collector. A group of 10 or fewer members is generally more productive. Many variations are possible but the following composition is suggested:

Several core members of the project who have proven themselves Several guests from outside the project with affinity to the problem One idea collector who records the suggested ideas

Session conduct: The facilitator leads the brainstorming session and ensures that ground rules are followed. The steps in a typical session are:

A warm-up session to expose novice participants to the criticism-free environment. A simple problem is brainstormed, for example, Can we minimize the number of reports on this project? or What can be improved in the way we do verification and validation? The facilitator presents the problem and gives a further explanation if needed. The facilitator asks the brainstorming group for their ideas. If no ideas are forthcoming, the facilitator suggests a lead to encourage creativity. All participants present their ideas, and the idea collector records them. To ensure clarity, participants may elaborate on their ideas. When time is up, the facilitator organizes the ideas based on the topic goal and encourages discussion. Ideas are categorized. The whole list is reviewed to ensure that everyone understands the ideas. Duplicate ideas and obviously infeasible solutions are removed. The facilitator thanks all participants and gives each a token of appreciation.

The process of conducting a brainstorming session includes the following: The process:

Participants who have ideas but were unable to present them are encouraged to write down the ideas and present them later. The idea collector should number the ideas, so that the chairperson can use the


number to encourage an idea generation goal, for example: We have 14 ideas now, let’s get it to 20! The idea collector should repeat the idea in the words he or she has written verbatim to confirm that it expresses the meaning intended by the originator. When many participants are having ideas, the one with the most associated idea should have priority. This is to encourage elaboration on previous ideas. During a brainstorming session, managers and other superiors may be discouraged from attending, since it may inhibit and reduce the effect of the four basic rules, especially the generation of unusual ideas.

Evaluation: Brainstorming is not just about generating ideas for others to evaluate and select. Usually the group itself will, in its final stage, evaluate the ideas and select one as the solution to the problem proposed to the group.

The solution should not require resources or skills the members of the group do not have or cannot acquire. If acquiring additional resources or skills is necessary, that needs to be the first part of the solution. There must be a way to measure progress and success. The steps to carry out the solution must be clear to all and amenable to being assigned to the members so that each will have an important role. There must be a common decision-making process to enable a coordinated effort to proceed and to reassign tasks as the project unfolds. There should be evaluations at milestones to decide whether the group is on track toward a final solution. There should be incentives to participation so that participants maintain their efforts.

There are several variations in the way brainstorming sessions are conducted.

Nominal group technique:

The nominal group technique is a type of brainstorming that encourages all participants to have an equal say in the process. It is also used to generate a ranked list of ideas. Participants are asked to write their ideas anonymously. Then the moderator collects the ideas and each is voted on by the group. The vote can be as simple as a show of hands in favor of a given idea. This process is called distillation. After distillation, the top-ranked ideas may be sent back to the group or to subgroups for further brainstorming. For example, one group may work on the color required for a product. Another group may work on the size, and so forth. Each group will come back to the whole group for ranking the listed


ideas. Sometimes ideas that were previously dropped may be brought forward again once the group has reevaluated the ideas. It is important that the facilitator be trained in this process before attempting to facilitate this technique. The group should be primed and encouraged to embrace the process. Like all team efforts, it may take a few practice sessions to train the team in the method before tackling the important ideas.

Group passing technique:

Each person in a circular group writes down one idea and then passes the piece of paper clockwise to the next person, who adds some thoughts. This continues until everybody gets his or her original piece of paper back. By this time, it is likely that the group will have extensively elaborated on each idea. The group may also create an “Idea Book” and post a distribution list or routing slip to the front of the book. On the first page is a description of the problem. The first person to receive the book lists his or her ideas and then routes the book to the next person on the distribution list. The second person can log new ideas or add to the ideas of the previous person. This continues until the distribution list is exhausted. A follow-up “read-out” meeting is then held to discuss the ideas logged in the book. This technique takes longer, but it allows individuals time to think deeply about the problem.

Team idea mapping method:

This method of brainstorming works by the method of association. It may improve collaboration and increase the quantity of ideas and is designed so that all attendees participate and no ideas are rejected. The process begins with a well-defined topic. Each participant brainstorms individually, then all the ideas are merged onto one large idea map. During this consolidation phase, participants may discover a common understanding of the issues as they share the meanings behind their ideas. During this sharing, new ideas may arise by the association, and they are added to the map as well. Once all the ideas are captured, the group can prioritize and/or take action.

Electronic brainstorming:

Electronic brainstorming is a computerized version of the manual brainstorming technique. It is typically supported by an electronic meeting system (EMS), but simpler forms can also be done via e-mail and may be browser based or use peer-to-peer software. With an electronic meeting system, participants share a list of ideas over the Internet. Ideas are entered independently. Contributions become immediately


visible to all and are typically anonymous to encourage openness and reduce personal prejudice. Modern EMSs also support asynchronous brainstorming sessions over extended periods of time as well as typical follow-up activities in the creative-problem-solving process such as categorization of ideas, elimination of duplicates, and assessment and discussion of prioritized or controversial ideas. Electronic brainstorming eliminates many of the problems of standard brainstorming, production blocking, and evaluation apprehension. An additional advantage of this method is that all ideas can be archived electronically in their original form and then retrieved later for further thought and discussion. Electronic brainstorming also enables much larger groups to brainstorm on a topic than would normally be productive in a traditional brainstorming session. Some Web-based brainstorming techniques allow contributors to post their comments anonymously through the use of avatars. This technique also allows users to log on over an extended time period, typically one or two weeks, to allow participants some “soak time” before posting their ideas and feedback. This technique has been used particularly in the field of new product development but can be applied in any number of areas where collecting and evaluating ideas would be useful.

Directed brainstorming:

Directed brainstorming is a variation of electronic brainstorming (described above). It can be done manually or with computers. Directed brainstorming works when the solution space (that is, the criteria for evaluating a good idea) is known prior to the session. If known, those criteria can be used to intentionally constrain the ideation process. In directed brainstorming, each participant is given one sheet of paper (or electronic form) and told the brainstorming question. They are asked to produce one response and stop; then all of the papers (or forms) are randomly swapped among the participants. The participants are asked to look at the idea they received and to create a new idea that improves on that idea based on the initial criteria. The forms are then swapped again and respondents are asked to improve upon the ideas, and the process is repeated for three or more rounds. In the laboratory, directed brainstorming has been found to almost triple the productivity of groups over electronic brainstorming.

Individual brainstorming:


“Individual brainstorming” is the use of brainstorming on a solitary basis. It typically includes such techniques as free writing, free speaking, word association, and drawing a mind map, which is a visual note-taking technique in which people diagram their thoughts. Individual brainstorming is a useful method in creative writing and has been shown to be superior to traditional group brainstorming.

Question Brainstorming:

This process involves brainstorming the questions, rather than trying to come up with immediate answers and short-term solutions. This technique stimulates creativity and promotes everyone’s participation because no one has to come up with answers. The answers to the questions form the framework for constructing future action plans. Once the list of questions is set, it may be necessary to prioritize them to reach the best solution in an orderly way. Another of the problems for brainstorming can be to find the best evaluation methods for a problem. Wikipedia provides an excellent list of references for brainstorming.



We must now decide which of the alternatives best resolves the problem, hopefully using some form of logical thinking. Decision-making has some degree of structure to it. Logical decision-making, as discussed briefly in Section 2.21, is an important part of all of project management, and this includes all of the PMBOK® Guide domain areas. It is a necessity for making informed decisions. However, in situations with time pressure, higher stakes, or increased ambiguities, project managers often use intuitive decision-making rather than structured approaches and immediately arrive at a satisfactory course of action without weighing alternatives. Because of time constraints, decisions may have to be made with just partial information being available.

Decision-making involves the following:

Objectives must be established. Objectives must be classified and placed in order of importance. Alternative actions must be developed. The alternatives must be evaluated against all the objectives. The alternative that is able to achieve all the objectives is the tentative decision. The tentative decision is evaluated for more possible consequences. The decisive actions are taken, and additional actions are taken to prevent any adverse consequences from becoming problems and starting both systems (problem analysis and decision-making) all over again.

The decision-making activities can be more time consuming and costlier to perform than the problem-solving activities. This is largely due to the number of alternatives that can be identified and the methods used to evaluate and prioritize them. Having a significant number of reasonable alternatives may seem nice but being unable to arrive at a decision on which one to actually adopt can be troublesome.

There are several models available for how project teams make decisions. A typical four-phase model might include:

Familiarization stage: This is where the team meets to understand the problem and the decision(s) that must be made. Options identification phase: This is where the team performs brainstorming


and lists possible alternatives for a solution. Option selection phase: This is where the team decides upon the best option. Justification phase: This is where the team rationalizes that they made the right decision and possibly evaluates the results.

There are several types of decision-making styles that people can use. There are also numerous tools that can assist in the decision-making processes. People must understand prior to attending both the problem-solving and the decision-making meetings how the decisions will be made. There are several options available and the approach taken to agree on what the problem is can be different from the decision on which alternative will be adopted. Options include:

Majority or consensus: All participants in the meeting are allowed to vote. The criteria might be a simple majority or another number such as a 75 percent majority. Qualified majority or consensus: If a majority is not reached, then the project manager, the client, or another designated individual will make the final decision. Project manager directed: The project manager makes the decision and informs the team which alternative he or she selected. This approach is most effective on crisis projects. Client directed: The team identifies the alternatives, makes a recommendation, and presents the data to the client. The client then makes the final decision and informs the team. The client may have the right not to select from the team’s alternatives but to develop his or her own solution to the problem.

Each person has their own style by which they make decisions and this may be in conflict with how the team wishes to make a decision. A partial list might include:

Intuitive style: Making a decision on the spot based upon a feeling in one’s gut. This is often a hit-or-miss approach. Systematic style: This involves evaluating each alternative using a structured approach. Partial procrastination style: This is waiting for enough (or at least a minimum amount of) information so that a decision can be made. This does not mean avoiding a decision. Individual style: This style occurs when people feel better making a decision by themselves without any input from others. Group consensus style: This is when the individual feels better having the decision made by voting among the group membership.


Every project manager has his or her own approach to decision-making and this may vary from project to project. The style selected is based upon the definition of the problem and the type of decision that must be made. The major difference here is that the project manager generally has the authority to enforce the style that he or she prefers. Although some approaches work well, there are approaches that often do more harm than good, especially if the project manager’s decision-making style is in conflict with the style preferred by the team members.

Textbooks on decision-making provide several different styles that are appropriate for project managers. There are also five styles that the project manager or group leader can use. These five styles most common for project managers are:

The autocratic decision-maker The fearful decision-maker The circular decision-maker The democratic decision-maker The self-serving decision-maker

The autocratic decision-maker usually trusts nobody on the team and dictates the decision even though the risks are great and very little time was consumed discussing the problem. Team members often are fearful of presenting alternatives and recommendations because they may be ridiculed by the project manager that believes that his or her decision is the only one. Team members may not contribute ideas even when asked.

The autocratic style can work if the project manager is regarded as an expert in the area in which the decision must be made. But in general, project managers today seem to possess more of an understanding of technology than a command of technology. As such, using the autocratic style when you have limited knowledge about the technology of the problem and the solution can lead to a rapid decision but often a decision that is not the optimal choice. Most of the time, autocratic decision-makers feel better making a decision by themselves without any input from others. They make a decision on the spot based upon a feeling in their gut. This is often a hit-or-miss approach.

While the autocratic decision-maker thrives on making the decision, right or wrong and in a timely manner, the fearful decision-maker is afraid of making the wrong decision. This is often referred to as the “ostrich” approach to making a decision. In this case, the project manager will bury his or her head in the sand and hope that the problem will disappear or that people will forget about the problem. The project manager also hopes that, by waiting, a miracle solution will appear by itself such that a decision may not have to be made at all.


Sometimes the fearful decision-maker adopts a procrastination attitude, which is waiting for enough (or at least a minimum amount of) information so that a decision can be made. This does not necessarily mean avoiding a decision. The fearful decision-maker knows that a decision must be made, eventually. The fearful decision-maker is afraid that making the wrong decision could have a serious impact upon his or her reputation and career. The team may not be invited to provide alternatives and recommendations because that would indicate that a problem exists and that a decision must be made. Information on the problem may even be withheld from senior management, at least temporarily. The project manager may try to get others to make the decision. The project manager may prefer to have someone act as the moderator of the decision-making group and, if a decision must be made, the project manager will always argue that it is a group decision rather than a personal decision. The project manager will avoid, if possible, taking personal accountability and responsibility for the decision.

As stated previously, time is a constraint on projects, not a luxury. Taking a wait- and-see approach to making a decision can lose precious time where the problem could have been easily resolved. Also, the longer we wait to make a decision, the fewer the options are.

The circular decision-maker is similar to the fearful decision-maker. The project manager not only wants to make the decision but also wants to make the perfect decision. Numerous team meetings are held to discuss the same problem. Each team meeting seems to discuss the problem and possible solutions from a different perspective. The team members are given action items that keep them scurrying about looking for additional information to support the perfect decision. And it appears that we always come up with the same answers and alternatives.

The circular decision-maker is willing to make a decision but sacrifices a great deal of time looking for the perfect decision to which everyone will agree. The decision-maker is willing to violate the time constraints on a project to accomplish this. The decision-maker may also believe that the problem may disappear if they think about it long enough.

The project manager can adopt the circular decision-making style even if he or she is an expert in the area in which the problem exists. The project manager needs reenforcement from the team, and possibly superiors, that the best decision was made. In the eyes of the project manager, the decision may be deemed more important than the outcome of the project.

The democratic decision-maker allows the team members to participate in the final decision. Voting by the group membership is critical and may even be mandatory. The company may even have a structured approach for this using


guidelines or templates. This can happen even if the project manager is the expert in the area where the problem exists and even if the project manager has the authority to make the decision by himself or herself.

Democratic decision-making can create long-term problems. Team members may feel that they should be involved in all future decisions as well, even those where they may have limited knowledge about the problems. Asking team members to take an early vote on the solution to a problem can lead to apprehension if the team members are uncomfortable with making a decision based upon incomplete information. Waiting too long to make the decision can limit the options available and frustrate the project team because of the time that was wasted overthinking the problem and the solution.

Democratic decision-making is a strong motivational tool if used properly. As an example, if the project manager believes that he or she already knows the decision that should be made, asking the team for their opinion and giving credit to a team member for coming up with the same idea is a good approach. This encourages people to participate in decision-making and makes them believe that they will be given credit for their contributions.

Sooner or later everyone is placed in a position where they must decide what is more important when making a decision: their individual values or the organizational values. This situation often forces people to make decisions in favor of either themselves or the organization. A compromise might be impossible.

These types of self-serving conflicts can permeate all levels of management. Executives may make decisions in the best interest of their pension rather than the best interest of their firm. One executive wanted to be remembered in history books as the pioneer of high-speed rapid transit. He came close to bankrupting his company in the process of achieving his personal ambitions at the expense of the projects he was sponsoring and also at the expense of the corporation.

Self-serving decision-makers seem to focus on what is in their own best interest in the short term and often disregard what might be in the best interest of the project. In a project environment, this can become quite a complex process if the team members, stakeholders client, and project sponsor all want the decision made in their own best interest. Suboptimal solutions are reached with several parties being quite unhappy with the final result. Unfortunately, self-serving decisions are almost always made for what is in the best interest of the largest financial contributor to the project fearing that, if the financial contributor removes support from the project, the project may be canceled.

Anybody can make a decision, but the hard part is making the right decision. Decision-makers often lack the skills in how to evaluate the results or impact of a


decision. What the project manager believes was the correct decision may be viewed differently by the client and the stakeholders.

Some decisions are easy to make whereas others require teams of experts. The tools and techniques used are dependent upon the type of decision. As an example, let us consider four types of decisions:

Routine decisions Adaptive decisions Innovative decisions Pressured decisions

Routine decisions are often handled solely by the project manager. Routine decisions may involve simply signing purchase orders, selecting which vendors to work with, and deciding whether or not to authorize overtime. Usually routine decisions are based upon company policies and procedures.

While routine decisions seem relatively easy to make, the number of routine decisions can be troublesome. Too many routine decisions can become time robbers and prevent the project manager from effectively managing the project. If the decisions are routine in nature, then many of the decisions may be able to be delegated to members of the project team.

Adaptive decision-making may require some degree of intuition. The problem is usually well understood and the project team may be able to make the decision without outside support or sophisticated tools and techniques. Adaptive decision- making is the most common form of decision-making used on projects.

Innovation is generally regarded as a new way of doing something. Innovative decision-making is most often used on projects involving R&D, new product development, and significant product enhancements. These decisions involve subject matter experts that may not be part of the project team and may require the use of more advanced decision-making tools and techniques. These decisions may require a radical departure from the project’s original objectives. Not all project managers are capable of managing projects involving innovation decisions.

While the goal of successful innovation is to add value, the effect of a failure of an innovative decision can be negative or even destructive if it results in poor team morale, an unfavorable cultural change, or a radical departure from existing ways of doing work. The failure of an innovation project can lead to demoralizing the organization and causing talented people to be risk-avoiders in the future rather than risk-takers.

Time is a critical constraint on projects and this can have a serious impact on the time necessary to understand the problem and find a solution. As an example, let’s


assume that a critical test fails and the client says that they will be meeting with you the day after the failure to discuss how you will correct the problem. They are expecting alternatives and a recommendation. Typically, you might need a week or longer to meet with your team and diagnose the situation. However, given the circumstances, you may have to make a decision, right or wrong, based upon the time available. This is high-pressured decision-making. Given sufficient time, we can all analyze or even ove-analyze a problem and come up with a list of viable alternatives.

High-pressured decision-making can also be part of adaptive and innovative decision-making as well. Being pressured to make a decision can have favorable results if it forces the decision-makers to look at only those attributes that are critical to the problem. But more often than not, high-pressured decision-making leads to suboptimal results.

Given that these situations will happen, you must expect that you will not always have complete or perfect information in order to make a decision. Most decision- making teams must deal with partial information.

As stated before, there are situations, such as routine decisions, where the ultimate decision is made by just the project manager. Groups are not needed in these situations. But more often than not, the problems that appear on projects require group thinking. There are several advantages to group decision-making. These include:

Groups provide better decisions than individuals. Group discussions lead to a better understanding of the problem. Group discussions lead to a better understanding of the solution. Groups make better judgment calls on the selection of alternatives. Groups tend to accept more risks in problem-solving than do individuals. Clients appear less likely to question the decision of the group compared to the decision of an individual. People are more willing to accept the final decision if they participated in the decision-making process.

There are several disadvantages to group decision-making as well. These include:

The discussions can be dominated by the personality of one person regardless of whether or not that person is recognized as a subject matter expert. Groups may accept too much risk knowing that a failure would be blamed equally among all of the members of the group. There is pressure to accept the decision of the group even though you know that other decisions might be better.


Too much time may be spent arriving at a consensus. Groups tend to overthink problems and solutions. It may be impossible to get the proper people released from other duties so they can attend the meeting. Finding a common meeting time that satisfies all parties may be difficult. If external people are involved, the costs associated with traveling could become quite large, especially if more than one decision-making meeting is needed.

Not everyone wants to make decisions or is capable of making them. Some people would prefer to have others make all decisions, especially critical decisions. Reasons for this behavior might include:

A previous history of making the wrong decisions Fear of making the wrong decision Fear of the associated risks Lack of conviction in one’s own beliefs High levels of anxiety Inability to cope with the politics of decision-making Unfamiliarity with the facts surrounding the problem and not willing to learn Unfamiliarity with members of the team Poor coping skills Lack of motivation Lack of perspective Being brought into the discussion well after the discussion began Inability to work under high levels of stress and pressure Fear of working with unions that are involved in the problem Fear of working with certain stakeholders involved in the problem Fear of contributing for fear of being ridiculed Fear of exposing one’s inadequacies Fear of damaging one’s career and/or reputation

These roadblocks are often categorized into five areas:

Emotional blockages Cultural blockages Perceptual blockages Intellectual blockages Expressive blockages

Biases can creep into our decision-making processes. A partial list might be:


Believing beforehand that your solution is the only possible solution Ignoring evidence that supports a conclusion other than yours Neglecting to understand the root cause of the problem Refusing to search for supporting data for a decision Neglecting to understand how the wrong decision can impact the project Being afraid to state your opinion and siding with the person whom you believe will provide the best approach Being afraid to make a decision for fear that you may make the wrong decision Being fearful of having your ideas criticized Unwilling to think differently or out-of-the-box Adopting a wishful thinking approach to making a decision Adopting a selective perception approach and looking at only the information and alternatives that are in your comfort zone Making the decision that others expect you to make even when you strongly believe it may be the wrong decision Making a decision that is in your personal interest rather than the best interest of the project Spending too much time on small or unimportant things that are in your comfort zone rather than focusing on what is critical

Not all decisions are easy to make. Sometimes you must make a decision whether you are ready or not and when you have partial rather than complete information available to you. Also, the decision to do nothing differently may be the best decision under certain circumstances. If the team believes that they can live with the problem at hand, then the team may wait and see if the problem gets worse before making a decision.

Finally, we must discuss the tools available for decision-making. Some of the decision-making tools and techniques people use in everyday life are:

Determining the pros and cons for a given situation Choosing the alternative with the highest probability of occurrence Accepting the first option that seems like it might achieve the desired result Following the advice of a subject matter expert Flipping a coin, cutting a deck of playing cards, and other random or coincidence methods Prayer, tarot cards, astrology, augurs, revelation, or other forms of divination

Some of the more complex decision-making tools are:

SWOT analysis: looking at the strengths, weaknesses, opportunities, and threats in a given situation


Pareto analysis: getting the most for your money using the 80/20 rule where you can get 80 percent of the desired results by performing 20 percent of the work Multiple criteria decision analysis: this is a combination of intuition and a systematic approach Paired comparison analysis: decision alternatives are compared two at a time to see the relative importance Decision trees: helps visualize outcomes Influence diagrams: graphical displays of the problem and its impact Affinity diagrams: useful when there are large amounts of data Game theory: considers responses of outside participants Cost–benefit analysis: useful for financial decisions Nominal groups: all of the experts sit in a room together, list ideas, and evaluate each other’s approach Delphi technique: team members are remotely located and may not know who else is on the team; ideas and voting are most often done electronically Linear programming applications: includes the application of management science and operations research models for decision-making Trial-and-error solutions: useful for small problems when the cause-and- effect relationships are reasonable well known Heuristic solutions: similar to trial-and-error solutions but experimentation is done to reduce the list of alternatives Scientific methods: used for problem-solving involving scientific issues where additional experimentation may be done to confirm the problem and/or hypothesis

Problem-solving sessions normally involve only one decision-making tool. Most of the more complex tools are time-consuming and costly to use, and combining several of these together may be prohibitive.



Part of decision-making requires the project manager to predict how those impacted by the decision will react to the alternative selected. Soliciting feedback prior to the implementation of the solution seems nice to do, but the real impact of the decision may not be known until after full implementation of the solution. As an example, as part of developing a new product, marketing informs the project manager that the competition has just come out with a similar product and marketing believes that we must add in some additional features into the product you are developing. The project team adds in a significant number of “bells and whistles” to the point where the product’s selling price is higher than that of the competition and the payback period is now elongated. When the product was eventually launched, the consumer did not believe that the added features were worth the additional cost.

It is not always possible to evaluate or predict the impact of a decision when making a choice among alternatives. But soliciting feedback prior to full implementation is helpful.

A useful tool for assisting in the selection of alternatives is a consequence table as shown in Table 5–7. For each alternative, the consequences are measured against a variety of factors such as each of the competing constraints. For example, an alternative could have a favorable consequence on quality but an unfavorable consequence on time and cost. Most consequence tables have the impacts identified quantitatively rather than qualitatively. Risk is also a factor that is considered, but the impact on risk is usually defined qualitatively rather than quantitatively. Table 5–7 Consequence Table

If there are three alternatives and five constraints, then there may be fifteen rows in the consequence table. Once all fifteen consequences are identified, they are ranked. They may be ranked according to either favorable or unfavorable


consequences. If none of the consequences are acceptable, then it may be necessary to perform trade-offs on the alternatives. This could become an iterative process until an agreed-upon alternative is found. The table could be prepared quantitatively or qualitatively. With a quantitative table, weighting factors can be used for the relative importance of each of the competing constraints.

The people preparing the table are the people that make up the project team rather than possible outsiders that were brought in as subject matter experts for a particular problem. Project team members know the estimating techniques as well as the tools that are part of the organization process assets that can be used for determining impacts.

It is nice to have several possible alternatives for the solution to a problem.

Unfortunately, the alternative that is finally selected must be implemented, and that can create additional problems.

One of the ways to analyze the impact is to create an impact implementation matrix as seen in Figure 5–15. Each alternative considered could have a high or low impact on the project. Likewise, the implementation of each alternative could be easy or hard.

FIGURE 5–15. Impact analysis matrix.

Each alternative is identified in its appropriate quadrant. The most obvious choice would be the alternatives that have a low impact and are easy to implement. But in reality, we often do not find very many alternatives in this quadrant.


5.24 FACILITATION A good facilitator helps people understand their common objectives and assists them in planning to achieve these objectives but without taking a particular position in the discussion. This may be difficult for a project manager to do. Some people identify a facilitator as:

An enabler Someone who helps people communicate and work together A person who adds structure and process to decision-making and problem- solving A person who creates synergy in the decision-making process A person who can get everyone to do their best thinking Someone who can tap into each person’s creative potential

The facilitator will not lead the group toward the answer that he or she thinks is best even if they possess an opinion on the subject matter. The facilitator does not evaluate ideas. The facilitator’s role is to make it easier for the group to arrive at its own answer, decision, solution, or deliverable. The facilitator sometimes acts as a resource to the group in the area of data analysis tools and problem-solving techniques. The facilitator must be comfortable with team-building techniques and group processes in order to assist the group in performing tasks and maintaining roles essential to team building. The facilitator intervenes to help the group stay focused and build cohesiveness, getting the job done with excellence, while developing the final product.

To keep the meeting on track, the facilitator must remain aware of the agenda, the time, and the flow of work. Facilitation skills are used to ensure total participation. Facilitators observe group development, noting both task and maintenance roles, and encourage group members to perform them. Facilitators handle inappropriate participant behaviors with skill and sensitivity.

The basic skills of a facilitator are about following good meeting practices: timekeeping, following an agreed-upon agenda, and keeping a clear record. Facilitators also need a variety of crossover skills that include active listening skills, the ability to paraphrase, draw people into the discussion, balance participation, and make space for more reticent group members. It is critical to the facilitator’s role to have the knowledge and skill to be able to intervene in a way that adds to the group’s creativity rather than taking away from it.

Facilitators must understand how the physical environment can affect group dynamics. This includes the layout of the room such as U-shaped or circular,


spacing between the chairs, the temperature, flip charts, audiovisual requirements, and even food or drink.

Fran Rees provides a description of the key skills and methods that facilitators may need19: Facilitators must have a variety of skills and techniques to be effective. Strong verbal and analytical skills are essential. Facilitators must know what questions to ask, when to ask them, and how questions should be structured to get good answers without defensiveness. Facilitators must know how to probe for more information when the initial answers are not sufficient. They must also know how to rephrase or “reframe” statements to enhance understanding, and to highlight areas of agreement and disagreement as they develop. Other skills include redirecting questions and comments, giving positive reinforcement, encouraging contrasting views, including quieter members of the group, and dealing with domineering or hostile participants. Nonverbal techniques include things such as eye contact, attentiveness, facial expressions, body language, enthusiasm, and maintaining a positive outlook. A facilitator must also develop the ability to read and analyze group dynamics on the spot in order to guide the group in a productive way Facilitation involves meetings. A meeting is a process of coming together for a purpose. Participants typically follow an agenda and interact with each other. We hold project meetings for different purposes: to update team members, exchange information, make routine decisions, identify issues, complete a task, build consensus, develop strategic and operational plans, make group decisions, resolve conflicts or solve problems. Whether you are holding a small, large, regular, or special team meeting, it is critical to have someone in charge of planning, facilitating, and following up after the meeting. It would be ideal if the project manager possessed all of these skills.

Some of the readily apparent skills of good facilitators include:

Knowing how to deal with difficult people Knowing how to minimize or prevent gamesmanship during meetings Knowing when and how to use intervention effectively Knowing the importance of a good environment for the meeting Being able to identify when participants are becoming, lazy, bored, or frustrated Being able to protect team members from attack

Good facilitators are able to see not only the obvious but also what else is happening that may not be quite apparent to the rest of the people in the meeting. In other words, facilitators must be experts in identifying negative dynamics or actions by people that can disrupt the intent of the meeting.


Part of the facilitator’s role is to establish the ground rules for an effective process. Ground rules are similar to a code of conduct that the group agrees to at the start of the process. They are based on an assumption of equality and fairness. The idea is that no individual is permitted to dominate a discussion or hold special privilege. According to Carpenter and Kennedy20: There are generally three kinds of ground rules. The first kind defines the behavior of participants; for example, “individuals will treat each other with respect.” The second kind applies to procedures to be used by the group, such as “all decisions will be made by consensus.” The last kind of ground rule may also define the boundaries of discussions on certain issues, for example, “discussion today will focus solely on the issue of water usage, and will not go into a discussion of mineral rights.”

Fran Rees has provided a list of some of the benefits of facilitation21:

Group members are often more motivated to support the decisions made because of their investment in the process. The best efforts of groups usually produce better results than individual efforts. Increased participation within the group increases productivity. It is possible for managers and leaders to draw more on their staffs as resources, which contributes to overall organizational success. Everyone involved has a chance to contribute and feels they are an integral part of the team. People realize and respect that responsibility for implementing decisions lies with everyone. Innovation and problem-solving skills are built. People are encouraged to think and act for the overall benefit of the group. Higher-quality decisions normally result. A forum for constructively resolving conflicts and clarifying misunderstandings is created. Negative attitudes, low morale, low involvement, and withholding of information are less likely because everyone is involved in a joint process.

Other results of effective facilitation, more aligned to a project team environment, are:

Better teamwork and cooperation among team members More realistic ideas being brought to the table Quicker problem-solving and decision-making Agreement between people with conflicting views A common understanding on what the next steps should be


A culture of trust and open communications A culture where people feel comfortable stating their opinion A culture where people are willing to accept ownership for the decisions

The facilitator is the protector of the processes used in group dynamics, more specifically as they relate to the project’s crossover skills requirements. The facilitator’s toolkit is a set of techniques, knowledge, and experience which they apply to protect the process the group is working through. The function of facilitation is to keep a meeting focused and moving and to ensure even participation. The facilitator makes sure these things occur, either by doing it or by monitoring the group and intervening as needed. The facilitator is the keeper of the task and doesn’t influence the content or product of the group. The facilitator pays attention to the way the group works—the process. The facilitator helps to create the process, adjust it, keep it heading in the right direction, and most importantly keep the people attached to it.

More projects today are being managed with virtual project teams. The people occupy positions within and outside of organizations. They reside throughout the hierarchy and they come from different functional areas. When they are assigned as part of the team, they bring with them, in addition to their knowledge, their backgrounds, beliefs, organizational culture, technical jargon, and personal behaviors. The facilitator may never see them all face-to-face, yet they may be part of the meeting. Understanding cultural diversity is essential. This may include:

Understanding that each person learns differently Having tolerance for ambiguity and recognizing the need to explain things perhaps more than once Demonstrating a sense of humility when needed Understanding cultural differences Demonstrating patience Demonstrating interpersonal sensitivity Possessing a sense of humor

There are risks when the project manager assumes the role of the facilitator. The project manager may try to lead the discussion toward the answer that the project manager wants. This is dangerous if the project manager acts as the facilitator and has preconceived expectations. Good facilitators do not have preconceived expectations or an axe to grind. Another problem might occur if people are afraid to contribute ideas because the project manager is leading the discussion and acting as the facilitator. The situation becomes more complicated if the project manager has wage and salary responsibilities for people in the meeting when acting as the facilitator.


Unfortunately, project budgets do not always allow for the cost of a facilitator whenever a meeting is needed. Project managers must learn facilitation skills to be effective. The project management office may have people assigned with facilitation skills and these people may be able to provide some support to various project teams.



Textbooks seem to accentuate the attributes of effective team dynamics. This is a necessity in order to teach people how to build morale and pride among the project team members. Unfortunately, there are negative team dynamics that must also be recognized and dealt with. People can learn from failures in organizational dynamics and what doesn’t work as well as from what does work.

As we stated previously, good facilitators are able to see not only the obvious but also what else is happening that may not be quite apparent to the rest of the people in the meeting. In other words, facilitators must be experts in identifying negative dynamics or actions by people that can disrupt the intent of the meeting. Unfortunately, sometimes project managers and facilitators create negative dynamics situations without realizing it. Items that are initiators of negative team dynamics include:

Having poor communication channels that can create a mindset among some team members that they do not feel as though they are part of the team Asking people to exhibit creativity for activities that do not require creativity Asking people to unnecessarily perform work outside of their comfort zone Failing to insulate the team from politics and possibly conflicting cultures Asking the team to create a project culture that may be in conflict with the traditional corporate culture Asking people to act unethically or in violation of standards During conflicts with the team, failing to put yourself in their shoes and seeing their side of the issue Failing to recognize that team members are not sharing information freely among one another Failing to recognize that some of the team members have their own personal agendas concerning the project Allowing the team to believe that they are in competition with other projects in the company Failing to resolve conflicts in a timely manner Failing to clearly define the roles and responsibilities of the team Failing to provide feedback on performance Providing personal criticism rather than constructive feedback Always questioning decisions made by team members Believing that your solution is the only correct approach and forcing the


solution upon the team without soliciting feedback Failing to listen to or value the opinion of your team members even if you do not believe in their solutions to a problem

There are certainly more items that could be included in this list. But it should be evident that there are numerous ways to initiate negative team dynamics.


5.26 COMMUNICATION TRAPS Projects are run by communications. The work is defined by the communications tool known as the work breakdown structure. Actually, this is the easy part of communications, where everything is well defined. Unfortunately, project managers cannot document everything they wish to say or relate to other people, regardless of the level in the company. The worst possible situation occurs when an outside customer loses faith in the contractor. When a situation of mistrust prevails, the logical sequence of events would be:

PMBOK® Guide, 5th Edition Chapter 10 Communications Management Communications Management Plan

More documentation More interchange meetings Customer representation on your site

In each of these situations, the project manager becomes severely overloaded with work. This situation can also occur in-house when a line manager begins to mistrust a project manager, or vice versa. There may suddenly appear an exponential increase in the flow of paperwork, and everyone is writing “protection” memos. Previously, everything was verbal.

Communication traps occur most frequently with customer–contractor relationships. The following are examples of this:

Phase I of the program has just been completed successfully. The customer, however, was displeased because he had to wait three weeks to a month after all tests were completed before the data were presented. For Phase II, the customer is insisting that his people be given the raw data at the same time your people receive it. The customer is unhappy with the technical information that is being given by the project manager. As a result, he wants his technical people to be able to


communicate with your technical people on an individual basis without having to go through the project office. You are a subcontractor to a prime contractor. The prime contractor is a little nervous about what information you might present during a technical interchange meeting where the customer will be represented, and therefore wants to review all material before the meeting. Functional employees are supposed to be experts. In front of the customer (or even your top management) an employee makes a statement that you, the project manager, do not believe is completely true or accurate. On Tuesday morning, the customer’s project manager calls your project manager and asks him a question. On Tuesday afternoon, the customer’s project engineer calls your project engineer and asks him the same question.

Communication traps can also occur between the project office and line managers. Below are several examples:

The project manager holds too many or too few team meetings. People refuse to make decisions, and ultimately the team meetings are flooded with agenda items that are irrelevant. Last month, Larry completed an assignment as an assistant project manager on an activity where the project manager kept him continuously informed as to project status. Now, Larry is working for a different project manager who tells him only what he needs to know to get the job done.

In a project environment, the line manager is not part of any project team; otherwise he would spend forty hours per week simply attending team meetings. Therefore, how does the line manager learn of the true project status? Written memos will not do it. The information must come firsthand from either the project manager or the assigned functional employee. Line managers would rather hear it from the project manager because line employees have the tendency to censor bad news from the respective line manager. Line managers must be provided true status by the project office.

Sometimes, project managers expect too much from their employees during problem-solving or brainstorming sessions, and communications become inhibited. There are several possible causes for having unproductive team meetings:

Because of superior–subordinate relationships (i.e., pecking orders), creativity is inhibited. All seemingly crazy or unconventional ideas are ridiculed and eventually discarded. Contributors do not wish to contribute anything further. Meetings are dominated by upper-level management personnel.


Many people are not given adequate notification of meeting time and subject matter.


5.27 PROVERBS AND LAWS Below are twenty project management proverbs that show you what can go wrong22:

You cannot produce a baby in one month by impregnating nine women. The same work under the same conditions will be estimated differently by ten different estimators or by one estimator at ten different times. The most valuable and least used word in a project manager’s vocabulary is “NO.” You can con a sucker into committing to an unreasonable deadline, but you can’t bully him into meeting it. The more ridiculous the deadline, the more it costs to try to meet it. The more desperate the situation, the more optimistic the situatee. Too few people on a project can’t solve the problems—too many create more problems than they solve. You can freeze the user’s specs but he won’t stop expecting. Frozen specs and the abominable snowman are alike: They are both myths, and they both melt when sufficient heat is applied. The conditions attached to a promise are forgotten, and the promise is remembered. What you don’t know hurts you. A user will tell you anything you ask about—nothing more. Of several possible interpretations of a communication, the least convenient one is the only correct one. What is not on paper has not been said. No major project is ever installed on time, within budget, with the same staff that started it. Projects progress quickly until they become 90 percent complete; then they remain at 90 percent complete forever. If project content is allowed to change freely, the rate of change will exceed the rate of progress. No major system is ever completely debugged; attempts to debug a system inevitably introduce new bugs that are even harder to find. Project teams detest progress reporting because it vividly demonstrates their lack of progress. Parkinson and Murphy are alive and well—in your project.

There are thousands of humorous laws covering all subjects, including


economics, general business, engineering, management, and politics. The list below shows some of these laws that are applicable to project management:

Abbott’s Admonitions

1. If you have to ask, you’re not entitled to know.

2. If you don’t like the answer, you shouldn’t have asked the question.

Acheson’s Rule of the Bureaucracy: A memorandum is written not to inform the reader but to protect the writer. Anderson’s Law: I have yet to see any problem, however complicated, which, when you looked at it in the right way, did not become still more complicated. Benchley’s Law: Anyone can do any amount of work provided it isn’t the work he or she is supposed to be doing at that moment. Bok’s Law: If you think education is expensive—try ignorance. Boling’s Postulate: If you’re feeling good, don’t worry. You’ll get over it. Brook’s First Law: Adding manpower to a late software project makes it later. Brook’s Second Law: Whenever a system becomes completely defined, some damn fool discovers something which either abolishes the system or expands it beyond recognition. Brown’s Law of Business Success: Our customer’s paperwork is profit. Our own paperwork is loss. Chisholm’s Second Law: When things are going well, something will go wrong. Corollaries

1. When things just can’t get any worse, they will.

2. Anytime things appear to be going better, you have overlooked something.

Cohn’s Law: The more time you spend reporting what you are doing, the less time you have to do anything. Stability is achieved when you spend all your time doing nothing but reporting on the nothing you are doing. Connolly’s Law of Cost Control: The price of any product produced for a government agency will be not less than the square of the initial firm fixed- price contract. Cooke’s Law: In any decisive situation, the amount of relevant information available is inversely proportional to the importance of the decision. Mr. Cooper’s Law: If you do not understand a particular word in a piece of technical writing, ignore it. The piece will make perfect sense without it. Cornuelle’s Law: Authority tends to assign jobs to those least able to do


them. Courtois’s Rule: If people listened to themselves more often, they’d talk less. First Law of Debate: Never argue with a fool. People might not know the difference. Donsen’s Law: The specialist learns more and more about less and less until, finally, he or she knows everything about nothing; whereas the generalist learns less and less about more and more until, finally, he knows nothing about everything. Douglas’s Law of Practical Aeronautics: When the weight of the paperwork equals the weight of the plane, the plane will fly. Dude’s Law of Duality: Of two possible events, only the undesired one will occur. Economists’ Laws

1. What men learn from history is that men do not learn from history.

2. If on an actuarial basis there is a 50–50 chance that something will go wrong, it will actually go wrong nine times out of ten.

Old Engineer’s Law: The larger the project or job, the less time there is to do it. Nonreciprocal Laws of Expectations

1. Negative expectations yield negative results.

2. Positive expectations yield negative results.

Fyffe’s Axiom: The problem-solving process will always break down at the point at which it is possible to determine who caused the problem. Golub’s Laws of Computerdom

1. Fuzzy project objectives are used to avoid the embarrassment of estimating the corresponding costs.

2. A carelessly planned project takes three times longer to complete than expected; a carefully planned project takes only twice as long.

3. The effort required to correct the course increases geometrically with time.

4. Project teams detest weekly progress reporting because it so vividly manifests their lack of progress.

Gresham’s Law: Trivial matters are handled promptly; important matters are never resolved.


Hoare’s Law of Large Programs: Inside every large program is a small program struggling to get out. Issawi’s Law of Cynics: Cynics are right nine times out of ten; what undoes them is their belief that they are right ten times out of ten. Johnson’s First Law: When any mechanical contrivance fails, it will do so at the most inconvenient possible time. Malek’s Law: Any simple idea will be worded in the most complicated way. Patton’s Law: A good plan today is better than a perfect plan tomorrow. Peter’s Prognosis: Spend sufficient time in confirming the need and the need will disappear. Law of Political Erosion: Once the erosion of power begins, it has a momentum all its own. Pudder’s Law: Anything that begins well ends badly. Anything that begins badly ends worse. Putt’s Law: Technology is dominated by two types of people—those who understand what they do not manage and those who manage what they do not understand. Truman’s Law: If you cannot convince them, confuse them. Von Braun’s Law of Gravity: We can lick gravity, but sometimes the paperwork is overwhelming.



If there is a weakness in some of the project management education programs, it lies in the area of human behavior education. The potential problem is that there is an abundance of courses on planning, scheduling, and cost control but not very many courses on behavioral sciences that are directly applicable to a project management environment. All too often, lectures on human behavior focus upon application of the theories and principles based upon a superior (project manager) to subordinate (team member) relationship. This approach fails because:

Team members can be at a higher pay grade than the project manager. The project manager most often has little overall authority. The project manager most often has little formal reward power. Team members may be working on multiple projects at the same time. Team members may receive conflicting instructions from the project managers and their line manager. Because of the project’s duration, the project manager may not have the time necessary to adequately know the people on the team on a personal basis. The project manager may not have any authority to have people assigned to the project team or removed.

Topics that managers and executives believe should be covered in more depth in the behavioral courses include:

Conflict management with all levels of personnel Facilitation management Counseling skills Mentorship skills Negotiation skills Communication skills with all stakeholders Presentation skills

The problem may emanate from the limited number of textbooks on human behavior applications directly applicable to the project management environment. One of the best books in the marketplace was written by Steven Flannes and Ginger Levin.23 The book stresses application of project management education by providing numerous examples from the authors’ project management experience.



Although project managers have the authority and responsibility to establish project policies and procedures, they must fall within the general guidelines established by top management. Table 5–8 identifies sample top-management guidelines. Guidelines can also be established for planning, scheduling, controlling, and communications. TABLE 5–8. PROJECT GUIDELINES

Program Manager Functional Manager Relationship The program manager is responsible for overall program direction, control, and coordination; and is the principal contact with the program management of the customer.

The functional organization managers are responsible for supporting the program manager in the performance of the contract(s) and in accordance with the terms of the contract(s) and are accountable to their cognizant managers for the total performance.

The program manager determines what will be done: he obtains, through the assigned program team members, the assistance and concurrence of the functional support organizations in determining the definitive requirements and objectives of the program.

To achieve the program objectives, the program manager utilizes the services of the functional organizations in accordance with the prescribed division policies and procedures affecting the functional organizations.

The functional organizations determine how the work will be done.

The program The functional support The program manager operates


manager establishes program and technical policy as defined by management policy.

organizations perform all work within their functional areas for all programs within the cost, schedule, quality, and specifications established by contract for the program so as to assist the program manager in achieving the program objectives.

within prescribed division policies and procedures except where requirements of a particular program necessitate deviations or modifications as approved by the general manager. The functional support organizations provide strong, aggressive support to the program managers.

The program manager is responsible for the progress being made as well as the effectiveness of the total program. Integrates research, development, production, procurement, quality assurance, product support, test, and financial and contractual aspects.

The functional support organization management seeks out or initiates innovations, methods, improvements, or other means that will enable that function to better schedule commitments, reduce cost, improve quality, or otherwise render exemplary performance as approved by the program manager.

Approves detailed The program manager relies on


performance specifications, pertinent physical characteristics, and functional design criteria to meet the program’s development or operational requirements.

the functional support program team members for carrying out specific program assignments.

Program managers and the functional support program team members are jointly responsible for ensuring that unresolved conflicts between requirements levied on functional organizations by different program managers are brought to the attention of management.

Ensures preparation of, and approves, overall plan, budgets, and work statements essential to the integration of system elements.

Directs the preparation and maintenance of a time, cost, and performance schedule to ensure the orderly progress of the program.

Coordinates and approves subcontract work statement, schedules, contract type, and price for major “buy” items.

Program managers do not make decisions that are the responsibility of the functional support organizations as defined in division policies and procedures and/or as


assigned by the general manager.

Coordinates and approves vendor evaluation and source selections in conjunction with procurement representative to the program team.

Functional organization managers do not request decisions of a program manager that are not within the program manager’s delineated authority and responsibility and that do not affect the requirements of the program.

Program decision authority rests with the program manager for all matters relating to his assigned program, consistent with division policy and the responsibilities assigned by the general manager.

Functional organizations do not make program decisions that are the responsibility of the program manager. Joint participation in problem solution is essential to providing satisfactory decisions that fulfill overall program and company


objectives, and is accomplished by the program manager and the assigned program team members. In arriving at program decisions, the program manager obtains the assistance and concurrence of cognizant functional support managers, through the cognizant program team member, since they are held accountable for their support of each program and for overall division functional performance.



CERTIFICATION EXAM This section is applicable as a review of the principles to support the knowledge areas and domain groups in the PMBOK® Guide. This chapter addresses:

Human Resources Management Communications Management Closure

Understanding the following principles is beneficial if the reader is using this text to study for the PMP® Certification Exam:

How the various management theories relate to project management Various leadership styles Different types of power Different types of authority Need to document authority Contributions of Maslow, McGregor, Herzberg, and Ouchi Importance of human resources management in project management Need to clearly identify each team member’s role and responsibility Various ways to motivate team members That both the project manager and the team are expected to solve their own problems That team development is an ongoing process throughout the project life cycle Barriers to encoding and decoding Need for communication feedback Various communication styles Types of meetings

In Appendix C, the following Dorale Products mini–case study is applicable:

Dorale Products (I) [Human Resources and Communications Management]

The following multiple-choice questions will be helpful in reviewing the principles of this chapter:

1. Which of the following is not one of the sources of authority for a project



A. Project charter B. Job description for a project manager C. Delegation from senior management D. Delegation from subordinates

2. Which form of power do project managers that have a command of technology and are leading R&D projects most frequently use?

A. Reward power B. Legitimate power C. Expert power D. Referent power

3. If a project manager possesses penalty (or coercive) power, he or she most likely also possesses: A. Reward power B. Legitimate power C. Expert power D. Referent power

4. A project manager with a history of success in meeting deliverables and in working with team members would most likely possess a great deal of: A. Reward power B. Legitimate power C. Expert power D. Referent power

5. Most project managers are motivated by which level of Maslow’s hierarchy of human needs?

A. Safety

B. Socialization C. Self-esteem

D. Self-actualization

6. You have been placed in charge of a project team. The majority of the team members have less than two years of experience working on project teams and most of the people have never worked with you previously. The leadership style you would most likely select would be: A. Telling

B. Selling

C. Participating D. Delegating

7. You have been placed in charge of a new project team and are fortunate to have been assigned the same people that worked for you on your last two projects. Both previous projects were very successful and the team performed as a high- performance team. The leadership style you would most likely use on the new project would be: A. Telling

B. Selling

C. Participating D. Delegating

8. Five people are in attendance in a meeting and are communicating with one another. How many two-way channels of communication are present?


A. 4

B. 5

C. 10

D. 20

9. A project manager provides a verbal set of instructions to two team members on how to perform a specific test. Without agreeing or disagreeing with the project manager, the two employees leave the project manager’s office. Later, the project manager discovers that the tests were not conducted according to his instructions. The most probable cause of failure would be: A. Improper encoding B. Improper decoding C. Improper format for the message D. Lack of feedback on instructions

10. A project manager that allows workers to be actively involved with the project manager in making decisions would be using which leadership style.

A. Passive

B. Participative/democratic C. Autocratic

D. Laissez-faire

11. A project manager that dictates all decisions and does not allow for any participation by the workers would be using which leadership style.

A. Passive

B. Participative/democratic C. Autocratic

D. Laissez-faire

12. A project manager that allows the team to make virtually all of the decisions without any involvement by the project manager would be using which leadership style.

A. Passive

B. Participative/democratic C. Autocratic

D. Laissez-faire



2. C

3. A 4. D

5. D

6. A 7. D

8. C

9. D

10. B

11. C

12. D


PROBLEMS 5–1 A project manager finds that he does not have direct reward power over salaries, bonuses, work assignments, or project funding for members of the project team with whom he interfaces. Does this mean that he is totally deficient in reward power? Explain your answer.

5–2 For each of the remarks made below, what types of interpersonal influences could exist?

a. “I’ve had good working relations with department X. They like me and I like them. I can usually push through anything ahead of schedule.”

b. A research scientist was temporarily promoted to project management for an advanced state- of-the-art effort. He was overheard making the following remark to a team member: “I know it’s contrary to department policy, but the test must be conducted according to these criteria or else the results will be meaningless.”

5–3 Do you agree or disagree that scientists and engineers are likely to be more creative if they feel that they have sufficient freedom in their work? Can this condition backfire?

5–4 Should the amount of risk and uncertainty in the project have a direct bearing on how much authority is granted to a project manager?

5–5 Some projects are directed by project managers who have only monitoring authority. These individuals are referred to as influence project managers. What kind of projects would be under their control? What organizational structure might be best for this?

5–6 As a project nears termination, the project manager may find that the functional people are more interested in finding a new role for themselves than in giving their best to the current situation. How does this relate to Maslow’s hierarchy of needs, and what should the project manager do?

5–7 Richard M. Hodgetts (“Leadership Techniques in the Project Organization,” Academy of Management Journal, June 1968, pp. 211–219) conducted a survey on aerospace, chemical, construction, and state government workers as to whether they would rate the following leadership techniques as very important, important, or not important:

Negotiation Personality and/or persuasive ability Competence Reciprocal favors

How do you think each industry answered the questionnaires?

5–8 In a project environment, time is a constraint rather than a luxury, and this creates a problem for the project manager who has previously never worked with certain team members. Some people contend that the project manager must create some sort of test to measure, early on, the ability of people to work together as a team.

Is such a test possible for people working in a project environment? Are there any project organizational forms that would be conducive for such testing?

5–9 Project managers consider authority and funding as being very important in gaining support. Functional personnel, however, prefer friendship and work assignments. How can these two outlooks be related to the theories of Maslow and McGregor?

5–10 On large projects, some people become experts at planning while others become experts at implementation. Planners never seem to put on another hat and see the problems of the people doing the implementation whereas the people responsible for implementation never seem to


understand the problems of the planners. How can this problem be resolved on a continuous basis?

5–11 What kind of working relationships would result if the project manager had more reward power than the functional managers?

5–12 For each of the following remarks, state the possible situation and accompanying assumptions that you would make.

a. “A good project manager should manage by focusing on keeping people happy.”

b. “A good project manager must be willing to manage tension.”

c. “The responsibility for the success or failure rests with upper-level management. This is their baby.”

d. Remarks by functional employee: “What if I fail on this project? What can he (the project manager) do to me?”

5–13 Can each of the following situations lead to failure?

a. Lack of expert power b. Lack of referent power c. Lack of reward and punishment power d. Not having sufficient authority

5–14 One of your people comes into your office and states that he has a technical problem and would like your assistance by making a phone call.

a. Is this managing or doing?

b. Does your answer depend on who must be called? (That is, is it possible that authority relationships may have to be considered?)

5–15 On the LRC, can we structure the responsibility column to primary and secondary responsibilities?

5–16 Discuss the meaning of each of the two poems listed below: We shall have to evolve Problem solvers galore Since each problem they solve Creates ten problems more.

Author unknown Jack and Jill went up the hill To fetch a pail of water Jack fell down and broke his crown And Jill came tumbling after.

Jack could have avoided this awful lump By seeking alternative choices Like installing some pipe and a great big pump And handing Jill the invoices.24

5–17 What is the correct way for a project manager to invite line managers to attend team meetings?

5–18 Can a project manager sit and wait for things to happen, or should he cause things to happen?

5–19 The company has just hired a fifty-four-year-old senior engineer who holds two masters degrees in engineering disciplines. The engineer is quite competent and has worked well as a loner for the past twenty years. This same engineer has just been assigned to the R&D phase of your project. You, as project manager or project engineer, must make sure that this engineer works as a team member with other functional employees, not as a loner. How do you propose to accomplish this? If the individual persists in wanting to be a loner, should you fire him?

5–20 Suppose the linear responsibility chart is constructed with the actual names of the people involved, rather than just their titles. Should this chart be given to the customer?

5–21 How should a functional manager handle a situation where the project manager:

a. Continually cries wolf concerning some aspect of the project when, in fact, the problem either does not exist or is not as severe as the project manager makes it out to be?


b. Refuses to give up certain resources that are no longer needed on the project?

5–22 How do you handle a project manager or project engineer who continually tries to “bite off more than he can chew?” If he were effective at doing this, at least temporarily, would your answer change?

5–23 A functional manager says that he has fifteen people assigned to work on your project next week (according to the project plan and schedule). Unfortunately, you have just learned that the prototype is not available and that these fifteen people will have nothing to do. Now what? Who is at fault?

5–24 Manpower requirements indicate that a specific functional pool will increase sharply from eight to seventeen people over the next two weeks and then drop back to eight people. Should you question this?

5–25 Below are several sources from which legal authority can be derived. State whether each source provides the project manager with sufficient authority from which he can effectively manage the project.

a. The project or organizational charter b. The project manager’s position in the organization c. The job description and specifications for project managers d. Policy documents e. The project manager’s “executive” rank f. Dollar value of the contract g. Control of funds

5–26 Is this managing or doing?25

MANAGING DOING _______ _______ 1. Making a call with one of your people to assist him in solving a

technical problem. _______ _______ 2. Signing a check to approve a routine expenditure. _______ _______ 3. Conducting the initial screening interview of a job applicant. _______ _______ 4. Giving one of your experienced people your solution to a new

problem without first asking for his recommendation. _______ _______ 5. Giving your solution to a recurring problem that one of your new

people has just asked you about. _______ _______ 6. Conducting a meeting to explain to your people a new procedure. _______ _______ 7. Phoning a department to request help in solving a problem that one

of your people is trying to solve. _______ _______ 8. Filling out a form to give one of your people a pay increase. _______ _______ 9. Explaining to one of your people why he is receiving a merit pay

increase. _______ _______ 10. Deciding whether to add a position. _______ _______ 11. Asking one of your people what he thinks about an idea you have

that will affect your people. _______ _______ 12. Transferring a desirable assignment from employee A to

employee B because employee A did not devote the necessary effort.

_______ _______ 13. Reviewing regular written reports to determine your people’s progress toward their objectives.

_______ _______ 14. Giving a regular progress report by phone to your supervisor. _______ _______ 15. Giving a tour to an important visitor from outside of your

organization. _______ _______ 16. Drafting an improved layout of facilities. _______ _______ 17. Discussing with your key people the extent to which they should


use staff services during the next year. _______ _______ 18. Deciding what your expense-budget request will be for your area

of responsibility. _______ _______ 19. Attending a professional or industrial meeting to learn detailed

technical developments. _______ _______ 20. Giving a talk on your work activities to a local community group.

5–27 Below are three broad statements describing the functions of management. For each statement, are we referring to upper-level management, project management, or functional management?

a. Acquire the best available assets and try to improve them.

b. Provide a good working environment for all personnel.

c. Make sure that all resources are applied effectively and efficiently such that all constraints are met, if possible.

5–28 Decide whether you agree or disagree that, in the management of people, the project manager:

Must convert mistakes into learning experiences. Acts as the lubricant that eases the friction (i.e., conflicts) between the functioning parts.

5–29 Functional employees are supposed to be the experts. A functional employee makes a statement that the project manager does not believe is completely true or accurate. Should the project manager support the team member? If so, for how long? Does your answer depend on to whom the remarks are being addressed, such as upper-level management or the customer? At what point should a project manager stop supporting his team members?

5–30 Below are four statements: two statements describe a function, and two others describe a purpose. Which statements refer to project management and which refer to functional management?

Function Reduce or eliminate uncertainty Minimize and assess risk

Purpose Create the environment (using transformations) Perform decision-making in the transformed environment

5–31 Manager A is a department manager with thirty years of experience in the company. For the last several years, he has worn two hats and acted as both project manager and functional manager on a variety of projects. He is an expert in his field. The company has decided to incorporate formal project management and has established a project management department. Manager B, a thirty-year-old employee with three years of experience with the company, has been assigned as project manager. In order to staff his project, manager B has requested from manager A that manager C (a personal friend of manager B) be assigned to the project as the functional representative. Manager C is twenty-six years old and has been with the company for two years. Manager A agrees to the request and informs manager C of his new assignment, closing with the remarks, “This project is yours all the way. I don’t want to have anything to do with it. I’ll be too busy with paperwork as the result of our new organizational structure. Just send me a memo once in a while telling me what’s happening.”

During the project kickoff meeting it became obvious to both manager B and manager C that the only person with the necessary expertise was manager A. Without the support of manager A, the time duration for project completion could be expected to double.


This situation is ideal for role playing. Put yourself in the place of managers A, B, and C and discuss the reasons for your actions. How can this problem be overcome? How do you get manager A to support the project? Who should inform upper-level management of this situation? When should upper-level management be informed? Would any of your answers change if manager B and manager C were not close friends?

5–32 Is it possible for a product manager to have the same degree of tunnel vision that a project manager has? If so, under what circumstances?

5–33 Your company has a policy that employees can participate in an educational tuition reimbursement program, provided that the degree obtained will benefit the company and that the employee’s immediate superior gives his permission. As a project manager, you authorize George, your assistant project manager who reports directly to you, to take courses leading to an MBA degree.

Midway through your project, you find that overtime is required on Monday and Wednesday evenings, the same two evenings that George has classes. George cannot change the evenings that his classes are offered. You try without success to reschedule the overtime to early mornings or other evenings. According to company policy, the project office must supervise all overtime. Since the project office consists of only you and George, you must perform the overtime if George does not. How should you handle this situation? Would your answer change if you thought that George might leave the company after receiving his degree?

5–34 Establishing good interface relationships between the project manager and functional manager can take a great deal of time, especially during the conversion from a traditional to a project organizational form. Below are five statements that represent the different stages in the development of a good interface relationship. Place these statements in the proper order and discuss the meaning of each one.

a. The project manager and functional manager meet face-to-face and try to work out the problem.

b. Both the project and functional managers deny that any problems exist between them.

c. The project and functional managers begin formally and informally to anticipate the problems that can occur.

d. Both managers readily admit responsibility for several of the problems.

e. Each manager blames the other for the problem.

5–35 John is a functional support manager with fourteen highly competent individuals beneath him. John’s main concern is performance. He has a tendency to leave scheduling and cost problems up to the project managers. During the past two months, John has intermittently received phone calls and casual visits from upper-level management and senior executives asking him about his department’s costs and schedules on a variety of projects. Although he can answer almost all of the performance questions, he has experienced great difficulty in responding to time and cost questions. John is a little apprehensive that if this situation continues, it may affect his evaluation and merit pay increase. What are John’s alternatives?

5–36 Projects have a way of providing a “chance for glory” for many individuals. Unfortunately, they quite often give the not-so-creative individual an opportunity to demonstrate his incompetence. Examples would include the designer who always feels that he has a better way of laying out a blueprint, or the individual who intentionally closes a door when asked to open it, or vice versa. How should a project manager handle this situation? Would your answer change if the individual were quite competent but always did the opposite just to show his individuality? Should these individuals be required to have close supervision? If close supervision is required, should it be the responsibility of the functional manager, the project


office, or both?

5–37 Are there situations in which a project manager can wait for long-term changes instead of an immediate response to actions?

5–38 Is it possible for functional employees to have performed a job so long or so often that they no longer listen to the instructions given by the project or functional managers?

5–39 On Tuesday morning, the customer’s project manager calls the subcontractor’s project manager and asks him a question. On Tuesday afternoon, the customer’s project engineer calls the contractor’s project engineer and asks him the same question. How do you account for this? Could this be “planned” by the customer?

5–40 Below are eight common methods that project and functional employees can use to provide communications:

a. Counseling sessions b. Telephone conversation c. Individual conversation d. Formal letter h. Formal report e. Project office memo f. Project office directive g. Project team meeting

For each of the following actions, select one and only one means of communication from the above list that you would utilize in accomplishing the action:

1. Defining the project organizational structure to functional managers 2. Defining the project organizational structure to team members 3. Defining the project organizational structure to executives 4. Explaining to a functional manager the reasons for conflict between his employee and your assistant project managers 5. Requesting overtime because of schedule slippages 6. Reporting an employee’s violation of company policy 7. Reporting an employee’s violation of project policy 8. Trying to solve a functional employee’s grievance 9. Trying to solve a project office team member’s grievance 10. Directing employees to increase production 11. Directing employees to perform work in a manner that violates company policy 12. Explaining the new indirect project evaluation system to project team members 13. Asking for downstream functional commitment of resources 14. Reporting daily status to executives or the customer 15. Reporting weekly status to executives or the customer 16. Reporting monthly or quarterly status to executives or the customer 17. Explaining the reason for the cost overrun 18. Establishing project planning guidelines 19. Requesting a vice president to attend your team meeting 20. Informing functional managers of project status 21. Informing functional team members of project status 22. Asking a functional manager to perform work not originally budgeted for 23. Explaining customer grievances to your people 24. Informing employees of the results of customer interchange meetings 25. Requesting that a functional employee be removed from your project because of incompetence

5–41 Last month, Larry completed an assignment as chief project engineering on project X. It was a pleasing assignment. Larry, and all of the other project personnel, were continually kept informed (by the project manager) concerning all project activities. Larry is now working for a new project manager who tells his staff only what they have to know in order to get their job done. What can Larry do about this situation? Can this be a good situation?

5–42 Phase I of a program has just been completed successfully. The customer, however, was displeased because he always had to wait three weeks to a month after all tests were complete before data were supplied by the contractor.

For Phase II of the program, the customer is requiring that advanced quality control procedures be adhered to. This permits the customer’s quality control people to observe all testing and obtain all of the raw data at the same time the contractor does. Is there anything wrong with this arrangement?

5–43 You are a subcontractor to company Z, who in turn is the prime contractor to company Q. Before any design review or technical interchange meeting, company Z requires that they


review all material to be presented both in-house and with company Q prior to the meeting. Why would a situation such as this occur? Is it beneficial?

5–44 Referring to Problem 5–43, during contract negotiations between company Q and company Z, you, as project manager for the subcontractor, are sitting in your office when the phone rings. It is company Q requesting information to support its negotiation position. Should you provide the information?

5–45 How does a project manager find out if the project team members from the functional departments have the authority to make decisions?

5–46 One of your functional people has been assigned to perform a certain test and document the results. For two weeks you “hound” this individual only to find out that he is continually procrastinating on work in another program. You later find out from one of his co-workers that he hates to write. What should you do?

5–47 During a crisis, you find that all of the functional managers as well as the team members are writing letters and memos to you, whereas previously everything was verbal. How do you account for this?

5–48 Below are several problems that commonly occur in project organizations. State, if possible, the effect that each problem could have on communications and time management:

a. People tend to resist exploration of new ideas.

b. People tend to mistrust each other in temporary management situations.

c. People tend to protect themselves.

d. Functional people tend to look at day-to-day activities rather than long-range efforts.

e. Both functional and project personnel often look for individual rather than group recognition.

f. People tend to create win-or-lose positions.

5–49 How can executives obtain loyalty and commitments from horizontal and vertical personnel in a project organizational structure?

5–50 What is meant by polarization of communications? What are the most common causes?

5–51 Many project managers contend that project team meetings are flooded with agenda items, many of which may be irrelevant. How do you account for this?

5–52 Paul O. Gaddis (“The Project Manager,” Harvard Business Review, May–June 1959, p. 90, copyright © 1959 by the President and Fellows of Harvard College. All rights reserved) has stated that: In learning to manage a group of professional employees, the usual boss– subordinate relationship must be modified. Of special importance, the how—the details or methods of work performance by a professional employee—should be established by the employee. It follows that he must be given the facts necessary to permit him to develop a rational understanding of the why of tasks assigned to him.

How would you relate this information to the employee?

5–53 The customer has asked to have a customer representative office set up in the same building as the project office. As project manager, you put the customer’s office at the opposite end of the building from where you are, and on a different floor. The customer states that he wants his office next to yours. Should this be permitted, and, if so, under what conditions?

5–54 During an interchange meeting from the customer, one of the functional personnel makes a presentation stating that he personally disagrees with the company’s solution to the particular problem under discussion and that the company is “all wet” in its approach. How do you, as a


project manager, handle this situation?

5–55 Do you agree or disagree with the statement that documenting results “forces” people to learn?

5–56 Should a project manager encourage the flow of problems to him? If yes, should he be selective in which ones to resolve?

5–57 Is it possible for a project manager to hold too few project review meetings?

5–58 If all projects are different, should there exist a uniform company policies and procedures manual?

5–59 Of the ten items below, which are considered as part of directing and which are controlling?

a. Supervising

b. Communicating c. Delegating

d. Evaluating

e. Measuring

f. Motivating

g. Coordinating

h. Staffing

i. Counseling

j. Correcting

5–60 Which of the following items is not considered to be one of the seven Ms of management?

a. Manpower

b. Money

c. Machines

d. Methods

e. Materials

f. Minutes

g. Mission

5–61 Match the following leadership styles (source unknown):

1. Management by inaction 2. Management by detail 3. Management by invisibility 4. Management by consensus 5. Management by manipulation 6. Management by rejection 7. Management by survival 8. Management by depotism 9. Management by creativity 10. Management by leadership

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________

a. Has an executive who manages with flair, wisdom, and vision. He listens to his people, prods them, and leads them.

b. Grows out of fear and anxiety.

c. Can be fair or unfair, effective or ineffective, legitimate or illegitimate. Some people are manipulators of others for power. People are not puppets.


d. Is the roughly negative style. Executive always has ideas; devil’s advocate. Well-prepared proponents can win—so such a boss can be stimulating.

e. Has an executive who needs every conceivable fact; is methodical and orderly; often is timid, inappropriate, or late.

f. Is good as long as it is based on reality. The executive has a trained instinct.

g. Has an executive who will do anything to survive—the jungle fighter. If it is done constructively, the executive will build instead of destroy.

h. Is totalitarian. There are no clashes of ideas. The organization moves. Creative people flee. Employees always know who is boss.

i. Has an executive who is not around, has good subordinates, and works in an office, offstage.

j. Can be important in dealing with the unknown (R&D projects). Subordinates are independent and powerful. This style could be a substitute for decision-making. It is important for setting policy.


THE TROPHY PROJECT The ill-fated Trophy Project was in trouble right from the start. Reichart, who had been an assistant project manager, was involved with the project from its conception. When the Trophy Project was accepted by the company, Reichart was assigned as the project manager. The program schedules started to slip from day one, and expenditures were excessive. Reichart found that the functional managers were charging direct labor time to his project but working on their own “pet” projects. When Reichart complained of this, he was told not to meddle in the functional manager’s allocation of resources and budgeted expenditures. After approximately six months, Reichart was requested to make a progress report directly to corporate and division staffs.

Reichart took this opportunity to bare his soul. The report substantiated that the project was forecasted to be one complete year behind schedule. Reichart’s staff, as supplied by the line managers, was inadequate to stay at the required pace, let alone make up any time that had already been lost. The estimated cost at completion at this interval showed a cost overrun of at least 20 percent. This was Reichart’s first opportunity to tell his


story to people who were in a position to correct the situation. The result of Reichart’s frank, candid evaluation of the Trophy Project was very predictable. Nonbelievers finally saw the light, and the line managers realized that they had a role to play in the completion of the project. Most of the problems were now out in the open and could be corrected by providing adequate staffing and resources. Corporate staff ordered immediate remedial action and staff support to provide Reichart a chance to bail out his program.

The results were not at all what Reichart had expected. He no longer reported to the project office; he now reported directly to the operations manager. Corporate staff’s interest in the project became very intense, requiring a 7:00 A.M. meeting every Monday morning for complete review of the project status and plans for recovery. Reichart found himself spending more time preparing paperwork, reports, and projections for his Monday morning meetings than he did administering the Trophy Project. The main concern of corporate was to get the project back on schedule. Reichart spent many hours preparing the recovery plan and establishing manpower requirements to bring the program back onto the original schedule.

Group staff, in order to closely track the progress of the Trophy Project, assigned an assistant program manager. The assistant program manager determined that a sure cure for the Trophy Project would be to computerize the various problems and track the progress through a very complex computer program. Corporate provided Reichart with twelve additional staff members to work on the computer program. In the meantime, nothing changed. The functional managers still did not provide adequate staff for recovery, assuming that the additional manpower Reichart had received from corporate would accomplish that task.

After approximately $50,000 was spent on the computer program to track the problems, it was found that the program objectives could not be handled by the computer. Reichart discussed this problem with a computer supplier and found that $15,000 more was required for programming and additional storage capacity. It would take two months for installation of the additional storage capacity and the completion of the programming. At this point, the decision was made to abandon the computer program.

Reichart was now a year and a half into the program with no prototype units completed. The program was still nine months behind schedule with the overrun projected at 40 percent of budget. The customer had been receiving his reports on a timely basis and was well aware of the fact that the Trophy Project was behind schedule. Reichart had spent a great deal of time with the customer explaining the problems and the plan for recovery. Another problem that Reichart had to contend with was that the vendors who were supplying components for the project were also running behind schedule.

One Sunday morning, while Reichart was in his office putting together a report for the client, a corporate vice president came into his office. “Reichart,” he said, “in any project I look at the top sheet of paper and the man whose name appears at the top of the sheet is the one I hold responsible. For this project your name appears at the top of the sheet. If you cannot bail this thing out, you are in serious trouble in this corporation.” Reichart did not know which way to turn or what to say. He had no control over the functional managers who were creating the problems, but he was the person who was being held responsible.

After another three months the customer, becoming impatient, realized that the Trophy Project was in serious trouble and requested that the division general manager and his entire staff visit the customer’s plant to give a progress and “get well” report within a week. The division general manager called Reichart into his office and said, “Reichart,


go visit our customer. Take three or four functional line people with you and try to placate him with whatever you feel is necessary.” Reichart and four functional line people visited the customer and gave a four-and-a-half-hour presentation defining the problems and the progress to that point. The customer was very polite and even commented that it was an excellent presentation, but the content was totally unacceptable. The program was still six to eight months late, and the customer demanded progress reports on a weekly basis. The customer made arrangements to assign a representative in Reichart’s department to be “on-site” at the project on a daily basis and to interface with Reichart and his staff as required. After this turn of events, the program became very hectic.

The customer representative demanded constant updates and problem identification and then became involved in attempting to solve these problems. This involvement created many changes in the program and the product in order to eliminate some of the problems. Reichart had trouble with the customer and did not agree with the changes in the program. He expressed his disagreement vocally when, in many cases, the customer felt the changes were at no cost. This caused a deterioration of the relationship between client and producer.

One morning Reichart was called into the division general manager’s office and introduced to Mr. “Red” Baron. Reichart was told to turn over the reins of the Trophy Project to Red immediately. “Reichart, you will be temporarily reassigned to some other division within the corporation. I suggest you start looking outside the company for another job.” Reichart looked at Red and asked, “Who did this? Who shot me down?”

Red was program manager on the Trophy Project for approximately six months, after which, by mutual agreement, he was replaced by a third project manager. The customer reassigned his local program manager to another project. With the new team the Trophy Project was finally completed one year behind schedule and at a 40 percent cost overrun.


Background Herb had been with the company for more than eight years and had worked on various R&D and product enhancement projects for external clients. He had a Ph.D. in engineering and had developed a reputation as a subject matter expert. Because of his specialized skills, he worked by himself most of the time and interfaced with the various project teams only during project team meetings. All of that was about to change.

Herb’s company had just won a two-year contract from one of its best customers. The first year of the contract would be R&D and the second year would be manufacturing. The company made the decision that the best person qualified to be the project manager was Herb because of his knowledge of R&D and manufacturing. Unfortunately, Herb had never taken any courses in project management, and because of his limited involvement with previous project teams, there were risks in assigning him as the project


manager. But management believed he could do the job.

The Team Is Formed Herb’s team consisted of fourteen people, most of whom would be full time for at least the first year of the project. The four people that Herb would be interfacing with on a daily basis were Alice, Bob, Betty, and Frank.

Alice was a seasoned veteran who worked with Herb in R&D. Alice had been with the company longer than Herb and would coordinate the efforts of the R&D personnel. Bob also had been with the company longer that Herb and had spent his career in engineering. Bob would coordinate the engineering efforts and drafting. Betty was relatively new to the company. She would be responsible for all reports, records management, and procurements. Frank, a five-year employee with the company, was a manufacturing engineer. Unlike Alice, Bob, and Betty, Frank would be part time on the project until it was time to prepare the manufacturing plans.

For the first two months of the program, work seemed to be progressing as planned. Everyone understood their role on the project and there were no critical issues.

Friday the 13th Herb held weekly teams meetings every Friday from 2:00 to 3:00 p.m. Unfortunately the next team meeting would fall on Friday the 13th, and that bothered Herb because he was somewhat superstitious. He was considering canceling the team meeting just for that week but decided against it.

At 9:00 a.m., on Friday the 13th, Herb met with his project sponsor as he always did in the past. Two days before, Herb casually talked to his sponsor in the hallway and the sponsor told Herb that on Friday the sponsor would like to discuss the cash flow projections for the next six months and have a discussion on ways to reduce some of the expenditures. The sponsor had seen some expenditures that bothered him. As soon as Herb entered the sponsor’s office, the sponsor said: It looks like you have no report with you. I specifically recall asking you for a report on the cash flow projections.

Herb was somewhat displeased over this. Herb specifically recalled that this was to be a discussion only and no report was requested. But Herb knew that “rank has its privileges” and questioning the sponsor’s communication skills would be wrong. Obviously, this was not a good start to Friday the 13th.

At 10:00 a.m., Alice came into Herb’s office and he could see from the expression on her face that she was somewhat distraught. Alice then spoke: Herb, last Monday I told you that the company was considering me for promotion and the announcements would be made this morning. Well, I did not get promoted. How come you never wrote a letter of recommendation for me?

Herb remembered the conversation vividly. Alice did say that she was being considered for promotion but never asked him to write a letter of recommendation. Did Alice expect


Herb to read between the lines and try to figure out what she really meant?

Herb expressed his sincere apologies for what happened. Unfortunately, this did not make Alice feel any better as she stormed out of Herb’s office. Obviously, Herb’s day was getting worse and it was Friday the 13th.

No sooner had Alice exited the doorway to Herb’s office when Bob entered. Herb could tell that Bob had a problem. Bob then stated: In one of our team meetings last month, you stated that you had personally contacted some of my engineering technicians and told them to perform this week’s tests at 70°F, 90°F and 110°F. You and I know that the specifications called for testing at 60°F, 80°F and 100°F. That’s the way it was always done and you were asking them to perform the tests at different intervals than the specifications called for.

Well, it seems that the engineering technicians forgot the conversation you had with them and did the tests according to the specification criteria. I assumed that you had followed up your conversation with them with a memo, but that was not the case. It seems that they forgot.

When dealing with my engineering technicians, the standard rule is, “if it’s not in writing, then it hasn’t been said.” From now on, I would recommend that you let me provide the direction to my engineering technicians. My responsibility is engineering and all requests of my engineering personnel should go through me.

Yes, Friday the 13th had become a very bad day for Herb. What else could go wrong, Herb thought? It was now 11:30 a.m. and almost time for lunch. Herb was considering locking his office door so that nobody could find him and then disconnecting his phone. But in walked Betty and Frank, and once again he could tell by the expressions on their faces that they had a problem. Frank spoke first: I just received confirmation from procurement that they purchased certain materials which we will need when we begin manufacturing. We are a year away from beginning manufacturing and, if the final design changes in the slightest, we will be stuck with costly raw materials that cannot be used. Also, my manufacturing budget did not have the cash flow for early procurement. I should be involved in all procurement decisions involving manufacturing. I might have been able to get it cheaper that Betty did. So, how was this decision made without me?

Before Herb could say anything, Betty spoke up: Last month, Herb, you asked me to look into the cost of procuring these materials. I found a great price at one of the vendors and made the decision to purchase them. I thought that this was what you wanted me to do. This is how we did it in the last company I worked for.

Herb then remarked: I just wanted you to determine what the cost would be, not to make the final procurement decision, which is not your responsibility.

Friday the 13th was becoming possibly the worst day in Herb’s life. Herb decided not to take any further chances. As soon as Betty and Frank left, Herb immediately sent out e- mails to all of the team members canceling the team meeting scheduled for 2:00 to 3:00 p.m. that afternoon.

QUESTIONS 1. How important are communication skills in project management?

2. Was Herb the right person to be assigned as the project manager?

3. There were communications issues with Alice, Bob, Betty, and Frank. For each communication issue, where was the breakdown in communications: encoding, decoding, feedback, and so on?



McRoy Aerospace was a highly profitable company building cargo planes and refueling tankers for the armed forces. It had been doing this for more than fifty years and was highly successful. But because of a downturn in the government’s spending on these types of planes, McRoy decided to enter the commercial aviation aircraft business, specifically wide-body planes that would seat up to 400 passengers, and compete head on with Boeing and Airbus Industries.

During the design phase, McRoy found that the majority of the commercial airlines would consider purchasing its plane provided that the costs were lower than the other aircraft manufacturers. While the actual purchase price of the plane was a consideration for the buyers, the greater interest was in the life-cycle cost of maintaining the operational readiness of the aircraft, specifically the maintenance costs.

Operations and support costs were a considerable expense and maintenance requirements were regulated by the government for safety reasons. The airlines make money when the planes are in the air rather than sitting in a maintenance hangar. Each maintenance depot maintained an inventory of spare parts so that, if a part did not function properly, the part could be removed and replaced with a new part. The damaged part would be sent to the manufacturer for repairs or replacement. Inventory costs could be significant but were considered a necessary expense to keep the planes flying.

One of the issues facing McRoy was the mechanisms for the eight doors on the aircraft. Each pair of doors had their own mechanisms which appeared to be restricted by their location in the plane. If McRoy could come up with a single design mechanism for all four pairs of doors, it would significantly lower the inventory costs for the airlines as well as the necessity to train mechanics on one set of mechanisms rather than four. On the cargo planes and refueling tankers, each pair of doors had a unique mechanism. For commercial aircrafts, finding one design for all doors would be challenging.

Mark Wilson, One of the department managers at McRoy’s design center, assigned Jack, the best person he could think of to work on this extremely challenging project. If anyone could accomplish it, it was Jack. If Jack could not do it, Mark sincerely believed it could not be done.

The successful completion of this project would be seen as a value-added opportunity for McRoy’s customers and could make a tremendous difference from a cost and efficiency standpoint. McRoy would be seen as an industry leader in life-cycle costing, and this could make the difference in getting buyers to purchase commercial planes from McRoy Aerospace.

The project was to design an opening/closing mechanism that was the same for all of the doors. Until now, each door could have a different set of open/close mechanisms, which made the design, manufacturing, maintenance, and installation processes more complex, cumbersome, and costly.

Without a doubt, Jack was the best—and probably the only—person to make this happen even though the equipment engineers and designers all agreed that it could not be done. Mark put all of his cards on the table when he presented the challenge to Jack. He told him wholeheartedly that his only hope was for Jack to take on this project and explore it from every possible, out-of-the-box angle he could think of. But Jack said right off the bat that this may not be possible. Mark was not happy hearing Jack say this right away, but he knew Jack would do his best.


Jack spent two months looking at the problem and simply could not come up with the solution needed. Jack decided to inform Mark that a solution was not possible. Both Jack and Mark were disappointed that a solution could not be found.

“I know you’re the best, Jack,” stated Mark. “I can’t imagine anyone else even coming close to solving this critical problem. I know you put forth your best effort and the problem was just too much of a challenge. Thanks for trying. But if I had to choose one of your co-workers to take another look at this project, who might have even half a chance of making it happen? Who would you suggest? I just want to make sure that we have left no stone unturned,” he said rather glumly.

Mark’s words caught Jack by surprise. Jack thought for a moment and you could practically see the wheels turning in his mind. Was Jack thinking about who could take this project on and waste more time trying to find a solution? No, Jack’s wheels were turning on the subject of the challenging problem itself. A glimmer of an idea whisked through his brain and he said, “Can you give me a few days to think about some things, Mark?” he asked pensively.

Mark had to keep the little glimmer of a smile from erupting full force on his face. “Sure, Jack,” he said. “Like I said before, if anyone can do it, it’s you. Take all the time you need.”

A few weeks later, the problem was solved and Jack’s reputation rose to even higher heights than before.

QUESTIONS 1. Was Mark correct in what he said to get Jack to continue investigating the problem?

2. Should Mark just have given up on the idea rather than what he said to Jack?

3. Should Mark have assigned this to someone else rather than giving Jack a second chance, and if so, how might Jack react?

4. What should Mark have done if Jack still was not able to resolve the problem?

5. Would it make sense for Mark to assign this problem to someone else now, after Jack could not solve the problem the second time around?

6. What other options, if any, were now available to Mark?


Paula, the project manager, was reasonably happy the way that work was progressing on the project. The only issue was the work being done by Frank. Paula knew from the start of the project that Frank was a mediocre employee and often regarded as a trouble-maker. The tasks that Frank was expected to perform were not overly complex and the line manager assured Paula during the staffing function that Frank could do the job. The line manager also informed Paula that Frank demonstrated behavioral issues on other projects and sometimes had to be removed from the project. Frank was a chronic complainer and found fault with everything and everybody. But the line manager also assured Paula that Frank’s attitude was changing and that the line manager would get actively involved if any of these issues began to surface on Paula’s project. Reluctantly, Paula agreed to allow Frank to be assigned to her project.

Unfortunately, Frank’s work on the project was not being performed according to Paula’s standards. Paula had told Frank on more than one occasion what she expected


from him, but Frank persisted in doing his own thing. Paula was now convinced that the situation was getting worse. Frank’s work packages were coming in late and sometimes over budget. Frank continuously criticized Paula’s performance as a project manager and Frank’s attitude was beginning to affect the performance of some of the other team members. Frank was lowering the morale of the team. It was obvious that Paula had to take some action.

QUESTIONS 1. What options are available to Paula?

2. If Paula decides to try to handle the situation first by herself rather than approach the line manager, what should Paula do and in what order?

3. If all of Paula’s attempts fail to change the worker’s attitude and the line refuses to remove the worker, what options are available to Paula?

4. What rights, if any, does Paula have with regard to wage and salary administration regarding this employee?


Ben was placed in charge of a one-year project. Several of the work packages had to be accomplished by the Mechanical Engineering Department and required three people to be assigned full time for the duration of the project. When the project was originally proposed, the Mechanical Engineering Department manager estimated that he would assign three of his grade 7 employees to do the job. Unfortunately, the start date of the project was delayed by three months and the department manager was forced to assign the resources he planned to use on another project. The resources that would be available for Ben’s project at the new starting date were two grade 6’s and a grade 9.

The department manager assured Ben that these three employees could adequately perform the required work and that Ben would have these three employees full time for the duration of the project. Furthermore, if any problems occurred, the department manager made it clear to Ben that he personally would get involved to make sure that the work packages and deliverables were completed correctly.

Ben did not know any of the three employees personally. But since a grade 9 was considered as a senior subject matter expert pay grade, Ben made the grade 9 the lead engineer representing his department on Ben’s project. It was common practice for the seniormost person assigned from each department to act as the lead and even as an assistant project manager. The lead was often allowed to interface with the customers at information exchange meetings.

By the end of the first month of the project, work was progressing as planned. Although most of the team seemed happy to be assigned to the project and team morale was high, the two grade 6 team members in the Mechanical Engineering Department were disenchanted with the project. Ben interviewed the two grade 6 employees to see why they were somewhat unhappy. One of the two employees stated: The grade 9 wants to do everything himself. He simply does not trust us. Every time we use certain equations to come up with a solution, he must review everything we did in microscopic detail. He has to approve everything. The only time he does not micromanage us is when we have to make copies of reports. We do not feel that we are part of the team.

Ben was unsure how to handle the situation. Resources are assigned by the department managers and usually cannot be removed from a project without the permission of the


department managers. Ben met with the Mechanical Engineering Department manager, who stated: The grade 9 that I assigned is probably the best worker in my department. Unfortunately, he’s a prima donna. He trusts nobody else’s numbers or equations other than his own. Whenever co-workers perform work, he feels obligated to review everything that they have done. Whenever possible, I try to assign him to one-person activities so that he will not have to interface with anyone. But I have no other one- person assignments right now, which is why I assigned him to your project. I was hoping he would change his ways and work as a real team member with the two grade 6 workers, but I guess not. Don’t worry about it. The work will get done, and get done right. We’ll just have to allow the two grade 6 employees to be unhappy for a little while.

Ben understood what the department manager said but was not happy about the situation. Forcing the grade 9 to be removed could result in the assignment of someone with lesser capabilities, and this could impact the quality of the deliverables from the Mechanical Engineering Department. Leaving the grade 9 in place for the duration of the project will alienate the two grade 6 employees and their frustration and morale issues could infect other team members.

QUESTIONS 1. What options are available to Ben?

2. Is there a risk in leaving the situation as is?

3. Is there a risk in removing the grade 9?


Background Every project team has team meetings. The hard part is deciding when during the day to have the team meeting.

Know Your Energy Cycle Vince had been a “morning person” ever since graduating from college. He enjoyed getting up early. He knew his own energy cycle and the fact that he was obviously more productive in the morning than in the afternoon.

Vince would come into work at 6:00 a.m., 2 hours before the normal work force would show up. Between 6:00 a.m. and noon, Vince would keep his office door closed and often would not answer the phone. This prevented people from robbing Vince of his most productive time. Vince considered time robbers such as unnecessary phone calls lethal to the success of the project. This gave Vince 6 hours of productive time each day to do the necessary project work. After lunch, Vince would open his office door and anyone could then talk with him.

A Tough Decision Vince’s energy cycle worked well, at least for Vince. But Vince had just become the project manager on a large project. Vince knew that he


may have to sacrifice some of his precious morning time for team meetings. It was customary for each project team to have a weekly team meeting, and most project team meetings seemed to be held in the morning.

Initially, Vince decided to go against tradition and hold team meetings between 2:00 and 3:00 p.m. This would allow Vince to keep his precious morning time for his own productive work. Vince was somewhat disturbed when there was very little discussion on some of the critical issues and it appeared that people were looking at their watches. Finally, Vince understood the problem. A large portion of Vince’s team members were manufacturing personnel that started work as early as 5:00 a.m. The manufacturing personnel were ready to go home at 2:00 p.m. and were tired.

The following week Vince changed the team meeting time to 11:00 to 12:00 a.m. It was evident to Vince that he had to sacrifice some of his morning time. But once again, during the team meetings there really wasn’t very much discussion about some of the critical issues on the project and the manufacturing personnel were looking at their watches. Vince was disappointed and, as he exited the conference room, one of the manufacturing personnel commented to Vince, “Don’t you know that the manufacturing people usually go to lunch around 11:00 a.m.?”

Vince came up with a plan for the next team meeting. He sent out e-mails to all of the team members stating that the team meeting would be at 11:00 to 12:00 noon as before but the project would pick up the cost for providing lunch in the form of pizzas and salads. Much to Vince’s surprise, this worked well. The atmosphere in the team meeting improved significantly. There were meaningful discussions and decisions were being made instead of creating action items for future team meetings. It suddenly became an informal rather than a formal team meeting.

While Vince’s project could certainly incur the cost of pizzas, salads, and soft drinks for team meetings, this might set a bad precedent if this would happen at each team meeting. At the next team meeting, the team decided that it would be nice if this could happen once or twice a month. For the other team meetings, it was decided to leave the time for the team meetings the same at 11:00 to 12:00 noon but they would be “brown bag” team meetings where the team members would bring their lunches and the project would provide only the soft drinks and perhaps some cookies or brownies.

QUESTIONS 1. How should a project manager determine when (i.e., time of day) to hold a team meeting? What factors should be considered?

2. What mistakes did Vince make initially?

3. If you were an executive in this company, would you allow Vince to continue doing this?

LEADERSHIP EFFECTIVENESS (A) Instructions This tabulation form on page 270 is concerned with a comparison of personal supervisory styles. Indicate


your preference to the two alternatives after each item by writing appropriate figures in the blanks. Some of the alternatives may seem equally attractive or unattractive to you. Nevertheless, please attempt to choose the alternative that is relatively more characteristic of you. For each question given, you have three (3) points that you may distribute in any of the following combinations: A. If you agree with alternative (a) and disagree with (b), write 3 in the top blank and 0 in bottom blank.

a. 3

b. 0

B. If you agree with (b) and disagree with (a), write: a. 0

b. 3 C. If you have a slight preference for (a) over (b), write: a. 2

b. 1

D. If you have a slight preference for (b) over (a), write: a. 1

b. 2

Important—Use only the combinations shown above. Try to relate each item to your own personal experience. Please make a choice from every pair of alternatives.

1. On the job, a project manager should make a decision and . . .

a. _____ tell his team to carry it out.

b. _____ “tell” his team about the decision and then try to “sell” it.

2. After a project manager has arrived at a decision . . .

a. _____ he should try to reduce the team’s resistance to his decision by indicating what they have to gain.

b. _____ he should provide an opportunity for his team to get a fuller explanation of his ideas.


3. When a project manager presents a problem to his subordinates . . .

a. _____ he should get suggestions from them and then make a decision.

b. _____ he should define it and request that the group make a decision.

4. A project manager . . .

a. _____ is paid to make all the decisions affecting the work of his team.

b. _____ should commit himself in advance to assist in implementing whatever decision his team selects when they are asked to solve a problem.

5. A project manager should . . .

a. _____ permit his team an opportunity to exert some influence on decisions but reserve final decisions for himself.

b. _____ participate with his team in group decision-making but attempt to do so with a minimum of authority.

6. In making a decision concerning the work situation, a project manager should . . .

a. _____ present his decision and ideas and engage in a “give-and-take” session with his team to allow them to fully explore the implications of the decision.

b. _____ present the problem to his team, get suggestions, and then make a decision.

7. A good work situation is one in which the project manager . . .

a. _____ “tells” his team about a decision and then tries to “sell” it to them.

b. _____ calls his team together, presents a problem, defines the problem, and requests they solve the problem with the understanding that he will support their decision(s).

8. A well-run project will include . . .

a. _____ efforts by the project manager to reduce the team’s resistance to his decisions by indicating what they have to gain from them.

b. _____ “give-and take” sessions to enable the project manager and team to explore more fully the implications of the project manager’s decisions.

9. A good way to deal with people in a work situation is . . .

a. _____ to present problems to your team as they arise, get suggestions, and


then make a decision.

b. _____ to permit the team to make decisions, with the understanding that the project manager will assist in implementing whatever decision they make.

10. A good project manager is one who takes . . .

a. _____ the responsibility for locating problems and arriving at solutions, then tries to persuade his team to accept them.

b. _____ the opportunity to collect ideas from his team about problems, then he makes his decision.

11. A project manager . . .

a. _____ should make the decisions in his organization and tell his team to carry them out.

b. _____ should work closely with his team in solving problems, and attempt to do so with a minimum of authority.

12. To do a good job, a project manager should . . .

a. _____ present solutions for his team’s reaction.

b. _____ present the problem and collect from the team suggested solutions, then make a decision based on the best solution offered.

13. A good method for a project manager is . . .

a. _____ to “tell” and then try to “sell” his decision.

b. _____ to define the problem for his team, then pass them the right to make decisions.

14. On the job, a project manager . . .

a. _____ need not give consideration to what his team will think or feel about his decisions.

b. _____ should present his decisions and engage in a “give-and-take” session to enable everyone concerned to explore, more fully, the implications of the decisions.

15. A project manager . . .

a. _____ should make all decisions himself.

b. _____ should present the problem to his team, get suggestions, and then


make a decision.

16. It is good . . .

a. _____ to permit the team an opportunity to exert some influence on decisions, but the project manager should reserve final decisions for himself.

b. _____ for the project manager to participate with his team in group decision-making with as little authority as possible.

17. The project manager who gets the most from his team is the one who . . .

a. _____ exercises direct authority.

b. _____ seeks possible solutions from them and then makes a decision.

18. An effective project manager should . . .

a. _____ make the decisions on his project and tell his team to carry them out.

b. _____ make the decisions and then try to persuade his team to accept them.

19. A good way for a project manager to handle work problems is to . . .

a. _____ implement decisions without giving any consideration to what his team will think or feel.

b. _____ permit the team an opportunity to exert some influence on decisions but reserve the final decision for himself.

20. Project managers . . .

a. _____ should seek to reduce the team’s resistance to their decisions by indicating what they have to gain from them.

b. _____ should seek possible solutions from their team when problems arise and then make a decision from the list of alternatives.



Tabulation Form


LEADERSHIP EFFECTIVENESS (B) The Project Your company has just won a contract for an outside customer. The contract is for one year, broken down as follows: R&D: six months; prototype testing: one month; manufacturing: five months. In addition to the risks involved in the R&D stage, both your management and the customer have stated that there will be absolutely no trade-offs on time, cost, or performance.


PMBOK® Guide, 5th Edition Chapter 9 Human Resources Management Chapter 10 Communications Management

When you prepared the proposal six months ago, you planned and budgeted for a full-time staff of five people, in addition to the functional support personnel. Unfortunately, due to limited resources, your staff (i.e., the project office) will be as follows: Tom: An excellent engineer, somewhat of a prima donna, but has worked very well with you on previous projects. You specifically requested Tom and were fortunate to have him assigned, although your project is not regarded as a high priority. Tom is recognized as both a technical leader and expert, and is considered as perhaps the best engineer in the company. Tom will be full-time for the duration of the project.

Bob: Started with the company a little over a year ago, and may be a little “wet behind the ears.” His line manager has great expectations for him in the future but, for the time being, wants you to give him on-the-job-training as a project office team member. Bob will be full-time on your project.

Carol: She has been with the company for twenty years and does an acceptable job. She has never worked on your projects before. She is full-time on the project.

George: He has been with the company for six years, but has never worked on any of your projects. His superior tells you that he will be only half-time on your project until he finishes a crash job on another project. He should be available for full-time work in a month or two. George is regarded as an outstanding employee.

Management informs you that there is nobody else available to fill the fifth position. You’ll have to spread the increased workload over the other members. Obviously, the customer may not be too happy about this.

In each situation that follows, circle the best answer. The grading system will be provided later.


Remember: These staff individuals are “dotted” to you and “solid” to their line manager, although they are in your project office.

Situation 1: The project office team members have been told to report to you this morning. They have all received your memo concerning the time and place of the kickoff meeting. However, they have not been provided any specific details concerning the project except that the project will be at least one year in duration. For your company, this is regarded as a long-term project. A good strategy for the meeting would be:

A. The team must already be self-motivated or else they would not have been assigned. Simply welcome them and assign homework.

B. Motivate the employees by showing them how they will benefit: esteem, pride, self-actualization. Minimize discussion on specifics.

C. Explain the project and ask them for their input. Try to get them to identify alternatives and encourage group decision-making.

D. Identify the technical details of the project: the requirements, performance standards, and expectations.

Situation 2: You give the team members a copy of the winning proposal and a “confidential” memo describing the assumptions and constraints you considered in developing the proposal. You tell your team to review the material and be prepared to perform detailed planning at the meeting you have scheduled for the following Monday. During Monday’s planning meeting, you find that Tom (who has worked with you before) has established a take-charge role and has done some of the planning that should have been the responsibility of other team members. You should:

A. Do nothing. This may be a beneficial situation. However, you may wish to ask if the other project office members wish to review Tom’s planning.

B. Ask each team member individually how he or she feels about Tom’s role. If they complain, have a talk with Tom.

C. Ask each team member to develop his or her own schedules and then compare results.

D. Talk to Tom privately about the long-term effects of his behavior.

Situation 3: Your team appears to be having trouble laying out realistic schedules that will satisfy the customer’s milestones. They keep asking you pertinent questions and seem to be making the right decisions, but with difficulty.


A. Do nothing. If the team is good, they will eventually work out the problem.

B. Encourage the team to continue but give some ideas as to possible alternatives. Let them solve the problem.

C. Become actively involved and help the team solve the problem. Supervise the planning until completion.

D. Take charge yourself and solve the problem for the team. You may have to provide continuous direction.

Situation 4: Your team has taken an optimistic approach to the schedule. The functional managers have reviewed the schedules and have sent your team strong memos stating that there is no way that they can support your schedules. Your team’s morale appears to be very low. Your team expected the schedules to be returned for additional iterations and trade-offs, but not with such harsh words from the line managers. You should:

A. Take no action. This is common to these types of projects and the team must learn to cope.

B. Call a special team meeting to discuss the morale problem and ask the team for recommendations. Try to work out the problem.

C. Meet with each team member individually to reinforce his or her behavior and performance. Let members know how many other times this has occurred and been resolved through trade-offs and additional iterations. State your availability to provide advice and support.

D. Take charge and look for ways to improve morale by changing the schedules.

Situation 5: The functional departments have begun working, but are still criticizing the schedules. Your team is extremely unhappy with some of the employees assigned out of one functional department. Your team feels that these employees are not qualified to perform the required work. You should:

A. Do nothing until you are absolutely sure (with evidence) that the assigned personnel cannot perform as needed.

B. Sympathize with your team and encourage them to live with this situation until an alternative is found.

C. Assess the potential risks with the team and ask for their input and suggestions. Try to develop contingency plans if the problem is as serious as the team indicates.


D. Approach the functional manager and express your concern. Ask to have different employees assigned.

Situation 6: Bob’s performance as a project office team member has begun to deteriorate. You are not sure whether he simply lacks the skills, cannot endure the pressure, or cannot assume part of the additional work that resulted from the fifth position in the project being vacant. You should:

A. Do nothing. The problem may be temporary and you cannot be sure that there is a measurable impact on the project.

B. Have a personal discussion with Bob, seek out the cause, and ask him for a solution.

C. Call a team meeting and discuss how productivity and performance are decreasing. Ask the team for recommendations and hope Bob gets the message.

D. Interview the other team members and see if they can explain Bob’s actions lately. Ask the other members to assist you by talking to Bob.

Situation 7: George, who is half-time on your project, has just submitted for your approval his quarterly progress report for your project. After your signature has been attained, the report is sent to senior management and the customer. The report is marginally acceptable and not at all what you would have expected from George. George apologizes to you for the report and blames it on his other project, which is in its last two weeks. You should:

A. Sympathize with George and ask him to rewrite the report.

B. Tell George that the report is totally unacceptable and will reflect on his ability as a project office team member.

C. Ask the team to assist George in redoing the report since a bad report reflects on everyone.

D. Ask one of the other team members to rewrite the report for George.

Situation 8: You have completed the R&D stage of your project and are entering phase II: prototype testing. You are entering month seven of the twelve-month project. Unfortunately, the results of phase I R&D indicate that you were too optimistic in your estimating for phase II and a schedule slippage of at least two weeks is highly probable. The customer may not be happy. You should:

A. Do nothing. These problems occur and have a way of working themselves out. The end date of the project can still be met.


B. Call a team meeting to discuss the morale problem resulting from the slippage. If morale is improved, the slippage may be overcome.

C. Call a team meeting and seek ways of improving productivity for phase II. Hopefully, the team will come up with alternatives.

D. This is a crisis and you must exert strong leadership. You should take control and assist your team in identifying alternatives.

Situation 9: Your rescheduling efforts have been successful. The functional managers have given you adequate support and you are back on schedule. You should:

A. Do nothing. Your team has matured and is doing what they are paid to do.

B. Try to provide some sort of monetary or nonmonetary reward for your team (e.g., management-granted time off or a dinner team meeting).

C. Provide positive feedback/reinforcement for the team and search for ideas for shortening phase III.

D. Obviously, your strong leadership has been effective. Continue this role for the phase III schedule.

Situation 10: You are now at the end of the seventh month and everything is proceeding as planned. Motivation appears high. You should:

A. Leave well enough alone.

B. Look for better ways to improve the functioning of the team. Talk to them and make them feel important.

C. Call a team meeting and review the remaining schedules for the project. Look for contingency plans.

D. Make sure the team is still focusing on the goals and objectives of the project.

Situation 11: The customer unofficially informs you that his company has a problem and may have to change the design specifications before production actually begins. This would be a catastrophe for your project. The customer wants a meeting at your plant within the next seven days. This will be the customer’s first visit to your plant. All previous meetings were informal and at the customer’s facilities, with just you and the customer. This meeting will be formal. To prepare for the meeting, you should:

A. Make sure the schedules are updated and assume a passive role since the customer has not officially informed you of his problem.


B. Ask the team to improve productivity before the customer’s meeting. This should please the customer.

C. Call an immediate team meeting and ask the team to prepare an agenda and identify the items to be discussed.

D. Assign specific responsibilities to each team member for preparation of handout material for the meeting.

Situation 12: Your team is obviously not happy with the results of the customer interface meeting because the customer has asked for a change in design specifications. The manufacturing plans and manufacturing schedules must be developed anew. You should:

A. Do nothing. The team is already highly motivated and will take charge as before.

B. Reemphasize the team spirit and encourage your people to proceed. Tell them that nothing is impossible for a good team.

C. Roll up your shirt sleeves and help the team identify alternatives. Some degree of guidance is necessary.

D. Provide strong leadership and close supervision. Your team will have to rely on you for assistance.

Situation 13: You are now in the ninth month. While your replanning is going on (as a result of changes in the specifications), the customer calls and asks for an assessment of the risks in cancelling this project right away and starting another one. You should:

A. Wait for a formal request. Perhaps you can delay long enough for the project to finish.

B. Tell the team that their excellent performance may result in a follow-on contract.

C. Call a team meeting to assess the risks and look for alternatives.

D. Accept strong leadership for this and with minimum, if any, team involvement.

Situation 14: One of the functional managers has asked for your evaluation of all of his functional employees currently working on your project (excluding project office personnel). Your project office personnel appear to be working more closely with the functional employees than you are. You should:


A. Return the request to the functional manager since this is not part of your job description.

B. Talk to each team member individually, telling them how important their input is, and ask for their evaluations.

C. As a team, evaluate each of the functional team members, and try to come to some sort of agreement.

D. Do not burden your team with this request. You can do it yourself.

Situation 15: You are in the tenth month of the project. Carol informs you that she has the opportunity to be the project leader for an effort starting in two weeks. She has been with the company for twenty years and this is her first opportunity as a project leader. She wants to know if she can be released from your project. You should:

A. Let Carol go. You do not want to stand in the way of her career advancement.

B. Ask the team to meet in private and conduct a vote. Tell Carol you will abide by the team vote.

C. Discuss the problem with the team since they must assume the extra workload, if necessary. Ask for their input into meeting the constraints.

D. Counsel her and explain how important it is for her to remain. You are already short-handed.

Situation 16: Your team informs you that one of the functional manufacturing managers has built up a brick wall around his department and all information requests must flow through him. The brick wall has been in existence for two years. Your team members are having trouble with status reporting, but always get the information after catering to the functional manager. You should:

A. Do nothing. This is obviously the way the line manager wants to run his department. Your team is getting the information they need.

B. Ask the team members to use their behavioral skills in obtaining the information.

C. Call a team meeting to discuss alternative ways of obtaining the information.

D. Assume strong leadership and exert your authority by calling the line manager and asking for the information.

Situation 17: The executives have given you a new man to replace Carol for the last two months of the project. Neither you nor your team have worked with this


man before. You should:

A. Do nothing. Carol obviously filled him in on what he should be doing and what is involved in the project.

B. Counsel the new man individually, bring him up to speed, and assign him Carol’s work.

C. Call a meeting and ask each member to explain his or her role on the project to the new man.

D. Ask each team member to talk to this man as soon as possible and help him come on board. Request that individual conversations be used.

Situation 18: One of your team members wants to take a late-afternoon course at the local college. Unfortunately, this course may conflict with his workload. You should:

A. Postpone your decision. Ask the employee to wait until the course is offered again.

B. Review the request with the team member and discuss the impact on his performance.

C. Discuss the request with the team and ask for the team’s approval. The team may have to cover for this employee’s workload.

D. Discuss this individually with each team member to make sure that the task requirements will still be adhered to.

Situation 19: Your functional employees have used the wrong materials in making a production run test. The cost to your project was significant, but absorbed in a small “cushion” that you saved for emergencies such as this. Your team members tell you that the test will be rerun without any slippage of the schedule. You should:

A. Do nothing. Your team seems to have the situation well under control.

B. Interview the employees that created this problem and stress the importance of productivity and following instructions.

C. Ask your team to develop contingency plans for this situation should it happen again.

D. Assume a strong leadership role for the rerun test to let people know your concern.


Situation 20: All good projects must come to an end, usually with a final report. Your project has a requirement for a final report. This final report may very well become the basis for follow-on work. You should:

A. Do nothing. Your team has things under control and knows that a final report is needed.

B. Tell your team that they have done a wonderful job and there is only one more task to do.

C. Ask your team to meet and provide an outline for the final report.

D. You must provide some degree of leadership for the final report, at least the structure. The final report could easily reflect on your ability as a manager.

Fill in the table below. The answers appear in Appendix B.

MOTIVATIONAL QUESTIONNAIRE On the next several pages, you will find forty statements concerning what motivates you and how you try to motivate others. Beside each statement, circle the number that corresponds to your opinion. In the example below, the choice is “Slightly Agree.”


The following twenty statements involve what motivates you. Please rate each of the statements as honestly as possible. Circle the rating that you think is correct, not the one you think the instructor is looking for:


Statements 21–40 involve how project managers motivate team members. Again, it is important that your ratings honestly reflect the way you think that you, as project manager, try to motivate employees. Do not indicate the way others or the instructor might recommend motivating the employees. Your thoughts are what are important in this exercise.



Part 1 Scoring Sheet (What Motivates You?) Place your answers (the numerical values you circled) to questions 1–20 in the corresponding spaces in the chart below.


Basic Needs Safety Needs Belonging Needs #1 ________ #5 ________ #7 ________ #3 ________ #10 ________ #9 ________ #14 ________ #13 ________ #12 ________ #17 ________ #20 ________ #19 ________ Total ________Total ________Total ________ Esteem/Ego Needs Self-Actualization Needs #4 ________ #2 ________ #6 ________ #15 ________ #8 ________ #16 ________ #11 ________ #18 ________ Total ________ Total ________

Transfer your total score in each category to the table on page 283 by placing an “X” in the appropriate area for motivational needs.

Part 2 Scoring Sheet (How Do You Motivate?) Place your answers (the numerical values you circled) to questions 21–40 in the corresponding spaces in the chart below.

Basic Needs Safety Needs Belonging Needs #22 ________ #21 ________ #24 ________ #28 ________ #25 ________ #27 ________ #34 ________ #32 ________ #33 ________ #40 ________ #37 ________ #39 ________ Total ________Total ________Total ________ Esteem/Ego Needs Self-Actualization Needs #23 ________ #26 ________ #29 ________ #30 ________ #31 ________ #36 ________ #35 ________ #38 ________ Total ________ Total ________

Transfer your total score in each category to the table on page 283 by placing an “X” in the appropriate area for motivational needs.





1. © 2010 by Harold Kerzner. Reproduced by permission. All rights reserved.

2. © 2010 by Harold Kerzner. Reproduced by permission. All rights reserved.


3. © 2010 by Harold Kerzner. Reproduced by permission. All rights reserved.

4. © 2010 by Harold Kerzner. Reproduced by permission. All rights reserved.

5. © 2010 by Harold Kerzner. Reproduced by permission. All rights reserved.

*Case Study also appears at end of chapter.

1. Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960), pp. 33–34.

2. W. G. Ouchi and A. M. Jaeger, “Type Z Organization: Stability in the Midst of Mobility,” Academy of Management Review, April 1978, pp. 305–314.

3. Abraham Maslow, Motivation and Personality (New York: Harper and Brothers, 1954).

4. F. Herzberg, B. Mausner, and B. B. Snyderman, The Motivation to Work (New York: John Wiley & Sons, 1959).

5. John M. Magenau, and Jeffrey K. Pinto, “Power, Influence, and Negotiation in Project Management,” Peter W. G. Morris and Jeffrey Pinto, eds., Project Organization and Project Management Competencies (Wiley, 2007), p. 91. Reprinted by permission of John Wiley.

6. P. Lencioni, The Five Dysfunctions of a Team (New York: Jossey-Bass, 2002), pp. 197–218. Reprinted by permission of John Wiley.

7. James M. Kouzes and Barry Z. Posner, The Leadership Challenge, 4th ed. (New York: Jossey-Bass, 2007), pp. 60, 62.

8. D. L. Wilemon and John P. Cicero, “The Project Manager: Anomalies and Ambiguities,” Academy of Management Journal, Vol. 13, pp. 269–282, 1970.

9. Richard M. Hodgetts, “Leadership Techniques in Project Organizations,” Academy of Management Journal, Vol. 11, pp. 211–219, 1968.

10. K. Hultman and B. Gellerman, Balancing Individual and Organizational Values (Jossey-Bass/Pfeiffer: San Francisco, 2002).

11. Note 10. pp. 105–106.

12. John B. Miner, “The OD-Management Development Conflict.” Reprinted with permission from Business Horizons, December 1973, p. 32. Copyright © 1973 by the Board of Trustees at Indiana University.

13. D. L. Wilemon and John P. Cicero, “The Project Manager: Anomalies and Ambiguities,” Academy of Management Journal, Vol. 13, 1970, pp. 269–282.

14. From David I. Cleland and William Richard King, Systems Analysis and


Project Management (New York: McGraw-Hill), p. 237.

15. William P. Killian, “Project Management—Future Organizational Concepts,” Marquette Business Review, Vol. 2, 1971, pp. 90–107.

16. Russell D. Archibald, Managing High-Technology Programs and Projects (New York: Wiley, 1976), p. 230.

17. Adapted from R. K. Wysocki, Effective Project Management: Traditional, Agile, Extreme, 5th ed. (Wiley, Hoboken, NJ, 2009), pp. 62–63).

18. Some of the material in this section has been adapted from Wikipedia, the free encyclopedia.

19. Adapted from F. Rees, The Facilitator Excellence Handbook: Helping People Work Creatively and Productively Together (Jossey-Bass, a John Wiley Imprint, San Francisco, 1998).

20. S. L. Carpenter. and W. J. D. Kennedy, Managing Public Disputes (Jossey- Bass, a John Wiley Imprint, San Francisco, 1988), pp.118–119.

21. See note 19, p. 13.

22. Source unknown.

23. Steven W. Flannes and Ginger Levin, People Skills for Project Managers (Vienna, VA: Management Concepts, 2001).

24. Stacer Holcomb, OSD (SA), as quoted in The C/E Newsletter, publication of the cost effectiveness section of the Operations Research Society of America, Vol. 2, No. 1, January 1967.

25. From Raymond O. Leon, Manage More by Doing Less (New York: McGraw- Hill), p. 4. Copyright © 1971 by McGraw-Hill, Inc., New York. Used with permission of McGraw-Hill Book Company.


Management of Your Time and Stress

Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 5th Edition, Reference Section for the PMP® Certification Exam

The Reluctant Workers* Time Management Exercise

Multiple Choice Exam Human Resource Management Risk Management


6.0 INTRODUCTION Managing projects within time, cost, and performance is easier said than done. The project management environment is extremely turbulent, and is composed of numerous meetings, report writing, conflict resolution, continuous planning and replanning, communications with the customer, and crisis management. Ideally, the effective project manager is a manager, not a doer, but in the “real world,” project managers often compromise their time by doing both.

PMBOK® Guide, 5th Edition Chaper 9 Human Resources Management

Chapter 6 Time Management

Disciplined time management is one of the keys to effective project management. It is often said that if the project manager cannot control his own time, then he will control nothing else on the project.



For most people, time is a resource that, when lost or misplaced, is gone forever. For a project manager, however, time is more of a constraint, and effective time management principles must be employed to make it a resource.

Most executives prefer to understaff projects, in the mistaken belief that the project manager will assume the additional workload. The project manager may already be heavily burdened with meetings, report preparation, internal and external communications, conflict resolution, and planning/replanning for crises. And yet, most project managers somehow manipulate their time to get the work done. Experienced personnel soon learn to delegate tasks and to employ effective time management principles. The following questions should help managers identify problem areas:

Do you have trouble completing work within the allocated deadlines? How many interruptions are there each day? Do you have a procedure for handling interruptions? If you need a large block of uninterrupted time, is it available? With or without overtime? How do you handle drop-in visitors and phone calls? How is incoming mail handled? Do you have established procedures for routine work? Are you accomplishing more or less than you were three months ago? Six months ago? How difficult is it for you to say no? How do you approach detail work? Do you perform work that should be handled by your subordinates? Do you have sufficient time each day for personal interests? Do you still think about your job when away from the office? Do you make a list of things to do? If yes, is the list prioritized? Does your schedule have some degree of flexibility?

The project manager who can deal with these questions has a greater opportunity to convert time from a constraint to a resource.


6.2 TIME ROBBERS The most challenging problem facing the project manager is his inability to say no. Consider the situation in which an employee comes into your office with a problem. The employee may be sincere when he says that he simply wants your advice but, more often than not, the employee wants to take the monkey off of his back and put it onto yours. The employee’s problem is now your problem.

PMBOK® Guide, 5th Edition Chapter 6 Time Management

Chapter 11 Risk Management

To handle such situations, first screen out the problems with which you do not wish to get involved. Second, if the situation does necessitate your involvement, then you must make sure that when the employee leaves your office, he realizes that the problem is still his, not yours. Third, if you find that the problem will require your continued attention, remind the employee that all future decisions will be joint decisions and that the problem will still be on the employee’s shoulders. Once employees realize that they cannot put their problems on your shoulders, they learn how to make their own decisions.

There are numerous time robbers in the project management environment.

These include:

Incomplete work A job poorly done that must be done over Telephone calls, mail, and email Lack of adequate responsibility and commensurate authority Changes without direct notification/explanation Waiting for people Failure to delegate, or unwise delegation Poor retrieval systems Lack of information in a ready-to-use format Day-to-day administration Union grievances Having to explain “thinking” to superiors Too many levels of review


Casual office conversations Misplaced information Shifting priorities Indecision at any level Procrastination Setting up appointments Too many meetings Monitoring delegated work Unclear roles/job descriptions Executive meddling Budget adherence requirements Poorly educated customers Not enough proven managers Vague goals and objectives Lack of a job description Too many people involved in minor decision-making Lack of technical knowledge Lack of authorization to make decisions Poor functional status reporting Work overload Unreasonable time constraints Too much travel Lack of adequate project management tools Departmental “buck passing” Company politics Going from crisis to crisis Conflicting directives Bureaucratic roadblocks (“ego”) Empire-building line managers No communication between sales and engineering Excessive paperwork Lack of clerical/administrative support Dealing with unreliable subcontractors Personnel not willing to take risks Demand for short-term results Lack of long-range planning Learning new company systems Poor lead time on projects Documentation (reports/red tape)


Large number of projects Desire for perfection Lack of project organization Constant pressure Constant interruptions Shifting of functional personnel Lack of employee discipline Lack of qualified manpower


6.3 TIME MANAGEMENT FORMS There are two basic forms that project managers and project engineers can use for practicing better time management. The first form is the “to do” pad as shown in Figure 6–1. The project manager or secretary prepares the list of things to do. The project manager then decides which activities he must perform himself and assigns the appropriate priorities.

FIGURE 6–1. “To-do” pad.

The activities with the highest priorities are then transferred to the “daily calendar log,” as shown in Figure 6–2. The project manager assigns these activities to the appropriate time blocks based on his own energy cycle. Unfilled time blocks are then used for unexpected crises or for lower-priority activities.

FIGURE 6–2. Daily calendar log.


If there are more priority elements than time slots, the project manager may try to schedule well in advance. This is normally not a good practice, because it creates a backlog of high-priority activities. In addition, an activity that today is a “B” priority could easily become an “A” priority in a day or two. The moral here is do not postpone until tomorrow what you or your team can do today.



There are several techniques that project managers can practice in order to make better use of their time2:

Delegate. Follow the schedule. Decide fast. Decide who should attend. Learn to say no. Start now. Do the tough part first. Travel light. Work at travel stops. Avoid useless memos. Refuse to do the unimportant. Look ahead. Ask: Is this trip necessary? Know your energy cycle. Control telephone and email time. Send out the meeting agenda. Overcome procrastination. Manage by exception.

As we learned in Chapter 5, the project manager, to be effective, must establish time management rules and then ask himself four questions:

Rules for time management Conduct a time analysis (time log). Plan solid blocks for important things. Classify your activities. Establish priorities. Establish opportunity cost on activities. Train your system (boss, subordinate, peers). Practice delegation. Practice calculated neglect. Practice management by exception. Focus on opportunities—not on problems.


Questions What am I doing that I don’t have to do at all? What am I doing that can be done better by someone else? What am I doing that could be done as well by someone else? Am I establishing the right priorities for my activities?


6.5 STRESS AND BURNOUT The factors that serve to make any occupation especially stressful are responsibility without the authority or ability to exert control, a necessity for perfection, the pressure of deadlines, role ambiguity, role conflict, role overload, the crossing of organizational boundaries, responsibility for the actions of subordinates, and the necessity to keep up with the information explosions or technological breakthroughs. Project managers have all of these factors in their jobs.

A project manager has his resources controlled by line management, yet the responsibilities of bringing a project to completion by a prescribed deadline are his. A project manager may be told to increase the work output, while the work force is simultaneously being cut. Project managers are expected to get work out on schedule, but are often not permitted to pay overtime. One project manager described it this way: “I have to implement plans I didn’t design, but if the project fails, I’m responsible.

Project managers are subject to stress due to several different facets of their jobs. This can manifest itself in a variety of ways, such as:

1. Being tired. Being tired is a result of being drained of strength and energy, perhaps through physical exertion, boredom, or impatience. The definition here applies more to a short-term, rather than long-term, effect. Typical causes for feeling tired include meetings, report writing, and other forms of document preparation.

2. Feeling depressed. Feeling depressed is an emotional condition usually characterized by discouragement or a feeling of inadequacy. It is usually the result of a situation that is beyond the control or capabilities of the project manager. There are several sources of depression in a project environment: Management or the client considers your report unacceptable, you are unable to get timely resources assigned, the technology is not available, or the constraints of the project are unrealistic and may not be met.

3. Being physically and emotionally exhausted. Project managers are both managers and doers. It is quite common for project managers to perform a great deal of the work themselves, either because they consider the assigned personnel unqualified to perform the work or because they are impatient and consider themselves capable of performing the work faster. In addition, project managers often work a great deal of “self-inflicted” overtime. The most common cause of emotional exhaustion is report writing and the preparation of handouts for interchange meetings.


4. Burned out. Being burned out is more than just a feeling; it is a condition. Being burned out implies that one is totally exhausted, both physically and emotionally, and that rest, recuperation, or vacation time may not remedy the situation. The most common cause is prolonged overtime, or the need thereof, and an inability to endure or perform under continuous pressure and stress. Burnout can occur almost overnight, often with very little warning. The solution is almost always a change in job assignment, preferably with another company.

5. Being unhappy. There are several factors that produce unhappiness in project management. Such factors include highly optimistic planning, unreasonable expectations by management, management cutting resources because of a “buy-in,” or simply customer demands for additional data items. A major source of unhappiness is the frustration caused by having limited authority that is not commensurate with the assigned responsibility.

6. Feeling trapped. The most common situation where project managers feel trapped is when they have no control over the assigned resources on the project and feel as though they are at the mercy of the line managers. Employees tend to favor the manager who can offer them the most rewards, and that is usually the line manager. Providing the project manager with some type of direct reward power can remedy the situation.

7. Feeling worthless. Feeling worthless implies that one is without worth or merit, that is, valueless. This situation occurs when project managers feel that they are managing projects beneath their dignity. Most project managers look forward to the death of their project right from the onset, and expect their next project to be more important, perhaps twice the cost, and more complex. Unfortunately, there are always situations where one must take a step backwards.

8. Feeling resentful and disillusioned about people. This situation occurs most frequently in the project manager’s dealings (i.e., negotiations) with the line managers. During the planning stage of a project, line managers often make promises concerning future resource commitments, but renege on their promises during execution. Disillusionment then occurs and can easily develop into serious conflict. Another potential source of these feelings is when line managers appear to be making decisions that are not in the best interest of the project.

9. Feeling hopeless. The most common source of hopelessness are R&D projects where the ultimate objective is beyond the reach of the employee or even of the state-of-the-art technology. Hopelessness means showing no signs of a favorable outcome. Hopelessness is more a result of the performance constraint than of time or cost.


10. Feeling rejected. Feeling rejected can be the result of a poor working relationship with executives, line managers, or clients. Rejection often occurs when people with authority feel that their options or opinions are better than those of the project manager. Rejection has a demoralizing effect on the project manager because he feels that he is the “president” of the project and the true “champion” of the company.

11. Feeling anxious. Almost all project managers have some degree of “tunnel vision,” where they look forward to the end of the project, even when the project is in its infancy. This anxious feeling is not only to see the project end, but to see it completed successfully.

Stress is not always negative, however. Without certain amounts of stress, reports would never get written or distributed, deadlines would never be met, and no one would even get to work on time. But stress can be a powerful force resulting in illness and even fatal disease, and must be understood and managed if it is to be controlled and utilized for constructive purposes.

The mind, body, and emotions are not the separate entities they were once thought to be. One affects the other, sometimes in a positive way, and sometimes in a negative way. Stress becomes detrimental when it is prolonged beyond what an individual can comfortably handle. In a project environment, with continually changing requirements, impossible deadlines, and each project being considered as a unique entity in itself, we must ask, How much prolonged stress can a project manager handle comfortably?

The stresses of project management may seem excessive for whatever rewards the position may offer. However, the project manager who is aware of the stresses inherent in the job and knows stress management techniques can face this challenge objectively and make it a rewarding experience.



CERTIFICATION EXAM This section is applicable as a review of the principles to support the knowledge areas and domain groups in the PMBOK® Guide. This chapter addresses:

Human Resources Management Risk Management Execution

Understanding the following principles is beneficial if the reader is using this text to study for the PMP® Certification Exam:

How stress can affect the way that the project manager works with the team How stress affects the performance of team members

The following multiple-choice questions will be helpful in reviewing the principles of this chapter:

1. Which of the following leadership styles most frequently creates “additional” time robbers for a project manager?

A. Telling

B. Selling

C. Participating

D. Delegating

2. Which of the following leadership styles most frequently creates “additional” time robbers for the project team?

A. Telling

B. Selling

C. Participating

D. Delegating

3. Which of the following time robbers would a project manager most likely want to handle by himself or herself rather than through delegation to equally qualified


team members?

A. Approval of procurement expenditures

B. Status reporting to a customer

C. Conflicting directives from the executive sponsor

D. Earned-value status reporting



2. D

3. C


PROBLEMS 6–1 Should time robbers be added to direct labor standards for pricing out work?

6–2 Is it possible for a project manager to improve his time management skills by knowing the “energy cycle” of his people? Can this energy cycle be a function of the hour of the day, day of the week, or whether overtime is required?


THE RELUCTANT WORKERS Tim Aston had changed employers three months ago. His new position was project manager. At first he had stars in his eyes about becoming the best project manager that his company had ever seen. Now, he wasn’t sure if project management was worth the effort. He made an appointment to see Phil Davies, director of project management.

Tim Aston: “Phil, I’m a little unhappy about the way things are going. I just can’t seem to motivate my people. Every day, at 4:30 P.M., all of my people clean off their desks and go home. I’ve had people walk out of late afternoon team meetings because they were afraid that they’d miss their car pool. I have to schedule morning team meetings.”

Phil Davies: “Look, Tim. You’re going to have to realize that in a project environment, people think that they come first and that the project is second. This is a way of life in our organizational form.”

Tim Aston: “I’ve continually asked my people to come to me if they have problems. I find that the people do not think that they need help and, therefore, do not want it. I just can’t get my people to communicate more.”

Phil Davies: “The average age of our employees is about forty-six. Most of our people have been here for twenty years. They’re set in their ways. You’re the first person that we’ve hired in the past three years. Some of our people may just resent seeing a thirty-year-old project manager.”

Tim Aston: “I found one guy in the accounting department who has an excellent head on his shoulders. He’s very interested in project management. I asked his boss if he’d release him for a position in


project management, and his boss just laughed at me, saying something to the effect that as long as that guy is doing a good job for him, he’ll never be released for an assignment elsewhere in the company. His boss seems more worried about his personal empire than he does in what’s best for the company.

“We had a test scheduled for last week. The customer’s top management was planning on flying in for firsthand observations. Two of my people said that they had programmed vacation days coming, and that they would not change, under any conditions. One guy was going fishing and the other guy was planning to spend a few days working with fatherless children in our community. Surely, these guys could change their plans for the test.”

Phil Davies: “Many of our people have social responsibilities and outside interests. We encourage social responsibilities and only hope that the outside interests do not interfere with their jobs.

“There’s one thing you should understand about our people. With an average age of forty-six, many of our people are at the top of their pay grades and have no place to go. They must look elsewhere for interests. These are the people you have to work with and motivate. Perhaps you should do some reading on human behavior.”

* Case Study also appears at end of chapter.

1. Sections 6.1, 6.2, and 6.3 are adapted from David Cleland and Harold Kerzner, Engineering Team Management (Melbourne, Florida: Krieger, 1986), Chapter 8.

2. Source unknown.



Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 5th Edition, Reference Section for the PMP® Certification Exam

Facilities Scheduling at Mayer Manufacturing* Scheduling the Safety Lab Telestar International* The Problem with Priorities

Multiple Choice Exam Human Resource Management


7.0 INTRODUCTION In discussing the project environment, we have purposely avoided discussion of what may be its single most important characteristic: conflicts. Opponents of project management assert that the major reason why many companies avoid changeover to a project management organizational structure is either fear or an inability to handle the resulting conflicts. Conflicts are a way of life in a project structure and can generally occur at any level in the organization, usually as a result of conflicting objectives.

PMBOK® Guide, 5th Edition 9.4 Manage Project Team Conflict Management

The project manager has often been described as a conflict manager. In many organizations the project manager continually fights fires and crises evolving from conflicts, and delegates the day-to-day responsibility of running the project to the project team members. Although this is not the best situation, it cannot always be prevented, especially after organizational restructuring or the initiation of projects requiring new resources.

The ability to handle conflicts requires an understanding of why they occur. Asking and answering these four questions may help handle and prevent conflicts.

What are the project objectives and are they in conflict with other projects? Why do conflicts occur? How do we resolve conflicts? Is there any type of analysis that could identify possible conflicts before they occur?


7.1 OBJECTIVES Each project must have at least one objective. The objectives of the project must be made known to all project personnel and all managers, at every level of the organization. If this information is not communicated accurately, then it is entirely possible that upper-level managers, project managers, and functional managers may all have a different interpretation of the ultimate objective, a situation that invites conflicts. As an example, company X has been awarded a $100,000 government contract for surveillance of a component that appears to be fatiguing. Top management might view the objective of this project to be discovering the cause of the fatigue and eliminating it in future component production. This might give company X a “jump” on the competition. The division manager might just view it as a means of keeping people employed, with no follow-on possibilities. The department manager can consider the objective as either another job that has to be filled, or a means of establishing new surveillance technology. The department manager, therefore, can staff the necessary positions with any given degree of expertise, depending on the importance and definition of the objective.

Project objectives must be:

Specific, not general Not overly complex Measurable, tangible, and verifiable Appropriate level, challenging Realistic and attainable Established within resource bounds Consistent with resources available or anticipated Consistent with organizational plans, policies, and procedures

Some practitioners use the more simplistic approach of defining an objective by saying that the project’s objective must follow the SMART rule, whereby:

S = specific M = measurable A = attainable R = realistic or relevant T = tangible or time bound

Unfortunately, the above characteristics are not always evident, especially if we consider that the project might be unique to the organization in question. As an example, research and development projects sometimes start out general, rather than specific. Research and development objectives are reestablished as time goes


on because the initial objective may not be attainable. As an example, company Y believes that they can develop a high-energy rocket-motor propellant. A proposal is submitted to the government, and, after a review period, the contract is awarded. However, as is the case with all R&D projects, there always exists the question of whether the objective is attainable within time, cost, and performance constraints. It might be possible to achieve the initial objective, but at an incredibly high production cost. In this case, the specifications of the propellant (i.e., initial objectives) may be modified so as to align them closer to the available production funds.

Many projects are directed and controlled using a management-by-objective (MBO) approach. The philosophy of management by objectives:

Is proactive rather than reactive management Is results oriented, emphasizing accomplishment Focuses on change to improve individual and organizational effectiveness

Management by objectives is a systems approach for aligning project goals with organizational goals, project goals with the goals of other subunits of the organization, and project goals with individual goals. Furthermore, management by objectives can be regarded as a:

Systems approach to planning and obtaining project results for an organization Strategy of meeting individual needs at the same time that project needs are met Method of clarifying what each individual and organizational unit’s contribution to the project should be

Whether or not MBO is utilized, project objectives must be set.



In the project environment, conflicts are inevitable. Conflicts occur because people on the project team may have different values, interests, feelings, and goals. Project managers that cannot resolve these conflicts in a timely manner are doomed to failure. Some conflicts can be resolved quickly while other conflicts may take much longer to resolve. In general, the fewer the number of people involved in the conflict, the less time is needed to resolve the issues. Determining the amount of time needed to resolve an issue is difficult. Resolving conflicts with direct reportees is easier than resolving conflicts with those team members that are still attached administratively to other functional managers.

There are several causes of conflicts. First, project managers have historically been brought on board the project after the business case has been prepared. As a result, the business case, schedule, cost, assumptions, and other constraints are imposed upon the project team. All of this happens well before a detailed project plan is prepared. Once the project plan is finally prepared, it is often the case that the deliverables cannot be achieved in a timely manner within the imposed requirements and constraints.

Second, companies often approve projects without any consideration being given to capacity planning and whether or not qualified resources will be available once the project begins. This is particularly true for companies that survive on competitive bidding. These companies may have no idea how many contracts they will win, if any. The result is usually a shortage of qualified resources.

Third, projects are often approved and added to the queue without knowing when the project will begin. High-level schedules are established from a go-ahead date rather than a calendar date and, once again, with little regard for available or qualified resources. Once the project officially begins, the qualifications or work habits of the assigned project team members may not fit the needs of the project. And, as expected, you are then told that these are the only resources that are available.

Fourth, your project must be accomplished without disrupting the ongoing business of your company and other projects being performed. If your project has a low priority, then you must expect that your most critical resources may be temporarily removed to put out fires elsewhere in the company. These conflicts are highly probable in non–project-driven companies.


Fifth, the type of organizational structure can create conflicts. As an example, line managers that perform in a matrix structure are under tremendous pressure to staff a multitude of projects possibly at the same time. A delay on one project could result is a late release of personnel needed to staff new projects about to begin.

Here, we described five common causes of conflicts that can occur as the project begins. There are also numerous other conflicts that can occur during project execution. Ginger Levin provides a good discussion of the types of conflicts that can exist in each life-cycle phase as well as ways to handle them.1

Good project managers understand that conflicts will happen and try to plan for their resolution. For example, projects managers know that team members can have a misunderstanding of each other’s roles and responsibilities, and therefore a responsibility assignment matrix or linear responsibility chart can prevent the conflict from occurring.


7.3 TYPES OF CONFLICTS It is impossible to develop a list of all of the different types of conflicts that can exist on each and every project. All projects differ in size, scope, and complexity.

The most common types of conflicts involve:

Manpower resources Equipment and facilities Capital expenditures Costs Technical opinions and trade-offs Priorities Administrative procedures Scheduling Responsibilities Personality clashes

Each of these conflicts can vary in relative intensity over the life cycle of a project. However, project managers believe that the most frequently occurring conflicts are over schedules but the potentially damaging conflicts can occur over personality clashes. The relative intensity can vary as a function of:

Getting closer to project constraints Having only two constraints instead of three (i.e., time and performance, but not cost) The project life cycle itself The person with whom the conflict occurs

Sometimes conflict is “meaningful” and produces beneficial results. These meaningful conflicts should be permitted to continue as long as project constraints are not violated and beneficial results are being received. An example of this would be two technical specialists arguing that each has a better way of solving a problem, and each trying to find additional supporting data for his hypothesis.

Conflicts can occur with anyone and over anything. Some people contend that personality conflicts are the most difficult to resolve. Below are several situations. The reader might consider what he or she would do if placed in the situations.

Two of your functional team members appear to have personality clashes and almost always assume opposite points of view during decision-making. They are both from the same line organization. Manufacturing says that they cannot produce the end-item according to


engineering specifications. R&D quality control and manufacturing operations quality control argue as to who should perform a certain test on an R&D project. R&D postulates that it is their project, and manufacturing argues that it will eventually go into production and that they wish to be involved as early as possible. Mr. X is the project manager of a $65 million project of which $1 million is subcontracted out to another company in which Mr. Y is the project manager. Mr. X does not consider Mr. Y as his counterpart and continually communicates with the director of engineering in Mr. Y’s company.

Ideally, the project manager should report high enough so that he can get timely assistance in resolving conflicts. Unfortunately, this is easier said than done. Therefore, project managers must plan for conflict resolution. As examples of this:

The project manager might wish to concede on a low-intensity conflict if he knows that a high-intensity conflict is expected to occur at a later point in the project. Jones Construction Company has recently won a $120 million effort for a local company. The effort includes three separate construction projects, each one beginning at the same time. Two of the projects are twenty-four months in duration, and the third is thirty-six months. Each project has its own project manager. When resource conflicts occur between the projects, the customer is usually called in. Richard is a department manager who must supply resources to four different projects. Although each project has an established priority, the project managers continually argue that departmental resources are not being allocated effectively. Richard now holds a monthly meeting with all four of the project managers and lets them determine how the resources should be allocated.

Many executives feel that the best way of resolving conflicts is by establishing priorities. This may be true as long as priorities are not continually shifted around. As an example, Minnesota Power and Light established priorities as:

Level 0: no completion date Level 1: to be completed on or before a specific date Level 2: to be completed in or before a given fiscal quarter Level 3: to be completed within a given year

This type of technique will work as long as there are not a large number of projects in any one level.

The most common factors influencing the establishment of project priorities



The technical risks in development The risks that the company will incur, financially or competitively The nearness of the delivery date and the urgency The penalties that can accompany late delivery dates The expected savings, profit increase, and return on investment The amount of influence that the customer possesses, possibly due to the size of the project The impact on other projects or product lines The impact on affiliated organizations

The ultimate responsibility for establishing priorities rests with top-level management. Yet even with priority establishment, conflicts still develop. David Wilemon has identified several reasons why conflicts still occur2:

The greater the diversity of disciplinary expertise among the participants of a project team, the greater the potential for conflict to develop among members of the team. The lower the project manager’s degree of authority, reward, and punishment power over those individuals and organizational units supporting his project, the greater the potential for conflict to develop. The less the specific objectives of a project (cost, schedule, and technical performance) are understood by the project team members, the more likely it is that conflict will develop. The greater the role of ambiguity among the participants of a project team, the more likely it is that conflict will develop. The greater the agreement on superordinate goals by project team participants, the lower the potential for detrimental conflict. The more the members of functional areas perceive that the implementation of a project management system will adversely usurp their traditional roles, the greater the potential for conflict. The lower the percent need for interdependence among organizational units supporting a project, the greater the potential for dysfunctional conflict. The higher the managerial level within a project or functional area, the more likely it is that conflicts will be based upon deep-seated parochial resentments. By contrast, at the project or task level, it is more likely that cooperation will be facilitated by the task orientation and professionalism that a project requires for completion.


7.4 CONFLICT RESOLUTION Although each project within the company may be inherently different, the company may wish to have the resulting conflicts resolved in the same manner. The four most common methods are:

PMBOK® Guide, 5th Edition Conflict Management

1. The development of company-wide conflict resolution policies and procedures

2. The establishment of project conflict resolution procedures during the early planning activities

3. The use of hierarchical referral

4. The requirement of direct contact

Many companies have attempted to develop company-wide policies and procedures for conflict resolution, but this method is often doomed to failure because each project and conflict is different. Furthermore, project managers, by virtue of their individuality, and sometimes differing amounts of authority and responsibility, prefer to resolve conflicts in their own fashion.

A second method for resolving conflicts, and one that is often very effective, is to “plan” for conflicts during the planning activities. This can be accomplished through the use of linear responsibility charts. Planning for conflict resolution is similar to the first method except that each project manager can develop his own policies, rules, and procedures.

Hierarchial referral for conflict resolution, in theory, appears as the best method because neither the project manager nor the functional manager will dominate. Under this arrangement, the project and functional managers agree that for a proper balance to exist their common superior must resolve the conflict to protect the company’s best interest. Unfortunately, this is not realistic because the common superior cannot be expected to continually resolve lower-level conflicts and it gives the impression that the functional and project managers cannot resolve their own problems.

The last method is direct contact in which conflicting parties meet face-to-face


and resolve their disagreement. Unfortunately, this method does not always work and, if continually stressed, can result in conditions where individuals will either suppress the identification of problems or develop new ones during confrontation.

Many conflicts can be either reduced or eliminated by constant communication of the project objectives to the team members. This continual repetition may prevent individuals from going too far in the wrong direction.



FUNCTIONAL CONFLICTS3 In order for the project manager to be effective, he must understand how to work with the various employees who interface with the project. These employees include upper-level management, subordinate project team members, and functional personnel. Quite often, the project manager must demonstrate an ability for continuous adaptability by creating a different working environment with each group of employees. The need for this was shown in the previous section by the fact that the relative intensity of conflicts can vary in the life cycle of a project.

PMBOK® Guide, 5th Edition Conflict Management

The type and intensity of conflicts can also vary with the type of employee, as shown in Figure 7–1. Both conflict causes and sources are rated according to relative conflict intensity. The data in Figure 7–1 were obtained for a 75 percent confidence level.

FIGURE 7–1. Relationship between conflict causes and sources.


In the previous section we discussed the basic resolution modes for handling conflicts. The specific mode that a project manager will use might easily depend on whom the conflict is with, as shown in Figure 7–2. The data in Figure 7–2 do not necessarily show the modes that project managers would prefer, but rather identify the modes that will increase or decrease the potential conflict intensity. For example, although project managers consider, in general, that withdrawal is their least favorite mode, it can be used quite effectively with functional managers. In dealing with superiors, project managers would rather be ready for an immediate compromise than for face-to-face confrontation that could favor upper-level management.

FIGURE 7–2. Association between perceived intensity of conflict and mode of conflict resolution.


Figure 7–3 identifies the various influence styles that project managers find effective in helping to reduce potential conflicts. Penalty power, authority, and expertise are considered as strongly unfavorable associations with respect to low conflicts. As expected, work challenge and promotions (if the project manager has the authority) are strongly favorable.

FIGURE 7–3. Association between influence methods of project managers and their perceived conflict intensity.



Good project managers realize that conflicts are inevitable, but that good procedures or techniques can help resolve them. Once a conflict occurs, the project manager must:

PMBOK® Guide, 5th Edition Conflict Management

Study the problem and collect all available information Develop a situational approach or methodology Set the appropriate atmosphere or climate

If a confrontation meeting is necessary between conflicting parties, then the project manager should be aware of the logical steps and sequence of events that should be taken. These include:

Setting the climate: establishing a willingness to participate Analyzing the images: how do you see yourself and others, and how do they see you? Collecting the information: getting feelings out in the open Defining the problem: defining and clarifying all positions Sharing the information: making the information available to all Setting the appropriate priorities: developing working sessions for setting priorities and timetables Organizing the group: forming cross-functional problem-solving groups Problem-solving: obtaining cross-functional involvement, securing commitments, and setting the priorities and timetable Developing the action plan: getting commitment Implementing the work: taking action on the plan Following up: obtaining feedback on the implementation for the action plan

The project manager or team leader should also understand conflict minimization procedures. These include:

Pausing and thinking before reacting


Building trust Trying to understand the conflict motives Keeping the meeting under control Listening to all involved parties Maintaining a give-and-take attitude Educating others tactfully on your views Being willing to say when you were wrong Not acting as a superman and leveling the discussion only once in a while

Thus, the effective manager, in conflict problem-solving situations:

Knows the organization Listens with understanding rather than evaluation Clarifies the nature of the conflict Understands the feelings of others Suggests the procedures for resolving differences Maintains relationships with disputing parties Facilitates the communications process Seeks resolutions



The management of conflicts places the project manager in the precarious situation of having to select a conflict resolution mode (previously defined in Section 7.4). Based upon the situation, the type of conflict, and whom the conflict is with, any of these modes could be justified.

PMBOK® Guide, 5th Edition Conflict Management


Confronting (or Collaborating) With this approach, the conflicting parties meet face-to-face and try to work through their disagreements. This approach should focus more on solving the problem and less on being combative. This approach is collaboration and integration where both parties need to win. This method should be used:

When you and the conflicting party can both get at least what you wanted and maybe more To reduce cost To create a common power base To attack a common foe When skills are complementary When there is enough time When there is trust When you have confidence in the other person’s ability When the ultimate objective is to learn


Compromising To compromise is to bargain or to search for solutions so both parties leave with some degree of satisfaction. Compromising is often the result of confrontation. Some people argue that compromise is a “give and take” approach, which leads to a “win-win” position. Others argue that compromise is a “lose-lose” position, since neither party gets everything he/she wants or needs. Compromise should be used:

When both parties need to be winners When you can’t win When others are as strong as you are When you haven’t time to win To maintain your relationship with your opponent When you are not sure you are right When you get nothing if you don’t When stakes are moderate To avoid giving the impression of “fighting”


Smoothing (or Accommodating) This approach is an attempt to reduce the emotions that exist in a conflict. This is accomplished by emphasizing areas of agreement and de-emphasizing areas of disagreement. An example of smoothing would be to tell someone, “We have agreed on three of the five points and there is no reason why we cannot agree on the last two points.” Smoothing does not necessarily resolve a conflict, but tries to convince both parties to remain at the bargaining table because a solution is possible. In smoothing, one may sacrifice one’s own goals in order to satisfy the needs of the other party. Smoothing should be used:

To reach an overarching goal To create obligation for a trade-off at a later date When the stakes are low When liability is limited To maintain harmony When any solution will be adequate To create goodwill (be magnanimous) When you’ll lose anyway To gain time


Forcing (or Competing, Being Uncooperative, Being Assertive)

This is what happens when one party tries to impose the solution on the other party. Conflict resolution works best when resolution is achieved at the lowest possible levels. The higher up the conflict goes, the greater the tendency for the conflict to be forced, with the result being a “win-lose” situation in which one party wins at the expense of the other. Forcing should be used:

When you are right When a do-or-die situation exists When stakes are high When important principles are at stake When you are stronger (never start a battle you can’t win) To gain status or to gain power In short-term, one-shot deals When the relationship is unimportant When it’s understood that a game is being played When a quick decision must be made


Avoiding (or Withdrawing) Avoidance is often regarded as a temporary solution to a problem. The problem and the resulting conflict can come up again and again. Some people view avoiding as cowardice and an unwillingness to be responsive to a situation. Avoiding should be used:

When you can’t win When the stakes are low When the stakes are high, but you are not ready yet To gain time To unnerve your opponent To preserve neutrality or reputation When you think the problem will go away When you win by delay



CERTIFICATION EXAM This section is applicable as a review of the principles to support the knowledge areas and domain groups in the PMBOK® Guide. This chapter addresses:

Human Resources Management Execution

Understanding the following principles is beneficial if the reader is using this text to study for the PMP® Certification Exam:

Components of an objective What is meant by a SMART criteria for an objective Different types of conflicts that can occur in a project environment Different conflict resolution modes and when each one should be used

The following multiple-choice questions will be helpful in reviewing the principles of this chapter:

1. When talking about SMART objectives, the “S” stands for: A. Satisfactory

B. Static

C. Specific

D. Standard

2. When talking about SMART objectives, the “A” stands for: A. Accurate

B. Acute

C. Attainable

D. Able

3. Project managers believe that the most commonly occurring conflict is: A. Priorities

B. Schedules


C. Personalities

D. Resources

4. The conflict that generally is the most damaging to the project when it occurs is:

A. Priorities

B. Schedules

C. Personalities

D. Resources

5. The most commonly preferred conflict resolution mode for project managers is: A. Compromise

B. Confrontation

C. Smoothing

D. Withdrawal

6. Which conflict resolution mode is equivalent to problem-solving? A. Compromise

B. Confrontation

C. Smoothing

D. Withdrawal

7. Which conflict resolution mode avoids a conflict temporarily rather than solving it?

A. Compromise

B. Confrontation

C. Smoothing

D. Withdrawal



2. C

3. B

4. C

5. B

6. B

7. D


PROBLEMS 7–1 Is it possible to establish formal organizational procedures (either at the project level or company-wide) for the resolution of conflicts? If a procedure is established, what can go wrong?

7–2 Under what conditions would a conflict result between members of a group over misunderstandings of each other’s roles?

7–3 Is it possible to have a situation in which conflicts are not effectively controlled, and yet have a decision-making process that is not lengthy or cumbersome?

7–4 If conflicts develop into a situation where mistrust prevails, would you expect activity documentation to increase or decrease? Why?

7–5 If a situation occurs that can develop into meaningful conflict, should the project manager let the conflict continue as long as it produces beneficial contributions, or should he try to resolve it as soon as possible?

7–6 Consider the following remarks made by David L. Wilemon (“Managing Conflict in Temporary Management Situations,” Journal of Management Studies, October 1973, p. 296):

The value of the conflict produced depends upon the effectiveness of the project manager in promoting beneficial conflict while concomitantly minimizing its potential dysfunctional aspects. A good project manager needs a “sixth sense” to indicate when conflict is desirable, what kind of conflict will be useful, and how much conflict is optimal for a given situation. In the final analysis he has the sole responsibility for his project and how conflict will impact the success or failure of his project.

Based upon these remarks, would your answer to Problem 7–5 change?

7–7 Mr. X is the project manager of a $65 million project of which $1 million is subcontracted out to another company in which Mr. Y is project manager. Unfortunately, Mr. X does not consider Mr. Y as his counterpart and continually communicates with the director of engineering in Mr. Y’s company. What type of conflict is that, and how should it be resolved?

7–8 Contract negotiations can easily develop into conflicts. During a disagreement, the vice president of company A ordered his director of finance, the contract negotiator, to break off contract negotiations with company B because the contract negotiator of company B did not report directly to a vice president. How can this situation be resolved?

7–9 For each part below there are two statements; one represents the traditional view and the other the project organizational view. Identify each one.

a. Conflict should be avoided; conflict is part of change and is therefore inevitable.

b. Conflict is the result of troublemakers and egoists; conflict is determined by the structure of the system and the relationship among components.

c. Conflict may be beneficial; conflict is bad.

7–10 Using the modes for conflict resolution defined in Section 7.6, which would be strongly favorable and strongly unfavorable for resolving conflicts between:

a. Project manager and his project office personnel?

b. Project manager and the functional support departments?

c. Project manager and his superiors?

d. Project manager and other project managers?


7–11 Which influence methods should increase and which should decrease the opportunities for conflict between the following:

Project manager and his project office personnel? Project manager and the functional support departments? Project manager and his superiors? Project manager and other project managers?

7–12 Would you agree or disagree with the statement that “Conflict resolution through collaboration needs trust; people must rely on one another.”

7–13 Davis and Lawrence (Matrix, © 1977. Adapted by permission of Pearson Education Inc., Upper Saddle River, New Jersey) identify several situations common to the matrix that can easily develop into conflicts. For each situation, what would be the recommended cure?

a. Compatible and incompatible personnel must work together

b. Power struggles break the balance of power

c. Anarchy

d. Groupitis (people confuse matrix behavior with group decision-making)

e. A collapse during economic crunch

f. Decision strangulation processes

g. Forcing the matrix organization to the lower organizational levels

h. Navel-gazing (spending time ironing out internal disputes instead of developing better working relationships with the customer)

7–14 Determine the best conflict resolution mode for each of the following situations:

a. Two of your functional team members appear to have personality clashes and almost always assume opposite points of view during decision-making.

b. R&D quality control and manufacturing operations quality control continually argue as to who should perform testing on an R&D project. R&D postulates that it’s their project, and manufacturing argues that it will eventually go into production and that they wish to be involved as early as possible.

c. Two functional department managers continually argue as to who should perform a certain test. You know that this situation exists, and that the department managers are trying to work it out themselves, often with great pain. However, you are not sure that they will be able to resolve the problem themselves.

7–15 Forcing a confrontation to take place assures that action will be taken. Is it possible that, by using force, a lack of trust among the participants will develop?

7–16 With regard to conflict resolution, should it matter to whom in the organization the project manager reports?

7–17 One of the most common conflicts in an organization occurs with raw materials and finished goods. Why would finance/accounting, marketing/sales, and manufacturing have disagreements?

7–18 Explain how the relative intensity of a conflict can vary as a function of:

a. Getting closer to the actual constraints

b. Having only two constraints instead of three (i.e., time and performance, but not cost)

c. The project life cycle

d. The person with whom the conflict occurs


7–19 The conflicts shown in Figure 7–1 are given relative intensities as perceived in project-driven organizations. Would this list be arranged differently for non–project-driven organizations?

7–20 Consider the responses made by the project managers in Figures 7–1 through 7–3. Which of their choices do you agree with, and which do you disagree with? Justify your answers.

7–21 As a good project manager, you try to plan for conflict avoidance. You now have a low- intensity conflict with a functional manager and, as in the past, handle the conflict with confrontation. If you knew that there would be a high-intensity conflict shortly thereafter, would you be willing to use the withdrawal mode for the low-intensity conflict in order to lay the groundwork for the high-intensity conflict?

7–22 Jones Construction Company has recently won a $120 million effort for a local company. The effort includes three separate construction projects, each one beginning at the same time. Two of the projects are eighteen months in duration and the third one is thirty months. Each project has its own project manager. How do we resolve conflicts when each project may have a different priority but they are all for the same customer?

7–23 Several years ago, Minnesota Power and Light established priorities as follows:

Level 0: no priority

Level 1: to be completed on or before a specific date

Level 2: to be completed in or before a given fiscal quarter

Level 3: to be completed within a given year

How do you feel about this system of establishing priorities?

7–24 Richard is a department manager who must supply resources to four different projects. Although each project has an established priority, the project managers continually argue that departmental resources are not being allocated effectively. Richard has decided to have a monthly group meeting with all four of the project managers and to let them determine how the resources should be allocated. Can this technique work? If so, under what conditions?



Eddie Turner was elated with the good news that he was being promoted to section supervisor in charge of scheduling all activities in the new engineering research laboratory. The new laboratory was a necessity for Mayer Manufacturing. The engineering, manufacturing, and quality control directorates were all in desperate need of a new testing facility. Upper-level management felt that this new facility would alleviate many of the problems that previously existed.

The new organizational structure (as shown in Exhibit 7–1) required a change in policy over use of the laboratory. The new section supervisor, on approval from his department manager, would have full


authority for establishing priorities for the use of the new facility. The new policy change was a necessity because upper-level management felt that there would be inevitable conflict between manufacturing, engineering, and quality control.

Exhibit 7–1. Mayer Manufacturing organizational structure

After one month of operations, Eddie Turner was finding his job impossible, so Eddie has a meeting with Gary Whitehead, his department manager.

Eddie: “I’m having a hell of a time trying to satisfy all of the department managers. If I give engineering prime-time use of the facility, then quality control and manufacturing say that I’m playing favorites. Imagine that! Even my own people say that I’m playing favorites with other directorates. I just can’t satisfy everyone.”

Gary: “Well, Eddie, you know that this problem comes with the job. You’ll get the job done.”

Eddie: “The problem is that I’m a section supervisor and have to work with department managers. These department managers look down on me like I’m their servant. If I were a department manager, then they’d show me some respect. What I’m really trying to say is that I would like you to send out the weekly memos to these department managers telling them of the new priorities. They wouldn’t argue with you like they do with me. I can supply you with all the necessary information. All you’ll have to do is to sign your name.”


Gary: “Determining the priorities and scheduling the facilities is your job, not mine. This is a new position and I want you to handle it. I know you can because I selected you. I do not intend to interfere.”

During the next two weeks, the conflicts got progressively worse. Eddie felt that he was unable to cope with the situation by himself. The department managers did not respect the authority delegated to him by his superiors. For the next two weeks, Eddie sent memos to Gary in the early part of the week asking whether Gary agreed with the priority list. There was no response to the two memos. Eddie then met with Gary to discuss the deteriorating situation.

Eddie: “Gary, I’ve sent you two memos to see if I’m doing anything wrong in establishing the weekly priorities and schedules. Did you get my memos?”

Gary: “Yes, I received your memos. But as I told you before, I have enough problems to worry about without doing your job for you. If you can’t handle the work let me know and I’ll find someone who can.”

Eddie returned to his desk and contemplated his situation. Finally, he made a decision. Next week he was going to put a signature block under his for Gary to sign, with carbon copies for all division managers. “Now, let’s see what happens,” remarked Eddie.

TELESTAR INTERNATIONAL* On November 15, 1998, the Department of Energy Resources awarded Telestar a $475,000 contract for the developing and testing of two waste treatment plants. Telestar had spent the better part of the last two years developing waste treatment technology under its own R&D activities. This new contract would give Telestar the opportunity to “break into a new field”—that of waste treatment.

The contract was negotiated at a firm-fixed price. Any cost overruns would have to be incurred by Telestar. The original bid was priced out at $847,000. Telestar’s management, however, wanted to win this one. The decision was made that Telestar would “buy in” at $475,000 so that they could at least get their foot into the new marketplace.

The original estimate of $847,000 was very “rough” because Telestar did not have any good man-hour standards, in the area of waste


treatment, on which to base their man-hour projections. Corporate management was willing to spend up to $400,000 of their own funds in order to compensate the bid of $475,000.

By February 15, 1999, costs were increasing to such a point where overrun would be occurring well ahead of schedule. Anticipated costs to completion were now $943,000. The project manager decided to stop all activities in certain functional departments, one of which was structural analysis. The manager of the structural analysis department strongly opposed the closing out of the work order prior to the testing of the first plant’s high-pressure pneumatic and electrical systems.

Structures Manager: “You’re running a risk if you close out this work order. How will you know if the hardware can withstand the stresses that will be imposed during the test? After all, the test is scheduled for next month and I can probably finish the analysis by then.”

Project Manager: “I understand your concern, but I cannot risk a cost overrun. My boss expects me to do the work within cost. The plant design is similar to one that we have tested before, without any structural problems being detected. On this basis I consider your analysis unnecessary.”

Structures Manager: “Just because two plants are similar does not mean that they will be identical in performance. There can be major structural deficiencies.”

Project Manager: “I guess the risk is mine.”

Structures Manager: “Yes, but I get concerned when a failure can reflect on the integrity of my department. You know, we’re performing on schedule and within the time and money budgeted. You’re setting a bad example by cutting off our budget without any real justification.”

Project Manager: “I understand your concern, but we must pull out all the stops when overrun costs are inevitable.”

Structures Manager: “There’s no question in my mind that this analysis should be completed. However, I’m not going to complete it on my overhead budget. I’ll reassign my people tomorrow. Incidentally, you had better be careful; my people are not very happy to work for a project that can be canceled immediately. I may have trouble getting volunteers next time.”


Project Manager: “Well, I’m sure you’ll be able to adequately handle any future work. I’ll report to my boss that I have issued a work stoppage order to your department.”

During the next month’s test, the plant exploded. Postanalysis indicated that the failure was due to a structural deficiency.

a. Who is at fault?

b. Should the structures manager have been dedicated enough to continue the work on his own?

c. Can a functional manager, who considers his organization as strictly support, still be dedicated to total project success?


The next several pages contain a six-part case study in conflict management. Read the instructions carefully on how to keep score and use the boxes in the table on page 314 as the worksheet for recording your choice and the group’s choice; after the case study has been completed, your instructor will provide you with the proper grading system for recording your scores.

Part 1: Facing the Conflict As part of his first official duties, the new department manager informs you by memo that he has changed his input and output requirements for the MIS project (on which you are the project manager) because of several complaints by his departmental employees. This is contradictory to the project plan that you developed with the previous manager and are currently working toward. The department manager states that he has already discussed this with the vice president and general manager, a man to whom both of you report, and feels that the former department manager made a poor decision and did not get sufficient input from the employees who would be using the system as to the best system specifications. You telephone him and try to convince him to hold off on his request for change until a later time, but he refuses.

Changing the input–output requirements at this point in time will


require a major revision and will set back total system implementation by three weeks. This will also affect other department managers who expect to see this system operational according to the original schedule. You can explain this to your superiors, but the increased project costs will be hard to absorb. The potential cost overrun might be difficult to explain at a later date.

At this point you are somewhat unhappy with yourself at having been on the search committee that found this department manager and especially at having recommended him for this position. You know that something must be done, and the following are your alternatives:

A. You can remind the department manager that you were on the search committee that recommended him and then ask him to return the favor, since he “owes you one.”

B. You can tell the department manager that you will form a new search committee to replace him if he doesn’t change his position.

C. You can take a tranquilizer and then ask your people to try to perform the additional work within the original time and cost constraints.

D. You can go to the vice president and general manager and request that the former requirements be adhered to, at least temporarily.

E. You can send a memo to the department manager explaining your problem and asking him to help you find a solution.

F. You can tell the department manager that your people cannot handle the request and his people will have to find alternate ways of solving their problems.

G. You can send a memo to the department manager requesting an appointment, at his earliest convenience, to help you resolve your problem.

H. You can go to the department manager’s office later that afternoon and continue the discussion further.

I. You can send the department manager a memo telling him that you have decided to use the old requirements but will honor his request at a later time.


Although other alternatives exist, assume that these are the only ones open to you at the moment. Without discussing the answer with your group, record the letter representing your choice in the appropriate space on line 1 of the worksheet under “Personal.”

As soon as all of your group have finished, discuss the problem as a group and determine that alternative that the group considers to be best. Record this answer on line 1 of the worksheet under “Group.” Allow ten minutes for this part.

Part 2: Understanding Emotions Never having worked with this department manager before, you try to predict what his reactions will be when confronted with the problem. Obviously, he can react in a variety of ways:

A. He can accept your solution in its entirety without asking any questions.

B. He can discuss some sort of justification in order to defend his position.

C. He can become extremely annoyed with having to discuss the problem again and demonstrate hostility.

D. He can demonstrate a willingness to cooperate with you in resolving the problem.


E. He can avoid making any decision at this time by withdrawing from the discussion.

In the table above are several possible statements that could be made by the department manager when confronted with the problem. Without discussion with your group, place a check mark beside the appropriate emotion that could describe this statement. When each member of the group has completed his choice, determine the group choice. Numerical values will be assigned to your choices in the discussion that follows. Do not mark the worksheet at this time. Allow ten minutes for this part.

Part 3: Establishing Communications Unhappy over the department manager’s memo and the resulting follow-up phone conversation, you decide to walk in on the department manager. You tell him that you will have a problem trying to honor his request. He tells you that he is too busy with his own problems of restructuring his department and that your schedule and cost problems are of no concern to him at this time. You storm out of his office,


leaving him with the impression that his actions and remarks are not in the best interest of either the project or the company.

The department manager’s actions do not, of course, appear to be those of a dedicated manager. He should be more concerned about what’s in the best interest of the company. As you contemplate the situation, you wonder if you could have received a better response from him had you approached him differently. In other words, what is your best approach to opening up communications between you and the department manager? From the list of alternatives shown below, and working alone, select the alternative that best represents how you would handle this situation. When all members of the group have selected their personal choices, repeat the process and make a group choice. Record your personal and group choices on line 3 of the worksheet. Allow ten minutes for this part.

A. Comply with the request and document all results so that you will be able to defend yourself at a later date in order to show that the department manager should be held accountable.

B. Immediately send him a memo reiterating your position and tell him that at a later time you will reconsider his new requirements. Tell him that time is of utmost importance, and you need an immediate response if he is displeased.

C. Send him a memo stating that you are holding him accountable for all cost overruns and schedule delays.

D. Send him a memo stating you are considering his request and that you plan to see him again at a later date to discuss changing the requirements.

E. See him as soon as possible. Tell him that he need not apologize for his remarks and actions, and that you have reconsidered your position and wish to discuss it with him.

F. Delay talking to him for a few days in hopes that he will cool off sufficiently and then see him in hopes that you can reopen the discussions.

G. Wait a day or so for everyone to cool off and then try to see him through an appointment; apologize for losing your temper, and ask him if he would like to help you resolve the problem.


Part 4: Conflict Resolution Modes Having never worked with this manager before, you are unsure about which conflict resolution mode would work best. You decide to wait a few days and then set up an appointment with the department manager without stating what subject matter will be discussed. You then try to determine what conflict resolution mode appears to be dominant based on the opening remarks of the department manager. Neglecting the fact that your conversation with the department manager might already be considered as confrontation, for each statement shown below, select the conflict resolution mode that the department manager appears to prefer. After each member of the group has recorded his personal choices in the table below, determine the group choices. Numerical values will be attached to your answers at a later time. Allow ten minutes for this part.

A. Withdrawal is retreating from a potential conflict.

B. Smoothing is emphasizing areas of agreement and de-emphasizing areas of disagreement.

C. Compromising is the willingness to give and take.

D. Forcing is directing the resolution in one direction or another, a win-or-lose position.

E. Confrontation is a face-to-face meeting to resolve the conflict.


Part 5: Understanding Your Choices Assume that the department manager has refused to see you again to discuss the new requirements. Time is running out, and you would like to make a decision before the costs and schedules get out of hand. From the list below, select your personal choice and then, after each group member is finished, find a group choice.

A. Disregard the new requirements, since they weren’t part of the original project plan.

B. Adhere to the new requirements, and absorb the increased costs and delays.

C. Ask the vice president and general manager to step in and make the final decision.

D. Ask the other department managers who may realize a schedule delay to try to convince this department manager to ease his request or even delay it.

Record your answer on line 5 of the worksheet. Allow five minutes for this part.

Part 6: Interpersonal Influences


Assume that upper-level management resolves the conflict in your favor. In order to complete the original work requirements you will need support from this department manager’s organization. Unfortunately, you are not sure as to which type of interpersonal influence to use. Although you are considered as an expert in your field, you fear that this manager’s functional employees may have a strong allegiance to the department manager and may not want to adhere to your requests. Which of the following interpersonal influence styles would be best under the given set of conditions?

A. You threaten the employees with penalty power by telling them that you will turn in a bad performance report to their department manager.

B. You can use reward power and promise the employees a good evaluation, possible promotion, and increased responsibilities on your next project.

C. You can continue your technique of trying to convince the functional personnel to do your bidding because you are the expert in the field.

D. You can try to motivate the employees to do a good job by convincing them that the work is challenging.

E. You can make sure that they understand that your authority has been delegated to you by the vice president and general manager and that they must do what you say.

F. You can try to build up friendships and off-work relationships with these people and rely on referent power.

Record your personal and group choices on line 6 of the worksheet. Allow ten minutes for completion of this part.

The solution to this exercise appears in Appendix A. * Revised, 2008.

* Case Study also appears at end of chapter.

1. G. Levin, Interpersonal Skills for Portfolio, Program, and Project Managers (Management Concepts, Leesburg Pike, VA, 2010), Chapter 8.

2. David L. Wilemon, “Managing Conflict in Temporary Management Situations,”


The Journal of Management Studies, 1973, pp. 282–296.

3. The majority of this section, including the figures, was adapted from Seminar in Project Management Workbook, © 1977 by Hans J. Thamhain. Reproduced by permission of Dr. Hans J. Thamhain.

4. See note 3.


Special Topics

Related Case Studies (from Kerzner/Project Management Case Studies, 4th Edition)

Related Workbook Exercises (from Kerzner/Project Management Workbook and PMP®/CAPM® Exam Study Guide, 11th Edition)

PMBOK® Guide, 4th Edition, Reference Section for the PMP® Certification Exam

American Electronics International The Tylenol Tragedies Photolite Corporation (A) Photolite Corporation (B) Photolite Corporation (C) Photolite Corporation (D) First Security Bank of Cleveland

The Potential Problem Audit The Situational Audit Multiple Choice Exam

Integration Management Human Resource Management Project Management Roles and Responsibilities


Jackson Industries Is It Fraud?*


8.0 INTRODUCTION There are several situations or special topics that deserve attention. These include:

Performance measurement Compensation and rewards Managing small projects Managing mega projects Morality, ethics and the corporate culture Internal partnerships External partnerships Training and education Integrated project teams Virtual teams Innovation projects Agile project management



A good project manager will make it immediately clear to all new functional employees that if they perform well in the project, then he (the project manager) will inform the functional manager of their progress and achievements. This assumes that the functional manager is not providing close supervision over the functional employees and is, instead, passing on some of the responsibility to the project manager—a common situation in project management organization structures.

PMBOK® Guide, 5th Edition Recognition and Rewards

9.4 Manage Project Team

Many good projects as well as project management structures have failed because of the inability of the system to evaluate properly the functional employee’s performance. In a project management structure, there are basically six ways that a functional employee can be evaluated on a project:

The project manager prepares a written, confidential evaluation and gives it to the functional manager. The functional manager will evaluate the validity of the project manager’s comments and prepare his own evaluation. Only the line manager’s evaluation is shown to the employee. The use of confidential forms is not preferred because it may be contrary to government regulations and it does not provide the necessary feedback for an employee to improve. The project manager prepares a nonconfidential evaluation and gives it to the functional manager. The functional manager prepares his own evaluation form and shows both evaluations to the functional employee. This is the technique preferred by most project and functional managers. However, there are several major difficulties with this technique. If the functional employee is an average or below-average worker, and if this employee is still to be assigned to this project after his evaluation, then the project manager might rate the employee as above average simply to prevent any sabotage or bad feelings downstream. In this situation, the functional manager might want a confidential evaluation instead, knowing that the functional employee will see


both evaluation forms. Functional employees tend to blame the project manager if they receive a below-average merit pay increase, but give credit to the functional manager if the increase is above average. The best bet here is for the project manager periodically to tell the functional employees how well they are doing, and to give them an honest appraisal. Several companies that use this technique allow the project manager to show the form to the line manager first (to avoid conflict later) and then show it to the employee. The project manager provides the functional manager with an oral evaluation of the employee’s performance. Although this technique is commonly used, most functional managers prefer documentation on employee progress. Again, lack of feedback may prevent the employee from improving. The functional manager makes the entire evaluation without any input from the project manager. In order for this technique to be effective, the functional manager must have sufficient time to supervise each subordinate’s performance on a continual basis. Unfortunately, most functional managers do not have this luxury because of their broad span of control and must therefore rely heavily on the project manager’s input. The project manager makes the entire evaluation for the functional manager. This technique can work if the functional employee spends 100 percent of his time on one project, or if he is physically located at a remote site where he cannot be observed by his functional manager. All project and functional managers jointly evaluate all project functional employees at the same time. This technique should be limited to small companies with fewer than fifty or so employees; otherwise the evaluation process might be time-consuming for key personnel. A bad evaluation will be known by everyone.

Evaluation forms can be filled out either when the employee is up for evaluation or after the project is completed. If it is to be filled out when the employee is eligible for promotion or a merit increase, then the project manager should be willing to give an honest appraisal of the employee’s performance. Of course, the project manager should not fill out the evaluation form if he has not had sufficient time to observe the employee at work.

The evaluation form can be filled out at the termination of the project. This, however, may produce a problem in that the project may end the month after the employee is considered for promotion. The advantage of this technique is that the project manager may have been able to find sufficient time both to observe the employee in action and to see the output.

Figure 8–1 (see page 321) represents, in a humorous way, how project personnel


perceive the evaluation form. Unfortunately, the evaluation process is very serious and can easily have a severe impact on an individual’s career path with the company even though the final evaluation rests with the functional manager.

FIGURE 8–1. Guide to performance appraisal.

Figure 8–2 shows a simple type of evaluation form on which the project manager identifies the best description of the employee’s performance. This type of form is generally used whenever the employee is up for evaluation.

FIGURE 8–2. Project work assignment appraisal.


Figure 8–3 shows another typical form that can be used to evaluate an employee. In each category, the employee is rated on a subjective scale. In order to minimize time and paperwork, it is also possible to have a single evaluation form at project termination for evaluation of all employees. This is shown in Figure 8–4. All employees are rated in each category on a scale of 1 to 5. Totals are obtained to provide a relative comparison of employees.

FIGURE 8–3. Project work assignment appraisal.


FIGURE 8–4. Project work assignment appraisal.


Obviously, evaluation forms such as that shown in Figure 8–4 have severe limitations, as a one-to-one comparison of all project functional personnel is of little value if the employees are from different departments. How can a project engineer be compared to a cost accountant?

Several companies are using this form by assigning coefficients of importance to each topic. For example, under a topic of technical judgment, the project engineer might have a coefficient of importance of 0.90, whereas the cost accountant’s coefficient might be 0.25. These coefficients could be reversed for a topic on cost consciousness. Unfortunately, such comparisons have questionable validity, and this type of evaluation form is usually of a confidential nature.

Even though the project manager fills out an evaluation form, there is no guarantee that the functional manager will believe the project manager’s evaluation. There are always situations in which the project and functional managers disagree as to either quality or direction of work.

Another problem may exist in the situation where the project manager is a “generalist,” say at a grade-7 level, and requests that the functional manager assign his best employee to the project. The functional manager agrees to the request and


assigns his best employee, a grade-10 specialist. One solution to this problem is to have the project manager evaluate the expert only in certain categories such as communications, work habits, and problem-solving, but not in the area of his technical expertise.

As a final note, it is sometimes argued that functional employees should have some sort of indirect input into a project manager’s evaluation. This raises rather interesting questions as to how far we can go with the indirect evaluation procedure.

From a top-management perspective, the indirect evaluation process brings with it several headaches. Wage and salary administrators readily accept the necessity for using different evaluation forms for white-collar and blue-collar workers. But now, we have a situation in which there can be more than one type of evaluation system for white-collar workers alone. Those employees who work in project- driven functional departments will be evaluated directly and indirectly, but based on formal procedures. Employees who charge their time to overhead accounts and non–project-driven departments might simply be evaluated by a single, direct evaluation procedure.

Many wage and salary administrators contend that they cannot live with a white- collar evaluation system and therefore have tried to combine the direct and indirect evaluation forms into one, as shown in Figure 8–5. Some administrators have even gone so far as to adopt a single form company-wide, regardless of whether an individual is a white-or blue-collar worker.

FIGURE 8–5. Job evaluation.


The design of the employee’s evaluation form depends on what evaluation method or procedure is being used. Generally speaking, there are nine methods available for evaluating personnel:


Essay appraisal Graphic rating scale Field review Forced-choice review Critical incident appraisal Management by objectives Work standards approach Ranking methods Assessment center

Descriptions of these methods can be found in almost any text on wage and salary administration. Which method is best suited for a project-driven organizational structure? To answer this question, we must analyze the characteristics of the organizational form as well as those of the personnel who must perform there. An an example, project management can be described as an arena of conflict. Which of the above evaluation procedures can best be used to evaluate an employee’s ability to work and progress in an atmosphere of conflict? Figure 8–6 compares the above nine evaluation procedures against the six most common project conflicts. This type of analysis must be carried out for all variables and characteristics that describe the project management environment. Most compensation managers would agree that the management by objectives (MBO) technique offers the greatest promise for a fair and equitable evaluation of all employees. Although MBO implies that functional employees will have a say in establishing their own goals and objectives, this may not be the case. In project management, maybe the project manager or functional manager will set the objectives, and the functional employee will be told that he has to live with that. Obviously, there will be advantages and disadvantages to whatever evaluation procedures are finally selected.

FIGURE 8–6. Rating evaluation techniques against types of conflict.




Proper financial compensation and rewards are important to the morale and motivation of people in any organization. However, there are several issues that often make it necessary to treat compensation practices of project personnel separately from the rest of the organization:

PMBOK® Guide, 5th Edition Recognition and Rewards

Job classification and job descriptions for project personnel are usually not compatible with those existing for other professional jobs. It is often difficult to pick an existing classification and adapt it to project personnel. Without proper adjustment, the small amount of formal authority of the project and the small number of direct reports may distort the position level of project personnel in spite of their broad range of business responsibilities. Dual accountability and dual reporting relationships of project personnel raise the question of who should assess performance and control the rewards. Bases for financial rewards are often difficult to establish, quantify, and administer. The criteria for “doing a good job” are difficult to quantify. Special compensations for overtime, extensive travel, or living away from home should be considered in addition to bonus pay for preestablished results. Bonus pay is a particularly difficult and delicate issue because often many people contribute to the results of such incentives. Discretionary bonus practices can be demoralizing to the project team.

Some specific guidelines are provided here to help managers establish compensation systems for their project organizations. The foundations of these compensation practices are based on four systems: (1) job classification, (2) base pay, (3) performance appraisals, and (4) merit increases.


Job Classifications and Job Descriptions Every effort should be made to fit the new classifications for project personnel into the existing standard classification that has already been established for the organization.

The first step is to define job titles for various project personnel and their corresponding responsibilities. Titles are noteworthy because they imply certain responsibilities, position power, organizational status, and pay level. Furthermore, titles may indicate certain functional responsibilities, as does, for example, the title of task manager.1 Therefore, titles should be carefully selected and each of them supported by a formal job description.

The job description provides the basic charter for the job and the individual in charge of it. A good job description is brief and concise, not exceeding one page. Typically, it is broken down into three sections: (1) overall responsibilities, (2) specific duties, and (3) qualifications. A sample job description is given in Table 8–1. TABLE 8–1. SAMPLE JOB DESCRIPTION

Job Description: Lead Project Engineer of Processor Development Overall Responsibility Responsible for directing the technical development of the new Central Processor including managing the technical personnel assigned to this development. The Lead Project Engineer has dual responsibility, (1) to his/her functional superior for the technical implementation and engineering quality and (2) to the project manager for managing the development within the established budget and schedule. Specific Duties and Responsibilities

1. Provide necessary program direction for planning, organizing, developing and integrating the engineering effort, including establishing the specific objectives, schedules, and budgets for the processor subsystem.

2. Provide technical leadership for analyzing and establishing requirements, preliminary designing, designing, prototyping, and testing of the processor subsystem.

3. Divide the work into discrete and clearly definable tasks. Assign tasks to technical personnel within the Lead Engineer’s area of responsibility and other organizational units.


4. Define, negotiate, and allocate budgets and schedules according to the specific tasks and overall program requirements.

5. Measure and control cost, schedule, and technical performance against program plan.

6. Report deviations from program plan to program office.

7. Replan trade-off and redirect the development effort in case of contingencies such as to best utilize the available resources toward the overall program objectives.

8. Plan, maintain, and utilize engineering facilities to meet the long-range program requirements.


1. Strong technical background in state-of-the-art central processor development.

2. Prior task management experience with proven record for effective cost and schedule control of multi-disciplinary technology-based task in excess of SIM.

3. Personal skills to lead, direct, and motivate senior engineering personnel.

4. Excellent communication skills, both orally and in writing.


Base-Pay Classifications and Incentives After the job descriptions have been developed, one can delineate pay classes consistent with the responsibilities and accountabilities for business results. If left to the personnel specialist, these pay scales may slip toward the lower end of an equitable compensation. This is understandable because, on the surface, project positions look less senior than their functional counterparts, as formal authority over resources and direct reports are often less necessary for project positions than for traditional functional positions. The impact of such a skewed compensation system is that the project organization will attract less qualified personnel and may be seen as an inferior career path.

Many companies that have struggled with this problem have solved it by (1) working out compensation schemes as a team of senior managers and personnel specialists, and (2) applying criteria of responsibility and business/profit accountability to setting pay scales for project personnel in accord with other jobs in their organization. Managers who are hiring can choose a salary from the established range based on their judgment of actual position responsibilities, the candidate’s qualifications, the available budget, and other considerations.


Performance Appraisals Traditionally, the purpose of the performance appraisal is to:

Assess the employee’s work performance, preferably against preestablished objectives Provide a justification for salary actions Establish new goals and objectives for the next review period Identify and deal with work-related problems Serve as a basis for career discussions

In reality, however, the first two objectives are in conflict. As a result, traditional performance appraisals essentially become a salary discussion with the objective to justify subsequent managerial actions. In addition, discussions dominated by salary actions are usually not conducive for future goal setting, problem-solving, or career planning.

In order to get around this dilemma, many companies have separated the salary discussion from the other parts of the performance appraisal. Moreover, successful managers have carefully considered the complex issues involved and have built a performance appraisal system solidly based on content, measurability, and source of information.

The first challenge is in content, that is, to decide “what to review” and “how to measure performance.” Modern management practices try to individualize accountability as much as possible. Furthermore, subsequent incentive or merit increases are tied to profit performance. Although most companies apply these principles to their project organizations, they do it with a great deal of skepticism. Practices are often modified to assure balance and equity for jointly performed responsibilities. A similar dilemma exists in the area of profit accountability. The comment of a project manager at the General Electric Company is typical of the situation faced by business managers: “Although I am responsible for business results of a large program, I really can’t control more than 20 percent of its cost.” Acknowledging the realities, organizations are measuring performance of their project managers, in at least two areas:

Business results as measured by profits, contribution margin, return on investment, new business, and income; also, on-time delivery, meeting contractual requirements, and within-budget performance. Managerial performance as measured by overall project management effectiveness, organization, direction and leadership, and team performance.

The first area applies only if the project manager is indeed responsible for business


results such as contractual performance or new business acquisitions. Many project managers work with company-internal sponsors, such as a company-internal new product development or a feasibility study. In these cases, producing the results within agreed-on schedule and budget constraints becomes the primary measure of performance. The second area is clearly more difficult to assess. Moreover, if handled improperly, it will lead to manipulation and game playing. Table 8–2 provides some specific measures of project management performance. Whether the sponsor is company-internal or external, project managers are usually being assessed on how long it took to organize the team, whether the project is moving along according to agreed-on schedules and budgets, and how closely they meet the global goals and objectives set by their superiors. TABLE 8–2. PERFORMANCE MEASURES FOR PROJECT MANAGERS

Who Performs Appraisal Functional superior of project manager Source of Performance Data Functional superior, resource managers, general managers Primary Measures

1. Project manager’s success in leading the project toward preestablished global objectives

Target costs Key milestones Profit, net income, return on investment, contribution margin Quality Technical accomplishments Market measures, new business, follow-on contract

2. Project manager’s effectiveness in overall project direction and leadership during all phases, including establishing:

Objectives and customer requirements Budgets and schedules Policies Performance measures and controls Reporting and review system

Secondary Measures

1. Ability to utilize organizational resources Overhead cost reduction Working with existing personnel


Cost-effective make-buy decisions

2. Ability to build effective project team Project staffing Interfunctional communications Low team conflict complaints and hassles Professionally satisfied team members Work with support groups

3. Effective project planning and plan implementation Plan detail and measurability Commitment by key personnel and management Management involvement Contingency provisions Reports and reviews

4. Customer/client satisfaction Perception of overall project performance by sponsor Communications, liaison Responsiveness to changes

5. Participation in business management Keeping mangement informed of new project/product/business opportunities Bid proposal work Business planning, policy development

Additional Considerations

1. Difficulty of tasks involved Technical tasks Administrative and orgnizational complexity Multidisciplinary nature Staffing and startup

2. Scope of the project Total project budget Number of personnel involved Number of organizations and subcontractors involved

3. Changing work environment Nature and degree of customer changes and redirections



On the other side of the project organization, resource managers or project personnel are being assessed primarily on their ability to direct the implementation of a specific project subsystem:

Technical implementation as measured against requirements, quality, schedules, and cost targets Team performance as measured by ability to staff, build an effective task group, interface with other groups, and integrate among various functions

PMBOK® Guide, 5th Edition 9.4 Manage Project Team Project Performance Appraisals

Specific performance measures are shown in Table 8–3. In addition, the actual project performance of both project managers and their resource personnel should be assessed on the conditions under which it was achieved: the degree of task difficulty, complexity, size, changes, and general business conditions. TABLE 8–3. PERFORMANCE MEASURES FOR PROJECT PERSONNEL

Who Performs Appraisal Functional superior of project person Source of Performance Data Project manager and resource managers Primary Measures

1. Success in directing the agreed-on task toward completion Technical implementation according to requirements Quality Key milestones/schedules Target costs, design-to-cost Innovation Trade-offs

2. Effectiveness as a team member or team leader Building effective task team Working together with others, participation, involvement


Interfacing with support organizations and subcontractors Interfunctional coordination Getting along with others Change orientation Making commitments

Secondary Measures

1. Success and effectiveness in performing functional tasks in addition to project work in accordance with functional charter

Special assignments Advancing technology Developing organization Resource planning Functional direction and leadership

2. Administrative support services Reports and reviews Special task forces and committees Project planning Procedure development

3. New business development Bid proposal support Customer presentations

4. Professional development Keeping abreast in professional field Publications Liaison with society, vendors, customers, and educational institutions

Additional Considerations

1. Difficulty of tasks involved Technical challenges State-of-the-art considerations Changes and contingencies

2. Managerial responsibilities Task leader for number of project personnel Multifunctional integration Budget responsibility


Staffing responsibility Specific accountabilities

3. Multiproject involvement Number of different projects Number and magnitude of functional task and duties Overall workload

Finally, one needs to decide who is to perform the performance appraisal and to make the salary adjustment. Where dual accountabilities are involved, good practices call for inputs from both bosses. Such a situation could exist for project managers who report functionally to one superior but are also accountable for specific business results to another person. While dual accountability of project managers is an exception for most organizations, it is common for project resource personnel who are responsible to their functional superior for the quality of the work and to their project manager for meeting the requirements within budget and schedule. Moreover, resource personnel may be shared among many projects. Only the functional or resource manager can judge overall performance of resource personnel.


Merit Increases and Bonuses Professionals have come to expect merit increases as a reward for a job well done. However, under inflationary conditions, pay adjustments seldom keep up with cost- of-living increases. To deal with this salary compression and to give incentive for management performance, companies have introduced bonuses. The problem is that these standard plans for merit increases and bonuses are based on individual accountability while project personnel work in teams with shared accountabilities, responsibilities, and controls. It is usually very difficult to credit project success or failure to a single individual or a small group.

Most managers with these dilemmas have turned to the traditional remedy of the performance appraisal. If done well, the appraisal should provide particular measures of job performance that assess the level and magnitude at which the individual has contributed to the success of the project, including the managerial performance and team performance components. Therefore, a properly designed and executed performance appraisal that includes input from all accountable management elements, and the basic agreement of the employee with the conclusions, is a sound basis for future salary reviews.



Today, most companies are using project teams. However, there still exist challenges in how to reward project teams for successful performance. The importance of how teams are rewarded is identified by Parker, McAdams, and Zielinski2:

PMBOK® Guide, 5th Edition Recognition and Rewards

Some organizations are fond of saying, “We’re all part of the team,” but too often it is merely management-speak. This is especially common in conventional hierarchical organizations; they say the words but don’t follow up with significant action. Their employees may read the articles and attend the conferences and come to believe that many companies have turned collaborative. Actually, though, few organizations today are genuinely team-based.

Others who want to quibble point to how they reward or recognize teams with splashy bonuses or profit-sharing plans. But these do not by themselves represent a commitment to teams; they’re more like a gift from a rich uncle. If top management believes that only money and a few recognition programs (“team of year” and that sort of thing) reinforce teamwork, they are wrong. These alone do not cause fundamental change in the way people and teams are managed.

But in a few organizations, teaming is a key component of the corporate strategy, involvement with teams is second nature, and collaboration happens without great thought or fanfare. There are natural work groups (teams of people who do the same or similar work in the same location), permanent cross-functional teams, ad hoc project teams, process improvement teams, and real management teams. Involvement just happens.

Why is it so difficult to reward project teams? To answer this question, we must understand what a team is and is not. According to Parker et al.3:

Consider this statement: an organizational unit can act like a team, but a team is not necessarily an organizational unit, at least for describing reward plans. An organizational unit is just that, a group of employees organized into an


identifiable business unit that appears on the organizational chart. They may behave in a spirit of teamwork, but for the purposes of developing reward plans they are not a “team.” The organizational unit may be a whole company, a strategic business unit, a division, a department, or a work group.

A “team” is a small group of people allied by a common project and sharing performance objectives. They generally have complementary skills or knowledge and an interdependence that requires that they work together to accomplish their project’s objective. Team members hold themselves mutually accountable for their results. These teams are not found on an organization chart.

Incentives are difficult to apply because project teams may not appear on an organizational chart. Figure 8-7 shows the reinforcement model for employees.4 For project teams, the emphasis is the three arrows on the right-hand side of Figure 8–7.

FIGURE 8–7. The reinforcement model.

Project team incentives are important because team members expect appropriate rewards and recognition for work well done. According to Parker et al.5:

Project teams are usually, but not always, formed by management to tackle specific projects or challenges with a defined time frame—reviewing processes for efficiency or cost-savings recommendations, launching a new software product, or implementing enterprise resource planning systems are just a few examples. In other cases, teams self-form around specific issues or as part of continuous improvement initiatives such as team-based suggestion systems.


Project teams can have cross-functional membership or simply be a subset of an existing organizational unit. The person who sponsors the team—its “champion” typically—creates an incentive plan with specific objective measures and an award schedule tied to achieving those measures. To qualify as an incentive, the plan must include pre-announced goals, with a “do this, get that” guarantee for teams. The incentive usually varies with the value added by the project.

Project team incentive plans usually have some combination of these basic measures:

Project Milestones: Hit a milestone, on budget and on time, and all team members earn a defined amount. Although sound in theory, there are inherent problems in tying financial incentives to hitting milestones. Milestones often change for good reason (technological advances, market shifts, other developments) and you don’t want the team and management to get into a negotiation on slipping dates to trigger the incentive. Unless milestones are set in stone and reaching them is simply a function of the team doing its normal, everyday job, it’s generally best to use recognition-after-the-fact celebration of reaching milestones—rather than tying financial incentives to it. Rewards need not always be time-based, such that when the team hits a milestone by a certain date it earns a reward. If, for example, a product development team debugs a new piece of software on time, that’s not necessarily a reason to reward it. But if it discovers and solves an unsuspected problem or writes better code before a delivery date, rewards are due. Project Completion: All team members earn a defined amount when they complete the project on budget and on time (or to the team champion’s quality standards). Value Added: This award is a function of the value added by a project, and depends largely on the ability of the organization to create and track objective measures. Examples include reduced turnaround time on customer requests, improved cycle times for product development, cost savings due to new process efficiencies, or incremental profit or market share created by the product or service developed or implemented by the project team.

One warning about project incentive plans: They can be very effective in helping teams stay focused, accomplish goals, and feel like they are rewarded for their hard work, but they tend to be exclusionary. Not everyone can be on a project team. Some employees (team members) will have an opportunity to earn an incentive that others (nonteam members) do not. There is a lack of internal equity. One way to address this is to reward core team members with incentives for reaching team


goals and to recognize peripheral players who supported the team, either by offering advice, resources, or a pair of hands, or by covering for project team members back at their regular job.

Some projects are of such strategic importance that you can live with these internal equity problems and nonteam members’ grousing about exclusionary incentives. Bottom line, though, is this tool should be used cautiously.

Some organizations focus only on cash awards. However, Parker et al. have concluded from their research that noncash awards can work equally well, if not better, than cash awards.6

Many of our case organizations use noncash awards because of their staying power. Everyone loves money, but cash payments can lose their motivational impact over time. However, noncash awards carry trophy value that has great staying power because each time you took at that television set or plaque you are reminded of what you or your team did to earn it. Each of the plans encourages awards that are coveted by the recipients and, therefore, will be memorable.

If you ask employees what they want, they will invariably say cash. But providing it can be difficult if the budget is small or the targeted earnings in an incentive plan are modest. If you pay out more often than annually and take taxes out, the net amount may look pretty small, even cheap. Noncash awards tend to be more dependent on their symbolic value than their financial value.

Noncash awards come in all forms: a simple thank you, a letter of congratulations, time off with pay, a trophy, company merchandise, a plaque, gift certificates, special services, a dinner for two, a free lunch, a credit to a card issued by the company for purchases at local stores, specific items or merchandise, merchandise from an extensive catalog, travel for business or a vacation with the family, and stock options. Only the creativity and imagination of the plan creators limit the choices.



BUSINESS ORGANIZATION The definition of a small project could be:

Total duration is usually three to twelve months. Total dollar value is $50,000 to $1.5 million (upper limit is usually capital equipment projects). There is continuous communication between team members, and no more than three or four cost centers are involved. Manual rather than computerized cost control may be acceptable. Project managers work closely with functional personnel and managers on a daily basis, so time-consuming detail reporting is not necessary. The work breakdown structure does not go beyond level three.

Here, we are discussing project management in both small companies and small organizations within a larger corporation. In small organizations, major differences from large companies must be accounted for:

In small companies, the project manager has to wear multiple hats and may have to act as a project manager and line manager at the same time. Large companies may have the luxury of a single full-time project manager for the duration of a project. Smaller companies may not be able to afford a full-time project manager and therefore may require that functional managers wear two hats. This poses a problem in that the functional managers may be more dedicated to their own functional unit than to the project, and the project may suffer. There is also the risk that when the line manager also acts as project manager, the line manager may keep the best resources for his own project. The line manager’s project may be a success at the expense of all the other projects that he must supply resources for.

In the ideal situation, the project manager works horizontally and has project dedication, whereas the line manager works vertically and has functional (or company) dedication. If the working relationship between the project and functional managers is a good one, then decisions will be made in a manner that is in the best interest of both the project and the company. Unfortunately, this may be difficult to accomplish in small companies when an individual wears multiple hats.


In a small company, the project manager handles multiple projects, perhaps each with a different priority. In large companies, project managers normally handle only one project at a time. Handling multiple projects becomes a serious problem if the priorities are not close together. For this reason, many small companies avoid the establishment of priorities for fear that the lower- priority activities will never be accomplished. In a small company, the project manager has limited resources. In a large company, if the project manager is unhappy with resources that are provided, he may have the luxury of returning to the functional manager to either demand or negotiate for other resources. In a small organization, the resources assigned may be simply the only resources available. In a small company, project managers must generally have a better understanding of interpersonal skills than in a larger company. This is a necessity because a project manager in the small company has limited resources and must provide the best motivation that he can. In the smaller company, the project manager generally has shorter lines of communications. In small organizations project managers almost always report to a top-level executive, whereas in larger organizations the project managers can report to any level of management. Small companies tend to have fewer levels of management. Small companies do not have a project office. Large companies, especially in aerospace or construction, can easily support a project office of twenty to thirty people, whereas in the smaller company the project manager may have to be the entire project office. This implies that the project manager in a small company may be required to have more general and specific information about all company activities, policies, and procedures than his counterparts in the larger companies. In a small company, there may be a much greater risk to the total company with the failure of as little as one project. Large companies may be able to afford the loss of a multimillion-dollar program, whereas the smaller company may be in serious financial trouble. Thus many smaller companies avoid bidding on projects that would necessitate hiring additional resources or giving up some of its smaller accounts. In a small company, there might be tighter monetary controls but with less sophisticated control techniques. Because the smaller company incurs greater risk with the failure (or cost overrun) of as little as one project, costs are generally controlled much more tightly and more frequently than in larger companies. However, smaller companies generally rely on manual or partially computerized systems, whereas larger organizations rely heavily on


sophisticated software packages. In a small company, there is usually more upper-level management interference. This is expected because in the small company there is a much greater risk with the failure of a single project. In addition, executives in smaller companies “meddle” more than executives in larger companies, and quite often delegate as little as possible to project managers. Evaluation procedures for individuals are usually easier in a smaller company. This holds true because the project manager gets to know the people better, and, as stated above, there exists a greater need for interpersonal skills on the horizontal line in a smaller company. In a smaller company, project estimating is usually more precise and based on either history or standards. This type of planning process is usually manual as opposed to computerized. In addition, functional managers in a small company usually feel obligated to live up to their commitments, whereas in larger companies, much more lip service is given.


8.5 MEGA PROJECTS Mega projects may have a different set of rules and guidelines from those of smaller projects. For example, in large projects:

Vast numbers of people may be required, often for short or intense periods of time. Continuous organizational restructuring may be necessary as each project goes through a different life-cycle phase. The matrix and project organizational form may be used interchangeably. The following elements are critical for success.

Training in project management Rules and procedures clearly defined Communications at all levels Quality front-end planning

Many companies dream of winning mega project contracts only to find disaster rather than a pot of gold. The difficulty in managing mega projects stems mainly from resource restraints:

Lack of available on-site workers (or local labor forces) Lack of skilled workers Lack of properly trained on-site supervision Lack of raw materials

As a result of such problems, the company immediately assigns its best employees to the mega project, thus creating severe risks for the smaller projects, many of which could lead to substantial follow-on business. Overtime is usually required, on a prolonged basis, and this results in lower efficiency and unhappy employees.

As the project schedule slips, management hires additional home-office personnel to support the project. By the time that the project is finished, the total organization is overstaffed, many smaller customers have taken their business elsewhere, and the company finds itself in the position of needing another mega project in order to survive and support the existing staff.

Mega projects are not always as glorious as people think they are. Organizational stability, accompanied by a moderate growth rate, may be more important than quantum steps to mega projects. The lesson here is that mega projects should be left to those companies that have the facilities, expertise, resources, and management know-how to handle the situation.



Companies that promote morality and ethics in business usually have an easier time developing a cooperative culture than those that encourage unethical or immoral behavior. The adversity generated by unethical acts can be either internally or externally driven. Internally driven adversity occurs when employees or managers in your own company ask you to take action that may be in the best interest of your company but violates your own moral and ethical beliefs. Typical examples might include:

PMBOK® Guide, 5th Edition Professional Responsibility and the PMP® Code of Conduct

You are asked to lie to the customer in a proposal in order to win the contract. You are asked to withhold bad news from your own management. You are asked to withhold bad news from the customer. You are instructed to ship a potentially defective unit to the customer in order to maintain production quotas. You are ordered to violate ethical accounting practices to make your numbers “look good” for senior management. You are asked to cover up acts of embezzlement or use the wrong charge numbers. You are asked to violate the confidence of a private personal decision by a team member.

External adversity occurs when your customers ask you to take action that may be in the customer’s best interest (and possibly your company’s best interest), but once again violates your personal moral and ethical beliefs. Typical examples might include:

You are asked to hide or destroy information that could be damaging to the customer during legal action against your customer. You are asked to lie to consumers to help maintain your customer’s public image. You are asked to release unreliable information that would be damaging to one


of your customer’s competitors. The customer’s project manager asks you to lie in your proposal so that he/she will have an easier time in approving contract award.

Project managers are often placed in positions where an action must be taken for the best interest of the company and its customers, and yet the same action could be upsetting to the workers. Consider the following example as a positive way to handle this:

A project had a delivery date where a specific number of completed units had to be on the firm’s biggest customer’s receiving dock by January 5. This customer represented 30% of the firm’s sales and 33% of its profits. Because of product development problems and slippages, the project could not be completed early. The employees, many of whom were exempt, were informed that they would be expected to work 12-hour days, including Christmas and New Year’s, to maintain the schedule. The project manager worked the same hours as his manufacturing team and was visible to all. The company allowed family members to visit the workers during the lunch and dinner hours during this period. After delivery was accomplished, the project manager arranged for all of the team members to receive two weeks of paid time off. At completion of the project, the team members were volunteering to work again for this project manager.

The project manager realized that asking his team to work these days might be viewed as immoral. Yet, because he also worked, his behavior reinforced the importance of meeting the schedule. The project manager’s actions actually strengthened the cooperative nature of the culture within the firm.

Not all changes are in the best interest of both the company and the workers. Sometimes change is needed simply to survive, and this could force employees to depart from their comfort zones. The employees might even view the change as immoral. Consider the following example:

Because of a recession, a machine tool company switched from a non–project- driven to a project-driven company. Management recognized the change and tried to convince employees that customers now wanted specialty products rather than standard products, and that the survival of the firm may be at stake. The company hired a project management consulting company to help bring in project management since the business was now project-driven. The employees vigorously resisted both the change and the training with the mistaken belief that, once the recession ended, the customers would once again want the standard, off-the-shelf products and that project management


was a waste of time. The company is no longer in business and, as the employees walked out of the plant for the last time, they blamed project management for the loss of employment.

Some companies develop “Standard Practice Manuals” that describe in detail what is meant by ethical conduct in dealing with customers and suppliers. Yet, even with the existence of these manuals, well-meaning individuals may create unintended consequences that wreak havoc.

Consider the following example:

The executive project sponsor on a government-funded R&D project decided to “massage” the raw data to make the numbers look better before presenting the data to a customer. When the customer realized what had happened, their relationship, which had been based upon trust and open communications, was now based upon mistrust and formal documentation. The entire project team suffered because of the self-serving conduct of one executive.

Sometimes, project managers find themselves in situations where the outcome most likely will be a win-lose position rather than a win-win situation. Consider the following three situations:

An assistant project manager, Mary, had the opportunity to be promoted and manage a new large project that was about to begin. She needed her manager’s permission to accept the new assignment, but if she left, her manager would have to perform her work in addition to his own for at least three months. The project manager refused to release her, and the project manager developed a reputation of preventing people from being promoted while working on his project. In the first month of a twelve-month project, the project manager realized that the end date was optimistic, but he purposely withheld information from the customer in hopes that a miracle would occur. Ten months later, the project manager was still withholding information waiting for the miracle. In the eleventh month, the customer was told the truth. People then labeled the project manager as an individual who would rather lie than tell the truth because it was easier. To maintain the customer’s schedule, the project manager demanded that employees work excessive overtime, knowing that this often led to more mistakes. The company fired a tired worker who inadvertently withdrew the wrong raw materials from inventory, resulting in a $55,000 manufacturing mistake.


In all three situations, the project manager believed that his decision was in the best interest of the company at that time. Yet the final result in each case was that the project manager was labeled as unethical or immoral.

It is often said that “money is the root of all evil.” Sometimes companies believe that recognizing the achievements of an individual through a financial reward system is appropriate without considering the impact on the culture. Consider the following example:

At the end of a highly successful project, the project manager was promoted, given a $5,000 bonus and a paid vacation. The team members who were key to the project’s success and who earned minimum wage, went to a fast food restaurant to celebrate their contribution to the firm and their support of each other. The project manager celebrated alone.

The company failed to recognize that project management was a team effort. The workers viewed management’s reward policy as immoral and unethical because the project manager was successful due to the efforts of the entire team.

Moral and ethical conduct by project managers, project sponsors, and line managers can improve the corporate culture. Likewise, poor decisions can destroy a culture, often in much less time than it took for the culture to be developed.



Professional responsibilities for project managers have become increasingly important in the last few years because of the unfavorable publicity on the dealings of corporate America. These professional responsibilities have been with us for some time, especially in dealing with government agencies. Professional responsibilities for a project manager are both broad-based and encompassing.

PMBOK® Guide, 5th Edition Professional Responsibility and the PMP® Code of Conduct

Professional responsibilities cover two major areas: our responsibilities to the profession of project management and our responsibilities to the customers and the public.

In 2010, PMI® released the finding of the latest version of the Role Delineation Study (RDS). In addition, PMI® updated their Code of Professional Conduct and renamed it the Code of Ethics and Professional Conduct. PMI® has also eliminated the Professional Responsibility Domain Area from the PMP® exam and included the professional responsibility questions in the other domain areas where appropriate.

The Code of Ethics and Professional Conduct applies to everyone working in a project environment, not merely the project manager. As such, the code emphasizes that PMP®s must function as “role models” and exhibit characteristics such as honesty, integrity, and ethical behavior. The code guides members of the project management profession on how to handle ethical issues as well as providing customers and stakeholders with some degree of assuredness that project personnel will make the right decisions.

The Code of Ethics and Professional Conduct is divided into four sections that were considered as important by the RDS. They are:

Responsibility: This includes taking ownership for the decisions we make, or failure to make decisions, as well as the consequences, whether they are good


or bad. Respect: This includes the way we regard ourselves as well as the resources provided to us. Fairness: This focuses on the way we make decisions. Decisions should be made in an impartial and objective manner and be free from conflicts of interest, favoritism, and prejudices. Honesty: This states that we should act in a truthful manner.

Each of the four sections includes both aspirational standards and mandatory standards. An aspirational standard is an agreed-upon, repeatable way of doing something. It can be a published document designed to be used consistently as a general rule, guideline, or definition. Aspirational standards are often a summary of good and best practices rather than general practices. Although we tend to say that abiding by aspirational standards is not optional, the aspirational standards are actually designed for voluntary use in the way that they are acted upon and may not impose any regulations. However, laws and regulations may refer to certain aspirational standards and make compliance with them compulsory.

Mandatory standards may be dictated by laws, legal requirements, and regulations. In this case, adherence is essential and violations could be subject to review by ethics review committees. As an example, if a project manager is placed in a situation where there may be a conflict of interest, we would naturally expect the project manager to make the right decision, perhaps his or her own, without reporting it to anyone. This would be an example of an aspirational standard. But if the company has a policy that all conflicts of interest must be documented and brought before the corporate legal staff for resolution, this would be a mandatory standard. Some people find it difficult to differentiate between an aspirational and a mandatory standard.

There are numerous situations that can create problems for project managers in dealing with professional responsibilities expectations. These situations include:

Maintaining professional integrity Adhering to ethical standards Recognizing diversity Avoiding/reporting conflicts of interest Not making project decisions for personal gains Receiving gifts from customers and vendors Providing gifts to customers and vendors Truthfully reporting information Willing to identify violations Balancing stakeholder needs


Succumbing to stakeholder pressure Managing your firm’s intellectual property Managing your customer’s intellectual property Adhering to security and confidentiality requirements Abiding by the Code of Ethics and Professional Conduct Report omissions and errors Living up to commitments Not engaging in deceptive practices Truthful and accurate communications Appropriate use of power and authority Demonstrating honest behavior

Several of these topics are explained below.


Conflict of Interest A conflict of interest is a situation where the individual is placed in a compromising position where the individual can gain personally based upon the decisions made. This is also referred to as personal enrichment. There are numerous situations where a project manager is placed in such a position. Examples might be:

Insider knowledge that the stock will be going up or down Being asked to improperly allow employees to use charge numbers on your project even though they are not working on your project Receiving or giving inappropriate (by dollar value) gifts Receiving unjustified compensation or kickbacks Providing the customer with false information just to keep the project alive

Project managers are expected to abide by the PMI® Code of Professional Conduct, which makes it clear that project managers should conduct themselves in an ethical manner. Unjust compensation or gains not only are frowned upon but are unacceptable. Unless these conflict-of-interest situations are understood, the legitimate interests of both the customer and the company may not be forthcoming.


Inappropriate Connections Not all stakeholders are equal in their ability to influence the decisions made by the project manager. Some stakeholders can provide inappropriate influence/compensation, such as:

A loan with a very low interest rate Ability to purchase a product/service at a price that may appear equivalent to a gift Ability to receive free gifts such as airline tickets, tickets to athletic events, free meals and entertainment, or even cash

Another form of inappropriate connections would be with family or friends. These individuals may provide you with information or influence by which you could gain personally in a business situation. Examples of affiliation connections might be:

Receiving insider information Receiving privileged information Opening doors that you could not open by yourself, at least without some difficulty


Acceptance of Gifts Today, all companies have rules concerning the acceptance of gifts and their disclosure. While it may be customary in some countries to give or accept gifts, the standard rule is usually to avoid all gifts. Some companies may stipulate limits on when gifts are permitted and the appropriateness of the gift. The gifts might be cash, free meals, or other such items.


Responsibility to Your Company (and Stakeholders) Companies today, more than ever before, are under pressure to maintain ethical practices with customers and suppliers. This could be interpreted as a company code of ethics that stipulates the professional behavior expected from the project manager and the team members. This applies specifically to the actions of both the project manager as well as the team members. Some companies even go so far as to develop “standard practice manuals” on how to act in a professional manner. Typical sections of such manuals might be:

Truthful representation of all information Full disclosure of all information Protection of company-proprietary information Responsibility to report violations Full compliance with groups auditing violations Full disclosure, and in a timely manner, of all conflicts of interest Ensure that all of the team members abide by the above items


8.8 INTERNAL PARTNERSHIPS A partnership is a group of two or more individuals working together to achieve a common objective. In project management, maintaining excellent, working relations with internal partners is essential. Internally, the critical relationship is between the project and line manager.

In the early days of project management, the selection of the individual to serve as the project manager was most often dependent upon who possessed the greatest command of technology. The result, as shown in Figure 8–8, was a very poor working relationship between the project and line manager. Line managers viewed project managers as a threat, and their relationship developed into a competitive, superior-subordinate relationship. The most common form of organizational structure was a very strong matrix where the project manager, perceived as having a command of technology, had a greater influence over the assigned employees than did their line manager.

FIGURE 8–8. Partnership strength.

As the magnitude and technical complexity of the projects grew, it became obvious that the project managers could not maintain a command of technology in all aspects of the project. Project managers were viewed as possessing an understanding of rather than command of technology. They became more dependent upon line managers for technical support. The project manager then found himself in the midst of a weak matrix where the employees were receiving the majority of their technical direction from the line managers.


As the partnership between the project and line managers developed, management recognized that partnerships worked best on a peer-to-peer basis. Project and line managers began to view each other as equals and share in the authority, responsibility, and accountability needed to assure project success. Good project management methodologies emphasize the cooperative working relationship that must exist between the project and line managers.


8.9 EXTERNAL PARTNERSHIPS Project management methodologies also emphasize the working relationships with external organizations such as suppliers. Outsourcing has become a major trend because it allows companies to bring their products and services to the market faster and often at a more competitive price. Therefore, external partnerships can become beneficial for both the suppliers and the customers.

PMBOK® Guide, 5th Edition 2.2.1 Project Stakeholders

There are three categories of suppliers:

An External Supplier: These are suppliers that you may or may not have worked with previously. There has been no investment into a relationship with these suppliers. If they win a contract, and even if they perform well, there is no guarantee that they will receive another contract. Usually an external supplier must go through all of the requirements of the competitive bidding process for each project. An Approved Supplier: This is usually considered the lowest level of external partnering. Approved suppliers are part of an approved supplier- bidding list and are invited to bid on selected projects. If the approved supplier wins a contract, there is no guarantee that any additional contracts will be forthcoming. Some minimal relationship between the customer and supplier may exist, but the supplier may still be required to go through all of the standard protocols of competitive bidding. A Preferred Supplier: These suppliers usually get the first chance at receiving a contract but may still have to go through the entire competitive bidding process, but with a minimum amount of paperwork. Proposal information on previous history, past experience with the customer or the type of project, and other such information may not be required as part of the contractual bidding process in order to reduce time and cost. A relationship between the customer and the supplier exists. Information on lessons learned, best practices, and technological changes are often exchanged freely. A Strategic Partnership Supplier: A strong relationship exists between the customer and supplier, and they freely exchange information, especially strategic information. Each views the relationship as a long-term partnership


with long-term benefits. Strategic suppliers often receive sole-source contracts without having to prepare a formal proposal, thus generating cost savings for both companies. Strategic suppliers may not be the lowest cost suppliers, but the customer’s cost savings of not having to perform competitive bidding is well worth the effort.

External partnerships, if properly managed, can provide significant long-term benefits to both the customer and supplier.

The Department of Defense has been conducting research into what constitutes an effective supplier relationship.7 Each Chrysler supplier had a Chrysler person knowledgeable about the supplier’s business to contact for all supplier dealings for that commodity. These companies also interacted with key suppliers in close teaming arrangements that facilitated sharing information. Commonly called integrated product teams (IPTs), members worked together so that design, manufacturing, and cost issues were considered together. Team members were encouraged to participate as partners in meeting project goals and to interact frequently. In addition, some companies collocated suppliers with their own people or set up central working facilities with suppliers for working out issues such as how a product might be improved or be made less expensive. Motorola and Xerox saw such teams as a key vehicle for facilitating early supplier involvement in their products—one of their primary strategies. Motorola said key suppliers had building access and came in many times during a week to work with Motorola engineers.