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Project Management

The Managerial Process Eighth Edition

Erik W. Larson

Clifford F. Gray Oregon State University

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PROJECT MANAGEMENT: THE MANAGERIAL PROCESS, EIGHTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2021 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2018, 2014, and 2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

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Library of Congress Cataloging-in-Publication Data

Names: Gray, Clifford F., author. | Larson, Erik W., 1952- author. Title: Project management : the managerial process / Erik W. Larson, Clifford F. Gray, Oregon State University. Description: Eighth edition. | New York, NY : McGraw-Hill Education, [2021] | Clifford F. Gray appears as the first named author in earlier editions. | Includes bibliographical references and index. | Summary: “Our motivation in writing this text continues to be to provide a realistic, socio-technical view of project management. In the past, textbooks on project management focused almost exclusively on the tools and processes used to manage projects and not the human dimension”– Provided by publisher. Identifiers: LCCN 2019028390 (print) | LCCN 2019028391 (ebook) | ISBN 9781260238860 (paperback) | ISBN 1260238865 (paperback) | ISBN 9781260242379 (ebook) Subjects: LCSH: Project management. | Time management. | Risk management. Classification: LCC HD69.P75 G72 2021 (print) | LCC HD69.P75 (ebook) | DDC 658.4/04–dc23 LC record available at https://lccn.loc.gov/2019028390 LC ebook record available at https://lccn.loc.gov/2019028391

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

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vii

Erik W. Larson ERIK W. LARSON is professor emeritus of project management at the College of Business, Oregon State University. He teaches executive, graduate, and undergraduate courses on project management and leadership. His research and consulting activities focus on project management. He has published numerous articles on matrix manage- ment, product development, and project partnering. He has been honored with teach- ing awards from both the Oregon State University MBA program and the University of Oregon Executive MBA program. He has been a member of the Project Manage- ment Institute since 1984. In 1995 he worked as a Fulbright scholar with faculty at the Krakow Academy of Economics on modernizing Polish business education. He was a visiting professor at Chulalongkorn University in Bangkok, Thailand, and at Baden-Wuerttemberg Cooperative State University in Bad Mergentheim, Germany. He received a B.A. in psychology from Claremont McKenna College and a Ph.D. in management from State University of New York at Buffalo. He is a certified Project Management Professional (PMP) and Scrum master.

Clifford F. Gray CLIFFORD F. GRAY is professor emeritus of management at the College of Business, Oregon State University. He has personally taught more than 100 executive develop- ment seminars and workshops. Cliff has been a member of the Project Management Institute since 1976 and was one of the founders of the Portland, Oregon, chapter. He was a visiting professor at Kasetsart University in Bangkok, Thailand, in 2005. He was the president of Project Management International, Inc. (a training and consulting firm specializing in project management) 1977–2005. He received his B.A. in economics and management from Millikin University, M.B.A. from Indiana University, and doc- torate in operations management from the College of Business, University of Oregon. He is a certified Scrum master.

About the Authors

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viii

“Man’s mind, once stretched by a new idea, never regains its original dimensions.”

Oliver Wendell Holmes, Jr.

To my family, who have always encircled me with love and encouragement—my parents (Samuel and Charlotte), my wife (Mary), my sons and their wives (Kevin and Dawn, Robert and Sally), and their children (Ryan, Carly, Connor and Lauren).

C.F.G.

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” Bernard Shaw, Man and Superman

To Ann, whose love and support have brought out the best in me. To our girls Mary, Rachel, and Tor-Tor for the joy and pride they give me. And to our grandkids, Mr. B, Livvy, Jasper Jones!, Baby Ya Ya, Juniper Berry, and Callie, whose future depends upon effective project management. Finally, to my muse, Neil—walk on!

E.W.L

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ix

Our motivation in writing this text continues to be to provide a realistic, socio-technical view of project management. In the past, textbooks on project management focused almost exclusively on the tools and processes used to manage projects and not the human dimension. This baffled us, since people, not tools, complete projects! While we firmly believe that mastering tools and processes is essential to successful project man- agement, we also believe that the effectiveness of these tools and methods is shaped and determined by the prevailing culture of the organization and interpersonal dynamics of the people involved. Thus, we try to provide a holistic view that focuses on both the technical and social dimensions and how they interact to determine the fate of projects.

Audience

This text is written for a wide audience. It covers concepts and skills that are used by managers to propose, plan, secure resources, budget, and lead project teams to success- ful completions of their projects. The text should prove useful to students and prospec- tive project managers in helping them understand why organizations have developed a formal project management process to gain a competitive advantage. Readers will find the concepts and techniques discussed in enough detail to be immediately useful in new-project situations. Practicing project managers will find the text to be a valuable guide and reference when dealing with typical problems that arise in the course of a project. Managers will also find the text useful in understanding the role of projects in the missions of their organizations. Analysts will find the text useful in helping to explain the data needed for project implementation as well as the operations of inher- ited or purchased software.

Members of the Project Management Institute will find the text is well structured to meet the needs of those wishing to prepare for PMP (Project Management Profes- sional) or CAPM (Certified Associate in Project Management) certification exams. The text has in-depth coverage of the most critical topics found in PMI’s Project Management Body of Knowledge (PMBOK). People at all levels in the organization assigned to work on projects will find the text useful not only in providing them with a rationale for the use of project management processes but also because of the insights they will gain into how to enhance their contributions to project success.

Our emphasis is not only on how the management process works but also, and more importantly, on why it works. The concepts, principles, and techniques are univer- sally applicable. That is, the text does not specialize by industry type or project scope. Instead, the text is written for the individual who will be required to manage a variety of projects in a variety of organizational settings. In the case of some small projects, a few of the steps of the techniques can be omitted, but the conceptual framework applies to all organizations in which projects are important to survival. The approach can be used in pure project organizations such as construction, research organizations, and engineering consultancy firms. At the same time, this approach will benefit orga- nizations that carry out many small projects while the daily effort of delivering prod- ucts or services continues.

Preface

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Content

In this and other editions we continue to try to resist the forces that engender scope creep and focus only on essential tools and concepts that are being used in the real world. We have been guided by feedback from reviewers, practitioners, teachers, and students. Some changes are minor and incremental, designed to clarify and reduce con- fusion. Other changes are significant. They represent new developments in the field or better ways of teaching project management principles. Below are major changes to the eighth edition.

∙ All material has been reviewed and revised based on the latest edition of Project Management Body of Knowledge (PMBOK), Sixth Edition, 2017.

∙ Discussion questions for most Snapshots from Practice are now at the end of each chapter.

∙ Many of the Snapshots from Practice have been expanded to more fully cover the examples.

∙ Agile Project Management is introduced in Chapter 1 and discussed when appropri- ate in subsequent chapters, with Chapter 15 providing a more complete coverage of the methodology.

∙ A new set of exercises have been developed for Chapter 5. ∙ New student exercises and cases have been added to chapters. ∙ The Snapshot from Practice boxes feature a number of new examples of project

management in action. ∙ The Instructor’s Manual contains a listing of current YouTube videos that corre-

spond to key concepts and Snapshots from Practice.

Overall the text addresses the major questions and challenges the authors have encountered over their 60 combined years of teaching project management and con- sulting with practicing project managers in domestic and foreign environments. These questions include the following: How should projects be prioritized? What factors con- tribute to project failure or success? How do project managers orchestrate the complex network of relationships involving vendors, subcontractors, project team members, senior management, functional managers, and customers that affect project success? What project management system can be set up to gain some measure of control? How are projects managed when the customers are not sure what they want? How do project managers work with people from foreign cultures?

Project managers must deal with all these concerns to be effective. All of these issues and problems represent linkages to a socio-technical project management per- spective. The chapter content of the text has been placed within an overall framework that integrates these topics in a holistic manner. Cases and snapshots are included from the experiences of practicing managers. The future for project managers is exciting. Careers will be built on successfully managing projects.

Student Learning Aids

Student resources include study outlines, online quizzes, PowerPoint slides, videos, Microsoft Project Video Tutorials, and web links. These can be found in Connect.

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Acknowledgments

We would like to thank Scott Bailey for building the end-of-chapter exercises for Con- nect; Pinyarat Sirisomboonsuk for revising the PowerPoint slides; Ronny Richardson for updating the Instructor’s Manual; Angelo Serra for updating the Test Bank; and Pinyarat Sirisomboonsuk for providing new Snapshot from Practice questions.

Next, it is important to note that the text includes contributions from numerous students, colleagues, friends, and managers gleaned from professional conversations. We want them to know we sincerely appreciate their counsel and suggestions. Almost every exercise, case, and example in the text is drawn from a real-world project. Spe- cial thanks to managers who graciously shared their current project as ideas for exer- cises, subjects for cases, and examples for the text. John A. Drexler, Jim Moran, John Sloan, Pat Taylor, and John Wold, whose work is printed, are gratefully acknowledged. Special gratitude is due Robert Breitbarth of Interact Management, who shared invalu- able insights on prioritizing projects. University students and managers deserve spe- cial accolades for identifying problems with earlier drafts of the text and exercises.

We are indebted to the reviewers of past editions who shared our commitment to elevating the instruction of project management. We thank you for your many thought- ful suggestions and for making our book better. Of course, we accept responsibility for the final version of the text.

Paul S. Allen, Rice University Victor Allen, Lawrence Technological University Kwasi Amoako-Gyampah, University of North Carolina–Greensboro Gregory Anderson, Weber State University Mark Angolia, East Carolina University Brian M. Ashford, North Carolina State University Dana Bachman, Colorado Christian University Robin Bagent, College of Southern Idaho Scott Bailey, Troy University Nabil Bedewi, Georgetown University Anandhi Bharadwaj, Emory University James Blair, Washington University–St. Louis Mary Jean Blink, Mount St. Joseph University S. Narayan Bodapati, Southern Illinois University at Edwardsville Warren J. Boe, University of Iowa Thomas Calderon, University of Akron Alan Cannon, University of Texas–Arlington Susan Cholette, San Francisco State Denis F. Cioffi, George Washington University Robert Cope, Southeastern Louisiana University

Kenneth DaRin, Clarkson University Ron Darnell, Amberton University Burton Dean, San Jose State University Joseph D. DeVoss, DeVry University David Duby, Liberty University Michael Ensby, Clarkson University Charles Franz, University of Missouri, Columbia Larry Frazier, City University of Seattle Raouf Ghattas, DeVry University Edward J. Glantz, Pennsylvania State University Michael Godfrey, University of Wisconsin–Oshkosh Jay Goldberg, Marquette University Robert Groff, Westwood College Raffael Guidone, New York City College of Technology Brian Gurney, Montana State University–Billings Owen P. Hall, Pepperdine University Chaodong Han, Towson University Bruce C. Hartman, University of Arizona Mark Huber, University of Georgia Richard Irving, York University Marshall Issen, Clarkson University

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In addition, we would like to thank our colleagues in the College of Business at Oregon State University for their support and help in completing this project. In par- ticular, we recognize Lacey McNeely, Prem Mathew, and Jeewon Chou for their help- ful advice and suggestions. We also wish to thank the many students who helped us at different stages of this project, most notably Neil Young, Saajan Patel, Katherine Knox, Dat Nguyen, and David Dempsey. Mary Gray deserves special credit for editing and working under tight deadlines on earlier editions. Special thanks go to Pinyarat (“Minkster”) Sirisomboonsuk for her help in preparing the last five editions.

Finally, we want to extend our thanks to all the people at McGraw-Hill Education for their efforts and support. First, we would like to thank Noelle Bathurst and Sarah Wood, for providing editorial direction, guidance, and management of the book’s development for the eighth edition. And we would also like to thank Sandy Wille, Sandy Ludovissy, Egzon Shaqiri, Beth Cray, and Angela Norris for managing the final production, design, supplement, and media phases of the eighth edition.

Erik W. Larson

Clifford F. Gray

Robert T. Jones, DePaul University Susan Kendall, Arapahoe Community College George Kenyon, Lamar University Robert Key, University of Phoenix Elias Konwufine, Keiser University Dennis Krumwiede, Idaho State University Rafael Landaeta, Old Dominion University Eldon Larsen, Marshall University Eric T. Larson, Rutgers University Philip Lee, Lone Star College–University Park Charles Lesko, East Carolina University Richard L. Luebbe, Miami University of Ohio Linh Luong, City University of Seattle Steve Machon, DeVry University–Tinley Park Andrew Manikas, University of Louisville William Matthews, William Patterson University Lacey McNeely, Oregon State University Carol Miller, Community College of Denver William Moylan, Lawrence Technological College of Business Ravi Narayanaswamy, University of South Carolina–Aiken Muhammad Obeidat, Southern Polytechnic State University Edward Pascal, University of Ottawa James H. Patterson, Indiana University Steve Peng, California State University–East Bay

Nicholas C. Petruzzi, University of Illinois–Urbana/ Champaign Abirami Radhakrishnan, Morgan State University Emad Rahim, Bellevue University Tom Robbins, East Carolina University Art Rogers, City University Linda Rose, Westwood College Pauline Schilpzand, Oregon State University Teresa Shaft, University of Oklahoma Russell T. Shaver, Kennesaw State University William R. Sherrard, San Diego State University Erin Sims, DeVry University–Pomona Donald Smith, Texas A&M University Kenneth Solheim, DeVry University–Federal Way Christy Strbiak, U.S. Air Force Academy Peter Sutanto, Prairie View A&M University Jon Tomlinson, University of Northwestern Ohio Oya Tukel, Cleveland State University David A. Vaughan, City University Mahmoud Watad, William Paterson University Fen Wang, Central Washington University Cynthia Wessel, Lindenwood University Larry R. White, Eastern Illinois University Ronald W. Witzel, Keller Graduate School of Management G. Peter Zhang, Georgia State University

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xiii

Established Learning Objectives Learning objectives are listed both at the beginning of each chapter and are called out as marginal elements throughout the narrative in each chapter.

Guided Tour First Pages

28

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Organization Strategy and Project Selection

OUTLINE

2.1 Why Project Managers Need to Understand Strategy

2.2 The Strategic Management Process: An Overview

2.3 The Need for a Project Priority System

2.4 Project Classification

2.5 Phase Gate Model

2.6 Selection Criteria

2.7 Applying a Selection Model

2.8 Managing the Portfolio System

Summary

LEARNING OBJECTIVES

After reading this chapter you should be able to:

2-1 Explain why it is important for project managers to understand their organization’s strategy.

2-2 Identify the significant role projects contribute to the strategic direction of the organization.

2-3 Understand the need for a project priority system.

2-4 Distinguish among three kinds of projects.

2-5 Describe how the phase gate model applies to project management.

2-6 Apply financial and nonfinancial criteria to assess the value of projects.

2-7 Understand how multi-criteria models can be used to select projects.

2-8 Apply an objective priority system to project selection.

2-9 Understand the need to manage the project portfolio.

C H A P T E R T W O

2

First Pages

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30 Chapter 2 Organization Strategy and Project Selection

global competition, and financial uncertainty. These conditions make strategy/project alignment even more essential for success.

The larger and more diverse an organization, the more difficult it is to create and maintain a strong link between strategy and projects. How can an organization ensure this link? The answer requires integration of projects with the strategic plan. Integration assumes the existence of a strategic plan and a process for prioritizing projects by their contribution to the plan. A key factor to ensure the success of inte- grating the plan with projects is an open and transparent selection process for all participants to review.

This chapter presents an overview of the importance of strategic planning and the process for developing a strategic plan. Typical problems encountered when strategy and projects are not linked are noted. A generic methodology that ensures integration by creating strong linkages of project selection and priority to the strategic plan is then discussed. The intended outcomes are clear organization focus, best use of scarce organization resources (people, equipment, capital), and improved communication across projects and departments.

2.1 Why Project Managers Need to Understand Strategy

Project management historically has been preoccupied solely with the planning and execution of projects. Strategy was considered to be under the purview of senior management. This is old-school thinking. New-school thinking recognizes that proj- ect management is at the apex of strategy and operations. Shenhar speaks to this issue when he states, “It is time to expand the traditional role of the project manager from an operational to a more strategic perspective. In the modern evolving organi- zation, project managers will be focused on business aspects, and their role will expand from getting the job done to achieving the business results and winning in the marketplace.”1

There are two main reasons project managers need to understand their organiza- tion’s mission and strategy. The first reason is so they can make appropriate deci- sions and adjustments. For example, how a project manager would respond to a suggestion to modify the design of a product to enhance performance will vary depending upon whether his company strives to be a product leader through inno- vation or to achieve operational excellence through low-cost solutions. Similarly, how a project manager would respond to delays may vary depending upon strategic concerns. A project manager will authorize overtime if her firm places a premium on getting to the market first. Another project manager will accept the delay if speed is not essential.

The second reason project managers need to understand their organization’s strat- egy is so they can be effective project advocates. Project managers have to be able to demonstrate to senior management how their project contributes to their firm’s mission in order to garner their continued support. Project managers need to be able to explain to stakeholders why certain project objectives and priorities are critical in order to secure buy-in on contentious trade-off decisions. Finally, project managers need to explain why the project is important to motivate and empower the project team (Brown, Hyer, & Ettenson, 2013).

Explain why it is impor- tant for project manag- ers to understand their organization’s strategy.

2-1LO

1 Shenhar, A., and Dov Dvie, Reinventing Project Management (Boston: Harvard Business School, 2007), p. 5.

End-of-Chapter Content Both static and algorithmic end-of-chapter content, including Review Questions and Exercises, are assignable in Connect.

SmartBook The SmartBook has been updated with new highlights and probes for optimal student learning.

Snapshots The Snapshot from Practice boxes have been updated to include a number of new exam- ples of project management in action. New discussion questions based on the Snapshots have been added to the end-of-chapter mate- rial and are assignable in Connect.

New and Updated Cases Included at the end of each chapter are between one and five cases that demonstrate key ideas from the text and help students understand how project management comes into play in the real world. Cases have been reviewed and updated across the eighth edition.

Instructor and Student Resources Instructors and students can access all of the supplementary resources for the eighth edition within Connect or directly at www.mhhe.com/larson8e.

First Pages

Chapter 3 Organization: Structure and Culture 87

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On entering the 24-hour Googleplex located in Mountain View, California, you feel that you are walking through a new-age college campus rather than the corporate office of a billion-dollar

business. The interconnected low-rise buildings with colorful, glass-encased offices feature upscale trap- pings—free gourmet meals three times a day, free use of an outdoor wave pool, indoor gym and large child care facility, private shuttle bus service to and from San Francisco and other residential areas—that are the envy of workers across the Bay area. These perks and others reflect Google’s culture of keeping people happy and thinking in unconventional ways.

The importance of corporate culture is no more evi- dent than in the fact that the head of Human Resources, Stacy Savides Sullivan, also has the title of chief culture officer. Her task is to try to preserve the innovative cul- ture of a start-up as Google quickly evolves into a mam- moth international corporation. Sullivan characterizes Google culture as “team-oriented, very collaborative and encouraging people to think nontraditionally, dif- ferent from where they ever worked before—work with integrity and for the good of the company and for the good of the world, which is tied to our overall mission of making information accessible to the world.” Google goes to great lengths to screen new employees to make sure not only that they have outstanding technical capa- bilities but also that they are going to fit Google’s cul- ture. Sullivan goes on to define a Google-y employee as somebody who is “flexible, adaptable, and not focusing on titles and hierarchy, and just gets stuff done.”

Google’s culture is rich with customs and traditions not found in corporate America. For example, project teams typically have daily “stand-up” meetings seven minutes after the hour. Why seven minutes after the hour?

Because Google co-founder Sergey Brin once estimated that it took seven minutes to walk across the Google campus. Everybody stands to make sure no one gets too comfortable and no time is wasted during the rapid-fire update. As one manager noted, “The whole concept of the stand-up is to talk through what everyone’s doing, so if someone is working on what you’re working on, you can discover and collaborate not duplicate.”

Another custom is “dogfooding.” This is when a project team releases the functional prototype of a future product to Google employees for them to test drive. There is a strong norm within Google to test new products and provide feedback to the developers. The project team receives feedback from thousands of Google-ys. The internal focus group can log bugs or simply comment on design or functionality. Fellow Google-ys do not hold back on their feedback and are quick to point out things they don’t like. This often leads to significant product improvements.

S N A P S H O T F R O M P R A C T I C E 3 . 4 Google-y*

Jade/Blend Images

*“Building a ‘Googley’ Workforce,” Washington Post, October 21, 2006; E. Mills, “Meet Google’s Culture Czar,” CNET News. com, April 27, 2007; H. Walters, “How Google Got Its New Look,” BusinessWeek, May 10, 2010.

espoused by top management. How pervasive these subcultures and countercultures are affects the strength of the culture of the organization and the extent to which culture influences members’ actions and responses.

Identifying Cultural Characteristics Deciphering an organization’s culture is a highly interpretative, subjective process that requires assessment of both current and past history. The student of culture cannot simply rely on what people report about their culture. The physical environment in which people work, as well as how people act and respond to different events that occur, must be examined. Figure 3.6 contains a worksheet for diagnosing the culture of an organization. Although by no means exhaustive, the checklist often yields clues about the norms, customs, and values of an organization.

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xiv

You will find the content of this text highly practical, relevant, and current. The con- cepts discussed are relatively simple and intuitive. As you study each chapter we sug- gest you try to grasp not only how things work but also why things work. You are encouraged to use the text as a handbook as you move through the three levels of competency:

I know.

I can do.

I can adapt to new situations.

The field of project management is growing in importance and at an exponen- tial rate. It is nearly impossible to imagine a future management career that does not include management of projects. Resumes of managers will soon be primarily a description of their participation in and contributions to projects.

Good luck on your journey through the text and on your future projects.

Chapter-by-Chapter Revisions for the Eighth Edition

Chapter 1: Modern Project Management

∙ New Snapshot: Project Management in Action 2019. ∙ New Snapshot: London Calling: Seattle Seahawks versus Oakland Raiders. ∙ New case: A Day in the Life—2019. ∙ New section on Agile Project Management.

Chapter 2: Organization Strategy and Project Selection

∙ Chapter text refined and streamlined. ∙ New section describing the phase gate model for selecting projects.

Chapter 3: Organization: Structure and Culture

∙ New section on project management offices (PMOs). ∙ New Snapshot: 2018 PMO of the Year.

Chapter 4: Defining the Project

∙ Consistent with PMBOK 6th edition, the scope checklist includes product scope description, justification/business case, and acceptance criteria.

∙ Discussion of scope creep expanded. ∙ New case: Celebration of Color 5K.

Note to Student

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Chapter 5: Estimating Project Times and Costs

∙ Snapshot from Practice on reducing estimating errors incorporated in the text. ∙ Snapshot from Practice: London 2012 Olympics expanded. ∙ A new set of six exercises.

Chapter 6: Developing a Project Schedule

∙ Chapter 6 retitled Developing a Project Schedule to better reflect content. ∙ New case: Ventura Baseball Stadium.

Chapter 7: Managing Risk

∙ New Snapshot: Terminal Five—London Heathrow Airport. ∙ Consistent with PMBOK 6e, “escalate” added to risk and opportunity responses

and “budget” reserves replaced by “contingency” reserves.

Chapter 8 Scheduling Resources and Costs

∙ Two new exercises. ∙ New case: Tham Luang Cave Rescue.

Chapter 9: Reducing Project Duration

∙ Snapshot 9.1: Smartphone Wars updated. ∙ New case: Ventura Baseball Stadium (B).

Chapter 10: Being an Effective Project Manager

∙ Effective Communicator has replaced Skillful Politician as one of the 8 traits asso- ciated with being an effective project manager.

∙ Research Highlight 10.1: Give and Take expanded.

Chapter 11: Managing Project Teams

∙ A new review question and exercises added.

Chapter 12: Outsourcing: Managing Interorganizational Relations

∙ Snapshot 12.4: U.S. Department of Defense Value Engineering Awards updated. ∙ New exercise added.

Chapter 13 Progress and Performance Measurement and Evaluation

∙ Expanded discussion of the need for earned value management. ∙ New case: Ventura Stadium Status Report.

Chapter 14: Project Closure

∙ New case: Halo for Heroes II.

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Chapter 15: Agile Project Management

∙ Chapter revised to include discussions of Extreme programming, Kanban, and hybrid models.

∙ New Snapshot: League of Legends. ∙ New case: Graham Nash.

Chapter 16: International Projects

∙ Snapshots from Practice: The Filming of Apocalypse Now and River of Doubt expanded.

∙ New case: Mr. Wui Goes to America.

MCGRAW-HILL CUSTOMER CARE CONTACT INFORMATION At McGraw-Hill, we understand that getting the most from new technology can be challenging. That’s why our services don’t stop after you purchase our products. You can e-mail our Product Specialists 24 hours a day to get product-training online. Or you can search our knowledge bank of Frequently Asked Questions on our sup- port website. For Customer Support, call 800-331-5094 or visit www.mhhe.com/ support. One of our Technical Support Analysts will be able to assist you in a timely fashion.

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13. Progress and Performance Measurement and Evaluation 474

14. Project Closure 532

15. Agile Project Management 562

16. International Projects 590

APPENDIX One Solutions to Selected Exercises 626 Two Computer Project Exercises 639

GLOSSARY 656 ACRONYMS 663 PROJECT MANAGEMENT EQUATIONS 664 CROSS REFERENCE OF PROJECT MANAGEMENT 665 SOCIO-TECHNICAL APPROACH TO PROJECT MANAGEMENT 666 INDEX 667

Preface ix

1. Modern Project Management 2

2. Organization Strategy and Project Selection 28

3. Organization: Structure and Culture 68

4. Defining the Project 104

5. Estimating Project Times and Costs 134

6. Developing a Project Schedule 168

7. Managing Risk 212

8. Scheduling Resources and Costs 258

9. Reducing Project Duration 318

10. Being an Effective Project Manager 354

11. Managing Project Teams 390

12. Outsourcing: Managing Interorganizational Relations 434

Brief Contents

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2.8 Managing the Portfolio System 52 Senior Management Input 52

Governance Team Responsibilities 52

Balancing the Portfolio for Risks and Types

of Projects 52

Summary 54

Chapter 3 Organization: Structure and Culture 68 3.1 Project Management Structures 70

Organizing Projects within the Functional

Organization 70

Organizing Projects as Dedicated Teams 73

Organizing Projects within a Matrix

Arrangement 77

Different Matrix Forms 78

3.2 Project Management Office (PMO) 81 3.3 What Is the Right Project Management

Structure? 83 Organization Considerations 83

Project Considerations 83

3.4 Organizational Culture 84 What Is Organizational Culture? 85

Identifying Cultural Characteristics 87

3.5 Implications of Organizational Culture for Organizing Projects 89

Summary 92

Chapter 4 Defining the Project 104 4.1 Step 1: Defining the Project Scope 106

Employing a Project Scope Checklist 107

4.2 Step 2: Establishing Project Priorities 111 4.3 Step 3: Creating the Work Breakdown

Structure 113 Major Groupings in a WBS 113

How a WBS Helps the Project Manager 113

A Simple WBS Development 114

4.4 Step 4: Integrating the WBS with the Organization 118

4.5 Step 5: Coding the WBS for the Information System 118

4.6 Process Breakdown Structure 121