3 question Need to answer - 5 page APA format - Business Finance
#1 From Chapter 1 in the book type a two page paper regarding what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding. Define and describe what you thought was worthy of your understanding in half a page, and then explain why you felt it was important, how you will use it, and/or how important it is in project management.#2 type at least two peer replies in response to your classmates posts (200 word minimum each). I will provide you once I submit my part.#3 Contrast project management with operations management. How do these differences impact the approach required to manage a project successfully?in essay form. This is to be in narrative form. Bullet points should not to be used. The paper should be at least 1.5 - 2 pages in length, Times New Roman 12-pt font, double-spaced, 1 inch margins and utilizing at least one outside scholarly or professional source related to project management. This does not mean blogs or websites. This source should be a published article in a scholarly journal (Journal of Project Management) or a professional journal (such as PMI's Project Management Journal). This source should provide substance and not just be mentioned briefly to fulfill this criteria. The textbook should also be utilized. Do not use quotes. Do not insert excess line spacing. APA formatting and citation should be used.
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List of Cases by Chapter
Chapter 1
Chapter 7
Chapter 2
Chapter 8
Development Projects in Lagos, Nigeria 2
“Throwing Good Money after Bad”: the BBC’s
Digital Media Initiative 10
MegaTech, Inc. 29
The IT Department at Hamelin Hospital 30
Disney’s Expedition Everest 31
Rescue of Chilean Miners 32
Tesla’s $5 Billion Gamble 37
Electronic Arts and the Power of Strong Culture
in Design Teams 64
Rolls-Royce Corporation 67
Classic Case: Paradise Lost—The Xerox Alto 68
Project Task Estimation and the Culture of “Gotcha!”
Widgets ’R Us 70
The Building that Melted Cars 224
Bank of America Completely Misjudges Its Customers 230
Collapse of Shanghai Apartment Building 239
Classic Case: de Havilland’s Falling Comet 245
The Spanish Navy Pays Nearly $3 Billion for a Submarine
That Will Sink Like a Stone 248
Classic Case: Tacoma Narrows Suspension Bridge 249
Sochi Olympics—What’s the Cost of National
Prestige? 257
The Hidden Costs of Infrastructure Projects—The Case
of Building Dams 286
Boston’s Central Artery/Tunnel Project 288
69
After 20 Years and More Than $50 Billion, Oil is No Closer
to the Surface: The Caspian Kashagan Project 297
Chapter 3
Project Selection Procedures: A Cross-Industry
Sampler 77
Project Selection and Screening at GE: The Tollgate
Process 97
Keflavik Paper Company 111
Project Selection at Nova Western, Inc. 112
Chapter 10
Enlarging the Panama Canal 331
Project Scheduling at Blanque Cheque Construction (A) 360
Project Scheduling at Blanque Cheque Construction (B) 360
Chapter 11
Chapter 4
Leading by Example for the London Olympics—
Sir John Armitt 116
Dr. Elattuvalapil Sreedharan, India’s Project
Management Guru 126
The Challenge of Managing Internationally 133
In Search of Effective Project Managers 137
Finding the Emotional Intelligence to Be a Real Leader
Problems with John 138
Chapter 5
“We look like fools.”—Oregon’s Failed Rollout
of Its ObamacareWeb Site 145
Statements of Work: Then and Now 151
Defining a Project Work Package 163
Boeing’s Virtual Fence 172
California’s High-Speed Rail Project 173
Project Management at Dotcom.com 175
The Expeditionary Fighting Vehicle 176
Chapter 6
Engineers Without Borders: Project Teams Impacting
Lives 187
Tele-Immersion Technology Eases the Use of Virtual
Teams 203
Columbus Instruments 215
The Bean Counter and the Cowboy 216
Johnson & Rogers Software Engineering, Inc. 217
Chapter 9
Developing Projects Through Kickstarter—Do Delivery
Dates Mean Anything? 367
Eli Lilly Pharmaceuticals and Its Commitment to Critical
Chain Project Management 385
It’s an Agile World 396
Ramstein Products, Inc. 397
137
Chapter 12
Hong Kong Connects to the World’s Longest Natural
Gas Pipeline 401
The Problems of Multitasking 427
Chapter 13
New York City’s CityTime Project 432
Earned Value at Northrop Grumman 451
The IT Department at Kimble College 463
The Superconducting Supercollider 464
Boeing’s 787 Dreamliner: Failure to Launch 465
Chapter 14
Duke Energy and Its Cancelled Levy County Nuclear
Power Plant 478
Aftermath of a “Feeding Frenzy”: Dubai and Cancelled
Construction Projects 490
New Jersey Kills Hudson River Tunnel Project 497
The Project That Wouldn’t Die 499
The Navy Scraps Development of Its Showpiece
Warship—Until the Next Bad Idea 500
Fourth Edition
Project ManageMent
achieving coMPetitive advantage
Jeffrey K. Pinto
Pennsylvania State University
Boston Columbus Indianapolis New York San Francisco Hoboken Amsterdam
Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi
Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
To Mary Beth, my wife, with the most profound thanks and love for her unwavering
support. And, to our children, Emily, AJ, and Joseph—three “projects” that are definitely
over budget but that are performing far better than I could have hoped!
VP, Product Management: Donna Battista
Editor-in-Chief: Stephanie Wall
Acquisitions Editor: Dan Tylman
Program Manager Team Lead: Ashley Santora
Program Manager: Claudia Fernandes
Editorial Assistant: Linda Albelli
VP, Marketing: Maggie Moylan
Product Marketing Manager: Anne Fahlgren
Field Marketing Manager: Lenny Raper
Strategic Marketing Manager: Erin Gardner
Project Manager Team Lead: Judy Leale
Project Manager: Nicole Suddeth
Operations Specialist: Carol Melville
Cover Designer: Lumina Datamatics, Inc
Cover Photo: f11photo/Fotolia
VP, Director of Digital Strategy & Assessment:
Paul Gentile
Manager of Learning Applications: Paul Deluca
Digital Editor: Brian Surette
Digital Studio Manager: Diane Lombardo
Digital Studio Project Manager: Robin Lazrus
Digital Studio Project Manager: Alana Coles
Digital Studio Project Manager: Monique Lawrence
Digital Studio Project Manager: Regina DaSilva
Full-Service Project Management and Composition:
Integra
Printer/Binder: Edwards Brothers
Cover Printer: Phoenix Color/Hagerstown
Text Font: 10/12 Palatino
Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear
on the appropriate page within text.
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Library of Congress Cataloging-in-Publication Data
Pinto, Jeffrey K.
Project management : achieving competitive advantage/Jeffrey K. Pinto.—Fourth edition.
pages cm
Includes index.
ISBN 978-0-13-379807-4 (alk. paper)—ISBN 0-13-379807-0 (alk. paper) 1. Project management. I. Title.
HD69.P75P5498 2016
658.4'04—dc23
2014036595
10 9 8 7 6 5 4 3 2 1
ISBN 10:
0-13-379807-0
ISBN 13: 978-0-13-379807-4
BrIEF COnTEnTS
Preface
xiii
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Introduction: Why Project Management? 1
The Organizational Context: Strategy, Structure, and Culture 36
Project Selection and Portfolio Management 76
Leadership and the Project Manager 115
Scope Management 144
Project Team Building, Conflict, and Negotiation 186
Risk Management 223
Cost Estimation and Budgeting 256
Project Scheduling: Networks, Duration Estimation,
and Critical Path 296
Project Scheduling: Lagging, Crashing, and Activity Networks 330
Advanced Topics in Planning and Scheduling: Agile
and Critical Chain 366
Resource Management 400
Project Evaluation and Control 431
Project Closeout and Termination 477
Appendix A The Cumulative Standard Normal Distribution
Appendix B Tutorial for MS Project 2013 510
Appendix C Project Plan Template 520
Glossary 524
Company Index 534
Name Index 535
Subject Index 538
509
iii
COnTEnTS
Preface
xiii
Chapter 1 IntroduCtIon: Why ProjeCt ManageMent?
Project Profile: Development Projects in Lagos, Nigeria
1
2
Introduction 4
1.1 What Is a Project? 5
General Project Characteristics 6
1.2 Why Are Projects Important? 9
Project Profile: “Throwing Good Money after Bad”: the BBC’s Digital
Media Initiative 10
1.3 Project Life Cycles
13
◾ Box 1.1: Project Managers in Practice
1.4 Determinants of Project Success
15
16
◾ Box 1.2: Project Management Research in Brief
19
1.5 Developing Project Management Maturity 19
1.6 Project Elements and Text Organization 23
Summary 27 • Key Terms 29 • Discussion Questions 29
• Case Study 1.1 MegaTech, Inc. 29 • Case Study 1.2 The IT
Department at Hamelin Hospital 30 • Case Study 1.3 Disney’s Expedition
Everest 31 • Case Study 1.4 Rescue of Chilean Miners 32 • Internet
Exercises 33 • PMP Certification Sample Questions 34 • Notes 34
Chapter 2 the organIzatIonal Context: Strategy, StruCture,
and Culture 36
Project Profile: Tesla’s $5 Billion Gamble
37
Introduction 38
2.1 Projects and Organizational Strategy 39
2.2 Stakeholder Management 41
Identifying Project Stakeholders 42
Managing Stakeholders 45
2.3 Organizational Structure 47
2.4 Forms of Organizational Structure 48
Functional Organizations 48
Project Organizations 50
Matrix Organizations 53
Moving to Heavyweight Project Organizations
◾ Box 2.1: Project Management Research in Brief
55
56
2.5 Project Management Offices 57
2.6 Organizational Culture 59
How Do Cultures Form? 61
Organizational Culture and Project Management
63
Project Profile: Electronic Arts and the Power of Strong Culture in Design Teams 64
Summary 65 • Key Terms 67 • Discussion Questions 67 • Case
Study 2.1 Rolls-Royce Corporation 67 • Case Study 2.2 Classic Case:
Paradise Lost—The Xerox Alto 68 • Case Study 2.3 Project Task Estimation
and the Culture of “Gotcha!” 69 • Case Study 2.4 Widgets ’R Us 70
• Internet Exercises 70 • PMP Certification Sample Questions 70
• Integrated Project—Building Your Project Plan 72 • Notes 74
iv
Contents
Chapter 3 ProjeCt SeleCtIon and PortfolIo ManageMent
Project Profile: Project Selection Procedures: A Cross-Industry Sampler
76
77
Introduction 78
3.1 Project Selection 78
3.2 Approaches to Project Screening and Selection 80
Method One: Checklist Model 80
Method Two: Simplified Scoring Models 82
Limitations of Scoring Models 84
Method Three: The Analytical Hierarchy Process 84
Method Four: Profile Models 88
3.3 Financial Models 90
Payback Period 90
Net Present Value 92
Discounted Payback 94
Internal Rate of Return 94
Choosing a Project Selection Approach 96
Project Profile: Project Selection and Screening at GE: The Tollgate Process
97
3.4 Project Portfolio Management 98
Objectives and Initiatives 99
Developing a Proactive Portfolio 100
Keys to Successful Project Portfolio Management 103
Problems in Implementing Portfolio Management 104
Summary 105 • Key Terms 106 • Solved Problems 107
• Discussion Questions 108 • Problems 108 • Case Study 3.1
Keflavik Paper Company 111 • Case Study 3.2 Project Selection at Nova
Western, Inc. 112 • Internet Exercises 113 • Notes 113
Chapter 4 leaderShIP and the ProjeCt Manager
115
Project Profile: Leading by Example for the London Olympics—Sir John Armitt
116
Introduction 117
4.1 Leaders Versus Managers 118
4.2 How the Project Manager Leads 119
Acquiring Project Resources 119
Motivating and Building Teams 120
Having a Vision and Fighting Fires 121
Communicating 121
◾ Box 4.1: Project Management Research in Brief
124
4.3 Traits of Effective Project Leaders 125
Conclusions about Project Leaders 126
Project Profile: Dr. Elattuvalapil Sreedharan, India’s Project Management Guru 126
4.4 Project Champions 127
Champions—Who Are They? 128
What Do Champions Do? 129
How to Make a Champion 130
4.5 The New Project Leadership 131
◾ Box 4.2: Project Managers in Practice
132
Project Profile: The Challenge of Managing Internationally
4.6 Project Management Professionalism
134
133
v
vi
Contents
Summary 135 • Key Terms 136 • Discussion Questions 136
• Case Study 4.1 In Search of Effective Project Managers 137
• Case Study 4.2 Finding the Emotional Intelligence to Be a Real Leader 137
• Case Study 4.3 Problems with John 138 • Internet Exercises 141
• PMP Certification Sample Questions 141 • Notes 142
Chapter 5 SCoPe ManageMent
144
Project Profile: “We look like fools.”—Oregon’s Failed Rollout of Its Obamacare
Web Site 145
Introduction 146
5.1 Conceptual Development 148
The Statement of Work 150
The Project Charter 151
Project Profile: Statements of Work: Then and Now
151
5.2 The Scope Statement 153
The Work Breakdown Structure 153
Purposes of the Work Breakdown Structure 154
The Organization Breakdown Structure 159
The Responsibility Assignment Matrix 160
5.3 Work Authorization 161
Project Profile: Defining a Project Work Package
5.4 Scope Reporting
163
164
◾ Box 5.1: Project Management Research in Brief
5.5 Control Systems 167
Configuration Management
5.6 Project Closeout 169
165
167
Summary 170 • Key Terms 171 • Discussion Questions 171
• Problems 172 • Case Study 5.1 Boeing’s Virtual Fence 172
• Case Study 5.2 California’s High-Speed Rail Project 173 • Case
Study 5.3 Project Management at Dotcom.com 175 • Case Study 5.4
The Expeditionary Fighting Vehicle 176 • Internet Exercises 178
• PMP Certification Sample Questions 178 • MS Project Exercises 179
• Appendix 5.1: Sample Project Charter 180 • Integrated Project—
Developing the Work Breakdown Structure 182 • Notes 184
Chapter 6 ProjeCt teaM BuIldIng, ConflICt, and negotIatIon
186
Project Profile: Engineers Without Borders: Project Teams Impacting Lives 187
Introduction 188
6.1 Building the Project Team 189
Identify Necessary Skill Sets 189
Identify People Who Match the Skills 189
Talk to Potential Team Members and Negotiate with Functional Heads 189
Build in Fallback Positions 191
Assemble the Team 191
6.2 Characteristics of Effective Project Teams 192
A Clear Sense of Mission 192
A Productive Interdependency 192
Cohesiveness 193
Trust 193
Enthusiasm 193
Results Orientation 194
Contents
6.3 Reasons Why Teams Fail 194
Poorly Developed or Unclear Goals 194
Poorly Defined Project Team Roles and Interdependencies 194
Lack of Project Team Motivation 195
Poor Communication 195
Poor Leadership 195
Turnover Among Project Team Members 196
Dysfunctional Behavior 196
6.4 Stages in Group Development 196
Stage One: Forming 197
Stage Two: Storming 197
Stage Three: Norming 198
Stage Four: Performing 198
Stage Five: Adjourning 198
Punctuated Equilibrium 198
6.5 Achieving Cross-Functional Cooperation 199
Superordinate Goals 199
Rules and Procedures 200
Physical Proximity 201
Accessibility 201
Outcomes of Cooperation: Task and Psychosocial Results 201
6.6 Virtual Project Teams 202
Project Profile: Tele-Immersion Technology Eases the Use
of Virtual Teams 203
6.7 Conflict Management 204
What Is Conflict? 205
Sources of Conflict 206
Methods for Resolving Conflict 208
6.8 Negotiation 209
Questions to Ask Prior to the Negotiation
Principled Negotiation 210
Invent Options for Mutual Gain 212
Insist on Using Objective Criteria 213
209
Summary 214 • Key Terms 214 • Discussion Questions 215 • Case
Study 6.1 Columbus Instruments 215 • Case Study 6.2 The Bean Counter
and the Cowboy 216 • Case Study 6.3 Johnson & Rogers Software
Engineering, Inc. 217 • Exercise in Negotiation 219 • Internet
Exercises 220 • PMP Certification Sample Questions 220 • Notes 221
Chapter 7 rISk ManageMent
223
Project Profile: The Building that Melted Cars
Introduction
224
225
◾ Box 7.1: Project Managers in Practice
227
7.1 Risk Management: A Four-Stage Process
Risk Identification 228
228
Project Profile: Bank of America Completely Misjudges Its Customers
Risk Breakdown Structures 231
Analysis of Probability and Consequences
Risk Mitigation Strategies 234
231
230
vii
viii
Contents
Use of Contingency Reserves 236
Other Mitigation Strategies 237
Control and Documentation 237
Project Profile: Collapse of Shanghai Apartment Building
239
7.2 Project Risk Management: An Integrated Approach
241
Summary 243 • Key Terms 244 • Solved Problem 244 • Discussion
Questions 244 • Problems 244 • Case Study 7.1 Classic Case: de
Havilland’s Falling Comet 245 • Case Study 7.2 The Spanish Navy Pays
Nearly $3 Billion for a Submarine That Will Sink Like a Stone 248 • Case
Study 7.3 Classic Case: Tacoma Narrows Suspension Bridge 249 • Internet
Exercises 251 • PMP Certification Sample Questions 251 • Integrated
Project—Project Risk Assessment 253 • Notes 255
Chapter 8 CoSt eStIMatIon and BudgetIng
256
Project Profile: Sochi Olympics—What’s the Cost of National Prestige?
257
8.1 Cost Management 259
Direct Versus Indirect Costs 260
Recurring Versus Nonrecurring Costs 261
Fixed Versus Variable Costs 261
Normal Versus Expedited Costs 262
8.2 Cost Estimation 262
Learning Curves in Cost Estimation 266
◾ Box 8.1: Project Management Research in Brief
Problems with Cost Estimation
270
272
◾ Box 8.2: Project Management Research in Brief
8.3 Creating a Project Budget 275
Top-Down Budgeting 275
Bottom-Up Budgeting 276
Activity-Based Costing 276
8.4 Developing Budget Contingencies
274
278
Summary 280 • Key Terms 281 • Solved Problems 282
• Discussion Questions 283 • Problems 284 • Case Study 8.1 The
Hidden Costs of Infrastructure Projects—The Case of Building Dams 286
• Case Study 8.2 Boston’s Central Artery/Tunnel Project 288 • Internet
Exercises 290 • PMP Certification Sample Questions 290 • Integrated
Project—Developing the Cost Estimates and Budget 292 • Notes 294
Chapter 9 ProjeCt SChedulIng: netWorkS, duratIon eStIMatIon,
and CrItICal Path 296
Project Profile: After 20 Years and More Than $50 Billion, Oil is No Closer to the Surface:
The Caspian Kashagan Project 297
Introduction 298
9.1 Project Scheduling 299
9.2 Key Scheduling Terminology
9.3 Developing a Network 302
Labeling Nodes 303
Serial Activities 303
Concurrent Activities 303
Merge Activities 304
Burst Activities 305
9.4 Duration Estimation 307
300
Contents
9.5 Constructing the Critical Path 311
Calculating the Network 311
The Forward Pass 312
The Backward Pass 314
Probability of Project Completion 316
Laddering Activities 318
Hammock Activities 319
Options for Reducing the Critical Path 320
◾ Box 9.1: Project Management Research in Brief 321
Summary 322 • Key Terms 323 • Solved Problems 323 •
Discussion Questions 325 • Problems 325 • Internet
Exercises 327 • MS Project Exercises 328 • PMP Certification
Sample Questions 328 • Notes 329
Chapter 10 ProjeCt SChedulIng: laggIng, CraShIng, and aCtIvIty
netWorkS 330
Project Profile: Enlarging the Panama Canal
331
Introduction 333
10.1 Lags in Precedence Relationships 333
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Losinski forwarded the article on a priority basis to Mary Scott
Losinksi wanted details on use of the ED at CGH. He asked the administrative resident