Copyright 2009 John Wiley & Sons, Inc.

Chapter 1

Projects in Contemporary Organizations

Introduction

Much of project management developed by the military

– Navy’s Polaris program– NASA’s space program– Strategic defense initiative

Project management has found wide acceptance in industry

It has many applications outside of construction– Managing legal cases– Managing new product releases

Introduction Continued

Main forces in driving the acceptance of project and other forms of management:

1. The exponential growth of human knowledge2. The growing demand for a broad range of

complex goods and services3. Increased worldwide competition

All of these contribute to the need for organizations to do more and to do it faster

Project management is one way to do more faster

Projects Tend to be Large

Projects tend to be large– The Channel Tunnel, or Chunnel– Denver International Airport– Panama Canal expansion project– Three Gorges Dam, China

Projects are getting larger over time– Flying: balloons planes jets rockets

reusable rockets The more we can do, the more we try to do

Project Management Also Getting Smaller

1. More people are seeing the advantages of project management techniques

2. The tools are become cheaper

3. The techniques are becoming more widely taught and written about

Main Goals of Project Management

1. Time2. Cost3. Performance

Time, cost, and performance are all related on a project

Direct Project Goals: Performance, Cost, Time

Figure 1-1

Project Management Institute (PMI)

The Project Management Institute is the major project management organization

Founded in 1969 Grew from 7,500 members in 1990 to over

260,000 in 2007 The Project Management Journal and PM

Network are the leading project management journals

Project Manager

Project manager is the key individual on a project

Project manager is like a mini-CEOWhile project manager always has

responsibility, may not have necessary authority

Trends in Project Management

Achieving strategic goalsAchieving routine goals Improving project effectivenessVirtual projectsQuasi-projects

Recent Changes in Managing Organizations

1. Consensual management

2. Systems approach

3. Projects as preferred way to accomplish goals

The Definition of a “Project”

Modern project management began with the Manhattan Project

In the early days, project management was used mainly for very complex projects

As the tools became better understood, they began to “trickle down” to smaller projects

It has also moved out of just manufacturing to services

Major Characteristics of a Project

Importance Performance Life cycle with a finite due date Interdependencies Uniqueness Resources Conflict

Why Project Management?

The main purpose for initiating a project is to accomplish some goal

Project management increases the likelihood of accomplishing that goal

Project management gives us someone (the project manager) to spearhead the project and to hold accountable for its completion

Negative Side to Project Management

Greater organizational complexityHigher probability organizational policy

will be violatedSays managers cannot accomplish the

desired outcomeConflict

The Project Life Cycle

Figure 1-3

Time Distribution of Project Effort

Figure 1-4

Another Possible Project Life Cycle

Figure 1-5

Risk During at the Start of the Life Cycle

Figure 1-6

Risk During the Life Cycle

Figure 1-7

The Structure of this Text

Follows the project life cycleSome topics stand-aloneOther topics incorporated throughout

Part I: Project Initiation

1. Projects in Contemporary Organizations

2. Strategic Management and Project Selection

3. The Project Manager

4. Negotiation and the Management of Conflict

5. The Project in the Organizational Structure

Part II: Project Planning

6. Project Activity Planning

7. Budgeting and Cost Estimation

8. Scheduling

9. Resource Allocation

Part III: Project Execution

10. Monitoring and Information Systems

11. Project Control

12. Project Auditing

13. Project Termination