Project management the management process

For sale in India , Pakistan , Nepal, Bangladesh , Sri Lanka & Bhutan on ly Third Edition r ject Mana ement The Managerial Process Third Edition r ject Management The Managerial Process Clifford F Gray Oregon State University Erik W Larson Oregon State University Tata McGraw-Hili Publishing Company Limited NEW DELHI McGraw-Hili Offices New Delhi New York St Louis San Francisco Auckland Bogota Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal San Juan Santiago Singapore Sydney Tokyo Toronto Information contained in this work has been obtained by Tata McGraw-Hill, from sources believed to be reliable However, neither Tata McGraw-Hill nor its authors guarantee the accuracy or completeness of any information published herein, and neither Tata McGraw-Hill nor its authors shall be responsible for any errors, omissions, or damages arising out of use of this information, This work is published with the understanding that Tata McGraw-Hill and its authors are supplying information but are not attempting to tender engineering or other professional services If such services are required, the assistance of an appropriate professional should be sought Iml Tala McGraw-Hili Project Management: The Managerial Process Indian Adaptation done by arrangement with The McGraw-Hill Companies, Inc., New York Sales Territories: India, Pakistan, Nepal, Bangladesh, Sri Lanka and Bhutan First reprint 2006 R.CXLCRQKRQLDX copyright © 2006, 2003, 2000 by The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020 All rights reserved No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database retrieval system, without the prior written consent of The McGraw Hill Companies, Inc., including but not limited to, in any network or other electronic storage or transmission, broadcast for distance learning ISBN 0-07-060093-7 Published by the Tata McGraw-Hill Publishing Company Limited, West Patel Nagar, New Delhi 110 008, typeset in Times at Script Makers, 19,AI-B, DDAMarket, Pashchim Vihar, New Delhi llO 063 and printed at Sai Printo Pack Pvt Ltd., A-I 02/4 Okhla Industrial Area, Phase-II, New Delhi 110020 Cover Printer: De Unique Cover Design: K Anoop 'To 'Mary, Xevin, and'Ro6ert C.P.§ 'To ~nn, 'Mary, tRachef, andVictoria :E.L j j j j j j j j j j j j j j j j j j j j j j j Preface Our motivation for writing this text wasto provide students with a holistic, integrative view of project management A holisitic view focuses on how projects contribute to the strategic goals of the organization The linkages for integration include the process of selecting projects that best support the strategy of a particular organization and that in turn can be supported by the technical and managerial processes made available by the organization to bring projects to completion The goals for prospective project managers are to understand the role of a project in their organizations and to master the project management tools, techniques, and interpersonal skills necessary to orchestrate projects from start to finish The role of projects in organizations is receiving increasing attention Projects are becoming the major tool for implementing and achieving the strategic goals of the organization In the face of intense, worldwide competition, many organizations have reorganized around a philosophy of innovation, renewal, and organizational learning to survive This philosophy suggests an organization that is flexible and project driven Project management has developed to the point where it is a professional discipline having its own body of knowledge and skills Today it is nearly impossible to imagine anyone at any level in the organization who would not benefit from some degree of expertise in the process of managing 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 successful completions of their projects The text should prove useful to students and prospective 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 ofinherited or purchased software Members ofthe Project Management Institute will find the text is well structured to meet the needs of those wishing to prepare for PMP (Project Management Professional) certification The text has in-depth coverage of the most critical topics found in PMI's Project Management Body ofKnowledge (PIMBOK) 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 ofproject management tools and techniques but also because of the insights they will gain on how to enhance their contributions to project success Our emphasis is not only on how the management process works, but, more importantly, on why it works The concepts, principles, and techniques are universally 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 different 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 vii viii Preface organizations such as construction, research organizations, and engineering consultancy firms At the same time, this approach will benefit organizations that carry out many small projects while the daily effort of delivering products or services continues Content In this latest edition of the book, we have responded to feedback received from both students and teachers, which is deeply appreciated As a result of the this feedback, the following changes have been made to the Third Edition: • Expanded discussions of change management, managing conflict, communication plans, request for proposals (RFP), and project maturity models • Revised chapters on organizations (Chapter 3) and monitoring project performance (Chapter 13) to make their terminology consistent with the Project Management Body of Knowledge (PMBOK) • The discussion of earned value has been completely revised to make it easier for students to understand • New student exercises have been added to several chapters Several computer exercises have been revised • Examples and screenshots from MS Project are now embedded in the text • The "Snapshot from Practice" boxes feature a number ofnew examples of project management in action as well as new research highlights that continue to promote practical application of project management Overall the text addresses the major questions and issues the authors have encountered over their 50 combined years of teaching project management and consulting with practicing project managers in domestic and foreign environments The following questions represent the issues and problems practicing project managers find consuming most of their effort: What is the strategic role of projects in contemporary organizations? How are projects prioritized? What organizational and managerial styles will improve chances of project success? How 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 factors contribute to the development of a high-performance project team? What project management system can be set up to gain some measure of control? How managers prepare for a new international project in a foreign culture? How does one pursue a career in project management? Project managers must deal with all these concerns to be effective All of these issues and problems represent linkages to an integrative project management view 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 appears to be promising Careers will be determined by success in managing projects The l20-day trial version of Microsoft Project software is included on its own CD-ROM free with the text Acknowledgments We want first to acknowledge with special thanks and appreciation the contribution of Diane Parente, Pennsylvania State University-Erie, who prepared the SimProject extended case in the appendix This Preface ix case consists of a series of exercises tied to the chapters of this book that coordinate with and make use of SimProject, a project management simulation developed by Diane and her colleague at Penn StateErie, Jeff Pinto SimProject adds a hands-on, experiential dimension to this course In addition, we would like to thank Ed Blevins, DeVry University-Irving, for updating the Test Bank; Charlie Cook, University of West Alabama, for creating PowerPoint slides; and Julie Mehra for accuracy checking the text and Instructor's Resource Manual content 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 Special thanks to managers who graciously shared their current project as ideas for exercises, subjects for cases, and examples for the text Shlomo Cohen, Pat Taylor, and John Wold, whose work is printed, are gratefully acknowledged Special gratitude is due Robert Breitbarth of Interact Management, who shared invaluable insights on prioritizing projects University students and managers deserve special accolades for identifying problems with earlier drafts ofthe text and exercises We are indebted to the reviewers of the first and second edition who shared our commitment to elevating the instruction of project management We thank all of them for their many thoughtful suggestions and for making our book better Ofcourse we accept responsibility for the final version of the text We would also like to thank our colleagues in the College of Business at Oregon State University for their support and help in completing this project In particular, we recognize Mark Pagell, Jimmy Yang, Prem Matheu, Jack Drexler, and Roger Graham for their helpful comments and suggestions Special thanks go to Lori Emmons, Sharon Carlson, Ann Leen, and Cheryl Hoflich who helped prepare the manuscript We also wish to thank the many students who helped us at different stages of this project, most notably Carrie Doran, Neil Young, Rebecca Keepers, Katie McAlexander, Katherine Knox, and Amanda Bosworth Mary Gray deserves special credit for editing and working under tight deadlines Finally, we want to extend our thanks to all the people at McGraw-HilllIrwin for their efforts and support First, we'd like to thank Scott Isenberg for continuing to champion and provide editorial direction and guidance through all three editions of the book, and Wanda Zeman, whose superb management of the book's development has continued to add value to the book with each new edition of it And we would also like to thank Jim Labeots, Rose Hepburn, Jeremy Cheshareck, Adam Rooke, Cathy Tepper, Elizabeth Mavetz, and Gina DeMartino for managing the final production, design, supplement, and media phases of the Third Edition Clifford E Gray Erik W Larson ACRONYMS AC Actual cost of the work completed KISS Keep it simple, stupid ACWP Actual cost of work performed LF Late finish AOA Activity on arrow LS Late start AON Activity on node MBWA Management by wandering around BAC Budget at completion NIH Not invented here BATNA Best alternative to a negotiated agreement NPV Net present value BCWP Budgeted cost of work performed OBS Organization breakdown structure BCWS Budgeted cost of work scheduled PBS Process breakdown structure c-c Critical-chain approach to project planning management and PCI Percent complete index PCIB Percent complete index-budget costs CPI Cost performance index PCIC Percent complete index-actual costs CPM Criticai path method PDM Precedence diagram method CV Cost variance PERT Project evaluation review technique DUR Duration PMO Project management office EAC Estimate at completion (with revised cost estimates) PV Planned value of work scheduled EF Early finish RM Responsibility matrix EPM Enterprise project management SL Slack ES Early start SPI Schedule performance index ETC Estimate to complete SV Schedule variance EV Earned value TCPI To complete cost performance index FAC Forecast at completion UV Usage variance FF Free float VAC Variance at completion IFB Invitation to bid WBS Work breakdown structure 549 PROJECT te = MANAGEMENT EQUATIO~S a+4m+b z= PCIB = BE:C FAC = (~~) (BAC - EV) TCPI = (BAC - AC) 550 Y'2:,rrt/ PCIC = CV = EV - AC EV CPI=AC // (BAC - EV) TS - TE E:~ SV = EV - PV + AC SPI = EV PV VACr = BAC - FAC VACe = BAC - EAC Index A ABB,391 Abdel-Hamid, T., 303 Abrahams, J., 97 Abramovici, Adrian, 449 AC (See Actual cost of work completed) Acceptance of conflict, 365 of project criteria trade-offs, 104,105 Acer,470 Ackoff, Russel, 489, 512 Acronyms list, 563 Activity(-ies),155-156 basic relationships for, 158 calendar dates for, 169, 172 cultural orientation to, 498 defmed, 154, 155 for high performance teams, 323 level of detail for, 168 numbering, 169 shortening, 289-294 Activity-on-arrow (AOA), 156, 194-205 activity-on-node vs., 201 backward pass, 199-200 forward pass, 197-199 nodes, 194 Activity-on-node (AON), 156-160 activity-on-arrow vs., 201 backward pass, 164-165 basic relationships, 158 forward pass, 160-164 hammock activities, 178, 179 laddering, 172, 173 lags, 172-179 slack, 165-166 Actual cost of work completed (AC), 418, 419, 421, 422,432 Ad hoc project management, 468 Adaptation stage (culture shock), 507 Adjourning stage (team development), 345 Adjustment stage (culture shock), 507 Administrative support groups, 313 Advanced development projects, 72 Affective learning approach, 510 Airbus, 217 Alder, N., 512 Allen, Roger E., 99n Allen, Stephen D., 990 Alternatives, generating, 361 Amazon.com, 95 Ambassador activities, 323 Ambition (of team members), 349 Americans characteristics of, 505 ethnocentrism of, 496-497 foreigners' perceptions of, 496, 504-505 and significance of luck, 500 Ameritrade, 10 Anbari, FrankT., 449 Ancona, D G., 323, 336 Andersen, Arthur E., 328 Angus, R B., 409 Aniftos, S., 484 Antarctic exploration, 325 AOA (See Activity-oo-arrow) AOCOG (AIhens Organizing Committee Olympic Games), 107 AON (See Activity-n-node) Apocalypse Nuw 493 Apple Compnter, 24-25, 62 Applebaum, Jeffrey, 386 Apportion estimating me1hod, 131-132 Arab cultures, working in, 503 Arafat, Yassir, ;i4 Arbitration, 365 Arnold, Gary, 525 Arrow, K 1, 269 Arrows, 154, 157 Arthur Andersen, 328 Ashley, D B., 121 Asia, luck on, 500 Assigning work, 259-260 AIhens Organizing Committee Olympic Games (AOCOG), 107 AT&T, 55,132,481 Audit leaders and members, 464 Audits (See Project audits) Avoiding risk, 216 Avraham Y Goldratt Institute, 279, 286n Baseline schedule changing, 142-143 integration of changes into, 227, 228 in scenario analysis, 214 Baselines changes to, 434, 436-438 costs in, 420-421 project, 419-421 mbber,436 BATNA,397 Baxter, Jerry 8., 282n BCWP (budgeted cost of1he work performed), 413 Beck, R., 337 Behavior deviant, 95 standards of, 74 BehavioraVexperientiallearning approach, 510 Benko, C., 17, 45 Bennis, 336 Benson, S., 374 Best-case schedule, 214 Beta disttibution, 235 Bets (as motivation), 295 Beyer, J M., 83, 97 Bezos, Jeff, 95 Bid proposals, 53 Big Berthagolf club, 102 Big Threeautomakers, Bigelow, D., 45 Bin-tech firms, outsourcing in, 284 Black, H., 149 Blame, 474 Block, T R., 71n, 82 w., BMW, B BAC (See Budgeted cost at completion) Backward pass, 160 in activity-on-arrcw me1hod, 199-200 in activity-on-node method, 164-165 wiIh lags, 177-179 rules for, 164 using information from, 167-168 Badaracco, J L., Jr., 336 Baker, 8., 230, 336, 529 Baker, B M., 303 Baker, W E., 336 Balance (as project manager trait), 332 Balanced matrix, 63, 65-67 Bank ofAmerica, 132 Bannoni, Brian, Bar charts, 169 Bard, rr; 337 Barnes, M., 146 Barnes, R., 279 Barrett, Craig R., 23 Bartering, 492, 493 Baseline budgets, 142-143 Baseline Gantt chart, 414-415 Baseline plan, 413 Boeing Co., 143,222,278 Bonding, team, 353 Bonneville Lock project, 407 Borsuk, R., 512 Bottom-up estimating, 129-130, 134-137 Boundaries, project, 101 Bowen,D., 512 Bowen,H K., 82 Bradford, D L., 316, 336 Brandon, Daniel M., Jr., 449 Bread-and-butter projects, 43 Breashears, David, 220 Bribery, 506 Brooks, Frederick P., 284, 303,411 Brooks' law, 284 Brown, S., 82 Brucker, p., 269 Budget reserves, 223, 437 Budgeted cost at completion (BAC), 418, 430 Budgeted cost of the work performed (BCWP),413 Budgets changing, 142-143 development of, 138 139 Buffer management, 278 Bureaucratic bypass syndrome, 370 551 552 Index Burgess, A R., 269 Burst activity, 156, 158, 164 Bypassing bureaucratic channels, 370 C c C Myers, Inc., 282 Cabanis, J., 336 Caldwell, D., 323, 336 Caldwell, D E, 84 Calendar dates, 169, 172 California Department ofTransportation, 282 Callaway Golf Equipment, 102 Cameron, K S., 82 Canan, Crystal, 386 Capability Maturity Model (CMM), 468 Career issues, 525-528 Carlton, J., 62n, 82 Carlzon, Jan, 27 Carnegie Mellon University, 468 Carr, M J., 230 Carrier Transcicold, 219 Cascading objectives/tasks, 28 Cashflow decisions, 222 Catherine the Great, Empress of Russia, 517 Cavendish, J., 409 CC (See Critical-chain) Celebrations, 389 Center for Project Management, 525 Certification, 526 Change control management, 226-228, 3-12 Change control system (contracts), 408 Change management, 438 Change request forms, 226-227 Change rec aest log, 227 228 Chaparral Steel, 72, 79 Character ethic, 329, 330 The Charles Schwab Corporation, 10 Chames, A., 270 Charter partnership, 387 project, 101-102 Chatman, J., 84 Checklists, PBS, 117 Chicago Bulls, 343 Chief information officers (CIOs), 14 Chilmeran, A H., 121 China, projects in, 491, 503-504 Chrysler Corporation, 175 Chunnel project, 23 CIOs (chief information officers), 14 Cisco Systems, 07 Citihank, 71 Clark, K B., 82 Cleland, D I., 373 Closed economies, II Closure (SeeProject closure) CMM (Capability Maturity Model), 468 Cochran, Dick, 481n, 484 Code of conduct (for virtual teams), 368 Coding system (WBS), 113-114 Coefficient of restitution (COR), 102 Cohen,A R., 316, 336 Cohen, D J., 17,46 Coleman, H J., 84 Collins, J., 512 Coll~,J.C., 82 Co-location of team members, 355 Comaneci, Nadia, 50 Commendation, letters of, 359 Communication, 332 with customers, 400 for internstional projects, 511 in partnerships, 383, 384 of project closeout plan, 476 trends in telecommunications, 523 for virtual teams, 367-369 Compaq Computer, 79, 92, 96 Competence, 330 Competition, global, 8-9 Competitive advantage, 7-8 Compliance projects, 31, 32 Compression, 174, 221 Computer project exercises, 545 556 Conveyor Belt Project, 550 556 Silver Zuma Project, 545 549 Computer-generated project networks, 169-171, 200-201 Concurrent activities, 158 Concurrent engineering, 174-176 Conductors, project managers as, 315 Conflict and art of negotiating, 393-397 dysfimctional, 364-365 fimctional, 363-364 with virtual teams, 368 Conflict management, 362-365 Confucius, 503 Consensus, 358, 360 Consensus estimating methods, 130 131 Consistency, 329 Constraints logic, 242 physical, 243 project, 103-104 resource, 243-244 and resource scheduling, 242-243 resource-eonstrained projects, 247-257 resource-constrained scheduling, 241-242 technical, 242 theory of, 272 time-eonstrained projects, 245 247 Construction industry network projects in, 68 project management in, Construction Industry Institute, 382 Consultants (for team rejuvenation), 366 Contacts, sharing, 318 Contingency fimds, 14Q 143, 223-224, 437 Contingency planning, 218-223 for cost risks, 221-222 for fimding risks, 222-223 for schedule risks, 219, 221 for technical risks, 219 with work packsge estimates, 129 Continuous improvement, partnering and, 388, 392-393 Continuous Risk Management Guidebook (Software Engineering Institute), 210 Contract management contract change control system, 408 cost-plus contracts, 407-408 fixed-price contracts, 405 407 for partnering, 405 409 Contractors, selection of, 53 Control charts, 415 416 Control process, 411-439 baseline changes, 434, 436-438 case, 449-450 conflict, 365 costs in baselines, 420-421 defined, 413 earned-value rules, 451-456 forecasting final project cost, 432-435 indexes for progress monitoring, 429-432 integrated cost/schedule system, 418-419 integration ofWBS and OBS, Ill, 113 with MS Project 2002, 456-459 need for integrated information system, 416-423 project baselines, 419-421 project munitoring information system, 411-412 status report development, 423-429 steps in, 413-414 time performance monitoring, 414-416 variance analysis methods, 421-423 Controlled Demolition Inc., 216 Conveyor Belt Project, 119,550 556 Cooper, W 270 Cooperation in leading by example, 327 strategy for gaining, 318 Coppola, Francis Ford, 493 COR (coefficient of restitution), 102 Core project tearn, 285 Coming, 383 Corporate downsizing, 9-10 Corrective actions, 413-414 Corruption in governments, 491 in international projects, 506 Cost accounts, 114-116,420 Cost and Optimization Engineering (F C Jelen and J H Black), 149 Cost estimates (See Project estimates) Cost performance index (CPI), 429, 430, 432 Cost risks, 221-222 Cost variance at completion (VAC),418, 421 Cost variance (CV), 418, 419 Cost-duration graph, 287-296 crash times for, 294 determining activities to shorten, 289-294 explanation of project costs, 287-289 linearity assumption, 294 steps in constructing, 289 time reduction and sensitivity, 296 using, 293-294 Cost-plus contracts, 407-408 Costs (SeeProject costs) Cost/schedule graph, 422 Cost/schedule software, 431 Cost-sensitive projects, duration of, 296-298 Cost-sharing ratio (CSR), 407 Cost/time dependency, 221, 296 Countercultures, 74 Coutu, D L., 373 Covance, 284 Covey, Stephen, 329, 336, 395, 401 Cowan, Charles, 382, 40 I, 407 CPI (See Cost performance index) CPM (See Critical path method) Crane, B., 337 Crash cost, 289 Crash time, 284, 289 Crashing, 289, 294 Credibility (of team members), 349 Crime, internstional, 491 Critical path, 153, 156 compressing duration of, 174 w., Index 553 and resource management, 167-168 and slack, 165 Critical path method (CPM), 167,235 Critical thinking, whitewashingof, 370 Critical-ehain (CC), 272-279 for accelerated completion, 285-286 buffers in, 278 debate on, 278 and multitasking, 275, 278 time estimates in, 272-273 traditional scheduling vs., 273-278 Cross-eultural frameworks Hofstede, 499 Kluckhohn and Strodtbeck, 498 CSR (cost-sharing ratio), 407 Cullinane, T P., 409 Culture (See also Organizational culture) defined, 496 international projects and differences in, 494, 496-499, 506 Culture shock, 506-509 Culver, Irvin, 60 Currencies, 316-319 inspiration-related,317, 318 personal-related,317, 319 position-related, 317, 318 relationship-related,317-319 task-related, 317-318 Customer relations managemenl, 397-400 Customers increasing focus on, 10-11 reviews with, 101 as stakeholders, 313, 316 Cusumano, Michael A., 417n CV (See Cost variance) Cznerzy,Elliot, 48 D Dahlgren, G., 391n DaimlerChrysler,522 Dalai Lama, 48 Dalkey, N c., 146 Dandridge, T C., 97 Dangler paths, 172 Daniel, Tim, 491 Data acquisition, costs/problems of, 437, 438 Data collection and analysis, 412, 464-465 Data General Corporation, 357 Database, estimating, 143 Davies, Douglas, 217 Deal, T E., 83, 97 DEC (See Digital Equipment Corporation) De Castro, Edson, 357 Decision making in establishing teams, 350-352 for project closure, 476 for project teams, 360-361 Dedicated project teams, 58-63, 316 Defining projects, 99-120 case, 122-123 coding WBS for information system, 113-114 integration ofWBS and OBS, 111-113 prioritization of criteria, 103-105 process breakdown structure, 116-117 project rollup, 114-116 responsibility matrices, 117-119 scope of project, 100-103 work breakdown structure, 105-111 Defming stage (project life cycle), 6, 362 Dehler, Gordon E., 3300, 337 De Laat, P B., 83 Delheeq, Andrew,371n Deliverables, 100, 101 for personal computers, 108 responsibility for, III in work breakdownstructure, 106 Delivering stage (project life cycle), 6, 363 Delphi Method, 130-131 DeMarco, T., 303, 373 DeMarie, S., 374 Demeulemeester,E L., 270, 279 Deneire, M., 512 Denver International Airport, 436 "Departmental silos," 56 Dependencies among stakeholders,313-316 identifying, 319-321 over- vs underestimating, 320 Descamps, J P., 22, 46 Design flaws, 141 Developing Products ill Halfthe Time (P G Smith and D G Reinertsen), 219 Dexter, Susan, 284 DiDonato, L S., 401 Digital Equipment Corporation (DEC), 79, 356,357 Dinsmore, P C., 529 Direct costs, 139, 288-289 Direct overheadcosts (DOC), 139,420 Discipline (in management), 519, 520 Discount rate, 34 Disney,25, 417 DiStefano, J., 512 DOC (See Direct overhead costs) Doctors Without Borders, 491 DOD (See U.S Department of Defense) Doh, J P., 512 Domestic projects, 489 Doran, G T., 26, 46 Downsizing, 9-10 DrexI, A., 269 Drexler, J A., 401, 402 Dunbar, E., 513 Duncan, David, 326 DuPont, 132, 481 Duration of project (See Project duration) Dvir, D., 84,279 Dworatscheck, S., 83 Dyer, S., 40 I Dysfunctional conflict, 364-365 Economy,P.,401 Eden, L., 512 EDS,417 Education (for project managers), 526 Edward,K A., 402 Edwards, Cliff, 23n Einhorn, B., 4700 Eisenhardt, K R., 82 Elimination of conflict, 365 Ellipsus Systems, AB, 217 e-mail (for team communication), 367 Emergency projects, 31, 32 Emergent style of management, 330 Emhjellenm, K , 146 Empathetic listening, 395 Energy (of team members), 349 Englund, R L., 83 Enron, 326 Enterprise Project Management (EPM), 518, 519 Environment (See External environment; Internal environment) Environmental factors (international projects), 490-494 EPM (See Enterprise Project Management) Equations list, 564 Equipment constraints, 244 ESA (European Space Agency), 522 Esca1ation, 388 e.Schwab, 10 Essilor,472 Estimate to complete (ETC), 418, 432 Estimated costs at completion (EAC), 418, 430,432 Estimates (See Project estimates) Ethics, 327-328 E"Trade,IO European Space Agency (ESA), 522 EV (See Earned value) Evaluations importance of, 478 for partnerships, 388, 389, 391 in project audits, 478-482 Event, defmed, 156 Everest (film), 220 Exchange view of influence, 316-319 Exclusions, 101 Executing stage (project life cycle), 6, 363 Expectations customer, 397-400 managing, 322 Experience curve, 134 Expertise (of team members), 349 External environment assessment of, 26 constant scanning of, 42 responding to changes in, 22-24 E F EAC (See Estimated costs at completion) Earned value (EY), 418, 422, 432 applications of, 451-456 background of, 417 defmed,413 rules for, 431-432, 451 The Echns, 50 e-commerce, 10 Economic factors (international projects), 492-493 Faerman, S R., 402 Failed projects, 473 Failure mode and effects analysis (FMEA), 213 Fast-tracking,285 Faxes(for team communication), 367 Federal Bureau of Investigation (FBI), Federal Reserve Bank of SI Louis, 525 Fendly,L G., 270 Feng shui, 500 554 Index 50/50 rule, 431 Filipczak, B., 75n, 84 Film industry, network projects in, 67 Financial selection models, 32-34 Financial Solutions Group ofMynd, 322 Fincher, A., 484 Finesse, 332 Finish-to-finish relationship, 176 Finish-to-start relationship, 172, 173, 175 Finland, 492 Fiorina, Carly, 96 Fischer, Randy, 386 Fisher, R., 394, 396, 397,40 I Five-stage team development model, 344-345 Fixed-price contracts, 405-407 Fleming, Joel M Koppelman, 449 Fleming, Q w., 409 Flexibility, 330, 359 Float (See Slack) Floyd, S W., 46 FMEA (failure mode and effects analysis), 213 Foley, 1., 96n Follow-up (of decisions), 361 Ford Motors, 132 Forecasting final project cost, 432-435 Foreign projects, 489 (See also International projects) Formal project management application, 469 Forming stage (tearn development), 344 Forward pass in activity-on-arrow method, 197-199 in activity-on-node method, 16{}-164 with lags, 177-179 rules for, 163-164 using information from, 167-168 Foti, R., 46,373 Frame, David, 355 Frame, D., 82, 373 France European Space Agency projects in, 522 managing projects in, 501-502 Frank, L., 46 Fraser, J., 409 Free slack (float), 166-167 Fritz, Robert, 356 Fuji, 358 Function point estimating methods, 132-133 Functional conflict, 363-364 Functional managers project managers vs., 63, 65 as stakeholders, 314 Functional matrix structure, 316 Functional organizations, 56-58 Funding risks, 222-223 Fusco, J c., 29, 46 Fusco, Joseph, 478 G G&A costs, 139 Gabarro, S 1., 336 Gallagher, R S., 83, 97 Gamble, Jolm E., 102n Gantt chart, 169-171,275,278,414-415 Gardner, D., 71n, 83 Gates, Bill, 92, 417 GE Appliances, 371 Geary, L Kelly, 83 Geeks,260 General and administrative (G&A) overhead costs, 139 General Electric, 132, 481 General Electric Plastics, General Motors (GM), 278, 481 Geography, international projects and, 492 Germany European Space Agency projects in, 522 high-tech projects in, 493 trucking in, 473 Gersick, Connie 1., 346 Giangreco, M., 467n Gibson, C B., 374 Gibson, G E., 407 Global competition, 8-9 Global projects, 489 Globerson, S., 121,337 GM (See General Motors) The Goal (Eliyahu Goldratt), 272 Goals, 24 long-range, 26 in partnerships, 383 Gobeli, D., 121,475,484 Gobeli, D H., 70, 83, 100 Going native, 370, 371, 506 Gold, Dan, 284 Goldberg, A I., 83 Goldberg, Aaron, 62 Goldratt, Eliyahu, 272, 273, 275, 278, 279 Goldsman, L P., 409 Government(s) corruption in, 491 as stakeholders, 315 Gradante, w., 71n, 83 Graham, L., 512 Graham, R J., 17,46,83 Graham, S., 512 Graves, R., 230 Gray, C F., 83, 230, 382,401 Gray, N S., 146 Green, Heather, Green, Stephen G., 330n, 337 Greenland, 492 Griswold, Terry A., 467n Group decision making, 360 361 Group development, 346 Groupthink, 370 Guard activities, 323 Gundersen, N A., 409 Gustafson, D H., 371n H Habitat for Humanity New Zealand, 286 Hacki, R., 83 Hallowell, R., 512 Hamburger, D H., 231 Hammock activities, 178, 179 Hansson, 1., 391n Harris Semiconductor, 278 Harrison, M T., 83 Harvard Negotiation Project, 394 HBA Architecture, Engineering, and Interior Design, 392 Hedberg, B., 391 Hendrickson, A R., 374 Hendrix, K., 121 Henricks, Paul, 284 Henry, W L., 512 Herodotus, 207 Herroelen, W S., 270, 279 Heuristics, 247-251 Hewlett, William, 96 Hewlett-Packard (HP), 55, 93-94, 96,132,321, 367,371,391,481,519,526 Hierarchical WBS breakdown, 106-108 High-performance project tearns, 347-366 characteristics of, 344 conducting meetings, 349-354 creating shared vision, 356-358 decision-making process, 360 361 establishing tearn identity, 354-356 managing internal conflict, 362-365 norms for, 352 recruiting members, 348-349 rejuvenating team, 365-366 reward systems, 359-360 situational factors affecting, 347 High-tech industry joint projects with Germany, 493 product life cycle in, 7-8 Hill, L A., 336 Hobbs, B., 71, 83 Hobday, M., 83 Hodgetts, R M., 513 Hoffman, Robert, 481n, 484 Hofstede, Geert, 83, 499, 513 Hofstede framework, 499 Holloway, C A., 82 Hollywood, project management in, Honeymoon stage (culture shock), 507 Hong Kong, 500 HP (See Hewlett-Packard) Hulett, D T., 231 Human Genome Project, 521 Hurowicz, L., 269 Hutchens, G., 46 Iacocca, Lee, 30 Ibbs, C w., 303,484 IBM, 79, 132, 143,284,470,499,519 IBM Global Services, 368 Identity culture and sense of, 73 of project teams, 354-356 IFB (See Invitation for bid) Illogical loop, 168 Impact definitions, 39-40 Implementation gap, 28-29 Imposed project duration dates, 221, 281, 283 Improvement curve, 134 Incentives (partnering), 283, 390 Incremental projects, 72 Independence of tasks, 128 Indexes for progress monitoring, 429-432 India, 495-496 Indirect project costs, 178, 288 Indonesia, 492 Industrial progress curve, 134 Infatuation (team), 370 Influence by building trust, 328-330 Index as exchange, 316-319 Information system coding WBS for, 113-114 integrated, 416-423 project monitoring, 411-412 Information technology (IT) managers of, 399, 475 project management in, trends in, 521 Information-giving learning approach, 510 Infrastructure differences (international projects), 493-494 Ingehretson, Mark, 121,231 Initiative (ofteam members), 349 Innovation, 330, 384 In-process project audits, 462 Insensitive project networks, 296 Inspiration-related currencies, 317, I Institutionalization of project management, 469 Integrated cost/schedule system, 418-419 Integrated information system, 416-423 Integrative project management, 11-15 Integrity, 332 Intel, 23, 278, 381, 525 Interaction costs, 14(}-141 Interests clarifying, 396 focusing on, 395 Internal conflict management, 362-365 Internal environment, assessment of, 26 International projects, 489-511 case, 513-515 in China, 503-504 cultural differences, 494, 496-499, 506 culture shock, 506-509 economic factors, 492-493 environmental factors, 490-494 in France, 501-502 geography of country, 492 infrastructure differences, 493-494 legal/political factors, 490-491 in Mexico, 499-501 personnel selection and training, 509-51 I in Saudi Arabia, 502-503 security issues, 491-492 site selection, 495-496 in the United States, 504-507 International SOS Assistance, Inc., 491 International Space Station project (ISS), 522 Internet, retail operations on, 10 Interorganizational relations (See Partuering) Interpersonal skills, 14 Into Thin Air (Jon Krakauer), 220 Invitation for bid (IFB), 384,405-406 Invulnerability, illusion of, 370 Ireland, 495-496 lrix Pbannaceuticals, 284 Irritability and hostility stage (culture shock),507 ISO 9000, ISS (International Space Station project), 522 IT (See Information technology) Italy, European Space Agency projects in, 522 Jeffery, R., 146 Jelen, E C, 149 Jensen, M C, 374 Job assignments (as rewards), 359 Jobs, Steve, 24-25, 62 Johnsen, R., 374 Johnson, C L., 83 Johnson, Clarence L "Kelly," 60 Johnson, R E., 46 Johnson Controls Inc., 95 Jones, C., 146 Jordan, Michael, 95, 343 K Kalaritis, Panos, 284 Kanter, Rosaheth Moss, 381, 402 Kaplan, R E., 336 Kaplan, R S., 46 Kapur, Gopal, 525 Katz, D M., 121 Katz, Ralph, 356, 374 Katzenbach, Jon R., 355n, 374 Kaufinan and Broad Home Corporation, 93 Keep it simple stupid! (KISS), 350 Keiko,50 Kellehrew, J B., 269 Kennedy, A A., 83, 97 Kenny, J., 46 Kerr,J.,97 Kerzner, H., 17,83,121 Kerzner, Harold, 4n, 449 Key projects, success in, 528 Key requirements, 101 Kezsbom, D S., 402 Khang, D B., 303 Kharbanda, O P, 46, 123n, 141, 146 Kidder, Tracy, 357, 358, 374 Kidnapping of professionals, 491 King, J., 97 King, J B., 337 Kinko's,5 Kirk, Dorothy, 322, 336 Kirkman, B L., 374 KISS (keep it simple stupid!), 350 Kjellberg, Rikard, I KIuckhohn, E, 498, I Knight-Ridder, 355 Knoepfel, H., 83 Knoop, C.-I., 512 Knowledge explosion, Kodak, 79, 143,358 Konda, S L., 230 Kotter, J P, 312, 336 Kouzes, J M., 337 Kraas, E., 513 Krakauer, Jon, 220 Krane, J., 513 KrispyKreme, 8-9 Krup, Goran, 220 Kurniawai, Budiyoso, 234n Kwak, Y H., 484 L Jago, A G., 374 Janis, I L., 370, 374 Jassawalla, A R., 83 Lackey, Michael B., 434n Laddering, 172, 173 Lafarge, 472 555 Lag(s),I72-179 combinations of, 176 defmed, 172 fmish-to-finish relationship, 176 finish-to-start relationship, 173 with forward and backward pass, 177-179 start-to-finish relationship, 176 start-to-start relationship, 173-174, 176 Lam, N M., 512 Lansing, Alfred, 325 Larson, K, 121,337,382,401,402,475,484 Larson, E W, 70, 83, 97, 100 Larson, Erik, 17 Laslo, Z., 83 Law of reciprocity, 316 Lawrence, P R., 83 Leach, L P, 279 Leadership, 311-334 and degree of uncertainty, I ethics in, 327-328 by example, 325-327 exchange view of influence, 316-319 identifying dependencies, 319-321 management by wandering around, 321-322 management vs., 311-312 for partuerships, 388 project stakeholder management, I 2-316 qnalities for, 33(}-333 social network building, I 9-327 and support of top management, 322-324 trust building, 328-330 Leading at the Edge (Dennis Perkins), 325 Leading by example, 325-327 Learning curves, 133-134, 148-151 Leavitt, H J., 370, 374 Lechler, T., 84 Lee, Graeme, 286 Lee, S.A., 303 Legal factors (international projects), 490-491 Leifer, R., 46 Lepore, Dawn, 10 Lerner, Mathew, 284n Letters of commendation, 359 Leus, R., 279 Level of detail, 137, 168 Levi Strauss, 417 Levin, G., 484 Levine, H A., 231, 279 Levy, S., 374 Lewis, J P., 121 Lewis, Marianne, 330, 337 Lewis, R., 146 Li, M I., 303 Lieberthal, G., 513 Lieberthal, K., 513 Lientz, B P, 529 Lighton, J., 83 Limits of scope, 10 I Linear assumption, 294 Linear responsibility chart (See Responsibility matrix) Linetz, B P, 374 Lipman-Blumen, J., 370, 374 Listening, 319, 395 Lister, T., 373 Lockheed Aerospace Corporation, 60 Lockheed Martin, 60, 208 Logic constraints, 242 Logic errors, 168 Loizeaux, Mark, I 556 Index Lonza Biologics, 284 Looping, 168 Lorsch, W., 83 Los Angeles earthquake, 282 Low, G c., 146 Low-priority projects, 362 Loyalty, 324, 330 Luby, R E., 121 Lucas, George, 493 Lucent Techuologies, 278 Luck, 500 Luthans, F., 513 M Mackay, H., 529 Mackey, 1., 279 Macro network, 178 Macro project estimates, 129-134 Madnick, S., 303 Magoe, E., 146 Maier, N R F., 374 Majchrzak, A., 84 Malaysia, 492 Management of interual conflict, 362-365 leadershipvs.,311-312 of project management system, 469-471 as stakeholders, 313, 314 support of, 322-324 Management by wandering around (MBWA), 321-322,360 Management reserves, 223, 224, 437 Management system, culture and legitimization of, 74 Managers, (See also Project managers) Managing Martians (Donna Shirley and Danele Morton), 351 Mantel, S K., 337 Marriott Corp., 371 Mars Climate Orbiter, 208 Mars Exploration Program, 351 Martin,A., 374 Martin, M., 409 Martin, P., 529 Materials constraints, 243-244 Matheson, David, 42 43, 46 Matheson, Jim, 42 43, 46 Mathews, 1.A., 84 Matrix management, 55, 63-67 advantages/disadvantages of, 66-67 matrix forms, 63, 65-66 Mattei, 9, 353 Maturity models, 466, 468 471 MBWA (See Management by wandering around) McDermott, C M., 46 McDougall, Lorna, 326n McFarlan, F.W., 17, 45 McGrath, M R., 402 McLeod, G., 146 McPherson, S 0., 374 McWilliams, G., 79n Medectns Sans Frontieres, 491 Mediation, 364-365 Meetings, conducting, 349-354 Menard, P., 71, 83 Mendenhall, M E., 513 Menon, R., 230 Mentors, 527 Merge activities, 156, 164 Merritt, G M., 231 Meta Stamford Group, 518 Metaphor, 315 Mexico, projects in, 499-501 MGM,67 Micro managing, 313 Micro project estimates, 129-130, 134-137 Microsoft Corporation, 32, 75, 92, 104,381,417 Middle management, 9-10 Miles, G., 84 Miles, R E., 84 Milestones;'] I, 346, 415 Miller, J., 60n, 84 Miller, William J., 481 Milosevic, D Z., 513 Mission review/definition of, 24-25 success and clear definition of, 100 Mission statements, 24-25 Mitigsting risk, 215 Mittman, R., 374 Mobil Oil, 481 Mobile Systems Unit (Acer), 470 Mohring, R., 269 Monarch, I., 230 Monitoring information system for, 411 412 time performance, 414 416 Morigeau, Stuart, 231n Morton, Danelle, 351 Motivation, 330 and rejuvenation ofteam, 365-366 reward systems as, 358-360 with shared vision, 356 and team identity, 355 Mott, Fred, 355 Mount Everest, 220 MS Office 2000, 134 MS Project 2002, 456 459 Multicultural environments, 494 Multicultural projects, 521 Multiple startslprojects, 172 Multiproject resource schedules, 260-262 Multitasking, 3(}-31 and critical-chain approach, 275, 278 and resource scheduling, 257-258 Multi-weighted scoring models, 34-36 Murch, R., 121 Murpby's law, 211, 214 "Must" objectives, 39 Mutual gain, options for, 395-396 The Mythical Man MOlllh (Frederick P Brooks),4.11 N Nabisco, 481 Narnbisan, S., 402 Name (for project team), 355-356 NASA Mars Climate Orbiter, 208 National cultures, 496 499 National Institutes of Health, 521 Nature, relation to, 498 NCR, 417 Negative sterectypes, 370 Negative synergy, 343 Negotiating skills (for partnering), 393-397 Negotiationjujitsu, 396-397 Nellenbach, Joanita M., 14 Net present value (NPV) model, 33-34 Network projects, 67-69 (See also Project network) Networks (See also Project network) law of reciprocity in, 316 position-related currencies in, 318 social, 319-327 Neuijen, B., 83 New Yor/c Times 216n Newbold, R C., 279 Newmann, L., 269 New-product teams, improving performance of, 323 NGT (nominsl group technique), 371 Nike, 9, 67, 95 Nodes, 154, 157 Nofziner, B., 337 Nokia, 217 Nominal group technique (NGT), 371 Nonfinancial selection models, 34-36 Noreen, E., 279 Normal conditions, estimates based on, 128, 141 Normal time (for activities), 289 Norming stage (team development), 345 Norms (for virtual tesrns), 368 Northridge earthquake, 282 Norton, D P., 46 Not-invented-here culture, 347 Novell, Inc., 260 NPV model (See Net present value model) Numbers, lucky/unlucky, 500 o Objective criteria, 396 Objectives, 24 cascading, 28 long-range, 26 "must" vs "want," 39 in partnerships, 383 project, 100 OBS (See Organization breakdown structure) O'Connor, G c., 46 Oddou, G R., 513 Ohayv, D D., 83 Ohio School Facilities Commission, 386 Olive, D., 96n Olsen, Kenneth H., 79 Olson, E M., 84 Olve, N.-G., 391n Olympic Forest (Washington), 259 Olympic Garnes 1999,497 2004, 106-107 2010,186 Openness, 329 Operation Eagle Claw, 467 Operational projects, 31, 32 OPM3fM,468 Optimism, 333 Optimization of project criteria, 104, 105 of project management system, 471 O'Reilly, C A., 84 Organization breakdown structure (OBS), 107 integrating WBS with, 111-113 responsibility matrix extending, 118 Organization level, project management questions at, 69-70 Organizational culture, 72-80 creation/communication of, 91-96 Index 557 defined, 73 and failure of partnerships, 391 at Hewlett-Packard, 96n identilYing,75-77 at Microsoft, 75 not-invented-here culture, 347 and organization of projects, 77-80 ~'le~nMi~ofo~tio~55 primary characteristics of, 73-74 and project estimates, 127 relationship of project management to, 78-79 subcultures, 74 trends in, 520 Organizational Project Maturity Model, 468 OrganizatiOnM restructuring, 9-10 Osmundsen, P, 146 Outdoor team-building activities, 366 Outsourcing, 284 for cost-sensitive projects, 297 of intercultural training, 510 trends in, 523 Overseas projects, 489 Overtime, 284-285 Ownership (by team), 366 Oysters, 43 P Packard, David, 96 Padding estimates, 126-127 Pantheon Inc., 284 Parallel activities, 156, 158 Parallel method (resource allocation), 247-251 Parametric estimating methods, 131, 134 Pareto's Law, 22 Parkinson's law, 272 Partnering,381-400 assumption underlying, 382 benefits of, 383, 384 cases, 402-405 charter, 387 contract management, 405-409 customer relations management, 397-400 defined, 382 failures in, 389-393 incentive contracts, 283 negotiating skills, 393-397 preproject activities, 384-387 project completion activities, 389 during project implementation, 388-389 team-building activities, 385-386 traditional problem solving vs., 382-383 Past experience, estimates based on, 125-126 Path, defined, 156 Patterson, J H., 270 Payback model, 32~33 PBS (See Process breakdown structure) Peace Corps, 509 Pearls, 43 Pell,D.,121 People as constraints, 243 as factor in estimates, 126, 128 as factor in international projects, 497, 498 problem vs., 394 unreasonable, 396-397 People's Republic ofChina (pRC), 503-504 Percent complete rule, 421 Performance evaluating (See Evaluations) measuring, 413, 478 MS Project information on, 456-45S specifications for, 104 standards for, 327 Performance improvement for new-product teams, 323 in partnerships, 384 Performance indexes, 429 Performance reviews, 480-482 Performing stage (team development), 345 Perkins, Dennis, 325 Perpetual project closure, 472, 473 Perrow, L A., 303 Personal-related currencies, 317, 319 Personnel (for international projects), 509-511 Perspective, 332 PERT and PERT simelation, 235-239 Pesch, E., 269 Peters, J E, 484 Peters, L R., 337 Peters, L S., 46 Peters, Lawrence, 357 Peters, T., 17,337,374 Peters, Tom, 3, 343 Pettegrew, A M., 84 Pbase estimating, 135-137 Philippines, 493, 494 Physical constraints, 243 Pinto, K., 46, 121, 125~ 141, 146 Pinto, L., 337 Pippett, D D., 484 Pitagorsky,G., 121 Pixar,25 Planned budgeted value of workscbeduled (PV), 417,418,421,422 Planned style of management, 330 Planning horizon, 126 Plaoning stage (project life cycle), 6, 362, 363 Platform projects, 72 PM Networlc, 473 PMBOK (See Project Management Body of Knowledge) PM! (See Project Management Institute) PM! Standards Committee, 121 PMOs (See Project management offices) Poland, ~ culture in, 72-73 PoIi,M.,84 Political factors (internationM projects), 490-491 Politics, organizatiOnM in selection of projects, 29-30 skill in, 333 and team member selection, 349 Po~,J.I.,82 Portfolio management (See Project portfolio management system) Portland General Electric Company, 434 Position-related currencies, 317, 318 Positive synergy, 343, 344 Posner, B Z., 121,337 Post-it® sticker networks, 161 Postproject project audits, 462 Pottruck, David, 10 PRC (See People's Republic of China) Precedence diagrsm method (See Activityon-node) Predecessor activities, 158 Prernsture project closure, 472 Preproject activities (for partnering), 384-387 Pressman, R S., 146 Price, M., 46 Price protection risks, 222 Prince, Ed, 95 Prince Corp., 95 Principled negotiation, 394-397 Pringle, David, 217n Prioritization case, 48-51 changes in, 473-474 in leading by example, 326 with multitasking, 30 of project criteria, 103-105 responsibility for, 40 unclear, 28-29 Priority matrix, 103-105 Priority team, 41, 473 Pritchard, C L., 231 Proactive approach, 332 Probability analysis, 213 Problem, people vs., 394 Problem solving in group decision making, 360-361 in leading by example, 326 in partnerships, 388 team members' abilities in, 348 traditional vs, partncring, 382-383 Process breakdown structure (PBS), 116-118 Process-oriented projects, 116-117 Product life cycle, 7-8 Productivity,343 Products customized, I o-n increasing complexity of, Prognun evaluation and review technique(See PERT and PERT simulation) Programs, Progress measurement, 413, 417 Project audits, 461 482 case, 486-487 data collection and analysis, 464-465 guidelines, 462-463 initiation of, 463 in-proceas, 462 maturity models, 466, 468-471 performance evaluations, 478-482 postproject, 462 and project closure, 471-479 reporting, 465-467 staff'mg,463-464 Project baselines, 419-421 Project charter, 101-102 Project closure, 471-479 checklist for, 484-486 conditions for, 471-474 decision for, 476 process for, 476-478 and project audits, 471-479 signMs for continuing vs., 474-475 Project completion activities (partncring), 389 Project constraints, 103-104 Project costs, 287-289 in baselines, 420-421 direct, 139, 288-289 direct overhead, 139-140 forecasting rmal, 432-435 general andadministrative overhead, 140 558 Index indirect, 288 integrated cost/schedule system, 418-419 interaction, 140-141 and project duration, 283 Project duration, 126,281-298 accelerating project completion, 283-287 cases, 304-309 cost-duration graph, 287-296 for cost-sensitive projects, 296-298 imposed dates for, 221 rationale for reducing, 281-283 time reduction and sensitivity, 296 Project estimates, 125-144 accuracy of, 136 adjusting, 142 and budget development, 138-139 case, 146-147 and contingeucy funds, 140-143 creating database for, 143 guidelines for, 127-129 learning curves for estimating, 148-151 level of detail in, 137 macro, 129-134 micro, 129-130, 134-137 nonproject factors in, 127 qnality of, 125 127 refming,140-143 types of costs in, 139-140 Project implementation, partnering during, 388-389 Project life cycle, 6-7 Project management, 15 career issues in, 525 528 case, 17-19 compression of product life cycle, 7-8 corporate downsizing, 9-10 defmition of "project," 4-5 development of third world/closed economies, II global competition, 8-9 growth of interest in, 3-4 under high levels of uncertainty, 524 importance of, increased customer focus in, 10-11 integrative approach to, 11-15 knowledge explosion, project life cycle, 6-7 project manager, relationship of organizational culture to, 78-79 small project problems, II structures for (See Structures for project management) trends in, I 7-523 unresolved issues in, 523 525 virtual, 523-524 Project Management Body ofKnowledge (pMBOK), 17,231 Project Management Consultants, 386 Project Management Institute (pMI), 3, 17,468, 526 Project management offices (PMOs), 41,70,71, 518-520 Project managers, (See also Leadership) case, 337-341 as conductors, 315 functional managers vs., 63, 65 in functional organizations, 56 partner team-building by, 385 qnalities for effectiveness, 330-333 risk mouitoring responsibilities of, 225 sociocultural respottsibilities of, 14 as stakeholders, 313 and task duration estimation, 137 trade-off management by, 103 understanding of strategy by, 22 Project mouitoring information system, 411-412 Project network, 153-179 activity numbering, 169 activity-on-arrow method, 156, 194-205 activity-on-node method, 156-160 arrows in, 154 backward pass, 160, 164-165 calendar dates, 169, 172 cases, 189-193 computer-generated, 169-171 constructing, 155 157 extended techniques, 172-179 forward pass, 160-164 free slack (float), 166-167 hammock activities, 178, 179 insensitive, 296 laddering, 172, 173 lags, 172-179 level of activity detail, 168 logic errors, 168 multiple projects, 172 multiple starts, 172 nodes in, 154 rules for developing, 156-157 sensitivity of, 296 slack (float), 165 166 sticky note approach to, 161 terminology, 155 156 using information from forward/backward pass, 167-168 value of, 153-154 work packages and, 154-155 Project offices/departments, 261 Project organization, time/cost estimates and, 126 Project percent complete index, 4:29,430 Project Platypus (MatteI), 353 Project portfolio management system, 28-36, 40-43 balancing portfolios, 42-43 classification of projects, 31-34 implementation gap problem and, 28-29 nonfinancial criteria in, 34-36 organization politics and, 29-30 resource conflicts/multitasking and,30-31 Project queue system, 261 Project rollup, 109, 114-116 Project screening matrix, 34-35 Project selection, 21,32-43 cases, 46-51 classification of projects, 36-37 fmancial models for, 32-34 and management of portfolio system, 40-43 nonfmancial models for, 34-36 prioritization, 40 ranking of proposals, 38-40 screening process, 38-40 sources/solicitation of proposals, 37-38 Project spousors, 29 cultivating ties with, 324 as stakeholders, 314 Project stakeholder management, 312-316 Project structure, time/cost estimates and, 126 Project teams, 3, 343 372 activities for high performance, 323 cases, 374-379 conducting meetings, 349-354 core, 285 creating sbared vision, 356-358 decision-making process, 360-361 dedicated, 58-63 establishing identity, 354-356 evaluation of, 479-480 five-stage team development model, 344-345 high-performance, 347-366 for low-priority projects, 362 managing internal conflict, 362-365 at Microsoft, 75 and projectitis, 369-371 recruiting members, 348-349 rejuvenating, 365 366 reward systems management, 358-360 risk monitoring responsibility of, 225 situational factors affecting, 347 as stakeholders, 313 24-hour product design teams, 523 virtual, 367-369, 521 WBS development by, III Projectitis, 67, 369-371 Projectized form of organization, 61 Projects (See also specific topics) assessing impact of changes on, 226 barriers to success of, 474 classification of, 31-34, 36-37 culture and organization of, 77-80 defined, 4-5 dimensions of, 43 implementing strategies through, 28 integrating strategic plan and, 12, 13 international (See International projects) life cycle of, 6-7 linking strategic plan and, I majorcharacteristics of, programsvs., project management questions at level 01; 71-72 routine work vs., selection of (See Project selection) strategic value 01; 32 Proposals ranking, 38-40 request for proposal, 37-38, 51-53 sources/solicitation of, 37-38 Protocols (for virtual teams), 368 Public interest groups, ) 16 Public recognition, 359 Public works, partnering in, 407 Punctuated equilihrium model, 346 Purpose, sense of, 329 PV (See Planned budgeted value ofwork scheduled) Q Qnality, compromising on, 287 Qnality movement, Queuing, 261 Quick and dirty solutions, 285 Quinn, R E., 82, 402 R RAND Corporation, 131 Rating scales (performance), 481 Ratio estimating methods, 131 Raz, T., 121,279 Rea, K P., 374, 529 Index 559 Rebello, K., 75n, 84 Reciprocity, law of, 316 Recognition, 318 Recruiting team members, 348-349 Redetermination contracts, 406 Reinersten, D G., 84, 219, 231, 270, 304 Reinman, R., 230 Rejuvenation of team, 365-366 Relationship-related currencies, 317-319 Reports and reporting, 412, 465-467 Request for proposal (RFP), 37-38, 51-53 Reserves budget, 223 management, 223, 224 Resource allocation methods, 28, 245-251 assumptions in, 245 optimal mathematical solutions to, 247 for resource-constrained projects, 247-257 for time-constrained projects, 245-247 Resource leveling, 241, 242 Resource scheduling, 241-262 assigning project work, 259-260 benefits of, 258-259 case, 270-271 classification problem in, 244 compoter demonstration of, 251-257 eritical-ehain approach, 272-279 multiproject, 260-262 and project constraints, 242-243 resource allocation methods, 245-251 and resource constraints, 243-244 resource leveling, 241, 242 resource-eonstrained projects, 247-257 resource-eonstrained scheduling, 241-242 splitting/multitasking, 257-258 for time-constrained projects, 245-247 Resource-eonstrained projects computer scheduling of, 251-257 defined, 244 resource scheduling for, 247-257 Resource-eonstrained scheduling, 241-242 by computer, 251-257 impacts of, 257 contingency planning, 218-223 identification of risks, 209-211 for international projects, 491-492 PERT and PERT simulation, 235-239 process of, 207~209 purpose of, 207 response to, 215-217, 225 trends in, 521, 523 Risk profile, 210 Risk response control of, 225 development of, 215-217 Risk response matrix, 218 Risk severity matrix, 213 Risk(s) assessment of, 129,211-215 in crashing activities, 294 defined, 207 in estimates, 129 identification of, 209-211 in partnerships, 383, 388 schedule, 219, 221 sources of, 208 technical, 219 Ritti, R R., 374 Rituals, team, 356 RM (See Responsibility matrix) Robb, J., 337 Rodriguez, P., 512 Roemer, T R., 304 Rose Garden stadium (Oregon), 285 Rosen, B., 374 Ross, Ivy, 353 Rourke, D L., 146 Royer, Isabelle, 472, 484 Rubber baseline, 436 Ruekert, R 84 Russ, Mitchel, 2600 Russia corruption in, 491 space projects in, 522 w., Resources for accelerated completion, 283, 284 conflicts over, 30-31 constraints on, 243-244 estimating (SeeProject estimates) partnerships and utilization of, 384 Responsibility for cost-sensitive projects, 297 for estimating, 127-128 for risk, 225 Responsibility matrix (RM), 117-119 Retail industry, changes in, 10 Retaining risk, 217 Reviews (with customer), 101 Reward systems management, 358-360 RFP (See Request for proposal) RHI Consulting, 14 Ricks, D., 513 Ricks, D A., 513 Risk assessment matrix, 212 Risk events, 208 (See also Riskts) Risk management, 207-229 assessment of risks, 211-215 cases, 231-235 change control management, 226 228 contingency funding, 223-224 S Saffo, P., 374 Saia, Rick, 525n Salter, Chuck, 353n Sanders, D., 83 Santayana, George, 461 SAS (Scandinavian Airlines), 27 Sashittal, H c, 83 Sassoon, Gideon, 10 SATT Control, 391 Saudi Arabia, projects in, 502-503 Sayles, L R., 337 Scandinavian Airlines (SAS), 27 Scenario analysis, 211-215 Schedule actua1 vs project network schedule, 421 baseline, 214 best-ease, 214 changing, 142-143 integrated cost/schedule system, 418-419 in project networks, 154 of resources (See Resource scheduling) time buffers in, 224, 225 worst-case, 214 Schedule risks, 219, 221 Schedule variance (SV), 418, 419, 421 Scheduling critical-ehain vs traditional, 273-278 heuristics for, 247 resource-constrained, 241-242, 247, 251-257 splitting/multitasking in, 257-258 Scheduling performance index (SPI), 429, 430 Schein, E., 84, 97 Schilling, D L., 402 Schmidt, Eric, 260 Schonfeld, Erick, 10 Schuler, J R., 231 Schultzel, H J., 402 Schwab, Charles R., 10 Scileppi, Greg, 14 Scope, 100-103, 141 changes in, 141 increase in, 517~518 reducing, 287, 297 unstable, 524 Scope creep, 102-103,437,438 Scouts, 323 Scown, M J., 513 Sculley,J.,84 Sculley, John, 62 Sears Roebuck, 132 Seattle Kingdome, 216 Securities and Exchange Commission, 326 Security issues (international projects), 491-492 SEE (See Simulation Experiential Exercises) Sega11a,M., 512 SEI (See Software Engineering Institute) Selby, Richard 417n Self-esteem, 319 Semiquantitative scenario analysis, 213-215 Senge, P M., 337,374 Senior management and failure of partnerships, 389, 391 portfolio system input from, 41 as stakeholders, 314 Sense of purpose, 329 Sensitivity of project network, 296 Sequent Corporation, 94 Services, customized, 10-11 Seven Habits ofHighly Effective People (StephenCovey), 329 Shackleton, Ernest, 325 Shanahan, S., 270 Shared vision, 356 358, 364 Sharing risk, 217 Sheen, Martin, 493 Shell, G R., 402 Shenhar, A J., 84, 337 Shenhar, Aaron, 22, 46 Shirley, Donna, 351 Shtub, A., 337 Sibbet, D., 374 Siemens, 391 SIGs (Specific Interest Groups), Sikorsky Aircraft Corp., 222 Silver Zurna Project, 545-549 Si1verstein, Ken, 231 SimProject case, 531-543 Simulation Experiential Exercises (SEE), 531-543 Singapore, 495-496 Singer, Carl A., 368 Site selection (for international projects), 495-496 Skunk works, 60 w., 560 Index Slack (float), 165-166 on bar charts, 169, 171 critical-ehain approach to, 272-279 and schedule risk, 221 Slevin, D P., 121,337 Slocum, 97 Small projects, management problems with, II SMART objectives, 26 Smith, Cynthia 1., 326n Smith, D., 146,279 Smith, D K., 374 Smith, Douglas K., 355n Smith, M., 83 Smith, M A., 100, 121 Smith, P G., 84, 219, 231, 304 Smoothing, 241 Snow, C c., 84 Snyder, D., 146 Social network building, 319-327 Social order, creation of, 74 Sociocultural project management process, 13, 14 Software, 15 Chaos research, 475 for planning andtracking, 352 for project cost/schedule systems, 431 for resource-eonstrained scheduling, 251-257 Software Engineering Institute (SEI), 210, 468,484 Software industry, function point estimating methods in, 132-133 Sojourner, 351 Sony, Sood, S., 279 The Soul ofa New Machine (Tracy Kidder), 357, 358 Southeast Asia, 492 SOW (statements of work), 101 Specialists (as stakeholders), 313 Specific Interest Groups (SIGs), SPI (See Scheduling performance index) Splitting, resource scheduling and, 257-258 Sponsors, 29 Squires, Susan E., 326n Stability, maintaining, 330 Stability zones, 508 Staffing for international projects, 509-511 for project audits, 463-464 and project closeout, 476 Stakeholders expectations of, 322 management of, 312-316 team building by, 385-386 Standard deviation, 236 Standards of behavior, 74 ISO 9000, Standish Group International, 475 Start-to-finish relatior.ship, 176 Start-to-startrelationship, 173-174, 176 Statements of work (SOW), 101 Status reports, 423-429 assumptions for, 423 baseline develupment for, 423-425 development of, 424-429 at Microsoft, 417 Stereotypes, 370 Stewart, T A., 17 Stewart, W E., 484 Storming stage (team develupment), 344, 345 w., Strategic management, 22-28 activities of, 24 analysis/formulation of strategies, 2~28 implementation of strategies, 28 long-range goals/objectives determination, 26 review/dermition of mission, 24-25 Strategic plan, integrating projects with, 12, 13,21 Strategic projects, 31, 32, 517-518 Strategy disconnect, 28-29 Strategy(-ies),21 analysis/formulation of, 2~28 formulation vs implementation of, 24 for gaining cooperation, 318 implementation of, 28 management view of, 29 project managers' understanding of, 22 Stress and culture shock, 507-509 tolerance for, 332 Strickland, A J., 102n Strodtbeck, F L., 498, 513 Strohl Systems Group, 491-492 Strong matrix, 63, 65-67 Strong organizational culture, 74 Structures for project management, 55-72 cases,84-91 choosing, 69-72 dedicated tearns,58-63 within functional organization, 5~58 matrix management, 6~7 network organization, 67-{j9 relative effectiveness of, 70 Stuckenbruck, L C., 84 Subcontractors (as stakeholders), 314, 315 Subeultures, organizational, 74 Subdeliverables, 109, III Subnetwork, 178 Successor activities, 158 Sun Microsystcms, 217 Suppliers (as stakeholders), 316 Suris,O., 175n, 189 SV (See Schedule variance) SwahI, W., 121 Sweden, 492 Switzerland, 493 SWOT analysis, 26 Symons, C R., 146 Synergy, 343, 344 Syskle and Obert, 49 System integration, increase in, 517-518 Systems thinking, 332 Techuical requirements, 101 Techuical risks, 219 Technology time tu implement, 126 trends in, 523 Tektronics, 417 Telecommunications, 523 Telephone conferencing, 368 Template estimating method, 134 Temporary assignments, 525-526 Terrorism, international projects and,491 Tesluk, P E., 374 Thailand, 492 Thamhain, H 1., 362, 374 Theory of constraints, 272 Thick organizational culture, 74 Thin organizational culture, 74 Third world economies, II Thompson, A A., 102n Thompson, M P.,402 Thorns, P., 374 Threats, 208 36O-degree feedback, 480-482 3M, 34, 78, 278, 520 Time buffers, 142, 224, 225 Time estimates (See also Project estimates) critical-ehain approach, 272-273 from task time in work packages, 154 weighted averages for, 236 Time management, 333 Time orientation, cultural, 498 Time performance mouituring, 414-416 Time to market, 7-8, 104,283,284 Time units (in estimates), 128 Time-eonstrained projects, 244-247 Time/cost dependency, 221, 296 Time-phased budgets, 138-139 Time-phasing ofcosts, 417 To Complete Performance Index (TCPI), 432-433 Top-down estimating, 129-134 Torti, M T., 399 Townsend, A M., 374 Tnyota, 383 Tracking Gantt chart, 414-415 Training for international projects, 509-511 for professional project managers, 526 Transferring risk, 216, 217 Transition points, 346 Trice, H M., 97 Trojan Nuclear Plant, 434, 435 Trust T Tactical project focus, 517-518 Talbot, B F., 270 Tales from Nepal, 48 Tallahassee Democrat, 355 Task coordinator activities, 323 Task-related currencies, 317-318 Tate, K., 121,529 Taverna, Michael A., 522n TCPI (See To Complete Performance Index) Team rituals, 356 Team-building activities, 365-366, 385-386 Techuical constraints, 242 Technical performance measurement, 430-431 Techuical project management process, 12-15 building, 328-330 in partnerships, 383 with virtual teams, 367 Thchman, B W., 374 Tucker, R L., 100, 121 lUng, R L., 513 Thmkey projects, 471-472 20th Century-Fox, 67 24-hour product design tearns, 523 U UhIenbruck, K., 512 Ulrich, F C., 230 Uncertainty, 223 Index 561 in contract prices, 406 leadership andamount of, 312 management with high levels of, 524 UnderwriterLaboratories, Inc., 509 United States, international projects in, 504-507 US Air Force,278 U.S.Anny Corps of Engineers, 407 US IDepartment of Agriculture, 259 U.S.Department of Defense (DOD), 3, 222, 392,417 US Department of Energy,521 U.S Embassy hostage crisis, 467 U.S.Forest Service, 259, 438 United States Golf Association, 102 US Navy, 52, 278 US West,371 Universities, project managementcourses in, Unruh, V P., 402 Unstable scope, 524 Upward relations managing,322-324 Urgency, coftV~ sense of, 326 Ury, W, 394, 396,197,401 v VAC(See Cost vaiance at completion) ValueEngineering\wards (DOD), 392 Van de Ven,Andt'evH., 371n Varianceanalysis, 4\-423 Variance(s),236, 42422 Verma, v.K., 337 Veroatec, 76, 77 Veryzer, R W, 46 Venub, E., 304 Veverka,M., 96n V,deoconferencing,36' virtualproject maoagCl\t, 523-524 virtualproject teams, 3~69 virtual teams, 521 Visibility,gaining, 527 Vision, shared.356-358, 3, Volunteerteam members, 3· Vroom, V H., 304, 374 W Walker,C E, 230 Walker,O C., Jr., 84 Wall Street Journal 491 Wal1ace, Jerry, 481 Wang,Q.,84 Wang, R, 304 "Want" objectives,39 WarnerBrothers, 67 Warner-Lambert,481 WBS (See Work breakdown structure) Weakmatrix, 63, 65, 67 Weakorganizationalculture, 74 Weatherconditions,extreme,492 Webtrading, 10 Webb,A P.,336 Webb,Alan, 449 Web-basedproject management, 521 Webber,S S., 399 Weightedaverage,236 Weightedscoring models, 34, 37 Weiler,Ed, 208 Welsh,M Ann, 3300, 337 West,Tom, 357 Weston,D C, 407 What Made Gertie Gallop (0 P.Kharbanda and Jeffrey Pinto), 141 Wbeatly,M., 484 Wheelwright,S c, 82 Whistler Ski Resort project, 186-187 White elephants, 43 Whitten, Danny,295 Wbybark, D Clay, 307n Wiest, J D., 270 Wilemon, D L., 362, 374 Willie, C 1., 270 Wilson,Pete, 282 Wisneiski, Mary, 386n Woodward, H., 46 Woodworth,B M., 270 Woolridge,B., 46 Workassignments,259-260, 525-526 Workbreakdown strueture (WBS), 14, lOS-III baseline derived from, 413 developmentof, 108-111 integration of changes in, 227, 228 level of detail in, 137 major groupingsin, 105-106 for Olympic Games, 107 responsibilitymatrix extending, 118 risk identification with, 209 value of, 106-108 Workpackages, 108-110 baseline costs for, 420 in cost accounts, 114-116 estimates at level of, 130 estimates for, 129, 134-135 in project network, 154-155 time-phasedbudgets for, 138 Workingcapital constraints, 244 Worldcom,326 Worst-caseschedule, 214 Worthington, M M., 409 Wysock,R K, 337 Wysocki,B., 17 x Xerox, 30, 76, 77 Y Yates,1 K., 484 Yeak,William R., 326n Yeung,I., 513 Yin,M., 303 Youker, R., 84 Young, Brue, 295 Z ZaImanson, E., 279 Zander,A., 374 Zaphiropoulos, Renn, 76, 77 0/100 percent rule, 431 Zimmerman, E., 121 .: '" Log on to http://highered.mcgraw-~ill.com/sites/0070600937 PR~J~~TMANAG~M~NT EDITION THE MANAGERIAL PROCESS • Text developed around a philosophy of a project-driven organization committed to continuous improvement and organizationalleaming • Emphasis on the project management 'process' • Tools, techniques, and concepts that have practical relevance • "Snapshot From Practice" boxes and Case Studies CLIFFORD F GRAY is professor emeritus of management at the College of Business, Oregon State University He teaches undergraduate and graduate project management courses overseas and in the United States He has personally taught in more than 100 executive development seminars and workshops ERIK W LARSON is professor of project management in the department of management, marketing, and international business at the College of Business, Oregon State University He teaches executive, graduate, and undergraduate courses on project management, organizational behavior, and leadership He is a certified project management professional (PMP) The McGraw ·HiII Companies ISB : 0-07-060093-7 0070 60 0935 Visit Tata McGraw-Hili at: www.tatamcgrawhill.com ... within the Process ofManaging Actual Projects There are two dimensions within the project management process (see Figure 1.3) The first dimension is the technical side of the management process, ... are allocated to the right projects Once a project has been selected for implementation, the focus switches to the project management process that sets the stage for how the project will be implemented... Work with Projects Chapter1 Modem Project Management The Project Life Cycle Another way of illustrating the unique nature of project work is in terms of the project life cycle Some project managers