CHAPTER 2

D. Costs to complete each project

A project screening matrix typically contains all of the following EXCEPT A. The list of available projects B. Specific criteria C. Weights assigned to specific criteria D. Costs to complete each project E. All of these are typically contained

B. Better utilization of the organization's resources. Without integration of projects with the strategic plan, resources are poorly utilized. Conversely, organizations that have a link of projects to strategy have more cooperation across the organization, perform better on projects and tend to have fewer projects.

A project selection process that is strongly linked to strategy results in A. The most profit. B. Better utilization of the organization's resources. C. More projects. D. A larger and more diverse organization. E. Stronger core competencies.

D. Not enough projects within the portfolio to make a profit. Frequent conflicts between managers, inadequate resources, confused employees and multitasking are all symptoms of organizations struggling with strategy disconnect and unclear priorities. Typically these organizations are also completing projects with low priority which results in a portfolio that consists of too many projects that do not align with organizational strategy.

All of the following are symptoms of organizations struggling with strategy disconnect and unclear priorities EXCEPT A. Frequent conflicts between managers. B. Inadequate resources. C. Confused employees regarding which projects are more important. D. Not enough projects within the portfolio to make a profit. E. People are working on multiple projects and feel inefficient.

E. None of these The net present value (NPV) model uses management's minimum desired rate of return to compute the present value of all net cash inflows.

The __________ financial model measures the current value of all cash inflows using management's minimum desired rate of return. A. FUBAR B. ARR C. IRS D. IRB E. None of these

A. SWOT The keys are to attempt to forecast fundamental industry changes and stay in a proactive mode rather than a reactive one. This assessment of the external and internal environments is known as the SWOT analysis (strengths, weaknesses, opportunities, and threats).

The assessment of the external and internal environments is called _______ analysis. A. SWOT B. Competitive C. Industry D. Market E. Strategic

E. Calculating the time it will take to recover the project investment. The payback model measures the time it will take to recover the project investment. It is considered a financial criterion.

Examples of nonfinancial criteria include all of the following EXCEPT A. Capturing a larger market share. B. Reducing dependency on unreliable suppliers. C. Preventing government intervention and regulation. D. Making it difficult for competitors to enter the market. E. Calculating the time it will take to recover the project investment.

E. All of these should be considered when formulating strategies.

In order to formulate strategies that align with the mission the organization will need to A. Assess internal strengths and weaknesses. B. Analyze competitors. C. Examine the external environment. D. Know their core competencies. E. All of these should be considered when formulating strategies.

C. Project sponsor. Project sponsors play a significant role in the selection and successful implementation of product innovation projects. Project sponsors are typically high-ranking managers who endorse and lend political support for the completion of a project.

One who endorses and lends political support for the completion of a specific project is known as the A. Project manager. B. CEO. C. Project sponsor. D. Project lead. E. Sacred cow.

E. Be able to focus on problems or solutions, even if the project is a low priority strategically. Project managers who understand the role that their project plays in accomplishing the organization's strategy will not be inclined to waste time focusing on problems that are a low priority in regard to achieving the organization's strategy.

Project managers who understand the role that their project plays in accomplishing the organization's strategy are able to do all of the following EXCEPT A. Demonstrate to senior management how their project contributes to the firm's mission. B. Explain to team members why certain project objectives and priorities are critical. C. Explain to stakeholders why certain project objectives and priorities are critical. D. Be able to respond appropriately to delays and/or questions about product design. E. Be able to focus on problems or solutions, even if the project is a low priority strategically.

A. Financial and nonfinancial.

Project selection criteria are typically classified as A. Financial and nonfinancial. B. Short-term and long-term. C. Strategic and tactical. D. Required and optional. E. Cost and schedule.

D. Political necessity Many organizations find they have three different kinds of projects in their portfolio: compliance and emergency (must do), operational, and strategic projects.

Projects are usually classified into all but one of the following categories. Which one is NOT one of the typical classifications? A. Compliance and emergency B. Operational C. Strategic D. Political necessity E. All of these are typical classifications

B. The project's fit to the organization strategy

Regardless of the criteria differences among different types of projects, the most important criterion for project selection is A. How the project will balance risk within the project portfolio B. The project's fit to the organization strategy C. Compliance D. Nonfinancial E. Profit

D. Multitasking. Resource sharing also leads to multitasking. Multitasking involves starting and stopping work on one task to go and work on another project, and then returning to the work on the original task. People working on several tasks concurrently are far less efficient, especially where conceptual or physical shutdown and startup are significant.

Susie's department is implementing many projects. She finds herself starting and stopping work on one task to go and work on another task, and then return to the work on the original task. Susie is experiencing A. Poor scheduling. B. Excess work burden. C. Flexible tasking. D. Multitasking. E. Burnout.

True

TF. A proposed project that ranks high on most criteria may not be selected because the organization's portfolio already includes too many projects with the same characteristics.

True A written mission statement provides focus for decision making when shared by organizational managers and employees. Everyone in the organization should be keenly aware of the organization's mission.

TF. A written mission statement provides focus for decision making when shared by organizational managers and employees.

False People working on several tasks concurrently are far less efficient, especially where conceptual or physical shutdown and startup are significant. Multitasking adds to delays and costs.

TF. Generally, people working on several projects at the same time are more efficient than people working full-time on one project.

True If a project does not meet designated "must" objectives, it is not considered and removed from consideration. In addition, there is no longer need to score "want" objectives.

TF. If a proposed project does not meet one of the designated "must" objectives it is immediately removed from consideration.

False Two major dimensions of strategic management are responding to changes in the external environment and allocating scarce resources of the firm to improve its competitive advantage. Constant scanning of the external environment for changes is a major requirement for survival in a dynamic competitive environment.

TF. Intermittent scanning of the external environment is required when managing organization strategy.

False Many organizations find they have three different kinds of projects in their portfolio: compliance and emergency (must do), operational, and strategic projects.

TF. Many organizations have three different kinds of projects in their portfolio: compliance, operational, and sacred cows.

False Mission statements change infrequently. However, when the nature of the business changes or shifts, revised mission and strategy may be required.

TF. Mission statements typically change frequently, responding to changes in the external environment.

False Weighted scoring models will generally include qualitative and/or quantitative criteria.

TF. Multiweighted scoring models include only quantitative criteria, not qualitative.

False *** Objectives should be specific in targeting an objective. They should establish a measurable indicator(s) of progress. Make the objective assignable to one person for completion and state what can realistically be done with available resources. It should also be stated when the objective can be achieved.

TF. Objectives should be specific, marketable, assignable, realistic, and time related.

True

TF. One benefit of project portfolio management is that it can justify killing a project that doesn't support organization strategy.

True Top management needs to develop a system for identifying and selecting projects that reduces the impact of internal politics and fosters the selection of the best projects for achieving the mission and strategy of the firm.

TF. One way to offset the influence of politics on project management within an organization is to have a well-defined project selection model.

True That is, a threat can be perceived as an opportunity, or vice versa. Examples of perceived external threats could be a slowing of the economy, a maturing life cycle, exchange rates, or government regulation.

TF. Opportunities and threats can be viewed as flip sides of each other; that is, a threat can be viewed as an opportunity, and vice versa.

True Objectives pinpoint the direction managers believe the organization should move toward. Objectives answer in detail where a firm is headed and when it is going to get there.

TF. Organizational objectives set targets for all levels of the organization not just for top management

True

TF. Project management historically has been preoccupied solely with the planning and execution of projects while strategy was under the purview of senior management.

False Many would argue that politics and project management should not mix. A more proactive response is that projects and politics invariably mix and that effective project managers recognize that any significant project has political ramifications.

TF. Project managers should not engage in organizational politics.

True

TF. Strategy formulation ends with cascading objectives or projects assigned to lower divisions, departments, or individuals.

True Every project should have a clear link to the organization's strategy.

TF. Strategy is implemented through projects.

True

TF. Studies have shown that companies using predominantly financial criteria to prioritize projects yield unbalanced portfolios and projects that aren't strategically aligned.

False The net present value (NPV) model uses management's minimum desired rate of return (discount rate, for example, 20 percent) to compute the present value of all net cash inflows.

TF. The NPV financial model measures the time it will take to recover the project investment.

True The keys are to attempt to forecast fundamental industry changes and stay in a proactive mode rather than a reactive one. This assessment of the external and internal environments is known as the SWOT analysis (strengths, weaknesses, opportunities, and threats).

TF. The assessment of the external and internal environments is called the SWOT analysis.

False The first step is: Review and define the organizational mission

TF. The first step in the Strategic Management Process is to set long-range goals and objectives.

False The implementation gap refers to the lack of understanding and consensus of organization strategy among top and middle-level managers.

TF. The information gap refers to the lack of understanding and consensus of organization strategy among top and middle-level managers.

A. Deciding how they wish to balance the available organizational resources among the different types of projects. Deciding how they wish to balance the available organizational resources among the different types of projects is the responsibility of senior management along with providing guidance in establishing selection criteria that strongly align with the current organization strategies.

The following are responsibilities of the governance team when managing a portfolio system EXCEPT A. Deciding how they wish to balance the available organizational resources among the different types of projects. B. Publishing the priority of every project and ensuring the process is open and free of power politics. C. Evaluating the progress of the projects in the portfolio. D. Constant scanning of the external environment to determine if organizational selection criteria need to be changed. E. Communicating which projects are approved.

B. Lack of funding A project portfolio system can go a long way to reduce the impact the implementation gap, organization politics, resource conflicts and multitasking.

Which of the following is NOT a problem associated with the absence of a project portfolio system? A. Organizational politics B. Lack of funding C. Resource conflicts D. Multitasking E. Implementation gap

C. Flexible

Which of the following is NOT one of the characteristics of effective objectives? A. Realistic B. Assignable C. Flexible D. Specific E. Measurable

E. Quality management First, completing tasks requires allocation of resources. Resources typically represent funds, people, management talents, technological skills, and equipment. Frequently, implementation of projects is treated as an "addendum" rather than an integral part of the strategic management process. However, multiple objectives place conflicting demands on organizational resources. Second, implementation requires a formal and informal organization that complements and supports strategy and projects. Authority, responsibility, and performance all depend on organization structure and culture. Third, planning and control systems must be in place to be certain project activities necessary to ensure strategies are effectively performed. Fourth, motivating project contributors will be a major factor for achieving project success. Finally, areas receiving more attention in recent years are portfolio management and prioritizing projects.

Which of the following is NOT one of the requirements for successful implementation of strategies through projects? A. Allocation of resources B. Prioritizing of projects C. Motivation of project contributors D. Adequate planning and control systems E. Quality management

B. Profitability Traditional components found in mission statements are major products and services, target customers and markets, and geographical domain. In addition, statements frequently include organizational philosophy, key technologies, public image, and contribution to society.

Which of the following is NOT one of the traditional components found in mission statements? A. Major products and services B. Profitability C. Target customers and markets D. Geographic domain E. Contribution to society

C. Only top management must understand strategy Strategy was considered to be under the purview of senior management, but this is old school thinking. Projects and project management play a key role in supporting strategic goals. It is vital for project managers to think and act strategically.

Which of the following is NOT true about an organization's strategy? A. Strategy determines how an organization will compete B. Strategy is implemented through projects C. Only top management must understand strategy D. Project selection should be clearly aligned with strategy E. Project management plays a key role in supporting strategy

A. Project managers should not engage in organizational politics Many would argue that project management and politics should not mix. A more proactive response would be that projects and politics invariably mix. Effective project managers recognize that any significant project has political ramifications.

Which of the following is NOT true about organizational politics? A. Project managers should not engage in organizational politics B. Politics can have a significant influence on which projects receive funding C. Politics exist in every organization D. Politics can influence project selection E. Politics can play a role in the aspirations behind projects

A. It should be done once every few years just before developing the operating plan

Which of the following is NOT true for strategic management? A. It should be done once every few years just before developing the operating plan B. It supports consistency of action at every level of the organization C. It develops an integrated and coordinated long-term plan of action D. It positions the firm to meet the needs of its customers E. It involves responding to changes in the external market and allocating scarce resources to improve a competitive position

B. It does not require a constant effort

Which of the following is NOT true when managing a portfolio system? A. The qualities of a particular project are assessed within the context of existing projects B. It does not require a constant effort C. Within a small organization it can be managed by a small group of key employees D. It requires input from senior management E. It involves monitoring and adjusting criteria to reflect the strategic focus of the organization

C. Mission, strategies, objectives, projects Once the mission statement has been written, strategies are formulated. After this, objectives are developed to achieve the strategy and finally strategies are implemented through projects.

Which of the following is the correct order for the strategic management process? A. Strategies, mission, objectives, projects B. Objectives, projects, mission, strategies C. Mission, strategies, objectives, projects D. Objectives, mission, strategies, projects E. Projects, mission, strategies, objectives

E. All of these are true

Which of the following is true of multiweighted scoring models? A. Will include quantitative criteria B. Will include qualitative criteria C. Each criterion is assigned a weight D. Projects with higher scores are considered more desirable E. All of these are true

C. Implementation gap

Which of the following problems refers to lack of understanding and consensus of organization strategy among top and middle-level managers? This also can result when top management formulates strategy and leaves implementation to functional managers. A. Multitasking B. Organization politics C. Implementation gap D. Resource conflicts E. Employee turnover

D. What do we want to become? The mission identifies "what we want to become," or the raison d'être. Mission statements identify the scope of the organization in terms of its product or service. They communicate and identify the purpose of the organization to stakeholders.

Which of the following questions does the organization's mission statement answer? A. What are our long-term strategies? B. What are our long-term goals and objectives? C. How do we operate in the existing environment? D. What do we want to become? E. All of these are answered by the mission statement

A. Sacred cow

Which of the following terms is often used to denote a project that a powerful, high-ranking official is advocating? A. Sacred cow B. Pet project C. Political necessity D. Special undertaking E. Strategic ploy

C. Increasing product demand Typical opportunities are increasing demand, emerging markets, and demographics. Managers or individual firms have limited opportunities to influence such external environmental factors; however, in recent years notable exceptions have been new technologies such as Apple using the iPod to create a market to sell music.

Which of the following would be classified as an organizational opportunity? A. Low debt B. Excellent employees C. Increasing product demand D. Talented management E. Government regulation

A. Slowing of the economy Examples of perceived external threats could be a slowing of the economy, a maturing life cycle, exchange rates, or government regulation.

Which of the following would be classified as an organizational threat? A. Slowing of the economy B. Excellent employees C. Poor product quality D. Declining facilities E. High labor costs

B. So they can make appropriate decisions and adjustments and be effective project advocates

Why do project managers need to understand their organization's mission and strategy? A. To reduce project duration and increase the number of projects implemented B. So they can make appropriate decisions and adjustments and be effective project advocates C. It is only important for senior management to understand the organization's mission and strategy D. To get their job done and increase opportunities for promotion E. So that they can make sure the customer is satisfied