Chapter 2 Organization Strategy and Project Selection

What are the criteria for selecting projects?

Financial Non-financial

Project Screening Matrix

A matrix used to assess and compare relative value of projects being considered for implementation

Organizational Politics

Actions by individuals or groups of individuals to acquire, develop, and use power and other resources to obtain preferred outcomes when there is uncertainty or disagreement over choices

4 Activities of the Strategic Management Process

Review and define the organizational mission Analyze and formulate strategies Set objectives to achieve strategies Implement strategies through projects

Priority System

The process used to select projects. The system uses selected criteria for evaluating and selecting projects that are strongly linked to higher-level strategies and objectives

Multi-Weighted Scoring Model

A weighted scoring model typically uses several weighted selection criteria to evaluate project proposals.

Which multi-criteria selection model fails to answer the relative importance or value of a potential project to the organization and fails to allow comparison to other projects?

Checklist Model

Project Portfolio

Group of projects that have been selected for implementation balanced by project type, risk, and ranking by selecting criteria.

Priority Team

The group (sometimes the project office) responsible for selecting, overseeing, and updating project priority selection criteria.

Reasons why a project would be selected if it did NOT meet the financial criteria

To capture a larger market share To make it difficult for competitors to enter the market To develop an enabler product To develop core technology that will be used on next generation products To reduce dependency on non-reliable suppliers To prevent government intervention or regulation

Strategic Management Process

Process of assessing "what we are" and deciding and implementing "what we intend to be and how we intend to get there."

Payback

model that measures the time it will take to recover the project investments

Net Present Value

model uses management's minimum desired rate-of-return to compute the present value of all net cash flows

Checklist Model

Most frequently used multi-criteria selection model; utilizes a list of questions to review potential projects and determine their acceptance or rejection

What are the 2 multi-criteria selection models?

Checklist Model Multi-weighted Scoring Model

Weighted scoring model where the score will generally include qualitative and/or quantitative criteria. Each selection criteria is assigned a weight. Scores are assigned to each criterion for the project based upon its importance to the project being evaluated. The weights and scores are multiplied to get a total weight score for the project. Projects can then be compared using the weighted score with higher weighted scores considered more favorable projects.

Multi-Weighted Scoring Model

Sacred Cow

Often a used to denote a project that a high ranking official is advocating

Implementation Gap

refers to the lack of understanding and consensus or organization strategy among top and middle-level managers