Project Management Chapter 2 Questions

Identify and briefly discuss the three classes of projects usually found in an organization's project portfolio.

(1) Compliance (must do); (2) Operational; (3) Strategic

Identify and briefly describe the five characteristics of effective objectives

(1) Specific; (2) Measurable; (3) Assignable; (4) Realistic; (5) Time related

The advantages of successful project portfolio management systems are becoming well recognized. Briefly describe three.

The following are all examples of acceptable answers: (1) Builds discipline into project selection process; (2) Links project selection to strategic metrics; (3) Prioritizes project proposals across a common set of criteria, rather than politics or emotion; (4) Allocates resources to projects that align with strategic direction; (5) Balances risk across all projects; (5) Justifies killing projects that do not support organization strategy; (6) Improves communication and supports agreement on project goals.

________ the portfolio system involves monitoring and adjusting selection criteria to reflect the strategic focus of the organization.

Managing

When considering criteria used to select projects, capturing a larger market share or reducing the dependency on unreliable suppliers would both be examples of ______ criteria.

Nonfinancial

The financial model that measures the time it will take to recover the project investment is the ______ model

Payback

Strategy is implemented through ______.

Projects

The assessment of the internal and external environments is known as a(n) _________

SWOT analysis

A project that a powerful, high-ranking official is advocating is often termed a(n) _____.

Sacred cow

In a SWOT analysis, good product quality, low debt, and an established supplier network are examples of internal _______.

Strengths

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

TRUE

The process of assessing "what we are" and deciding and implementing "what we intend to be and how we are going to get there" is _____________

strategic management

"Politics and project management should not mix." Agree or disagree and support your position.

Projects and politics invariably mix and effective project managers recognize that any significant project has political ramifications. A good project selection process will minimize the impact of internal politics.

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

C. Flexible

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

C. Implementation gap

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

C. Increasing product demand

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

C. Mission, strategies, objectives, projects

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

C. Only top management must understand strategy

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.

C. Project sponsor.

The financial model that measures the current value of all cash inflows and outflows using management's minimum desired rate of return is known as the _________ model.

Net present value (NPV)

________ translate the organization's strategy into specific, concrete, and measurable terms.

Objectives

In a SWOT analysis, strong competition, reduced product demand, and a maturing product life cycle are examples of external ______.

Threats

The typical Strategic Management Process includes four activities. Identify and briefly describe each of those four activities.

(1) Review and define the organizational mission; (2) Analyze and formulate strategies that align with mission; (3) Set objectives to achieve the strategy; (4) Implement strategies through projects.

Why is it important that organizations develop a process to align selected projects with strategic goals?

A result of not having a process that aligns selected projects with strategic goals is poor utilization of resources. Companies that have developed this process have more cooperation across the organization, perform better on projects and have fewer projects.

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.

A. Deciding how they wish to balance the available organizational resources among the different types of projects.

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.

A. Financial and nonfinancial.

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

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

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. Project managers should not engage in organizational politics

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

A. SWOT

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

A. Sacred cow

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

A. Slowing of the economy

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.

B. Better utilization of the organization's resources

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

B. It does not require a constant effort

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

B. Lack of funding

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

B. Profitability

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

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

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

B. The project's fit to the organization strategy

In classifying the kinds of projects an organization has in its portfolio, projects that are typically those needed to meet regulatory conditions required to operate in a region are ________ projects.

Compliance (must do)

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

D. Costs to complete each project

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.

D. Multitasking.

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.

D. Not enough projects within the portfolio to make a profit.

5. 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

D. Political necessity

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

D. What do we want to become?

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

E. All of these are true

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.

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

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.

E. Be able to focus on problems or solutions, even if the project is a low priority strategically.

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. Calculating the time it will take to recover the project investment.

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

E. None of these

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

E. Quality management

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

FALSE

Intermittent scanning of the external environment is required when managing organization strategy. T/F

FALSE

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

FALSE

Mission statements typically change frequently, responding to changes in the external environment. T/F

FALSE

Multiweighted scoring models include only quantitative criteria, not qualitative. T/F

FALSE

Objectives should be specific, marketable, assignable, realistic, and time-related. T/F

FALSE

Project managers should not engage in organizational politics. T/F

FALSE

The NPV financial model measures the time it will take to recover the project investment. T/F

FALSE

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

FALSE

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

FALSE

How strategies will be realized, given available resources, is answered through _______.

Implementation

The lack of understanding and consensus of organization strategy among top and middle-level managers is known as the ________

Implementation Gap

What is a SWOT analysis and how does it relate to the Strategic Management Process?

It is an assessment of the internal and external environments and is the link between reviewing the current mission statement and the development of goals and objectives that support organization strategy.

What the organization wants to become and the scope of the firm in terms of its product or service would be identified in the organization's ______.

Mission statement

__________ change infrequently and may require revision only when the nature of the business changes or shifts.

Mission statement

Starting and stopping work on one task to go and work on another project, and then returning to work on the original task is known as ______.

Multitasking

Why do project managers need to understand strategy?

Project managers need to understand strategy so they can make appropriate decisions and adjustments and so they can be effective project advocates.

A list of potential projects, several criteria, weights for those criteria, and criteria scores for those projects are all typically included on a(n) ________ matrix.

Project screening

A weighted scoring model typically uses several weighted selection criteria to evaluate project proposals. An example of this would be a(n) ________.

Project screening matrix

In some cases organizations will use a(n) _______ to solicit ideas for projects when the knowledge requirements for the project are not available in the organization.

Request for Proposal (RFP)

Management of a portfolio system requires two major inputs from senior management. What are they?

Senior management must provide guidance in establishing selection criteria that strongly align with the current organization strategies and they must decide how they wish to balance the available organizational resources among different types of projects.

High-ranking managers who endorse and lend political support for the completion of a specific project are known as project _______.

Sponsors

In classifying the kinds of projects an organization has in its portfolio, projects that directly support the organization's long-term mission are _____ projects.

Strategic

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. T/F

TRUE

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

TRUE

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

TRUE

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

TRUE

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

TRUE

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. T/F

TRUE

Organizational objectives set targets for all levels of the organization not just for top management. T/F

TRUE

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

TRUE

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

TRUE

Strategy is implemented through projects. T/F

TRUE

The assessment of the external and internal environments is called the SWOT analysis. T/F

TRUE

What are the two major shortcomings of using the Checklist approach to select projects?

The Checklist approach fails to determine the relative importance of the project to the firm and fails to compare projects to other potential projects

What is the implementation gap and how does it impact project management? How can it be prevented?

The implementation gap refers to the lack of understanding and consensus of organization strategy among top and middle-level managers. If managers lack a common understanding of the priority for a given set of projects, then the achievement of long-range goals will be impossible. A project portfolio system can go a long way to reduce or even eliminate this problem.

Why is profitability alone not an adequate measure of a project's value to an organization?

Today management is interested in identifying the potential mix of projects that will yield the best use of human and capital resources to maximize return on investment in the long run. Factors such as researching new technology, public image, ethical position, protection of the environment, core competencies, and strategic fit might be important criteria for selecting projects.

In classifying the kinds of projects an organization has in its portfolio, projects that are typically needed to support current operations are _______ projects.

operational