Chapter 2 PMP testbank
27. In the Snapshot from Practice, Intel's CEO has concentrated Intel's strategy toward? A. Creating chips to support the digital device market B. Eliminating AMD as a competitor C. Strengthening Intel's position in the PC market D. Expanding Intel's international market E. Expand efforts in the mainframe computer market
A. Creating chips to support the digital device market
21. Project selection criteria are typically classified as: A. Financial and non-financial B. Short-term and long-term C. Strategic and tactical D. Required and optional E. Cost and schedule
A. Financial and non-financial Although there are many criteria for selecting projects, selection criteria are typically identified as financial and nonfinancial.
3. A critical factor to ensure the success of integrating the strategic plan with projects lies in a process that A. Is open and published for all participants to review B. Starts with top management's directives C. With projects first and integrates them with the strategic plan D. Both B and C are correct E. A, B, and C are all correct
A. Is open and published for all participants A crucial factor to ensure the success of integrating the plan with projects lies in the creation of a process that is open and transparent for all participants to review.
9. Which of the following is not true for strategic management? A. It should be done once each year 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. All of these are true statements
A. It should be done once each year just before developing the operating plan 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 position. Constant scanning of the external environment for changes is a major requirement for survival in a dynamic competitive environment.
2. Strategy considered to be under purview of senior management is A. Old school thinking B. A new school of management thought C. Necessary in a company structure D. Beneficial to the Project Manager E. Depended on company goals
A. Old school thinking Project management historically has been preoccupied solely with the planning and execution of projects. Strategy was considered to be under the purview of senior management. This is old-school thinking.
15. The assessment of the external and internal environments is called _______ analysis. A. SWOT analysis B. Competitive C. Industry D. Market E. Strategic
A. SWOT analysis This assessment of the external and internal environments is known as the SWOT analysis (strengths, weaknesses, opportunities, and threats).
19. 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
24. Which of the following is not one of the classifications for assessing a project portfolio? A. Sacred cow B. Bread-and-butter C. Pearls D. Oysters E. White elephants
A. Sacred cow
17. Which of the following would not be classified as an organizational opportunity? A. Increasing product demand B. Excellent employees C. Emerging markets D. demographics E. All of these are organizational opportunities
B. Excellent employees increasing demand, emerging markets, and demographics
12. 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 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.
29. A major project proposal form will likely include all of the following except: A. Project Classification B. Schedule objective C. Major deliverables of the project D. How success will be measured E. All of these are likely to be included
B. Schedule objective
Using the Project Portfolio Matrix, software upgrades and manufacturing cost reduction projects are examples of ________ projects that involve evolutionary improvements to existing products.
Bread-and-Butter Bread and butter projects typically involve evolutionary improvements to current products and services. Examples include software upgrades and manufacturing cost reduction efforts.
13. 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 SMART Specific, measurable, attainable, realistic timely
10. Which of the following is the correct order for the strategic management process? A. Strategies, mission, goals, projects B. Goals, projects, mission, strategies C. Mission, goals, strategies, projects D. Goals, mission, strategies, projects E. Projects, mission, strategies, goals
C. Mission, goals, strategies, projects
16. Which of the following would not be classified as an organizational threat? A. Slowing of the economy B. A maturing life cycle C. Poor product quality D. Government regulations E. All of these are organizational threats
C. Poor product quality perceived external threats could be a slowing of the economy, a maturing life cycle, exchange rates, or government regulation.
The most common approach to selecting project has been to use the __________ model.
Checklist The most frequently used method in selecting projects has been the checklist. This approach basically uses a list of questions to review potential projects and to determine their acceptance or rejection.
22. Which of the following financial models are typically included in project selection? A. Payback B. Net present value C. Internal rate of return D. Both A and B are correct E. A, B, and C are all correct
D. Both A and B are correct For most managers financial criteria are the preferred method to evaluate projects. These models are appropriate when there is a high level of confidence associated with estimates of future cash flows; These models are payback and net present value (NPV).
26. Which of the following is the reason(s) why project managers need to understand their organization's mission and strategy? A. To make appropriate decisions and adjustments B. To be effective project advocates C. To be able to get their job done D. Both A and B are correct E. A, B, and C are all correct
D. Both A and B are correct There are two main reasons why project managers need to understand their organization's mission and strategy. The first reason is so they can make appropriate decisions and adjustments. For example, how a project manager would respond to a suggestion to modify the design of a product to enhance performance will vary depending upon whether his company strives to be a product leader through innovation or to achieve operational excellence through low cost solutions. The second reason project managers need to understand their organization's strategy is so that they can be effective project advocates. Project managers have to be able to demonstrate to senior management how their project contributes to their firm's mission.
7. In today's business environment, project managers find it valuable to have a keen understanding of A. Strategic management B. Technical issues C. Project selection process D. Both A and C are correct E. A, B, and C are all correct
D. Both A and C are correct Project managers need to understand their organization's strategy is so that they can be effective project advocates. Project managers have to be able to demonstrate to senior management how their project contributes to their firm's mission. Protection and continued support come from being aligned with corporate objectives. Project managers also need to be able to explain to team members and other stakeholders why certain project objectives and priorities are critical. This is essential for getting buy-in on contentious trade-off decisions. For these reasons project managers will find it valuable to have a keen understanding of strategic management and project selection processes.
30. Which of the following is a common multicriteria selection model? A. Checklist B. Net Present Value C. Weighted criteria model D. Both A and C are correct E. All of these are common multicriteria selection models
D. Both A and C are correct Since no single criterion can reflect strategic significance, portfolio management requires multi-criteria screening models. There are two models, the checklist and multi weighted scoring models.
5. Which of the following is a main reason why project managers need to understand their organization's mission and strategy? A. They can better focus on the immediate customer B. They can make appropriate decisions and adjustments C. So they can be effective project advocates D. Both B and C are correct E. A, B, and C are all correct
D. Both B and C are correct There are two main reasons why project managers need to understand their organization's mission and strategy. The first reason is so they can make appropriate decisions and adjustments. For example, how a project manager would respond to a suggestion to modify the design of a product to enhance performance will vary depending upon whether his company strives to be a product leader through innovation or to achieve operational excellence through low cost solutions. The second reason project managers need to understand their organization's strategy is so that they can be effective project advocates. Project managers have to be able to demonstrate to senior management how their project contributes to their firm's mission.
8. The textbook indicated that ________ is the major dimension of strategic management. A. Responding to changes in the external market B. Allocating scarce resources of the organization C. Beating competition to the market D. Both a and b are correct E. Both a and c are correct
D. Both a and b are correct 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 position.
14. Strategy formulation includes which of the following activities? A. Determining alternatives B. Creating profitability targets C. Evaluating alternatives D. Both a and c are correct E. A, B, and C are all correct
D. Both a and c are correct Strategy formulation includes determining and evaluating alternatives that support the organization's objectives and selecting the best alternative.
25. 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 the above are typically contained
D. Costs to complete each project
20. 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 Resource sharing also leads to multitasking
23. 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 Many organizations find they have three different kinds of projects in their portfolio: compliance and emergency (must do), operational, and strategic projects.
11. 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? 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.
1. Which of the follow is not one of the commonly heard comments of project managers? A. Where did this project come from? B. Why are we doing this project? C. How can all these projects be first priority? D. Why is this project so strongly linked to the strategic plan? E. Where are we going to get the resources to do this project?
D. Why is this project so strongly linked to the strategic plan? Ample evidence still suggests that many organizations have not developed a process that clearly aligns project selection to the strategic plan.
4. The intended outcome of strategy/projects integration is A. Clear organization focus B. Best use of scare organization resources C. Improved communication across projects and departments D. Both A and C are correct E. A, B, and C are all correct
E. A, B, and C are all correct A generic methodology that ensures integration by creating very strong linkages of project selection and priority to the strategic plan is then discussed. The intended outcomes are clear organization focus, best use of scarce organization resources (people, equipment, capital), and improved communication across projects and departments.
28. Which of the following is not true of multi-weighted 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 the above are true
E. All of the above are true A weighted scoring model typically uses several weighted selection criteria to evaluate project proposals. Weighted scoring models will generally include qualitative and/or quantitative criteria. Each selection criterion is assigned a weight. Scores are assigned to each criterion for the project, based on its importance to the project being evaluated. The weights and scores are multiplied to get a total weighted score for the project. Using these multiple screening criteria, projects can then be compared using the weighted score. Projects with higher weighted scores are considered better.
18. 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. All of these are requirements
E. All of these are requirements 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, an area receiving more attention in recent years is prioritizing projects.
6. Project managers who do not understand the role that their project plays in accomplishing the organization's strategy tend to make all the following mistakes except: A. Focusing on low priority problems B. Overemphasizing technology as an end in and of itself C. Focusing on the immediate customer D. Trying to solve every customer issue E. All the above are likely mistakes
E. All the above are likely mistakes
________ answers the question of how strategies will be realized, given available resources.
Implementation Implementation answers the question of how strategies will be realized, given available resources. The conceptual framework for strategy implementation lacks the structure and discipline found in strategy formulation.
Apple Computers has been successful in developing a turnaround strategy that has developed new markets and increased market share. This began with strict adherence to the ________.
Mission Statement Since Steve Jobs returned to Apple Computers as CEO in 1997, he has been strikingly successful in developing a turnaround strategy that has developed new markets and increased market share. It all begins with strict adherence to their mission statement.
________ change infrequently and may require revision only when the nature of the business changes or shifts.
Mission statements Mission statements change infrequently; however, when the nature of the business changes or shifts, a revised mission statement may be required.
________ translate the organization's mission statement into specific, concrete, and measurable terms.
Objectives Objectives translate the organization mission into specific, concrete, measurable terms. Organizational objectives set targets for all levels of the organization.
A ___________ will typically include a list of potential projects, several criteria, weights for those criteria, and criteria scores for those projects.
Project Screening Matrix
A weighted scoring model such as _________ typically uses several weighted selection criteria to evaluate project proposals
Project Screening Matrix A weighted scoring model typically uses several weighted selection criteria to evaluate project proposals. Weighted scoring models will generally include qualitative and/or quantitative criteria. Each selection criterion is assigned a weight. Scores are assigned to each criterion for the project, based on its importance to the project being evaluated. The weights and scores are multiplied to get a total weighted score for the project. Using these multiple screening criteria, projects can then be compared using the weighted score. Projects with higher weighted scores are considered better.
In some cases organizations will use a __________ to solicit ideas for projects when the knowledge requirements for the project are not available in the organization.
RFP (Request for Proposal) Organizations will solicit ideas for projects when the knowledge requirements for the project are not available in the organization. Typically, the organization will issue an RFP (Request for Proposal) to contractors/vendors with adequate experience to implement the project.
The assessment of the internal and external environments is known as a ________. ________________________________________
SWOT analysis 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).
Project ________ are typically high-ranking managers who endorse and lend political support for the completion of a specific project.
Sponsors Project sponsors are typically high-ranking managers who endorse and lend political support for the completion of a specific project. They are instrumental in winning approval of the project and in protecting the project during the critical development stage.
In a SWOT analysis, good product quality, low debt, and an established dealer network are examples of positive ________.
Strengths Examples of internal strengths could be core competencies, such as technology, product quality, management talent, low debt, and dealer networks.
In classifying the kinds of projects an organization has in its portfolio, ________ projects are typically those needed to meet regulatory conditions required to operate in a region.
compliance (must do) Compliance projects are typically those needed to meet regulatory conditions required to operate in a region; hence, they are called "must do" projects.
Capacity overload which inevitably leads to confusion and inefficient use of scarce resources is an __________.
implementation gap Capacity overload inevitably leads to confusion and inefficient use of scarce organizational resources. The presence of an implementation gap, of power politics, and of multitasking adds to the problem of which projects are allocated resources first.
The __________ identifies what the organization wants to become and the scope of the firm in terms of its product or service.
mission statement 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.
The ________ financial model measures the current value of all cash inflows and outflows using management's minimum desired rate of return.
net present value (NPV) 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.
In classifying the kinds of projects an organization has in its portfolio, ________ projects are typically those needed to support current operations.
operational Operational projects are those that are needed to support current operations. These projects are designed to improve efficiency of delivery systems, reduce product costs, and improve performance.
The _______ financial model measures the time it will take to recover the project investment.
payback The payback model measures the time it will take to recover the project investment. Shorter paybacks are more desirable. Payback is the simplest and most widely used model.
Xerox's ALTO computer and the Ford Mustang are examples of the significance that ________ can play in project management.
politics Politics can play a role not only in project selection but also in the aspirations behind projects. Individuals can enhance their power within an organization by managing extraordinary and critical projects. Power and status naturally accrue to successful innovators and risk takers rather than to steady producers. Many ambitious managers pursue high-profile projects as a means for moving quickly up the corporate ladder.
The term ________ is often used to denote a project that a powerful, high-ranking official is advocating.
sacred cow Project selection may be based not so much on facts and sound reasoning, but rather on the persuasiveness and power of people advocating projects. The term "sacred cow" is often used to denote a project that a powerful, high-ranking official is advocating.
In classifying the kinds of projects an organization has in its portfolio, ________ projects are typically those that directly support the organization's long run mission.
strategic Strategic projects are those that directly support the organization's long-run mission. They frequently are directed toward increasing revenue or market share.
Successful ________ requires strong links among mission statements, goals, objectives, and strategies.
strategic management Strategic management requires strong links among mission, goals, objectives, strategy, and implementation.
In a SWOT analysis, strong competition, reduced product demand, and a maturing product life cycle are examples of ________.
threats Examples of perceived external threats could be a slowing of the economy, a maturing life cycle, exchange rates, or government regulation.