Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

Semester: 3 - Assignment Set: 1

Question 1: Describe the three strategy levels in detail.

Answer:

Strategies can be formulated on three different levels. Johnson and Scholes define strategy as
“Strategy is the direction and scope of an organization over the long term: which achieves
advantage for the organization through its configuration of resources within a challenging
environment, to meet the needs of markets and to fulfill stakeholder expectations”.

While strategy may be about competing and surviving as a firm, one can argue that products,
not corporations compete, and products are developed by business units. The role of the
corporation then is to manage its business units and products so that each is competitive and
so that each contributes to corporate purposes.

In other words, strategy is about:

 Market; scope are which markets should the business compete in and what kind of
activities are involved in such markets.
 Advantage is how the business can perform better in such markets.
 Resources are the skills, assets, finance, relationships, technical competence, facilities
required to enable the business to compete.
 Environment is the external, environmental factors that affect the business‟ ability to
compete.
 Stakeholders‟ expectations are the values and expectations of those who have power in
and around the business.

Strategy at Different Levels of a Business:

Strategies exist at several levels in any organization - ranging from the overall business (or
group of businesses) through to individuals working in it

Strategy Levels:

Strategy exists at three hierarchical levels in an organization – ranging from the overall
business (or group of businesses) through to individuals working in it.

Corporate Strategy:

It is concerned with the overall purpose and scope of the business to meet stakeholder
expectations. This is a crucial level since it is heavily influenced by investors in the business
and acts to guide strategic decision-making throughout the business. Corporate strategy is
often stated explicitly in a "mission statement". It consists of the kinds of initiatives the
company uses to establish business positions in different industries, the approaches corporate
executives pursue to boost the combined performance of the set of businesses the company
has diversified into, and the means of capturing cross-business synergies and turning them into
competitive advantage. Senior corporate executives normally have lead responsibility for
devising corporate strategy and for choosing among whatever recommended actions bubble up
from the organization below.

Business Unit Strategy:

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 Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

Semester: 3 - Assignment Set: 1

This strategy is concerned more with how a business competes successfully in a particular
market. It concerns strategic decisions about choice of products, meeting needs of customers,
gaining advantage over competitors, exploiting or creating new opportunities etc. Business
strategy concerns the actions and the approaches crafted to produce successful performance in
one specific line of business. The key focus here is crafting responses to changing market
circumstances and initiating actions to strengthen market position, build competitive
advantage, and develop strong competitive capabilities. Orchestrating the development of
business-level strategy is the responsibility of the manager in charge of the business.

Operational Strategy:

It is concerned with how each part of the business is organised to deliver the corporate and
business-unit level strategic direction. Operational strategy therefore focuses on issues of
resources, processes, people etc. Operating strategies concerns the relatively narrow strategic
initiatives and approaches for managing key operating units(plants, distribution centres, geographic
units) and for specific operating activities with strategic significance (advertising campaigns, the
management of specific brands, supply chain-related activities, and Website sales and
operations).Operating strategies add further detail and completeness to functional-area
strategies and to the overall business strategy. Lead responsibility for operating strategies is
usually delegated to frontline managers, subject to review and approval by higher-ranking
managers.

Question 2:
a) Describe the various roles undertaken by a Project Manager.
b) List and explain in brief the qualities of a Project Manager.

Answer:

a) Various roles undertaken by a Project Manager:

The role of the Project Manager is to plan, execute and finalize projects according to strict
deadlines and within budget. This includes acquiring and coordinating the efforts of team
members and third-party contractors or consultants in order to deliver projects according to
plan. The role & responsibilities of a Project Manager is little complex and needs to be
explained elaborately in clear terms for each project. Below are few important roles &
responsibilities of a Project Manager:

 The Project Manager is the person responsible for managing the project.

 The Project Manager is the person responsible for accomplishing the project
objectives within the constraints of the project. He is responsible for the outcome (success
or failure) of the project.

 The Project Manager is involved with the planning, controlling and monitoring,
and also managing and directing the assigned project resources to best meet project
objectives.

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 Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

Semester: 3 - Assignment Set: 1

 The Project Manager Controls and monitors “triple constraints”—project scope,

time and cost (quality also)—in managing competing project requirements.

 The Project Manager examines the organizational culture and determines

whether project management is recognized as a valid role with accountability and
authority for managing the project.

 The Project Manager collects metrics data (such as baseline, actual values for
costs, schedule, work in progress, and work completed) & reports on project progress and
other project specific information to stakeholders.

 The Project Manager is responsible for identifying, monitoring, and responding to

risk.

 The Project Manager is responsible to the project stakeholders for delivering a

project’s objectives within scope, schedule, cost, and quality.

 The reporting structure of a Project Manager will change depending on

organizational structure. He may reports to a Functional Manager or to a Program
Manager.

In a bit exaggerating terms, Project Manager is the ‘God’ of his project and he is the one who
decides the success of the project.

b) Qualities of a Project Manager:

You do not lead by hitting people over the head – that’s assault, not leadership. How apt these
words by Dwight D Eisenhower are, leadership is not about bullying people, it is about getting
people to respect you with your leadership skills and qualities. People should want to be lead by
the project manager. So what are the leadership qualities that a project manager should have?
Should he be skilled or compassionate? Or maybe he needs to be a good communicator or a
visionary? There is not right answer and there is no wrong answer. Even as I make this
statement, here is a list of some leadership qualities for a project manager.

Vision:

Every project manager should have a vision, a vision of what he wants the project to be like, a
vision of how to get things done and a vision of the near future of the project. And he needs to
be able to convey this vision to his team members. Only when there is vision is there going to
be real involvement on the part of the project manager and thus involvement on part of the
team members. This is when the team members and project manager start feeling like a part
of the organization and not just the project.

Communication skill:

Most would say communication is the most important skill of a project manager and some
would beg to differ. But communication is an integral part of the leadership qualities. Without
communication the project manager cannot lead. Communication not only allows for great
leadership but also for openness and relativity. Persuasion and negotiation are all a part of
communication and the project manager’s qualities.

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Honesty:

Call it honesty, integrity or loyalty, the project manager needs to have it all. The actions of the
project manager set an example for the rest of the team members. The project manager is
ultimately responsible for setting standards, ethically and otherwise for the rest of the team.
The project manager needs to practice before preaching and to lead by example.

Passion:

A project manager without passion is one that is simple put, lacking dedication. The project
manager has to be passionate about the project; he should have enthusiasm and the right
attitude. Only then will people follow him and respect his decisions, because they need to feel
he is doing it for the project. There needs to be commitment and optimism involved.

Compassion:

Do not mistake empathy or compassion for sympathy. These two words are independent of
each other. Empathy means to understand. A good project manager needs to understand or
empathize with the fact that there is a life outside the work place and that people are not
machines without emotions.

Skill and knowledge:

There needs to be some skill and knowledge that the project manager needs to have. To put it
simply, the project manager should know what he is doing and should be able to guide the rest
of the team.

Delegation:

The project manager should be able to handle delegation with ease. He should be able to
recognize skills and expertise of his team members and assign or delegate tasks according to
those. Also this shows that the project manager trusts the team in doing tasks. Trust inspires
confidence.

Composed:

We do not live in a perfect world. There are times when things do not go as expected in such a
case the project needs to maintain his cool and be composed irrespective of the amount
pressure he is under. This shows good leadership and strength in character.

Team building:

The project manager should also be a team builder. He should be able to hold and pull the
team together to work under different conditions. The team starts as a group of strangers and
needs to be made into a core group of people.

Problem solver:

An efficient project manager should be capable of solving any and all problems, either with the
team or the project itself.

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 Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

Semester: 3 - Assignment Set: 1

Question 3:
a) Describe the major types of stakeholders in a project.
b) Describe the major type of Organizational structure in Detail.

Answer:

a) Major types of stakeholders in a project:

According to PMI’s guide to PMBoK, project stakeholders are “individuals and organizations
actively involved in the project, or whose interests may be positively or negatively affected as a
result of project execution or project completion”.

According to Stanford Research Institute5 stakeholders are “those groups without whose
support the organization would cease to exist”. The major stakeholders of a project are:

 Project Manager
 Customer
 Performing Organization
 Project Team Members
 Sponsor
 Society

Below figure depicts a diagrammatic representation of the major stakeholders of a project.

Project Manager:

Project manager is the interface between the customer and other internal stakeholders. The
project manager holds the responsibility for the successful implementation of the project and is
an important stakeholder.

Customer:

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 Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

Semester: 3 - Assignment Set: 1

Customers are the internal or external group of individuals who directly affect the project. The
aim of the project is to create a product, service or facility based on customer requirements
and to deliver it to the customer. Hence, the project team must consider all requirements of
the customer while creating the deliverable. The customer can be any one of the following:

 Internal customer:
They are individuals within the parent organisation. For example, the IT
department is assigned to provide a software package for the accounts
department. The accounts department is the internal customer.

 Intermediate customer:
They are external to the company but not the final user of the product e.g.
distributors and wholesalers.

 External customer:
They are individuals or organisations that pay for and use the final product.

Performing Organization:

The performing organization is the enterprise whose employees are most directly involved in
performing the work of the project. Therefore, the project contributes towards achieving the
corporate goals of the performing organization. In addition, there are several other
stakeholders like project owner, fund providers, suppliers or contractors, government agencies
and media outlets and the society. Stakeholder roles and responsibilities may overlap. For
example, when an engineering firm finances a plant it is in the designing or construction field,
the role of the engineering firm changes from performing organization to sponsor for the
projects undertaken by the designing or construction company. The naming or grouping of
stakeholders is primarily an aid to identify individuals or organizations who view themselves as
stakeholders.

Project Team Members:

Team members working in their individual areas of expertise play a crucial role in the success
of the project. They work directly with or under the project manager depending on the
organization structure adopted for the project. The project manager, therefore, uses team
building skills to ensure that the team members work as a team.

Sponsor:

The sponsor is an individual or a group within or external to the parent organization who
arranges the financial resources in cash or in kind for the project. The sponsor may be a senior
executive of an organization or a junior manager with formal authority who is responsible for
the project thus, acting as a link between the project and the performing organization.

b) Major type of Organizational structure in Detail:

Organizational structure has a significant impact on the functioning of a project manager. To

enable successful completion of a project, it is important that the resources required for project
implementation flow freely from the organization to the project.

There are three types of organizational structures:

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Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

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1) Functional organization:

It is a hierarchical structure. It defines a clear Superior-Subordinate relationship, i.e.,

the line of control is clear. Each department carries out work in its area of specialization
and employees in each department work with its respective expertise within the
department's line of control. In a manufacturing organization, the different departments
are production, finance, marketing, quality control, engineering, administration,
personnel ands so on. If a new product is to be developed, the engineering department
handles only the design development phase of the product. If answers to questions
concerning manufacturing, marketing or quality control are found, the query is passed
on to the respective department through formal communication channels.

2) Project-based organizations:

These are designed to provide near total authority to the project manager. The project
manager directs work and sets priorities to employees assigned to the project manager
for the project. Functional departments exist in this organization, but the groups
working in these departments report directly to the project manager in the execution of
various projects.

3) Matrix-based organizations:

It is the combination of the features of functional and project-based organizational

structures. In this type of organizational structure, project managers and functional
managers have equal authority, which implies that the functional staff member reports
to both project manager and their functional manager. This constitutes a dual reporting
system for each functional staff member.

Question 4: List and describe in brief the various qualities of the project management
process.

Answer:

Overview of Project Management Processes:

PMBoK organizes Project management processes into five groups, defined as the Project
Management Process Groups, each group comprising one or more processes. Project
management of a single project essentially comprises a number of interlinked processes. The
underlying concept for the interaction among the processes is the Plan-Do-Check-Act (PDCA)
cycle is referred in the American Society for Quality (ASQ) handbook.

Traditionally, project management includes a number of elements: four to five process groups,
and a control system. Regardless of the methodology or terminology used, the same basic
project management processes will be used.

Major process groups generally include:

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Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

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 Initiation
 Planning or development
 Production or execution
 Monitoring and controlling
 Closing

Initiation:

The initiation processes determine the nature and scope of the project.[21] If this stage is not
performed well, it is unlikely that the project will be successful in meeting the business’ needs.
The key project controls needed here are an understanding of the business environment and
making sure that all necessary controls are incorporated into the project. Any deficiencies
should be reported and a recommendation should be made to fix them.
Planning and design:

After the initiation stage, the project is planned to an appropriate level of detail. The main
purpose is to plan time, cost and resources adequately to estimate the work needed and to
effectively manage risk during project execution. As with the Initiation process group, a failure
to adequately plan greatly reduces the project's chances of successfully accomplishing its goals.

Executing:

Executing consists of the processes used to complete the work defined in the project
management plan to accomplish the project's requirements. Execution process involves
coordinating people and resources, as well as integrating and performing the activities of the
project in accordance with the project management plan. The deliverables are produced as
outputs from the processes performed as defined in the project management plan.

Monitoring and controlling:

Monitoring and controlling consists of those processes performed to observe project execution
so that potential problems can be identified in a timely manner and corrective action can be
taken, when necessary, to control the execution of the project. The key benefit is that project
performance is observed and measured regularly to identify variances from the project
management plan.

Closing:

Closing includes the formal acceptance of the project and the ending thereof. Administrative
activities include the archiving of the files and documenting lessons learned.

Question 5: Write a short note on the following:

a) SWOT Analysis as a Strategic Planning tool.
b) Net Present Value (NPV) as a Project selection criterion.

Answer:

a) SWOT Analysis as a Strategic Planning tool:

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Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

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S.W.O.T. is an abbreviation for Strengths-Weaknesses-Opportunities-Threats.

One of the most fundamental tools for strategic market planning is the use of SWOT
analysis template to evaluate potential business success. This simple tool, developed at
Stanford University in the late 1960's, is an extremely powerful ingredient in the recipe for
business success.
Used by most Fortune 500 companies in strategic planning, the SWOT matrix involves a
frank evaluation of a business' Strengths, Weaknesses, Opportunities and Threats:

STRENGTHS:

Attributes of the organization those are HELPFUL to achieving the objective. These are the
company's core competencies, and include proprietary technology, skills, resources,
market position, patents, and others.

WEAKNESSES:

Attributes of the organization those are HARMFUL to achieving the objective. Weaknesses
are conditions within the company that can lead to poor performance, and can include
obsolete equipment, no clear strategy, heavy debt burden, poor product or market image,
long product development cycle, weak management, and others.

OPPORTUNITIES:

External conditions those are HELPFUL to achieving the objective. Opportunities are outside
conditions or circumstances that the company could turn to its advantage, and could
include a specialty niche skill or technology that suddenly realizes a growth in broad
market interest.

THREATS:

External conditions those are HARMFUL to achieving the objective. Threats are current or
future conditions in the outside environment that may harm the company, and might
include population shifts, changes in purchasing, serious competitive barriers, changes in
governmental or environmental regulations, and others.

SWOT analysis provides an efficient way to evaluate the range of factors that influence your
operation, and can give you valuable guidance in making decisions about what to do next. It
also provides a highly productive way to get your key personnel involved in the management
decision-making process.

The exercise of going through the SWOT analysis matrix can be a great opportunity to do
management team building. If you have a large team, break into 4 teams for each of the
quadrants and each team can prepare and report its findings. Make sure to include not only
your market planners, but also finance, operations, product development and others.

SWOT Analysis is one of the effective analytical tools to evaluate a situation. The situation may
be strategic related or capabilities related. SWOT Analysis is often used along with Strategic
planning and it forms one of the key critical success factors in a Strategic Planning Process.

There are many ways how a SWOT analysis is used. This TQM article aimed to share how SWOT

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Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

Semester: 3 - Assignment Set: 1

analysis can be used as an essential tool to Strategic Planning Process as I practiced in my

workshop conducted over the years.

While detail Analysis is performed, it can become a complex process because it entails several
data analysis involves external factors such as Political, Economic, Societal and Technological in
short called P.E.S.T. Besides, it also examines internal factors such as operational capabilities
as compared to the competitors.

b) Net Present Value (NPV) as a Project selection criterion:

In finance, the net present value (NPV) or net present worth (NPW) of a time series of cash
flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the
individual cash flows. In the case when all future cash flows are incoming (such as coupons
and principal of a bond) and the only outflow of cash is the purchase price, the NPV is
simply the PV of future cash flows minus the purchase price (which is its own PV). NPV is a
central tool in discounted cash flow (DCF) analysis, and is a standard method for using the
time value of money to appraise long-term projects. Used for capital budgeting, and widely
throughout economics, finance, and accounting, it measures the excess or shortfall of cash
flows, in present value terms, once financing charges are met.

The NPV of a sequence of cash flows takes as input the cash flows and a discount rate or
discount curve and outputs a price; the converse process in DCF analysis - taking a
sequence of cash flows and a price as input and inferring as output a discount rate (the
discount rate which would yield the given price as NPV) - is called the yield, and is more
widely used in bond trading.

Each cash inflow/outflow is discounted back to its present value (PV). Then they are
summed. Therefore NPV is the sum of all terms,

Where
t - The time of the cash flow
i - The discount rate (the rate of return that could be earned on an investment in the
financial markets with similar risk.)
Rt - the net cash flow (the amount of cash, inflow minus outflow) at time t. For
educational purposes, R0 is commonly placed to the left of the sum to emphasize its role
as (minus) the investment.

The result of this formula if multiplied with the Annual Net cash in-flows and reduced by
Initial Cash outlay will be the present value but in case where the cash flows are not equal
in amount then the previous formula will be used to determine the present value of each
cash flow separately. Any cash flow within 12 months will not be discounted for NPV
purpose.

Net Present Value (NPV) as Project Selection Criterion:

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Sikkim Manipal University - MBA - PM0010 - Introduction to Project Management

Semester: 3 - Assignment Set: 1

NPV is the present value of the future revenues after deducting future costs. This is a very
popular and valid method for selecting a project from the financial viewpoint. Some factors
that companies use to enhance NPV are:

 Government policy. For example, special tax benefits and exemptions for an
industry or a location.
 Economies of scale: In manufacturing, unit cost is substantially reduced by
adopting high production volume. For example, petroleum refining, steel
production, and mining.
 Product differentiation: This is achieved by innovative product features, high
quality products, customised service and so on.
 Technology superiority: DRL outperformed its competitors in the drug-
manufacturing industry because of their technology based on research and
development.

Question 6: Describe in brief the Human resource management process in a project.

Answer:

Project Human Resource Management:

Project Human Resource Management is a subset of Project Management that includes various
processes that are essential and are required for making the most effective use of the people
involved with the project.

Human Resource Management includes various processes that are vital to make the most
effective use of the people involved with a project. The main process involved with the HR
Management process includes:

 Acquiring the project team.

 Developing the project team.
 Managing the project team.

Acquiring a Project Team:

The members who belong to different groups and functions and are allocated to the activities of
the same project, form a project team. A team can be divided into sub-teams if required.
Generally, the project teams are only used for a defined period of time. However, they are
disbanded when the project is complete. Sometimes, due to the nature of the specific
formation and disbandment, project teams are usually agile in organisations.

Acquiring a project team is the process of acquiring the specific people needed to accomplish all
phases of the given project. Ultimately the team members will bring all the specific
qualifications and capabilities to the project team. However, the project management team has
control over the selection process. Selection of team mates involves certain concerns which
need to be evaluated.

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A number of factors are considered while deciding the team members. These factors include a
series of environmental factors (such as work experience, availability, and cost), derivation of
clear and concise project organisation charts, and formulation of a thorough staffing
management plan. Once the team is properly staffed, the next steps (or outputs) of the
process involve staffing out assignments to the team, determining availability of resources, and
updating the staffing management plan.

Important factors that are considered during the process of acquiring the team are:

 The project manager should efficiently discuss and induct others who are in a position to
supply the required Human Resources in a project.
 Failure to obtain the essential Human Resources for the project will affect project
agenda, budgets, consumer satisfaction and quality. It declines the probability of
success and eventually results in project cancellation.

Developing a Project Team:

Developing a project team is a process of enhancing interaction among the team members and
also the project manager. The process refers to increasing competencies of individuals and
building up team spirit, which finally leads to a quality project.

To achieve project success, there should be good communication among the team members.
Project managers should administer the development of the project team. The project manager
should create the relevant environment for teamwork, provide new goals for the team to
compete and achieve. Project managers should encourage feedback from the team. The project
manager should provide effective review and good support to the team staff.

Open communication between the project manager and team reduces conflicts. The
management should also support the project managers. The project stakeholders should
provide the required support to the development of the project team.

Projects are done in diversified environments. The project team may experience variance in
language, industry and culture while at work. The project team should be dedicated to the
project and the team members should work together, without losing their individuality. The
goals for developing a project team are:

 To develop technical knowledge about the project, this leads to quality output and
meeting delivery schedules with reduced cost.
 To enhance trust among team members, thus reducing conflicts.
 To develop cohesiveness in the project.
 To allow sharing knowledge among team members.

The five stages of team development are:

 Forming:

Forming involves knowing every team member individually. The team members are
inclined to work independently. They find out about each other and know who’s who.
 Storming:

Storming involves the actual Project Management process. This stage promises action.
There is a struggle for project team control, and momentum builds as members have to

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lead the project team. During this phase, the team members figure out the hierarchy of
the team and the informal roles of team members.
 Norming:

Norming is working together, socialising, and providing constructive criticism. The team
develops a strong commitment to the team’s goal and work to achieve it.
 Performing:

Performing means smooth movement of project development by a well-organised

project team. The team members blend into their roles and focus on completing the
project work as a team.
 Adjourning:

Adjourning implies completion of the project so that the team is ready for a new one.

Managing a Project Team:

Managing a project team is the process of delegating responsibilities and tasks, monitoring
team performance, providing feedback, solving issues, and coordinating changes to enhance
overall project performance. Managing the team is one of the most critical aspects of project
management. The project manager should encourage building competencies among the team
members and reward them accordingly.

Key aspects of managing a project team are:

 Assigning work and observing the commitment level in each team member.
 Building co-operative working relationship and ensuring effective communication among
all members of the project team.
 Monitoring team spirit.
 Providing effective performance review and appraisal to inspire the project team.

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