Project Management
Description
THE NEWEST EDITION OF THE #1 PROJECT MANAGEMENT GUIDE FOR STUDENTS AND PROFESSIONALS
In the newly revised 13th Edition of Project Management: A Systems Approach to Planning, Scheduling, and Controlling, project management pioneer, leader, and educator Dr. Harold Kerzner delivers a comprehensive and intuitive approach to project management. Widely known as the bestselling "bible" of project management, this book aligns with the concepts and standards outlined in PMI's latest A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) and contains the detailed coverage of tools and methods used at all stages of a project.
New content added to this 13th Edition includes project health checks, the continued growth of strategic project management, new business models, lean project management, artificial intelligence, and the use of new metrics and KPIs. Supplementary material for academic and corporate instructors, students, and practicing project managers can be found on the book's companion website.
- A thorough introduction to project management concepts, like project success definition, the role of the project manager, working with executives, and project classification
- Comprehensive explorations of the evolution and growth of project management, organizational structures, staffing a project team, and management functions
- Practical discussions of communications management, conflicts, project planning, network scheduling techniques, and pricing and estimation
- In-depth examinations of cost control, metrics and KPIs, and risk, contract, and quality management
Perfect for students and scholars of project management in business and engineering programs, Project Management: A Systems Approach to Planning, Scheduling, and Controlling will also earn a place in the libraries of anyone studying for the PMP® exam, as well as practicing project managers, project consultants, and trainers.
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Harold Kerzner, is Senior Executive Director for Project Management for the International Institute for Learning (IIL). He taught project management at Baldwin-Wallace University for 38 years, and he has published over 60 textbooks on project management. His success and impact on the industry led IIL and the Project Management Institute (PMI) to establish the Kerzner International Project Manager of the Year Award as well as the annual Dr. Harold Kerzner Scholarship fund.
Content
Preface
Chapter 1: Overview
1.0 Introduction
1.1 Understanding Project Management
1.2 Defining Project Success
1.3 Trade-Offs and Competing Constraints
1.4 The Entry-Level Project Manager
1.5 The Talent Triangle
1.6 Technology-Based Projects
1.7 The Project Manager-Line Manager Interface
1.8 Defining the Project Manager's Role
1.9 Defining the Functional Manager's Role
1.10 Defining the Functional Employee's Role
1.11 Defining the Executive's Role
1.12 Working with Executives
1.13 Committee Sponsorship/Governance
1.14 The Project Manager as the Planning Agent
1.15 Project Champions
1.16 Project-Driven Versus Non-Project-Driven Organizations
1.17 Marketing in the Project-Driven Organization
1.18 Classification of Projects
1.19 Location of the Project Manager
1.20 Differing Views of Project Management
1.21 Public-Sector Project Management
1.22 International Project Management
1.23 Concurrent Engineering: A Project Management Approach
1.24 Added Value
1.25 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: Williams Machine Tool Company
Chapter 2: Project Management Growth: Concepts and Definitions
2.0 Introduction
2.1 The Evolution of Project Management: 1945-2021
2.2 Resistance to Change
2.3 Systems, Programs, and Projects: A Definition
2.4 Projects versus Operations
2.5 Product versus Project Management: A Definition
2.6 Maturity and Excellence: A Definition
2.7 Informal Project Management: A Definition
2.8 The Many Faces of Success
2.9 The Many Faces of Failure
2.10 Causes of Project Failure
2.11 Degrees of Success and Failure
2.12 Project Health Checks
2.13 The Stage-Gate Process
2.14 Project Life Cycles
2.15 Gate Review Meetings (Project Closure)
2.16 Engagement Project Management
2.17 Project Management Methodologies: A Definition
2.18 From Enterprise Project Management Methodologies to Frameworks
2.19 Growth of Strategic Project Management
2.20 Business Models
2.21 Methodologies Can Fail
2.22 Lean Project Management
2.23 Organizational Change Management and Corporate Cultures
2.24 Benefits Harvesting and Cultural Change
2.25 Agile and Adaptive Project Management Cultures
2.26 Project Management Intellectual Property
2.27 Systems Thinking
2.28 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: Creating a Methodology
Chapter 3: Organizational Structures
3.0 Introduction
3.1 Organizational Work Flow
3.2 Traditional (Classical) Organization
3.3 Pure Product (Projectized) Organization
3.4 Matrix Organizational Form
3.5 Modification of Matrix Structures
3.6 The Strong, Weak, or Balanced Matrix
3.7 Project Management Offices
3.8 Selecting the Organizational Form
3.9 Strategic Business Unit (SBU) Project Management
3.10 Transitional Management
3.11 Seven Fallacies That Delay Project Management Maturity
3.12 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Chapter 4: Organizing and Staffing the Project Office and Team
4.0 Introduction
4.1 The Staffing Environment
4.2 Selecting the Project Manager: An Executive Decision
4.3 Skill Requirements for Project and Program Managers
4.4 Special Cases in Project Manager Selection
4.5 Today's Project Managers
4.6 Duties and Job Descriptions
4.7 The Organizational Staffing Process
4.8 The Project Office
4.9 The Functional Team
4.10 The Project Organizational Chart
4.11 Selecting the Project Management Implementation Team
4.12 Mistakes Made by Inexperienced Project Managers
4.13 Studying Tips for the PMI®Project Management Certification Exam
Answers
Problems
Chapter 5: Management Functions
5.0 Introduction
5.1 Controlling
5.2 Directing
5.3 Project Authority
5.4 Interpersonal Influences
5.5 Barriers to Project Team Development
5.6 Suggestions for Handling the Newly Formed Team
5.7 Team Building as an Ongoing Process
5.8 Leadership in a Project Environment
5.9 Value-Based Project Leadership
5.10 Transformational Project Management Leadership
5.11 Organizational Impact
5.12 Employee-Manager Problems
5.13 General Management Pitfalls
5.14 Time Management Pitfalls
5.15 Management Policies and Procedures
5.16 Human Behavior Education
5.17 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: The Trophy Project
Case Study: McRoy Aerospace
Case Study: The Poor Worker
Case Study: The Prima Donna
Case Study: The Reluctant Workers
Case Study: Leadership Effectiveness (A)
Case Study: Leadership Effectiveness (B)
Chapter 6: Communications Management
6.0 Introduction
6.1 Modeling the Communications Environment
6.2 The Project Manager as a Communicator
6.3 Project Review Meetings
6.4 Project Management Bottlenecks
6.5 Active Listening
6.6 Communication Traps
6.7 Project Problem Solving
6.8 Using Action Items
6.9 Brainstorming
6.10 Predicting the Outcome of a Decision
6.11 Facilitation
6.12 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: Communication Failures
Case Study: The Team Meeting
Chapter 7: Conflicts
7.0 Introduction
7.1 The Conflict Environment
7.2 Types of Conflicts
7.3 Conflict Resolution
7.4 The Management of Conflicts
7.5 Conflict Resolution Modes
7.6 Understanding Superior, Subordinate, and Functional Conflicts
7.7 Studying Tips for the PMI® Project Management Certification Exam
Problems
Case Study: Facilities Scheduling at Mayer Manufacturing
Case Study: Telestar International
Case Study: Handling Conflict in Project Management
Chapter 8: Special Topics
8.0 Introduction
8.1 Performance Measurement
8.2 Financial Compensation and Rewards
8.3 Effective Project Management in the Small Business Organization
8.4 Mega Projects
8.5 Morality, Ethics, and the Corporate Culture
8.6 Professional Responsibilities
8.7 Internal and External Partnerships
8.8 Training and Education
8.9 Integrated Product/Project Teams
8.10 Virtual Project Teams
8.11 Managing Innovation Projects
8.12 Agile Project Management
8.13 Artificial Intelligence
8.14 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: Is It Fraud?
Chapter 9: The Variables for Success
9.0 Introduction
9.1 Predicting Project Success
9.2 Project Management Effectiveness
9.3 Expectations
9.4 Lessons Learned
9.5 Understanding Best Practices
9.6 Downside Risks of Best Practices
9.7 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: Radiance International
Chapter 10: Working with Executives
10.0 Introduction
10.1 The Project Sponsor
10.2 Handling Disagreements with the Sponsor
10.3 The Collective Belief
10.4 The Exit Champion
10.5 The In-House Representatives
10.6 Stakeholder Relations Management
10.7 Project Portfolio Management
10.8 Politics
10.9 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: The Prioritization of Projects
Case Study: The Irresponsible Sponsors
Case Study: Selling Executives on Project Management
Chapter 11: Planning
11.0 Introduction
11.1 Business Case
11.2 Validating the Assumptions
11.3 Validating the Objectives
11.4 General Planning
11.5 Life-Cycle Phases
11.6 Life-Cycle Milestones
11.7 Kickoff Meetings
11.8 Understanding Participants' Roles
11.9 Establishing Project Objectives
11.10 The Statement of Work
11.11 Project Specifications
11.12 Data Item Milestone Schedules
11.13 Work Breakdown Structure
11.14 WBS Decomposition Problems
11.15 Work Breakdown Structure Dictionary
11.16 Project Selection
11.17 Role of the Executive in Planning
11.18 Management Cost and Control System
11.19 Work Planning Authorization
11.20 Why Do Plans Fail?
11.21 Stopping Projects
11.22 Handling Project Phaseouts and Transfers
11.23 Detailed Schedules and Charts
11.24 Master Production Scheduling
11.25 Project Plan
11.26 The Project Charter
11.27 Project Baselines
11.28 Verification and Validation
11.29 Management Control
11.30 Configuration Management
11.31 Enterprise Project Management Methodologies
11.32 Project Audits
11.33 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Chapter 12: Network Scheduling Techniques
12.0 Introduction
12.1 Network Fundamentals
12.2 Graphical Evaluation and Review Technique (GERT)
12.3 Dependencies
12.4 Slack Time
12.5 Network Replanning
12.6 Estimating Activity Time
12.7 Estimating Total Project Time
12.8 Total Pert/CPM Planning
12.9 Crash Times
12.10 PERT/CPM Problem Areas
12.11 Alternative PERT/CPM Models
12.12 Precedence Networks
12.13 Lag
12.14 Scheduling Problems
12.15 The Myths of Schedule Compression
12.16 Project Management Software
12.17 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: The Invisible Sponsor
Chapter 13: Pricing and Estimating
13.0 Introduction
13.1 Global Pricing Strategies
13.2 Types of Estimates
13.3 Pricing Process
13.4 Organizational Input Requirements
13.5 Labor Distributions
13.6 Overhead Rates
13.7 Materials/Support Costs
13.8 Pricing out the Work
13.9 Smoothing Out Department Man-Hours
13.10 The Pricing Review Procedure
13.11 Systems Pricing
13.12 Developing the Supporting/Backup Costs
13.13 The Low-Bidder Dilemma
13.14 Special Problems
13.15 Estimating Pitfalls
13.16 Estimating High-Risk Projects
13.17 Project Risks
13.18 The Disaster of Applying the 10 Percent Solution to Project Estimates
13.19 Life-Cycle Costing (LCC)
13.20 Logistics Support
13.21 Economic Project Selection Criteria: Capital Budgeting
13.22 Payback Period
13.23 The Time Value of Money and Discounted Cash Flow (DCF)
13.24 Net Present Value (NPV)
13.25 Internal Rate of Return (IRR)
13.26 Comparing IRR, NPV, and Payback
13.27 Risk Analysis
13.28 Capital Rationing
13.29 Project Financing
13.30 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: The Estimating Problem
Chapter 14: Cost Control
14.0 Introduction
14.1 Understanding Control
14.2 The Operating Cycle
14.3 Cost Account Codes
14.4 Budgets
14.5 The Earned Value Measurement System (EVMS)
14.6 Variance and Earned Value
14.7 The Cost Baseline
14.8 Justifying the Costs
14.9 The Cost Overrun Dilemma
14.10 Recording Material Costs Using Earned Value Measurement
14.11 Material Variances: Price and Usage
14.12 Summary Variances
14.13 Status Reporting
14.14 Cost Control Problems
14.15 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: The Bathtub Period
Case Study: Franklin Electronics
Chapter 15: Metrics
15.0 Introduction
15.1 Project Management Information Systems
15.2 Enterprise Resource Planning
15.3 Project Metrics
15.4 Key Performance Indicators (KPIs)
15.5 Growth of New Metrics and KPIs
15.6 Value-Based Metrics
15.7 Strategic Metrics
15.8 Metrics for Measuring Intangible Assets
15.9 Dashboards and Scorecards
15.10 Metrics Feedback
15.11 Metrics and Customer Relations Management
15.12 Business Intelligence
15.13 Studying Tips for the PMI®Project Management Certification Exam
Answers
Problems
Chapter 16: Trade-off Analysis in a Project Environment
16.0 Introduction
16.1 Methodology for Trade-Off Analysis
16.2 Contracts: Their Influence on Projects
16.3 Industry Trade-Off Preferences
16.4 Project Manager's Control of Trade-Offs
16.5 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Chapter 17: Risk Management
17.0 Introduction
17.1 Definition of Risk
17.2 Tolerance for Risk
17.3 Definition of Risk Management
17.4 Certainty, Risk, and Uncertainty
17.5 Risk Management Process
17.6 Plan Risk Management
17.7 Risk Identification
17.8 Risk Analysis
17.9 Qualitative Risk Analysis
17.10 Quantitative Risk Analysis
17.11 Plan Risk Response
17.12 Monitor and Control Risks
17.13 Some Implementation Considerations
17.14 The Use of Lessons Learned
17.15 Dependencies between Risks
17.16 The Impact of Risk Handling Measures
17.17 Risk and Concurrent Engineering
17.18 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: Teloxy Engineering (A)
Case Study: Teloxy Engineering (B)
Case Study: The Risk Management Department
Chapter 18: Learning Curves
18.0 Introduction
18.1 General Theory
18.2 The Learning Curve Concept
18.3 Graphic Representation
18.4 Key Words Associated with Learning Curves
18.5 The Cumulative Average Curve
18.6 Sources of Experience
18.7 Developing Slope Measures
18.8 Unit Costs and Use of Midpoints
18.9 Selection of Learning Curves
18.10 Follow-on Orders
18.11 Manufacturing Breaks
18.12 Learning Curve Limitations
18.13 Competitive Weapon
18.14 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Chapter 19: Contract Management
19.0 Introduction
19.1 Procurement
19.2 Plan Procurements
19.3 Conducting the Procurements
19.4 Conduct Procurements: Request Seller Responses
19.5 Conduct Procurements: Select Sellers
19.6 Types of Contracts
19.7 Incentive Contracts
19.8 Contract Type versus Risk
19.9 Contract Administration
19.10 Contract Closure
19.11 Using a Checklist
19.12 Proposal-Contractual Interaction
19.13 Studying Tips for the PMI® Project Management Certification Exam
Answers
Problems
Case Study: To Bid or Not to Bid
Case Study: The Management Reserve
Chapter 20: Quality Management
20.0 Introduction
20.1 Definition of Quality
20.2 The Quality Movement
20.3 Quality Management Concepts
20.4 The Cost of Quality
20.5 The Seven Quality Control Tools
20.6 Acceptance Sampling
20.7 Implementing Six Sigma
20.8 Quality Leadership
20.9 Responsibility for Quality
20.10 Quality Circles
20.11 Total Quality Management (TQM)
20.12 Studying Tips for the PMI®Project Management Certification Exam
Answers
Problems
Chapter 21: Modern Developments in Project Management
21.0 Introduction
21.1 The Project Management Maturity Model (PMMM)
21.2 Developing Effective Procedural Documentation
21.3 Project Management Methodologies
21.4 Continuous Improvement
21.5 Capacity Planning
21.6 Competency Models
21.7 Managing Multiple Projects
21.8 The Business of Scope Changes
21.9 End-of-Phase Review Meetings
Case Study: Honicker Corporation
Case Study: Kemko Manufacturing
Appendix A: Solution to Leadership Exercise
Appendix B: Solutions to the Project Management Conflict Exercise
Appendix C: Dorale Products Case Studies
Appendix D: Solutions to the Dorale Products Case Studies
Appendix E: Alignment of the PMBOK® Guide, 6e to the Text
Appendix F: Alignment of the PMBOK® Guide, 7e to the Text
Index
Preface
Project management has evolved from a management philosophy restricted to a few functional areas and regarded as something nice to have to an enterprise project management system affecting every functional unit of the company. Simply stated, project management has evolved into a business process rather than merely a project management process. More and more companies are now regarding project management as being mandatory for the survival of the firm. Organizations that were opponents of project management are now advocates. Management educators of the past, who preached that project management could not work and would be just another fad, are now staunch supporters. Project management is here to stay. Colleges and universities are now offering undergraduate and graduate degrees in project management.
This book is addressed not only to those undergraduate and graduate students who wish to improve their project management skills but also to those functional managers and upper-level executives who serve as project sponsors, provide meaningful governance, and must provide continuous support for projects. During the past several years, management's knowledge and understanding of project management has matured to the point where almost every company is using project management in one form or another. These companies have come to the realization that project management, productivity, and business value creation are related, and that we are now managing our business as though it is a series of projects. Project management coursework is now consuming more of training budgets than ever before.
General reference is provided in the text for engineers. However, the reader should not consider project management as strictly engineering-related. The engineering examples are the result of the fact that project management first appeared in the engineering disciplines, and we should be willing to learn from their mistakes. Project management now resides in every profession, including information systems, healthcare, consulting, pharmaceutical, banks, and government agencies.
The text can be used for both undergraduate and graduate courses in business, information systems, and engineering. The structure of the text is based on my belief that project management is much more behavioral than quantitative, since projects are managed by people rather than tools. The first seven chapters are part of the basic core of knowledge necessary to understand project management, specifically topics related to PMI®'s "Talent Triangle." Chapters deal with the support functions and describe factors for predicting success and management support. It may seem strange that 10 chapters on organizational behavior and structuring are needed prior to the "hard-core" chapters of planning, scheduling, and controlling. However, these first 10 chapters are needed to understand the cultural environment for all projects and systems. They are necessary for the reader to understand the difficulties in achieving cross-functional cooperation on projects where team members are working on multiple projects concurrently and why the people involved - all of whom may have different backgrounds - cannot simply be forged into a cohesive work unit without friction. Chapters are more of the quantitative chapters on planning, scheduling, cost control, estimating, contracting (and procurement), and quality. Chapter 21 focuses on some of the more advanced topics.
The changes that were made in the thirteenth edition include:
- Updated section on Committee Sponsorship/Governance (Section 1.13)
- Updated section on the Benefits of Project Management (Table 2.2)
- New section on Projects versus Operations (Section 2.4)
- New section on Project Health Checks (Section 2.12)
- Updated section on Methodologies to Frameworks (Section 2.18)
- New section on Growth of Strategic Project Management (Section 2.19)
- New section on Business Models (Section 2.20)
- New section on Lean Project Management (Section 2.22)
- Updated section on Project Management Intellectual Property (Section 2.26)
- Updated section on Project Management Offices (3.7)
- Updated section on Team Building as an Ongoing Process (Section 5.7)
- Updated section on Leadership in a Project Environment (Section 5.8)
- New section on Using Action Items (Section 6.8)
- Updated section on Agile Project Management (8.12)
- New section on Artificial Intelligence (Section 8.13)
- Updated section on Lessons Learned (9.4)
- New section on Downside Risks of Best Practices (Section 9.6)
- Updated section on Validating the Assumptions (Section 11.2)
- Updated section on WBS Decomposition Problems (11.14)
- Updated section on Dependencies (12.3)
- Updated section on Network Slack (Section 12.4)
- New section on the Growth of New Metrics and KPIs (Section 15.6)
- New section on Strategic Metrics (Section 15.7)
- New section on Metrics for Measuring Intangible Assets (Section 15.8)
- New section on Metrics Feedback (Section 15.10)
- New section on Metrics and Customer Relations Management (Section 15.11)
- Updated section on Risk Identification (Section 17.1)
- Updated section on Implementing Six Sigma (20.7)
The text contains case studies, multiple-choice questions, and discussion questions. There is also a separate companion book of cases (Project Management Case Studies, 6th Edition) that provides additional real-world examples. New case studies include the following:
- Zane Corp. The case illustrates the challenges a company must face when its one-size-fits-all approach can no longer be used for many of its newer projects.
- Redstone, Inc. The company had been using project management successfully in its aerospace division, which focused only on large government contracts. When they decided to implement project management in their new commercial products division, the company decided to staff key positions with people from the aerospace group, even though the projects in the new division were much smaller and needed different tools and techniques.
- Jill's Dilemma. The case discusses the dilemma a project manager faces when told to withhold risk management information from the customer.
- Berlin Brandenburg Airport. The case illustrates what happens when governance fails on a large project and people do not consider the risk issues in sufficient detail.
- Sierra Telecom. The case illustrates the challenges a company faces on projects that may incur numerous scope changes.
- The Government Think Tank. The case study illustrates the challenges that the government has in trying to get competitors for government contracts to share information.
- LXT International. The case discusses the challenges a company has when trying to create a crisis dashboard to provide management with an insight on when to intervene in certain projects.
- Lego Brand Management. The case study discusses the challenges Lego faces when innovation activities may have restrictions of having to satisfy the Lego brand image.
- Simone Engineering Company. The case illustrates the challenges a company faces when told that a proposal must identify their company's project management maturity level.
- Northstar Software Company. The case study illustrates how a company involved in IT projects might report their maturity level in project management if asked.
- Sandora Company. The case illustrates the impact that enterprise environmental factors can have on the execution of a project.
The thirteenth edition text, the PMBOK® Guide, 6e and 7e, and the book of cases are ideal as self-study tools for the Project Management Institute's PMP® Certification exam. Because of this, there are tables of cross references at the end of each chapter in the textbook detailing the sections from the book of cases and the Guide to the Project Management Body of Knowledge (PMBOK® Guide, 6e and 7e) that apply to that chapter's content. The left-hand margin of the pages in the text has sidebars that identify the cross-listing of the material on that page to the appropriate section(s) of the PMBOK® Guide. At the end of most of the chapters is a section on study tips for the PMP® exam.
This textbook is currently used in the college market, in the reference market, and for studying for the PMP® Certification exam. Therefore, to satisfy the needs of all markets, a compromise had to be reached on how much of the text would be aligned to the PMBOK® Guide and how much new material would be included without doubling the size of the text. Some colleges and universities use the textbook to teach project management fundamentals without reference to the PMBOK® Guide. The text does not contain all of the material necessary to support each section or process in the PMBOK® Guide. Therefore, to study for the PMP® Certification exam, the PMBOK® Guide must also be used together with this text. The text covers material for almost all of the PMBOK® Guide, 6e, knowledge areas but not necessarily in the depth that appears in the PMBOK® Guide.
An instructor's manual is available...
