UNIT : 1

INTRODUCTION

1
 Concept and Meaning of Project
 A project is a planned investment undertaken to deliver a unique product as
output.

 A project is accomplished by performing a set of activities .

 Each project is unique in the sense that activities of a project are unique and
non-repetitive.

 A project consumes resources and resources requires fir the project are me,
material, money and time.

 A project can be defined as non-routine, non-repetitive, one off undertaking,

normally with discrete time, financial and technical performance goals.

 Project us temporary Endeavour undertaken to create a unique product and

service.

For example: Construction of a PHC is a project. The construction of a PHC

consists of many activities like digging of foundations pits, construction of roof,
fixing of doors and windows, fixing of sanitary fittings, wiring etc.
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 Concept and Meaning of Project
According to Project Management Institute of USA, “A project is a
temporary endeavour undertaken to create a unique product or
service”.

According to Harlod Kerzner, “ A project is any series of activities

and takes that
• have a specific objectives to be complete within certain
specifications
• have defined start and end dates
• have funding limits
• consume resources

Projects works within the constraints of time, cost and quantity in a

dynamic environment.

3
 Characteristics of a Projects
1. Objectives : A project has a set of objectives . Once the
objectives are achieved the project is treated as completed.
2. Life cycle : A project has a life cycle. The life cycle consists of
four stages.
3. Uniqueness : Every project is unique and no two projects are
similar. Setting up a cement plant and construction of a highway
are two different projects having unique features.
4. Team Work : Project is a team work and it normally consists of
diverse areas. There will be personnel specialized in their
respective areas and co-ordination among the diverse areas calls
for team work.
5. Complexity : A project is a complex set of activities relating to
diverse areas.
6. Risk and uncertainty : Risk and uncertainty go hand in hand
with project. A risk-free, it only means that the element is not
apparently visible on the surface and it will be hidden
underneath.
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 Characteristics of a Projects
7. Customer specific nature : A project is always customer specific.
It is the customer who decides upon the product to be produced
or services to be offered.
8. Change : Changes occur through out the life span of a project.
The changes may very from minor changes to major changes
which may have very little to a big impact on the project.
9. Optimality : A project is always aimed at optimum utilization of
resources for the overall development of the economy.
10. Sub-contracting : A high level of work in a project is done
through contractors. The more the complexity of the project, the
more will be the extent of contracting.
11. Unity in diversity : A project is a complex set of thousands of
varieties. The varieties are in terms of technology, equipment and
materials, machinery and people, work, culture and others.
5
 Project Management as a Profession

A profession is an economic activity performed on the basis of

specialized knowledge to provide services to the clients and
charge fees from them. It has following important features:

• It provides services of a specialized nature.

• It requires completion of academic and practical training.
• Knowledge and skills are used to provide services to the clients.
• Professionals charge ‘fees’ from the clients for their services.
• It requires certificate of public practice from the professional
organization or association’s viz. Medical Association,
Management Association, Medical Council etc.

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 Project Management as a Profession
Management is a profession, because managers need to obtain
professional degree viz. BBA, MBA etc. They need to obtain
membership from Management Association to provide
independent services to the organizations. They charge
consultation and counselling fees from their clients.

• The US-based Project Management Institute (PMI), which is

unquestionably the largest professional organization representing
project management practitioners, refers to project management
as a profession 20-plus times in its code of ethics.
• The oldest and second largest professional organization in terms
of membership, the EU-based International Project Management
Association (IPMA), while less strident, also refers to project
management as a profession.
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 Project Management as a Profession
• And the UK’s Association for Project Management (APM), in 2008,
applied to the UK’s Privy Council for “Royal Chartered” status,
giving project management legal status as a “profession.”
• So what is the truth? Is project management truly a profession,
the same as engineering or law or medicine, or teaching? Or is it
something else? Are the professional organizations — which
clearly have a vested interest in making project management a
profession — biased in their views?
• As a life-long construction project manager, with an
undergraduate degree in civil engineering majoring in
construction project management, claims by PMI, IPMA, and APM
bothered me. I always considered my profession to be civil
engineering; construction project management was the approach,
methodology, or system I used to deliver my construction projects.
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 Project Management as a Profession
• Also, project and program management is a process, which is
embedded in just about everything we do. If we use PMI’s
somewhat over-simplified definition of a “project” as being “a
temporary undertaking to produce a unique product, service, or
result” and we can begin to appreciate how pervasive, ubiquitous
and broad the context specific applications are for the processes
associated with “project management”:
• For an accountant, the project might be doing a client’s taxes. All
of the accounting services provided to a client would be the
program.
• For a doctor a project might be a patient’s specific procedure or
intervention; that person’s treatment over time could be
considered a program.
• For a lawyer, each case becomes a project. Like the accountant
and doctor, the entirety of the client’s legal activities over time
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becomes a program.
 Project Management as a Profession
• For a plumber, each “project” could be a specific work order in a
particular building. The program might consist of the multiple jobs
the plumber performs within the same construction project.
• For a mom or dad, each “project” could be getting a child through
a particular developmental stage: toilet training, tying shoes,
helping prepare a first science project. The collective results of all
these “projects” become a program.

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 Project Family Tree
Project originates from plan which can be
national or corporate plan.
Plan

Program

Project

Work Package

Task

Activity 11
 Project Family Tree
Plan: It is the action or means the organization uses to
achieve its goals. A plan is the result of the planning
process.

While planning following questions arises:

 Why a particular action is necessary?

 What is to be done?
 What will it be done?
 Where will it be done?
 Who will do it?
 How will it be done?

For example:- Strategic Plan of PUSOM- 2076-2080, 20 Year Strategic

Vision of TU, Three Year Interim Plan 2076-2079

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 Project Family Tree
Program: It is a single used but comprehensive plan
designed to implement the policies. And
accomplish the objectives.

It is based upon the steps-by step approach to

guide action to be carried out pre-determined
goals.

Programs have no fixed life span as in the projects

and it continued over the periods.

For example:- Mortality Health Program, Science

and technology Program, Land Reform program
etc.
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 Project Family Tree
Project: A project is a unique set of one time
activities designed to create a product or
service within the constraints of time, cost and
quantity through the integrated use of various
resources.
It is unique venture with a beginning and end
date.
It has fixed life span.
For example:- Skill for Development Project,
Housing Project, Hydropower Development
Project, Melamchi Water Supply Project etc.
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 Project Family Tree
Work Package: It is the package of related tasks
performed over the period of time that are
similar in nature.

It is the lowest level of deliverable of WBS.

For example:- Power Supply and Distribution

Package, Sanitation Work Package, Water
Supply and Distribution Package etc.

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 Project Family Tree
Task: It is a unit in the project breakdown
structure. The task involves more than one
activity.

For example:- Construction of foundation,

Construction of roof, Award of contract for
construction of academic buildings etc.

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 Project Family Tree
Activity: It is a distinct task performed for a
distinct purpose, a unit within the project work
breakdown structure.

For example:- Preparation of technical

specification of computer, Lying of cable,
Preparation of drawing and estimates etc.

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 Project Life Cycle/Project Phases
• An integrated effort made to achieve certain objective
within certain period is called project. The project has also
its life cycle.

• The project life cycle refers to a logical sequence of

activities to accomplish the projects goals or objectives.

• A project has a fixed life span.

• It has beginning and end points.

• The life span of a project is divided into phases.

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 Project Life Cycle/Project Phases
• Generally the following phases found in the life cycle of a project

organizing Phase
Planning &
Definition
Concept
Level of Effort

Phase

Phase

Implementation Phase Clean-Up Phase

85%
Effort

8% 3% Effort
4% Effort
Effort Time 19
 Project Life Cycle/Project Phases
1. Concept Phase:
Concept phase is the phase before the start of any project.

In this phase concept is developed to operate or start a

project. Conceptual decisions are taken on-
1. What is the problem?
2. How to solve it?
3. How much it costs?
4. How long it needs?
5. What type of machines/tools are needed?
6. From where to collect financial resources?
7. What are the special objectives of the projects? etc.
This phase indicates the success or failure of a project.
So, the project operators should be careful in this phase.
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 Project Life Cycle/Project Phases
2. Definition Phase:
In this phase, different aspects are explained in detail to translate the
conceptual decision into practice.

Definition or explanation is based on reality.

For example, explanation how to collect resources, how much to collect,

where to collect from, for which period to collect, etc. are made clear.
In this phase of project cycle detail explanation is made on the following
heads:-
 Raw materials
 Technology
 Manpower and Organizational Pattern
 Power Sources
 Power Layout
 Machine/Plant
 Location
 Financial Analysis
 Civil Engineering Works
 Implementation Schedule 21
3. Planning and Organizing Phase:
Formulating plan and organizing for the performance
according to the plan is the third phase of project cycle.

At this stage, the project formally starts and different

activities are conducted.

Mainly the following works are done at this stage:-

 Main structural base of the project
 Structure of technological system
 Arrangement of resources for investment
 Formation/determination of objective
 Division of work
 Functional network
 Source of work and schedule of time
 Permission letter and government formalities
 Working package etc.
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4. Implementation Phase:
After the planning and organizing phase of project,
implementation phase starts. This is the starting phase of
performance. So, this is the longest phase of project cycle.

The following works are done in this phase:

 Installation of machines
 Building of working field
 Contract on construction
 Arrangement of tools and equipments
 Trail or test production and operation etc.

In this phase of project cycle is about 80- to 90 percent

works is done.

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4. Implementation Phase (Continue):
Different sub-phases of the implementation of project
Sub-Phase Months

Description 1 2 3 4 5 6 7 8 9 10 11 12

Detail
Engineering

Ordering

Delivery

Construction
and Erection

Start-Up

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5. Clean Phase:
 It is the concluding phase of project life cycle.

 All the objectives of the project are achieved in this phase.

 Necessary documents, files, report including all the properties of the

project is handed over to the concerned body.

 Customer's satisfaction is given priority.

 If anything is lacking to give satisfaction to the customers from the part

of the project, improvement is made in this phase giving guarantee of
satisfaction.

 In this phase the project life cycle, employees and workers are bidden
good-bye and the project is closed.

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 Project Environment
 A project operates in a specific environment.
 The project manager has to take into account the elements and
forces of their environment.
 Environment consists of forces that influence the project's ability
to achieve its objectives.
 It operates in a rapidly changing dynamic environment.
 All influencing forces which are all round the project is called
project environment.

 Project environment is of two types:

1. Internal Environment
2. External Environment
i. Task Environment
ii. General Environment
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 Project Environment
External Environment (General Environment)
Political and Legal Environment
External Environment (Task Environment)
Customers Suppliers
Consultants
Technological Environment

Economic Environment
Internal Environment
Financial
Institutions Goals and Resources
Objectives Pressure
Media PROJECT Groups
Constraints
Owners or
Financiers Shareholders Structure Contractors

Labour Unions Government Strategic Allies

Socio-Cultural Environment

Figure: Project Environment

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 Project Environment
1. Internal Environment
It is located within the project. It is controllable by the project. It
provides strengths and weaknesses to the project. The forces in
the internal environment consists of :

i. Project Goals and Objectives:

Objectives are the desired outcomes or end results of the
project. Project activities must be conducted within project goals
and objectives.
The goals and objective must be SMART.
S= Specific
M=Measurable
A= Agree
R= Realistic
T= Time bound
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 Project Environment
ii. Project Resources:
A project consists of human and non-human resources.
It usually has its own budget. Resource availability sets
a limit on projects activities.

iii. Project Structure:

A project is a temporary organization designed to
implement project activities. Its structure generally
cuts across organizational and departmental lines. The
project has its own management with project team
headed by a project manager. Team members come
from various disciplines with varied experiences.
Projects must function within the boundary of their
structure.

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 Project Environment
iv. Constraints:
A project operates within the constraints of time, cost
and quality performance. They shape and reshape the
scope and boundaries of the project.

v. Project Owner or Shareholders:

Owner or shareholders are part of the project. In big
and mega sized project, selective owners and
shareholders represent in the management of the
project. Influence and attitudes of shareholders or
owners set limits on the projects.

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 Project Environment
2. External Environment
 External environment refers to external aspects of the surroundings of
project, which have influence on the functioning of project.
 The environment that remains outside of the project is known as external
environment.
 As the environment is outside, it is not under control of management.
However, the external environment affects the activities of the project.

External environment is classified into two types. They are:

i. Task Environment
ii. Specific Environment

i. Tasks Environment:
The task environment of a project immediately surrounds the project. It is
made up of stakeholders. Their interests are affected by the project. They
affect the project activities.

Task environment is specific forces which are the part of the environment that
is directly relevant to the achievement of an organization’s goals.
Robbins & Coulter, 2005
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 Project Environment
Elements or Forces of Task Environment
a) Customers
They are highly influential as they are the central point of every
project. Success of project largely depends on identifying the
need, desire, tastes, liking etc. of a customers.
b) Suppliers
 Supplier are parties and institutions that supply materials,
machines and other resources to the project.
 It is an important force of the micro environment of a project.
Long lasting relationships with suppliers are essential.
c) Consultants
Consultants are more influential force in the project due to
expert advice. The project consists of an array of consultants
from inception to completion.
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 Project Environment
Elements or Forces of Task Environment
d) Contractors
A project involves high level of contracting and subcontracting. The
performance, capacity and attitudes of the contractors heavily
influence the time, cost, and quality performance of the project.
e) Competitors
 Competitors are everywhere.
 Competitors are rivals that compete with the organization or any
organizations that competes with other organizations for resources.
 Competitors actions affect the project.
f) Government Agencies
Government’s agencies are the regulating body of project activities.
Government forms rules and regulation. Project activities must be
performs according to the government. There is also certain impact of
project upon the government.
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 Project Environment
Elements or Forces of Task Environment
g) Pressure Groups
They are special interest groups. They are organized to use the political
process to advance their position on a particular issue. They force
government to enact or withdraw laws to protect their interest.
Examples are consumer association, environmental groups, women
groups etc.
h) Financial Institutions
Project activities depend on financial institutions for the supply of
funds. They can be banks, finance companies, insurance companies and
other capital market institutions. Effective working relationships with
financial institutions are important to facilitate fund mobilization.
i) Media
It may be in print, visual, audio and others. Project must deal
effectively with media. Every action of the project is subject to media
scrutiny (search, analysis, inspection etc.). Public relations
programmes are needed to promote and protest the image of the
projects.

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 Project Environment
Elements or Forces of Task Environment
j) Financiers
The financiers of the project can be owners, shareholders,
organizations or donors. They affect fund mobilization and
utilization for the project.
k) Labour Unions
They represent the problems and feelings of their members to
management. Projects must manage their labour relations
effectively. They should cooperate with labour unions for
collective bargaining.
l) Strategic Allies
It is the process in which two or more organizations work
together in a collaborative manner. It help organizations to get
from other organizations the expertise they lack and spread risk.
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 Project Environment
ii. General Environment:
General conditions and forces that are located outside the
project are known as general environment. General environment
is also known as indirectly interactive forces.

It is the set of broad dimensions and forces in an organization’s

surrounding that create its overall context..
Griffin, 2005

It provides opportunities, threats and constraints of the project.

It is composed with the set of elements that are outside the

project’s operating system.

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 Elements or Forces of General Environment

1) POLITICAL-LEGAL ENVIRONMENT

A. Political Environment
Political environment of project refers to the government actions which affect
the operation of a project. These actions may be on local, regional, national or
international level. Managers pay close attention to the political environment to
measure how government actions will affect their project.

COMPONENTS/ELEMENTS/FORCES OF POLITICAL-LEGAL ENVIRONMENT

a) Political System
 It consists of ideological forces, political parties, election procedures, and
power centers.
 A stable, efficient and honest political system is essential for projects.

b) Political Institutions (Government and its Branches)

It involves legislative, executive, judiciary and other constitutional bodies.
component

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 Legislative (Parliament): It main responsibility is formulation and
enactment of law. It also forms the executive i.e. the government.

 Executive (Government): It refers to the organ of the state that is

responsible for the overall administration of the nation. It is
composed of the government and its organs as bureaucracy, army
and police.

 Judiciary (Court of Law): It refers to the court of law. It is

responsible for settling disputes and interpreting the rules and
laws if required. It has the right of judicial review under the
constitution.

 Other Constitutional Bodies: They involve the constitutional

bodies created by law. Some of them are; The Commission for the
Investigation of Abuse of Authority, Office of the Auditor General,
Federal Public Service Commission, Election Commission and
National Human Rights Commission: 38
c) Political Philosophy (Ideology)
It may be defined as a set of ideas, principles and philosophy.

The main political ideologies are:

• Democratic: Under democratic ideology, the power is vested on people.

Fundamental rights are ensured. The private sector is regarded as the
indispensable part of development of the country.

• Totalitarian: Under it, the power is centralized to the government that

does not tolerate parties of differing opinion. The private sector doesn’t
flourish under such ideology.

• Mix: A mix of both is based on power sharing.

Political philosophies influence project's activities. Democracy provides

greater role to private sector. Totalitarianism provides greater role to
state. Mixed philosophies provide roles to both private sectors and
state.
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B. Legal Environment
Legal environment refers to all the legal surroundings that affect the project
activities. It consists of an array of acts, rules, regulations. It defines what
project can and cannot do.
COMPONENTS/ELEMENTS/FORCES OF LEGAL ENVIRONMENT
i) Constitution: It is the fundamental law or supreme law of a country. It provides
direction to the nation.
ii) Law: They consist of an array of laws that regulate business activities. It also
protects the organization, to protect consumers, and to protect the interest of
the society.
iii) Courts of Law: They are the institutions to define and solve legal disputes.
Nepal has a three-tire court system.
 The Supreme Court is at the national level and is the highest level
judiciary.
 The Court of Appeal are at the middle level.
 The 77 district courts are at the district level.

iv) Law Administrators: They are the various law enforcement agencies, which
ensure implementation of the laws as well as judgments made by the courts of
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law.
 2) ECONOMIC ENVIRONMENT
Economic environment refers to all the economic surroundings that influence
project activities like interest rates, inflation or deflation in the market, and
changes in disposable income, stock market fluctuations, and the stage of
trade or business cycle that affect the project activities in general.

COMPONENTS/ELEMENTS/FORCES OF ECONOMIC ENVIRONMENT

a) Economic System
It determines the degree of private participation in economy and role of
market forces. Three types of economic system are prevalent. They are:

• Free market economy: It is based on private sector ownership of the factors of

production.

• Centrally planned economy: It is based on public ownership of all the factors of

production.

• Mixed system: It is based on co-existing both private and public sectors.

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b) Economic Policies
They are the economic guidelines of the government. They aim at
development and growth of different sectors of economy. Some of the
important economic policies are:

• Monetary policy: It deals with money supply, interest rates, credit availability
and exchange rates.
• Fiscal policy: It is related to taxation and government expenditure and regulates
the level of aggregate economic activity.
• Industrial policy: It is concerned with industrial licensing, location, incentives,
facilities, foreign investment, technology transfer, and nationalization of
industries.

c) Economic Conditions
They indicate the health of the economy in which the project operate. The
factors of economic conditions are:

• Gross domestic product (GDP): It is the broadest measure of a country’s

economy. It represents the total market value of all goods and services produced
in a country during a given year.
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• Inflation: It represents changes in the level of retail prices for the basic
consumer basket. Inflation is tied directly to the purchasing power of a currency.
• Employment indicators: They involve number of jobs created or destructed;
percentages of active and unemployed workforce. They indicate the economic
health of a country.
• Balance of payment: It represents the ratio between the amount of payments
received from abroad and the amount of payments going abroad.
• Income distribution: It shows how a notion’s total GDP is distributed amongst its
population.
• Business Cycles: They affect the health of organization. They may be depression
(contraction), recovery (revival), prosperity and recession.

d) Regional Economic Groups (Integration)

 Regional and global economic integration are also the important components
of economic environment. Economic integration facilitates removing or
minimizing tariffs and other restrictions on economy at international level.
 It promotes cooperation and free trade among the countries.
 Economic integration has been promoted by SAARC, APEC, ASEAN, EU and
the WTO.
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 3) SOCIO-CULTURAL ENVIRONMENT
Socio-cultural environment is the sum of all the cultural elements that affect
the operation of a business directly or indirectly.
The norms, values, beliefs, attitudes, language, symbols and behaviour which
are learned and developed over time collectively from culture. It is a complex
phenomenon and transfers over generations.

COMPONENTS/ELEMENTS/FORCES OF SOCIO-CULTURAL ENVIRONMENT

i) Demographics
Demography is the study of human population. It consists of composition of
population based on age, groups, male and female, urbanization, migration of
people etc. It determines the market segmentation of business. Therefore, it is
essential for the managers to make detailed analysis of the demographic
structure of nation.
ii) Social Institutions
Social institution includes family, reference groups and social class.
 Family: Family is the primary unit of society which involve member’s relation
with other families.
 Reference Groups: Reference group represents the prestigious individuals whose
activities may bring change in attitude and life style of people.
 Social Class: Social class is the division of society on the basis like upper, middle
and lower economic group. The division of social institution changes attitudes
and beliefs of people that affect business. 44
iii) Pressure Groups
They are special interest groups. They use the political process to advance their
position on an issue of social concern. They pressurize and lobby government and
organizations to protect their interests through change in laws, policies and practices.
iv) Social Change
Change is making things different. Social change implies modification in
relationship and behaviour patterns in a society. Life style and social values
promote social change.
v) Religion
Religion reflects and shapes culture. It is shared beliefs, values and rituals.
vi) Attitudes
It is a positive or negative concept towards product, person, organization, and
other elements.
vii) Values and Beliefs
Values are basic convictions. Beliefs are descriptive thoughts about something.
They are based on knowledge, opinion, faith, experience and religion.
viii) Language
It is a medium of communication. It also reflects culture. It may be differ on the
basis of class and ethnicity.
ix) Education
It is a continuous process of learning. Education is very important for developing
and nurturing culture. 45
 4) TECHNOLOGICAL ENVIRONMENT
 Technological environment is the composition of forces that include the
expertise, procedures and system used by organization to make change in the
transformation process.
 It refers to the systematic application of organized knowledge essential to do
things. It focuses on machines and equipment, transmission of information,
techniques and process, research and development etc.
 The technology is ever changing and rapidly growing in society that has crucial
impact on the success and prosperity of business.
 Therefore, every manager must have knowledge about technological changes in
their own area of project (business).

COMPONENTS/ELEMENTS/FORCES OF TECHNOLOGICAL ENVIRONMENT

i) Nature of Technology
Technology can be manual or mechanical. Manual technology is labour
oriented but mechanical technology is capital oriented. The manual
technology causes low investment but its operating cost is higher. On the other
side, the investment on mechanical technology is higher but its operating cost
is lower.
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ii) Pace of Technological Change
Technology is an ever changing. The change in technology creates immediate
impact on project. It creates opportunity to the project if the business can adopt
the new technology but it becomes threat to project if the project can’t utilize
the new technology.

iii) Technology Transfer:

As the technology is dynamic, no project is self-sufficient in modern technology.
It is essential to transfer technology from technologically advanced foreign
countries to developing countries. The technology transfer can be through
globalization, trade, technical assistance, training and publications, joint
venture, multinational company, projects, direct investment, etc.

iv) Research and Development (R & D) Budget:

Research and development is important element of technological environment.
The changes in customer demand are common. This is only known through
continuous research and development work. For this it is essential to invest a
certain part of budget in research and development work. It becomes helpful in
innovation of new knowledge and technology in production and distribution
system. 47
 BENEFITS OF PROJECT MANAGEMENT

CONCEPT OF PROJECT MANAGEMENT

Project management is a new way of thinking about management. It

manages complexity and change in a dynamic environment. It makes
efficient use of resources for better client satisfaction.

Project management is a system approach for efficient and effective

achievement of project objectives through:

 assignment of total project responsibility and accountability to a single

project manager from inception to completion.

 coordination across functional lines

 proper utilization of planning and control tools for better resource use
within the constraints of time, cost and quality.

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BENEFITS OF PROJECT MANAGEMENT
Change Management

Environmental Adaptation

Results-Orientation

Coordination

Team Development

Organizational Reengineering

Timely Correction

Customer Satisfaction

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 BENEFITS OF PROJECT MANAGEMENT
1. Change Management
It serves as a vehicle for introducing and managing change. It facilitates introduction
of new technologies. It break down functional barriers which reduce resistance to
change.
2. Environmental Adaptation
 Project management operates in a dynamic and risky environment. It has flexibility
in operations.
 The change in political, legal, economic, socio-cultural, technological environment
etc. affects projects in various ways.
 Adjustments can be made to adapt to changing requirements during the life cycle
phases of a project.
3. Result-Orientation
 It always focuses to achieve predetermined goals and objectives within constraints
of scope, time, cost and quality.
 The goal of project manager is to maximize efficiency and economy of human
efforts.
 The success of project manager is measured by the extent to which the established
goals are achieved. 50
4. Co-ordination
The project manager has total responsibility and accountability for project results.
The project manager serves as a single responsibility and accountability center.
Project manager must create balance between project and functional departments
along with coordination within the project. Decision making is faster. Conflict are
managed effectively.
5. Team Development
 A project has a multiple-disciplinary team drawn from various departments.
 Project management creates conditions for good team work by building trust and
respect.
 It encourages development and creativity of team members through participation.
6. Reengineering
 Project management is based on temporary organization structure. It can be pure
project structure or matrix structure. Generally, matrix structure is used which cuts
across functional lines. The work flow is both vertical and horizontal. This
facilitate reengineering. Its temporary nature causes minimum organizational
disruption. There are no long term commitments to employees.

51
 Top
Policy Management

Gap
Middle
Planning Management
Gap
Lower
Scheduling
Management
Gap

Gap
Operations Labors

Management Gaps Functional Gaps

7. Timely Correction
Project planning and control goes hand in hand. Actual performance is measured
against plans. Identification of deviations is done to take corrective actions.
Problems are solved as and when they arise. This improves capacity for future
planning. This also ensures adherence to objectives and to time-cost-quality
constraints.
8. Customer Satisfaction
Project management is customer focused. The results are achieved within the
constraints of time, cost and quality. The needs of customers are satisfied. Satisfied
customers tend to be lifelong customers. 52
 LIMITATIONS OF PROJECT MANAGEMENT

Lack of Long
Range Planning

Organizational
Unsuitable
Disruption

LIMITATIONS Constrained
Human
Conflicts OF PROJECT Resource
MANAGEMENT Development

Reluctance for
Team-Related
Authority
Problems
Delegation

Organizational
Restructuring

53
 LIMITATIONS OF PROJECT MANAGEMENT
1. Lack of Long Range Planning
Organization are involved in achieving the objectives of temporary projects.
This may adversely affect strategic planning for long-term direction and
scope of the organization.

2. Organizational Disruption
Projects compete for people and resources with functional departments. This
may disrupt the normal functioning of the organization.

3. Constrained Human Resource Development

Shifting people from project to project may constrain the training and
development of new employees by experiences employees.

4. Reluctance for Authority Delegation

Senior line managers may be unwilling to delegate authority to project
managers. They may be afraid of losing their positions to project managers.
Top management support may also be lacking.
54
5. Organizational Restructuring
Organizational restructuring for project management may require changes.
They may be resisted by employees in functional departments.

6. Team-Related Problems
Members of project team lack stability. This constraints effective team work.
Team identity and norms development take a long time. Team members have
divided loyalty if they work on multiple projects and also report to line
managers.

7. Conflicts
Conflicts in project team may not be managed effectively. They can disrupt
the project. Project autonomy may create conflicts with line departments.

8. Unsuitable
Project management may not be suitable for all tasks. It is not suitable for
small organizations which lack resources.

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