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UNIT 1 Introduction PDF
UNIT 1 Introduction PDF
INTRODUCTION
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Concept and Meaning of Project
A project is a planned investment undertaken to deliver a unique product as
output.
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.
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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.
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Project Management as a Profession
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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.
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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.
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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.
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Project Family Tree
Task: It is a unit in the project breakdown
structure. The task involves more than one
activity.
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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.
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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.
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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
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.
Installation of machines
Building of working field
Contract on construction
Arrangement of tools and equipments
Trail or test production and operation etc.
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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.
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.
Economic Environment
Internal Environment
Financial
Institutions Goals and Resources
Objectives Pressure
Media PROJECT Groups
Constraints
Owners or
Financiers Shareholders Structure Contractors
Socio-Cultural Environment
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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.
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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.
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.
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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.
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Legislative (Parliament): It main responsibility is formulation and
enactment of law. It also forms the executive i.e. the government.
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.
• 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:
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.
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Top
Policy Management
Gap
Middle
Planning Management
Gap
Lower
Scheduling
Management
Gap
Gap
Operations Labors
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
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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.
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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