What is 5P in project management

The 5 P’s of management provide managers with a framework for making these
good choices and for building a process which creates value for the
shareholders. By contrast, the traditional management approach is to focus on
functions of management in order to achieve the goals of the organization. In
the global economy, where the competition is based on knowledge, the
environment is changing rapidly. Employees, suppliers, and shareholders have
more knowledge and information than ever before, and there is, therefore, a
need for a framework which enables managers to make decisions which lead to
value creation. The 5 P’s of management provide such a framework. The 5 Ps
are: 1) Plan, 2) Process, 3) People, 4) Possessions, and 5) Profits.

Plan
Planning is the key to the success of an organization. It is necessary because
businesses operate amid uncertainty and risk, and the managers do not have the
opportunity of making decisions under a background of certainty. Planning
involves setting clear and realistic goals, organizing business activity based on
the revenues forecast, formulating strategies, preparing budgets, and
implementing strategies, and evaluation and control systems.

Process

An organizational process includes both business process and operational

process. The business process is based on the business model of the firm. The
business process guides the firm in generating revenues, managing costs, and
generating profits. Managers select a business model that has the potential of
creating value for the shareholders.

An operational process consists of multiple inputs, outputs, and processes that

result in an organizational output (product or service). In the operational
process, inputs arise from all the basic business functions, including marketing,
finance, operations management, human resources, and technology as required.
Managers select the appropriate inputs and process modules necessary for the
desired output. They structure the modules in the operational process to
minimize cost, improve quality, increase productivity, and generate the desired
output (product or service).

People

The people within an organization include employees, suppliers, customers, and

shareholders. Managers motivate, prepare and assign the appropriate people to
the appropriate positions in the operational process. They build long-term
relationships with people who are able to deliver the resources required for the
product or service. They listen to the people who are buying or will buy the
product or service. They monitor organizational outputs to make sure they meet
the needs of the people who will buy the product. They also understand the
expectations of the people who have invested in the company and aim to create
value that meets their expectations.

Possessions

Organizational possessions include assets and capital. Organization capital

includes human capital, intellectual capital, economic capital, and marketing
capital. Managers evaluate the organizational needs and the value of the
organizational capital of the firm. They raise economic capital and invest in
human, intellectual, and marketing capital. They apply organizational assets and
capital in the operational process in ways that will generate maximum value for
the firm.

Profits

Managing a business without concern for profits is not good management.

Managers adopt management processes which have the potential of generating
long-term profits. They make their decisions based on the understanding that the
first step in business is to survive, the second is to generate profits, and the third
is to create value for the shareholders. Managers evaluate organizational
performance with both qualitative and quantitative measures.

Management is not about functions, but rather it is about the process of

achieving organizational goals and creating value.