PROJECT MANAGEMENT PE 309

MODULE 2
Course Objectives:
This course enables the students to:
1 Comprehend the scope and types of projects
2 Identify the Project Life Cycle and project constraints
3 Construct organizational structure of project management
4 Realize environmental issues and social cost benefit analysis of projects
5 Apply project scheduling tools (PERT and CPM)
Course Outcomes:
After the completion of this course, students will able to:
• CO1 Recognise the project morphology, organizational structure and elements of project
• CO2 Incorporate the importance environmental issues in projects
• CO3 Handle real-life projects as in various organizations
• CO4 Solve complex scheduling problems in project management using PERT/CPM
• CO5 Prepare project report and budget planning
SYLLABUS
• Module 2: Organization structure [8 classes]
• Organizational structures for projects, Functional, Product and project
organization, Matrix and modified matrix structure, Responsibilities of
project manager, Project risk analysis, Techniques of risk analysis -
Break-even, expected monetary value (EMV) and make-or-buy
decision
Organizational structures for projects
Organizational structure is concerned with the allocation of task and establishment of
authority-responsibility relationship between the member of organization.

Objectives:
• Understand the various organizational structures for project management
• Understand how to choose the most appropriate structure
• Understand the role of corporate culture in project management
Challenges to organize projects:
• The uniqueness and short-term duration of projects relative to the ongoing longer-term
organizational goals
• The multi-disciplinary and cross-functional nature of projects creates authority and
responsibility dilemmas choosing an appropriate project management structure
• The best system balances the needs of the project with the needs of the organization
Formal organisation
This is the internal structure of a business — the way in which human
resources are organised. It takes into account:
• the relationships between individuals
• who is in charge
• who has authority to make decisions
• who carries out decisions
• how information is communicate
 Span of control
• The number of people who directly report to one manager in a hierarchy.
• The more people under the control of one manager, the wider the span of control
• Less people means a narrower span of control.
• The example below would have a span of control of four people.
Call center organization showing
a ‘wide’ span of control
Organizational levels of hierarchy

• Width: Organization structures can be described as wide (with a

larger span of control) or narrow (with a smaller span of control.)

• Height: As there are levels of management, or hierarchy, an

organization may be tall (with many levels) or flat (with fewer levels.)
• Flat organizations have a ‘wide’ span of control and Tall
organizations have a ‘narrow’ span of control. While there are pros
and cons with both tall and flat structures, a company’s structure
must be designed to suit the business (the customer and markets)
and in a way that fits with the workforce’s capability.
Tall vs Flat
Characteristics of a Flat Organizational Structure (Wide Span of Control)
Pros
• Encourages delegation. Managers must better delegate to handle larger
numbers of subordinates, and grant opportunities for subordinates to
take on responsibilities
• Agile. Improves communication speed and quality
• Reduces costs. More cost effective because of fewer levels, thus requiring
fewer managers
• Helps prevent the workforce from disengaging by focusing on
empowerment, autonomy and self-direction
Cons
• High managerial workload comes with high span of control
• Role confusion more likely
• May cultivate distrust of management
Characteristics of a Tall Organizational Structure (Narrow Span of Control)
Pros
• More rapid communication between small teams
• Groups are smaller and easier to control/manage
• There’s a greater degree of specialization and division of labor
• More and better opportunities for employee promotion

Cons
• Communication can take too long, hampering decision-making
• Silos may develop and prevent cross-functional problem solving
• Employees may feel lost and powerless
Chain of Command in Organizational Structure

• In an organizational structure, “chain of command” refers to a

company's hierarchy of reporting relationships – from the bottom to
the top of an organization, who must answer to whom. The chain of
command not only establishes accountability, it lays out a company’s
lines of authority and decision-making power.
Responsibility and Authority
Each employee on the chain of command is
responsible for a particular area of the
business. For example, operations supervisors
or managers must ensure that workers
complete production tasks and activities, while
upper-management employees establish the
high-level direction the company takes.

An operations director may develop a plan to

reduce lead time in production by two days,
but supervisors directing the activities of
production workers execute the high-level
plan. When a worker doesn't follow the
established chain of command, he undermines
the authority of his direct supervisor.
• Mechanistic Structure
• This is the most formal and the strictest kind of structure with a clear
distinction in the hierarchy and roles. Hence, these structures are vertically
oriented. The hierarchy of the authority is well-defined. Decision-making
rests in the hands of the senior management. As a lot of bureaucracy is
involved in these structures, the leaders find it difficult to deal with
competition. Also, innovation oftentimes is hampered due to red-tapeism.
Employees work separately and are specialists of a task.

• Organic Structure
• It is the exact opposite of a mechanistic organizational structure. In an
organization following the organic structure, the authority is delegated and
is decentralized. Hence, communication takes place laterally. There is a lot
of flexibility in this type of an organization. Employees generally work
together and coordinate different tasks. They are highly flexible to adapt to
the changes in the external business environment.
Organizational structures

Objectives:
• Understand the various organizational structures for project management
• Understand how to choose the most appropriate structure
• Understand the role of corporate culture in project management

Organizational structure can be of various types

• Functional organization
• Product organization
• Matrix organization
• Modified Matrix organization
• Pure project organization
 Functional organization
A functional organization is the most common type of organizational structure. This is where the
organization is divided into smaller groups based on its special functions such as IT, finance or
marketing. This departmentalization allows greater operational efficiency because the
employees have their skills and knowledge to be shared within the group. The basis of this
functional organization structure is an arrangement where a worker has different managers for
different areas of the organization operation.
In a functional organization structure, the reporting relationships are grouped based on the
specialty or functional area. Separate areas are established to take care of different concerns.
The advantages of Functional Organization:
• The team is managed by an experienced person with a high ability and skills who
can adequately understand and review the entire work.
• The team members work with other people in the field and it allows sharing of
thoughts and knowledge to make the people learn new skills.
• The staffers have the chance to get promoted within their functional areas which
can be a reason for them to stay long term. The company is getting the advantage
of their expertise and knowledge.
• Because of people’s expertise, the workers with specialized skills can perform
tasks quickly, efficiently and with more confidence, while reducing of work-
related mistakes. The clear nature of the career path within the functional unit
makes it possible for employees to be highly motivated to advance their careers
as they move up within the hierarchy. This will keep them aiming for
advancement and development.
• This can be an ideal structure for small businesses that focus on one product or
service because one can maximize performance by encouraging peer cooperation
among different units at various levels of management through supervision and
coordination. Specialization leads to operational efficiencies and enhances
productivity levels.
• The disadvantages of Functional Organization:
• The functional organization may have unhealthy competition working with the
other areas. There may be a lack of understanding as to how significant that
specific are to the company. In one example, there may be a request from the
marketing department which may not be prioritized in order to attend to the
concerns.
• Another disadvantage of functional organization structure is that these functional
groups may not be able to communicate more often which decreases flexibility
and innovation.
• When a company uses this type of structure, it groups its people according to
their knowledge and skills which help them become specialists on that field. It
also requires a management system which allows promotion, development and
visibility of skills of people in each functional area.
• Management issues may arise because it is more bureaucratic and the functional
organization are not accountable to each other and the poor horizontal
coordination within the department may occur. Employees’ motivation is greatly
affected by lack of innovation and restricted views of organizational goals.
• Another weakness of functional organizational structure is there could be lack of
unit coordination. This means that though the functional units can perform with
higher level of efficiency however, there could be difficulty working well with
each other thus, cooperation is compromised.
Product organization
Merits of Product Structure

~Units which are not working can be closed down easily.

~Each unit can be operated and treated as a separate profit center.
~It accords rapid and easy decision-making.
~It also gives a lot of independence to the decision makers.
~Individual products get separate attention as per the problems they
face.
~It enables the organization to have a high productivity and efficiency
quotient.
Demerits of Product Structure
• As each unit operates on its own, organizational goals may not be
achieved.
• Unhealthy competition may exist among internal business units.
• As it has too many managerial levels, it may hamper the business.
• Accounting work and taxes may increase considerably.
• All the units may not be considered as equal.
• Marketing individual products may add up to the cost significantly.
Matrix organization
Advantages
• There are several advantages to using the matrix organizational structure.
One benefit of the matrix structure is that it allows cross-collaboration
between staff and departments that may not always have opportunities to
work together. There are several other key advantages as well:

• Collaboration between different departments

• Combines project and functional management structures
• Allows interdepartmental communication
• Employees can develop new skills
• Team members and managers keep their functional roles
Disadvantages of the matrix organizational structure

• Conversely, the matrix structure may sometimes be difficult in achieving

total structure in an environment where managers hold equal superiority
over their shared team members. Additionally, team members might have
misconceptions about how they are expected to divide their time between
their functional duties and their project responsibilities. There can
sometimes be several key disadvantages to using a matrix structure:

• Managerial roles may not be clearly defined.

• Team roles may not be clearly defined.
• The decision-making process can be slowed down.
• Too much work can cause overload.
• Measuring employee performance might become difficult.
Pure project organization structure
• Advantages

• The obvious advantage of a project structure is that one have more control over
the team
• Teams can have a strong sense of identity. It is the easiest structure within which
to create a strong team culture.
• The whole team is focused on the team’s goals, so conflict of loyalty exists with
the day job for the people working on the project. Their day job is the project.
• Resources are dedicated to the project, so it’s much easier to schedule work.
• Projects run in this structure are great environments for improving project
management skills as well as more technical leadership skills.
• Disadvantages

• The project structure is the easiest to work with, but still has some
drawbacks:

• Having a team dedicated to one project is an expensive commitment. It

tends to be an option only on big projects.
• If you remove people from their functional jobs, they might find it difficult
to go back, especially if the project is long. Project work stretches you, so
returning to your previous role after working in a multidisciplinary
environment on a new, challenging project, isn't an appealing prospect for
many people. Thus, managing the transition of the team when you close a
project becomes even more important.
• Sometimes closing a project can mean losing jobs if the business has
moved on and another role isn't available.
Departmental project organization structure
• What are the factors that influence organizational structure?
• Company size and development stage
Smaller companies or new businesses, like startups, often have to
operate with an “all hands on deck” mentality where everyone has to
wear several different hats. In that case, it doesn’t make sense to have
different tiers of managers if there aren’t even enough employees to
make up different departments.
As companies grow larger, and add more specialized roles, adding a
hierarchical structure with managers and department heads becomes a
help. It would be inefficient for a general manager or CEO to have
hundreds or even thousands of employees report to him or her
directly.
• Business strategy
• How could the organizational structure enhance the company
objectives?
• For example, software development is an industry where flexibility
and speed of innovation is paramount for staying ahead of the
competition. Cross-functional teams work well in this industry
because of the need for rapid iteration that would be difficult if each
department worked individually.
• For companies offering different products or services, each product or
service might require very different strategies and thereby result in
distinct subdivisions.
• Location
• Companies across all industries have to consider how they’ll handle employees
who work from home, employees in satellite offices or international offices,
partners, freelancers, and the many complexities of the 21st-century workplace.
These aren’t just logistical questions but important organizational considerations.
• Culture
• What the company want it’s employees to think or feel when they come to work
and how can the team structure make that happen?
• While seemingly intangible, there are a lot of concrete factors that affect a
company’s brand––benefits, activities, workspace arrangement, and values, to
name a few––which means that one can be purposeful in creating the kind of
culture that the firm want for it’s employees.
• Although a hierarchy will be a stable, predictable environment for people to work
in. However, a flat hierarchy with very little upper management allows for more
genuine collaboration, employee-driven problem solving, and creativity. Some
companies push this to having no hierarchy whatsoever, to intensify that
collaborative, self-driven spirit in all their employees.
• Technology
Advances in technology make it easier than ever to track various
metrics, collect and analyze information, and communicate with others.
These aren’t just convenient––they change how businesses operate.
How can the company use technology to become more efficient and
streamline the organizational structure?
The move to have more “virtual” workplaces, which lowers costs.
Simpler communication and reporting also makes it possible for
managers to oversee more workers, possibly shrinking the number of
managerial positions.
Selection of Project org. structure

• Guidelines:
• 1. For project driven enterprises like L&T, Mecon etc. matrix form of
organization is suitable. Construction companies and companies
undertaking turnkey projects are the organizations that can be
benefitted by matrix structure.
• 2. Functional form is suitable for stable and repetitive environments.
For example, a project involving construction of 5000 similar houses.
• 3. Departmental Project organization is suitable for expansion,
modernization projects.
• 4. Pure Project org work better for the control of human resources
and hence are suitable for labour intensive projects like IT/Software
companies, Movie production, election campaigning etc.
• Project involving high complexity and requiring huge resources can be
better handled by pure project org structure.
PROJECT MANAGER : QUALITIES

•• Vision
•• Innovation
•• Direction and leadership
•• Technical expertise and People Management Skills
•• Effective communication
•• Trust, respect, credibility
•• Cross-functional cooperation
•• Negotiation and Conflict Resolution skills
PROJECT MANAGER : CHALLENGES

•• Management of team dynamics

•• Management of client relationships
•• Long working hours
•• High stress work environment
•• Ethical dilemmas
•• Impact on personal life
PROJECT MANAGER : RESPONSIBILITIES
Requirement Analysis, Planning and budgeting
Decision Making
Standardizing procedures, Project workplan and allocation of resources
Coordination with clients, vendors, team
Operational efficiency, Quality control and Change Management
Setting the work culture
Team Building – Inspiring, motivating, rewarding, guiding the team, taking care of
their growth in organization and maintaining good team environment
Anticipating potential threats – Risk management
• Resilience - Dealing with internal and external pressure
• • Balancing between organizational goals, employee and client satisfaction
• • Status Reports
• • Team Meetings, Review Meetings and Look Ahead Meetings (LAM)
• • Getting approvals and feedback on deliverables
• • Negotiations
• • Recruitment
• • Keeping up with the new technology
Project risk analysis
• Risk analysis is the process that figures out how likely that a risk will arise in
a project. It studies uncertainty and how it would impact the project in
terms of schedule, quality and costs if in fact it was to show up. Two ways
to analyze risk is quantitative and qualitative. But it’s important to know
that risk analysis is not an exact science, it’s more like an art.
• Risk Management
• Risk engineering is a continuous process of balancing risk response
strategies for different risks in the project
• Risk management is the overall process that project managers use to
minimize and manage risk. It includes risk identification, risk assessment,
risk response and risk response control.
• Project managers who have some experience with risk management in
projects are a great resource.
• The process of evaluating project risk begins in the planning stages, but it
must continue through every stage of the project. Both qualitative and
quantitative risk analysis are used.
• Qualitative risk analysis is the process of prioritizing risks for further
analysis or action. Determining each risk’s likelihood or probability of
occurring, as well as rating its impact on the project. The scale used is
commonly ranked from zero to one. That is, if the likelihood of the risk
happening in project is 0.5, then there is a 50 percent chance it will occur.
There is also an impact scale, which is measured from one to five, with five
being the most impact on the project.
• Qualitative risk analysis is beneficial because one can focus mostly on high-
impact risks, for which plan out appropriate mitigation responses.
• Quantitative Risk Analysis
• Quantitative risk analysis are numerical, mathematical or statistical
analysis of the effect of those identified risks on the overall project.
This helps team leaders to make decisions with reduced uncertainty,
and supports the process of controlling risks.
• Quantitative risk counts the possible outcomes for the project and
figures out the probability of still meeting project objectives. This
helps with decision-making, especially when there is uncertainty, and
creates cost, schedule or scope targets that are realistic. For example:
• Expected Monetary value (EMV)
• Event Tree and Decision Tree Analysis
• Make-or-buy decision
• Break even point
Techniques of risk analysis - expected monetary
value (EMV)
• Expected Monetary Value (EMV) is a statistical technique in risk
management used to quantify risks and calculate the contingency
reserve. It calculates the average outcome of all future events that
may or may not happen. Multiply the probability with the impact of
the identified risk to get the EMV.
• To calculate EMV, multiply the Money value of each possible outcome
by each outcome’s chance of occurring (percentage), and total the
results.
• For example, if one bet $60 that in roll of a die and it’ll come up on
the number 4, the EMV is –$40, because he has a 1 in 6 chance of
winning $60 and a 5 in 6 chance of losing $60:
Same bet for the coin flip:
• For Example, in a construction project.
• Weather, cost of construction material, and labor turmoil are key
project risks found in most construction projects:
• Project Risks 1 - Weather: There is a 25 percent chance of excessive
snow fall that’ll delay the construction for two weeks which will, in
turn, cost the project $80,000.
• Project Risks 2 - Cost of Construction Material: There is a 10 percent
probability of the price of construction material dropping, which will
save the project $100,000.
• Project Risks 3 - Labor Turmoil: There is a 5 percent probability of
construction coming to a halt if the workers go on strike. The impact
would lead to a loss of $150,000.
• How to quantify the project risks by calculating the Expected Monetary
Value of each risk.
• Two negative project risks (Weather and Labor Turmoil) and a positive
project risks (Cost of Construction Material). The Expected Monetary Value
for the project risks:
• Weather: 25/100 * (-$80,000) = - $ 20,000
• Cost of Construction Material: 10/100 * ($100,000) = $ 10,000
• Labor Turmoil: 5/100 * (-$150,000) = - $7,500
• Note: Though the highest impact is caused by the Labor Turmoil project
risk, the EMV is the lowest. This is because the probability of it occurring is
very low.
• The project’s EMV based on these project risks is:
-($20,000) + ($10,000) – ($7,500) = - $17,500
Event Tree
• An event tree is a graphical representation of a series of possible
events in a sequence. This approach assumes that as each event
occurs, there are only two outcomes, failure or success. A success
ends the sequence and the postulated outcome is either the
sequence terminated successfully or was mitigated successfully.
• For instance, a fire starts in a plant. This is the initiating event. Then
the fire suppression system is challenged. If the system actuates, the
fire is extinguished or suppressed and the event sequence ends. If the
fire suppression system fails, then the fire is not extinguished or
suppressed and the accident sequence progresses.
• Figure shows this accident sequence via an event tree.
• As in most of the risk assessment techniques, probabilities can be
assigned to the events and combined using the appropriate Boolean
logic to develop an overall probability for the various paths in the
event.
Event Probabilities
Event Tree with Path Probabilities
Decision tree
• A decision tree is a simple way to get a visual display of the uncertainty and the
various decision options for project risks.
• It is a graphical approach that can be used to evaluate decisions under
uncertainty. MS Excel Add-in can be used
• To determine the expected monetary value of a risk or a decision, the following
steps are required:
Identify the scenarios that could occur.
Determine the probability of each scenario.
Determine the monetary value associated with each outcome.
Multiply the probability times the monetary value of each outcome.
Sum the outcomes to get the expected monetary value of the risk or decision.
Example: Evaluating four Systems A, B, C, D using decision tree
Decision
Tree
System C provides the best
EMV.
make-or-buy decision
• Outsourcing is closely related to make or buy decision. The corporations made
decisions on what to make internally and what to buy from outside in order to
maximize the profit margins.
• All of the components of the iPhone are made by companies other than Apple.
• In the automobile industry, for example, the typical car contains more than
10,000 components, so automobile firms constantly face make-or-buy decisions.
• Ford buys truck and automobile seats, as well as many other components and
individual parts, from various suppliers and then assembles them at Ford
factories. With each component, Ford must decide if it is more cost effective to
make that component internally or to buy that component from an external
supplier.
• The decision applies to both goods and services. Businesses compare the cost
and benefits of producing the goods or services within the company and the cost
and benefits of getting an outside supplier to supply the goods and services into
consideration. The value here must include all the fees associated with
manufacturing (including material, labor, cost of machinery and space), storing,
moving, taxes, etc. and the corresponding benefits must include benefits in terms
of increased margins (for in-house production) or low capital requirement (for
outsourcing).
• The make-or-buy decision is the action of deciding between
manufacturing an item internally (or in-house) or buying it from an
external supplier (also known as outsourcing). Such decisions are
typically taken when a firm that has manufactured a part or product,
or else considerably modified it, is having issues with current
suppliers, or has reducing capacity or varying demand.
• Vertical integration provides its own set of advantages. An integrated
company depends less on its suppliers and so can be certain of a
smoother flow of materials and parts for the manufacture than a non-
integrated company. In addition, some companies believe they can
manage quality better by manufacturing their own parts and
materials instead of depending on the quality control standards of
external suppliers.
Factors favoring in-house manufacture
• Need for direct control over manufacturing and/or quality
• Cost considerations (costs less to make the part)
• Improved quality control
• No competent suppliers and/or unreliable suppliers
• Quantity too little to interest a supplier
• Design secrecy is necessary to protect proprietary technology
• Control of transportation, lead time, and warehousing expenses
• Political, environmental, or social reasons
• Productive utilization of excess plant capacity to assist with absorbing fixed
overhead (utilizing existing idle capacity)
• Greater guarantee of continual supply
Factors favoring purchase from outside
• Suppliers’ specialized know-how and research are more than that of the
buyer
• Lack of expertise
• Small-volume needs
• Cost aspects (costs less to purchase the item)
• Item not necessary to the firm’s strategy
• Limited facilities for a manufacture or inadequate capacity
• Brand preference
make-or-buy decision
Four things to know before applying Make-or-buy decision

• The volume or Quantity (Q)

• The fixed cost of making (FC)
• Per-unit direct/variable cost when making (v)
• Per-unit cost when buying (p)
Cost of making = (FC + v*Q)
Cost of buying = p*Q
Equating both, Q (Threshold volume) = FC/(p-v)
Project Appraisal
A review has shown that about 70% of project time or cost overruns are due to unrealistic
assumptions at the project formulation stage.
Project appraisal is the process of analyzing the technical feasibility and economic viability
of a project proposal with a view to financing it.
During the appraisal stage, measurement of costs and benefits are difficult as these are
spread over a long term with high degree of uncertainty
Project appraisal is the process of assessing, in a structured way, the case for proceeding
with a project or proposal, or the project's viability.

Categories of project appraisal:

• Technical
• Economic
• Financial
• Management etc.
Technical Appraisal

• Determines whether the technical parameters are soundly conceived,

realistic and technically feasible. Technical feasibility analysis is the
systematic gathering and analysis of the data pertaining to the
technical inputs required and formation of conclusion there from.
• The availability of the raw materials, equipment, hard/software,
power, sanitary and sewerage services, transportation facility, skilled
man power, engineering facilities, maintenance, local people etc.,
depending on the type of project are coming under technical analysis.
• This feasibility analysis is very important since its significance lies in
planning the exercises, documentation process, risk minimization
process and to get approval.
Technical Appraisal
• - Physical scale (plant capacity) and location/site/layout
• - Technology used & Type of equipment & Suitability conditions
• - How realistic is the implementation schedule
• - Procurement arrangement
• - Consultants
• - Product mix
• - Cost of operation & Maintenance
• - Necessary raw material & Inputs
• - Potential impact of project on human & physical Environment
Financial Appraisal
To determine whether the financial costs and returns are properly
estimated and whether the project is financially viable. It includes the fund
requirements from bank loans or from market through shares etc. Following
minimum details are determined in the financial appraisal;
1. Total Cost
2. O & M Expenditure (operation and maintenance)
3. Opportunity costs (It represent the potential benefits an investor, or business
misses out on when choosing one alternative over another)
4. Returns on Investment (RoI) over project life
5. NPV - Net present value
Commercial/Market Appraisal
• The demand and scope of the project among the beneficiaries,
customer friendly process and preferences, future demand of the
supply, effectiveness of the selling arrangement, latest information
availability on all areas, government control measures, etc.
• The appraisal involves the assessment of the current demand/market
scenario, which enables the project to get adequate demand.
Estimation, distribution and advertisement scenario also to be here
considered into.
Institutional/Management Appraisal
• To determine whether the implementing agencies as identified in the
report are capable for effective implementation, monitoring, and
evaluation of the scheme. Managerial competence, integrity,
knowledge of the project, the promoters should have the knowledge
and ability to plan, implement and operate the entire project
effectively.
• The past record of the promoters is to be appraised to clarify their
ability in handling the projects.
• Whether the entity is properly organised do the job
• Strength to use capability and take initiatives to reach the objectives
• Openness to new ideas and willingness to adopt long term approach
to extend over several projects
Institutional/Management Appraisal

• Management ability or competence plays an important role in making

an enterprise a success or otherwise. Strictly speaking, in the absence
of managerial competence, the projects which are otherwise feasible
may fail.
• On the contrary, even a poor project may become a successful one
with good managerial ability. Hence, while doing project appraisal,
the managerial competence or talent of the promoter should be
taken into consideration.
Economic Appraisal

How far the project contributes to the development of the sector,

industrial development, social development, maximizing the growth of
employment, etc. are kept in view while evaluating the economic
feasibility of the project.
• Estimation of market revenue
• Cost of production
• RoI
• Risk and uncertainty involved
• Tax factor
Legal Appraisal

• To determine whether the project satisfies the legal issues related to

land acquisition, title deed, environmental clearance etc.
SOCIAL APPRAISAL
• A social appraisal of a project goes beyond an economic appraisal to
determine which projects will increase welfare once their distribution
impact is considered. The project analyst is not only concerned to
determine the level of a project's benefits and costs but also who receives
the benefits and pays the costs.
• Social Appraisals that engage with key stakeholders to better understand
their interests and to obtain well structured feedback about action and
outcomes.
• Social appraisal processes provide clients with information about the
outcomes of programs and actions that they have implemented, facilitating
improved strategies to deliver cost effective benefits for businesses and
communities.