A Guidebook of Program & Project Management For Enterprise Innovation International Edition

Third Edition
P2M
A Guidebook of
Program & Project
Management
for
Enterprise Innovation
［ International Edition ］
June 2017
Project Management Association of Japan

[PMAJ]
Third Edition
P2M
A Guidebook of
Program & Project Management
for Enterprise Innovation
[ International Edition]
July 2017

[ PMAJ ]
Cyber Publishing Center
Cyber Creative Institute Co. Ltd.
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©2017 by Project Management Association of Japan[PMAJ]

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This book is in copyright. Subject to statutory exception and to the provision of relevant
collective licensing agreements, no reproduction of any part may take place without the
written permission of PMAJ.
First published 2017
ISBN 978-4-908520-20-4
Preface
Preface
Publication of ‘Project & Program Management for Enterprise Innovation’
(P2M) and its Features and Impact
The first edition of P2M was published by ENAA, or Engineering Advancement
Association of Japan, in 2001. MITI, or the Ministry of International Trade and Industry,
established a committee within ENAA in 1999. The purpose of MITI was to transform
individual enterprises and to realize value creation by developing methodology, cultivating
professional personnel and implementing change. MITI changed to METI, or the Ministry
of Economy, Trade and Industry, in 2001.
The features of P2M are:

1) To create a single body of knowledge by linking the formerly individualized areas of
project management and program management with the aim of overall optimization.
2) To incorporate the strengths of Japan’s industries into this body of knowledge.
After the first publication, P2M became highly rated in Europe where the study and
research of project management (PM) was further advanced. P2M research began to be
carried out at many major universities in Europe with P2M-related courses being
established at more than 25 institutions. The degree to which P2M impacted Europe can
be seen when the link between project management and program management was
adopted by national PM associations in Europe.
Impact of the Knowledge Society

American sociologist Daniel Bell advocated the "post-industrial society" in 1962. The
“industrialized society,” which centered on the production of goods, had been shifting its
center of economic activity to knowledge-centered services, or a “knowledge society.” Along
with that, the role of the "working class" was being reduced and the "knowledge class,” that
of professionals and technological experts, was becoming larger. Furthermore,
organizational management greatly changed, too. As the core of the economy and society
changed from primary industry to secondary industry through the "industrial revolution,"
it was said that the transition to tertiary industry, or a knowledge society, was happening
through the "information revolution." (The Coming of Post-Industrial Society: A Venture in
Social Forecasting, Basic Books, 1973)
Knowledge Society and the Necessity of Professionals

The root cause of various issues in Japan such as globalization, low economic growth,
declining birthrate, aging society, financial crisis and so on is due to the deep progression of
this industrial structural transformation. In 2000, when Project & Program Management
for Enterprise Innovation or P2M was first conceived, Japan as well as other industrialized
countries began to be impacted by this knowledge society. In order to continue to be
prosperous in a new society where the rules of the game have changed, it became necessary
to acquire strategies and capabilities in line with the new rules. For example, "open
innovation" and "cloud computing" are not just new techniques but basic strategies that
match with the times. However, in less than 10 years, these may be just common industry
knowledge. New knowledge and strategies will be required depending on the times. In this
Preface
new era, professionals with a bold viewpoint and broad perspective are needed. The
purpose of P2M is to train such professionals to realize new value creation by bringing
together leaders who have achieved innovative changes with specialists and experts from
the various fields of science, technology and business.
Applications of P2M and Prospective Readers

As the title shows, just as a standard guidebook does, this is a guide for obtaining and
utilizing basic knowledge. The knowledge system should be modified and expanded in
accordance with the development of science and technology as well as societal trends. It is
with this view that we seek to build sound cooperative and collaborative relationships with
relevant universities, academic societies, associations, industries, etc., and to adapt to
environmental changes. Professionals practicing project management and program
management can also refine their knowledge and experiences accumulated throughout
their careers to enhance their own capabilities and achieve their goals.
The prospective readers of this guidebook are executives, managers, professionals,

students, and so on. The scope of utilization is not limited to social infrastructure, natural
resources development, production facility, product development, general engineering and
construction, ICT system development, etc. A major feature of P2M is that it can be applied
not only to businesses but also to social fields including public administration, education,
medicine, and the local community.
P2M 3rd Edition English Version

Both the first and the second editions were translated into English, but they were not
released to the public because they were limited to specific readers. Recently, there have
been many requests to publish an English version so the 3rd edition is being published in
English. Only the main features of P2M were included in the book and the remaining
features, i.e. general management theory, were not. In the 3rd edition, the chapter on
“Project Finance” was reprinted from the 1st Edition English version, since that part of the
3rd Edition Japanese version was simplified and did not contain enough detail for readers
outside of Japan. Please refer to the Table of Contents for further details.
Acknowledgement
To conclude, I would like to thank Professor Motoh Shimizu, the chairperson of the
Revision 3 Committee and its members, Mr. Toru Kato, Dr. Ichiro Koshijima, Dr. Yoshiaki
Shibao, Mr. Hisashi Hama, and Mr. Fumihiro Miyamoto. Furthermore, my gratitude to the
many authors and reviewers whose names are listed in this book as well as our technical
adviser, Dr. Hiroshi Tanaka and our editors, Mr. Yutaka Furuzono and Mr. Susumu Miura.
July 2017
Non-Profit Organization PMAJ -
Akio Mitsufuji, President
Revised 3rd Edition P2M Standard Guide Book
Member List of Revision Committee & Writing Committee
Revision Committee Member (and Writing)

Motoh Shimizu (Chairman)
Hisato Hama Fumihiro Miyamoto
Yoshiaki Shibao Ichiro Koshijima
Toru Kato
Writing Committee Member

Hiromi Sugiura Hiroki Ono
Hisakazu Nishiguchi Kenichi Suzuki
Kentarou Hayashi Kentaro Ito
Kotaro Shimizu Kouji Iwasaki
Masanobu Nakamura Masao Watabe
Takatoshi Imaoka Naoki Kasahara
Nobuaki Ishii Makoto Kuribayashi
Taeko Inoue Takashi Kagawa
Takeshi Matsumoto Takeshi Saito
Tetsuya Yonezawa Tomoichi Sato
Tsutomu Furumoto Yasunari Kitamura
Yoshio Satoh Yukio Momomura
Reviewer
Hiroshi Tanaka Junichi Koizumi
Kaoru Nakamura Katsuo Tsuchide
Kenji Hatsuda Kosei Watanabe
Kumiko Shirai Masao Motegi
Naoki Oshima Shoei Komatsu
Tadaaki Kougo Takayuki Asada
Tomio Umeda Toru Mihara
Toshiyuki Kuroyanagi Yasuko Kaminuma
Yutaka Utashiro
Secretariat (and Writing)

Akio Mitsufuji Yutaka Furuzono
CONTENTS
Part １　Outline Overview and Characteristics of P2M 1
Chapter 1 Introduction 2
1. What Is P2M? 2
2. P2M Program Management 5
3. Professionals Human Resources Who Aim to Solve Complicated Complex Problems
6
4. Innovation and Human Development through P2M 7
5. Fields Where P2M Can Be Used 9
Chapter 2 Structure of the P2M Guidebook 10

Chapter 3 Business, Program ,and Project 12
1. Business Managemen 12
2. Hierarchy of Business Activities 13
3. Program Management and Project Management 14
Chapter 4 Characteristics of P2M Program Management 21

1. Multiplicity of Contexts of a Program 21
2. Sense of the Knowledge Necessary for Managers 21
3. Essentials of Program Management 22
Chapter 5 Capabilities for P2M 24

1. Qualifications for Program Managers and Project Managers 24
2. Manager’s Work 25
3. Capability 25
Part 2　Program　Management 27
Introduction Outline 28
Chapter 1 Program and Program Management 30
1. Organization’s Strategy and Program 30
2. Definition and Classification of Programs 33
3. Program Management 36
4. Lifecycle 39
5. Program Organization 40
Chapter 2 Program Integration Management 43

1. Mission ProfilingProfiling 44
2. Program Design 54
3. Integration Management of Program Implementation 70
4.Relationship Management 79
5.Multi-project Management 81
Chapter 3 Program Strategy and Risk Management 84

1.Program Strategies and Risks 85
2.Program Strategy Management 87
3.Pgram Risk Management 96
Chapter 4　Value Assessment Management 104

1.Value Assessment Management 105
2.Process of Value Assessment 110
3.Value Assessment Indices 127
ⅰ
Part 3　Project　Management 131
Chapter 1　Project and Project Management 132
1. Definition of Project 132
2. Basic Attributes of Project 132
3. Stepwise Refinement and Rolling Wave Planning 133
4. Definition of Project Management 133
5.Requirements of Project Managementt. 133
6.Concepts Related to Project Management 134
7.Project Activities 138
Chapter 2　Integration management 141

1. Overview 141
2. Developing a Project Charter 143
3. Develop Project Plan 145
4. Execute Project 148
5. Project Operation Management 149
6. Change Control 151
7. Closing Project Phase or Project 153
Chapter 3 Stakeholder Management 155

1. Outline 155
2. Identify Stakeholders 157
3. Stakeholder Management 159
Chapter 4 Scope Management 162

1. Overview 162
2. Scope Plan 163
3. Definition of Scope 164
4. Preparation of WBS 165
5. Scope Change Control 170
Chapter 5 Resource Management 171

1. Outline 171
2. Identification of Resources 173
3. Development of a Resource Plan 175
4. Implementation of the Resource Plan 178
5. Monitoring and Control of Resources 179
6. Improvement/Correction Plan 180
7. Accumulation of Resources 182
Chapter 6 Time Management 188

1. Outline 188
2. Develop Schedule 190
3. Project Progress Control 196
4. Progress Trend Analysis and Forecasting 196
5. Adjustment to Achieve the Goal 197
6. Relevant Knowledge for Critical Chain Management 197
ⅱ
Chapter 7 Cost Management 201
1. Outline 201
2. Cost Estimation 204
3. Budget Compilation 208
4. Cost Management 213
Chapter 8: Risk Management 219

1. Overview 219
2. Development of Policy 228
3. Risk Identification 231
4. Risk Analysis and Evaluation 232
5 Preparation of Risk Countermeasures 235
6. Implementation, Monitoring, and Evaluation of Countermeasures 238
7. Compilation of Lessons Learned from Risk Management 238
Chapter 9: Quality Management 239

1. Overview 239
2. Quality Plan 242
3. Quality Assurance 242
4. Quality Control 244
Chapter 10: Procurement Management 248

1. Overview 248
2. Procurement Planning 249
3. Procurement Execution 253
4. Procurement Control 255
5. Delivery of Procured Products 258
Chapter 11: Communication Management 261

1. Overview 261
2. Communication Planning 263
3. Information Distribution 267
4. Communication Management 268
Part 4 Business Management Foundation 275

Introduction: Strategy Formulation 276
1. Strategies 276
2. Strategy Formulation 278
3. Forms of Strategy Formulation 279
4. Programs and Strategies 281
Chapter 1: Business Enterprises and Programs 282

1. Business Management Foundation 282
2. Business Strategies and Programs 285
3. Program and Project Governance 288
4. CSR and Programs/Projects 291
ⅲ
Part 4 Business Management Foundation
Chapter 2 Program Strategy Method 296
1. Need for Program Strategy Method 296
2. Methods for Implementing Strategy 296
3. Customer Relation Strategy 303
4. Process of Decision Making 306
5. Open Innovation 310
Chapter 3. Project Organization Management 318

1. Overview 318
2. An organization and Project 318
3. Management of a Batrix-based Organization Model 323
4. Project Management Office 325
5. Project Teams 328
6.Maturity of Organization 332
7. Strategic Alliance 337
8. Design and Application of a Community 343
Chapter4 Project Finance Management 350

1. Overview 350
2. Basics of Project Finance Management 351
3. Basic Concept of Finance for a Project 356
4. Selection and Specification of Fund Elements 360
5. Creation of Feasible and Optimum Structure (Structuring) 362
6. Optimum Risk Allocation in Project Materialization 368
7. Evaluation of Financial Viability and Economic Efficency 372

Chapter5 Information Management and Infrastructure
Part 5 Knowledge Fundation 379

Chapter 1 Systems approach 380
1. Overview 380
2. The Systems Approach 383
3. Systems Engineering 392
4. Systems Management 399

Chapter 2 Knowledge and information asseta,
Chapter 3 Value and value assessment
Part 6 Human Capability Foundation 405

Introduction: What is human capability foundation? 406
Chapter 1 : Capability of Manager for Practicing P2M 407
1. Capability Required for a Manager 407
2. Ability Elements and Evaluation Criteria in Capability 413
3. P2M Capability 416
4. Experiential Learning Process for Honing Capability 420
ⅳ
Chapter 2 : Human Capability Foundation on Program/Project
Chapter 3 : Leadership
Chapter 4 : Communication Skill and Creation of Community
Chapter 5 : Multicultural Correspondence
Index 422
　:　Shaded areas are not translated
Ⅴ
Program & Project Management for Enterprise Innovation
Part １
Overview and
Characteristics of
P2M
Chapter 1 Introduction
Chapter 2 Structure of the P2M Guidebook (3rd Revised Edition)
Chapter 3 Business, Program and Project
Chapter 4 Characteristics of P2M Program Management
Chapter 5 Capabilities for P2M
Copyright © 2017 Project Management Association of Japan
1
Part 1 Overview and Characteristics of P2M
Chapter1 Introduction
Chapter 1 Introduction
1. What Is P2M?
1-1. What Is P2M?

P2M is the abbreviated name for “Program & Project Management,*1 and this guidebook
provides a body of systematic knowledge about P2M. The first edition of the P2M Guidebook
was published in 2001, a time when there was rapid progress in globalization, the expansion of
the digital information industry, the growth of emerging countries, and other social and
economic changes. The first edition’s subtitle was “Project & Program Management for
Enterprise Innovation,” which reflected the understanding that Japanese companies and Japan
as a whole were in a phase of major changes. Therefore, a strong sense of innovation or
renovation has been engraved in the knowledge system of P2M, concerning not only knowledge
on the management process of programs and projects but also the mode of conducting business
of project performing organizations, the business enterprises or public agencies and other
not-for-project bodies.
We often solve large and complicated problems by combining two or more projects.
Integrated activities for appropriately combined projects to achieve given objectives are what we
call a program traditionally. To aim for the achievement of better results, P2M synthetically
deals with program management, which consists of conceiving, planning and implementing a
program, methods of project management for carrying out each of the component projects of the
program more effectively and efficiently, as well as other related knowledge.
1-2. The Rapidly Changing Society

Companies receive compensations from customers for the provision of products and services.
Government and other public agencies also provide services to citizens as customers. In the
globalized and complicated modern society, products and services needed by customers and the
society change rapidly. This change necessarily affects large and small companies and central
and local government agencies. The Japanese society has changed greatly over the past decade.
The world has also greatly moved. In particular, the Chinese society has completely changed
within a decade, becoming one of the world’s leaders. Although how change occurs differs from
country to country, this situation is similar to that of other Asian countries, the US, European
countries, Latin American countries, and African countries. With global progress in the
information revolution, such social change has been accelerated further and we may predict
that the world will become totally different in the next decade.
Even in the so-called knowledge economy or post-industrial society, where knowledge
and information have greater value than before, the demand for products and services will
not decrease, but increase even more.
------------------------------
*1 Since the revised third edition, the book title has been changed to “Program & Project
Management Guidebook” to place more importance on program management.
2
However, the dimensions of products and services, ways of providing them, and the
resources they require change rapidly. Companies and other organizations need to discover the
new values that customers hope to acquire and become the first to create “mechanisms” to
provide these values widely throughout the society. This requires reconsideration and the
conversion of everything, including their own organizational structure and business processes.
The key words for adaptation to the times are “value creation” and “innovation.”
This guidebook systematically provides the core knowledge for using P2M to solve
complicated modern issues, such as value creation and innovation, dividing the knowledge into
the following three types:
1) Knowledge on program management that systematizes the processes of conception and

behavior concerning innovation and value creation
2) Knowledge on project management as a process system for steadily carrying out the
projects that constitute a program.
3) Knowledge of other relevant business administration that constitutes the grounds for the
implementation of programs and projects in the course of business management.
1-3. Programs and Projects

It is appropriate to start with simple explanations about the concepts of program and project
for the purpose of this guidebook.
A project consists of activities characterized by non-repetitive tasks and timelines for
completion, which means that there is a mandated or agreed due date for completion. On the
other hand, as described above, a program is a series of activities into which plural component
projects are systematically integrated to achieve the super-objectives, such as the
materialization of organizational strategies.
Generally, when the management of a stand-alone project officially begins, the goal of the
project has been set up concretely in the form of a “project charter”. Project management
involves the processes for achieving the goal efficiently without fail.
On the other hand, programs can be classified into two typical types. The first type is
applicable to the construction of a large plant, the development of an IT solution system, and
social infrastructure that have a goal specified in a contract or the like in the beginning, but
these are so large in scale as to be divided into plural component projects and are managed by
integrating all of them. Because the scale is large, however, although the goal has been firmly
set, usually uncertain factors remain or various examinations are needed for a program before
the goal is specified in a contract or a program concept plan. This type of program is often
handled by a company specialized in the implementation of the program itself. Because such a
company regards the implementation as if it is a daily operation, this type of program is
called an “operational program” for the purpose of P2M.
The second type of program starts only with the conceptual strategic purpose of “what value
to aim at” – for example, the creation of a new market by development of a totally new product
or the creation of a mechanism that improves the efficiency of the production to surpass rival
companies. In this case, because any concrete goal is unclear at first, it is important to develop a
3
process for establishing an appropriate strategic goal. Although this type of program varies
depending on the concept of its purpose, such as creation or innovation, it is possible to
collectively call them “strategic programs.”
Exhibit 1-1-1 Typical types of programs
A project or program falls under the general definition of “system,” which is defined as
“something that systematically consists of several elements and performs some functions as a
whole.” Therefore, a project or program can be regarded as a “process-type system.”＊2 If a
program is regarded as a system, a project can be regarded as a subsystem. Generally, the entire
structure of a complicated system can be understood as an integration of subsystems, each of
which can be understood after the system is divided hierarchically into the subsystems to limit
the scope. If interfaces are established appropriately for the projects (subsystems) of a program
(system), it is possible to carry out a project (subsystem) autonomously without being affected by
the other projects. If a project is regarded as a module subordinate to a program, this is an
advantage of modularization. ＊ 3 Operational programs can enjoy this advantage of
modularization if subordinate projects can be established appropriately.1）
In the case of a strategic program, there is a vague strategic concept at first. To carry out a
program practically, the process of mission profiling is extremely important to redefine the vague
strategic concept as a group of concrete objectives. (Part 2, Chapter 2) Subordinate projects cannot be
established like an operational program until a group of objectives is clarified.
------------------------------
*2 For example, if operational elements – design, manufacture, assembly, and inspection – are systematically
combined for mechanical equipment, this results in a production process – that is, “something that performs
some functions” as a whole. This production process can be regarded as a kind of system. What is generally
called a system, such as a mechanical product, is an expression of a snapshot of elements at a point of time. If
needed, this is called a “product system” to be distinguished from a “process system.”
*3 Modularization divides a system into modules (subsystems) highly independent of each other. In the case also
of a single system that is not mass-produced, one of the advantages of modularization is to enable each module
to be made highly independent through the appropriate division and establishment of interfaces. Concretely,
this enables the following: simultaneous development of modules; improvement of efficiency and shortening of
the schedule through the concentration of technologies in each module and the use of specialized human
resources and organizations for each module; reduction in the complexity of the system; and changes in the
system by using each module as a unit.
4
In addition, because a strategic program is usually greatly affected by the

circumstances, such as the market and competitive trends, and takes a long time to
complete, it is ordinarily designed on the assumption that there will be considerable
changes in the circumstances. One of the methods for coping with this is to set up options,
such as postponement, suspension, and addition, regarding each project as a module unit.
Moreover, in most cases, the results of a strategy can be gained as a result of the use of
a certain system created by a program. Under P2M, this stage of program product use is
regarded as a service model project, which is a part of the program for realizing the
strategy.
When designing an operational program, it may be necessary to pay a consideration as
in the case of designing a strategic program. Because an operational program is highly
complicated, has many elements to be developed, or takes a long time to complete, it is
highly likely to be affected by external environmental changes.
With regard to the irregular operations among the organizational activities, P2M
explains the three typical types of project described herein, operational programs, and
strategic programs. In reality, project activities are complicated and are not necessarily
carried out as described in a textbook. For example, even a project may have some strategic
elements. In many cases, a certain activity cannot be explained only by one of the types. It
is also necessary to select appropriate processes and techniques in the course of
program/project management, depending on the situation.
2. P2M Program Management
Project management has been developed to carry out a planned business with “one theme,”
and project management professionals have been recognized widely in the world mainly in such
industries as engineering, construction, and IT. On the other hand, the problems in today’s
knowledge society require the simultaneous solution of a complication of “several themes”.
Although project management provides basic knowledge for solving each of them, it is
insufficient to deal with complicated problems with “several themes” from a holistic perspective.
So, to deal with such complicated problems, program management treats them by combining
several projects systematically, and in addition, P2M Guidebook organizes program
management as a way to implement enterprise innovation in order to deal with not only
complicated projects but also complicated management complex systems. The first edition of
P2M Guidebook is one of the earliest efforts clearly presented this way of thinking to the world
in advance of other program management in a form.
After the P2M Guidebook (first edition), several knowledge systems concerning program
management have been published overseas. In this guidebook, the contents peculiar to P2M
concerning program management knowledge will be called “P2M Program Management.”
P2M Program Management aims to cope with not only complicated problems but also
“rapidly changing and complicated problems.” This requires the assumption that great
environmental changes may occur during the implementation of a project. Ordinary project
5
management is based on the assumption that the goal and conditions of the project is made
clear beforehand and there are no or few environmental changes. On this assumption, the scope
of the project is clarified – that is, subdivided – and is finally developed into each of its concrete
activities. Subdivision makes it possible to reduce complexity to a level that makes an easy
solution possible.
Similarly, a typical large project is divided into a number of small projects, which are
carried out step-by-step to reduce the complexity. This is a program in the traditional sense.
On the other hand, today’s programs have to deal with complexity caused by uncontrollable
environmental changes, such as changes in customers’ needs, the new entrance of rivals with
unforeseeable techniques, rapid changes in resource supply markets, and rapid changes in
political and economic circumstances.＊4
From the viewpoint of complexity, project management is, so to speak, a chess problem. The
conditions of the board surface have been fixed beforehand and the usable resources (chess
pieces) have also been fixed. However, in today’s global economy and society, there is an increase
in the number of the opponent’s pieces, a change in the position of the king, and an increase or
decrease in the number of squares without notice. Your rook may also change into a pawn
without notice. This is dynamic complexity. P2M Program Management tries to adapt itself to
such environmental changes. It copes with each situation by dividing it into elements
manageable by established projects, while it copes with a great change by dealing with the
entire structure of the program.
Among others, P2M places importance on “value creation.” From the perspective described
above, activities for creating a new value earlier than rivals also create a new environment for
the market (customers and other companies). This can be said to be the best defense against
changes in the market environment.
Finding the essentials of the program mission (mission profiling) is important for P2M
Program Management, which places importance on the relationship between the strategy and
the program. This is a process that is indispensable for identifying the potential for
environmental changes instead of merely following environmental changes and preparing a
plan that makes it difficult for environmental changes to have an effect.
3. Professionals Who Aim to Solve Complex Problems
P2M is mainly characterized by its viewpoint of developing not only processes and
knowledge for innovation and value creation, but also excellent professionals for this purpose.
The sustainable development of a company requires growth. Although the improvement of
efficiency and the acquisition of synergy by M&A are important strategic methods for growth;
mere merger does not lead to growth. Organic growth is important in order to improve the
capabilities of human resources of the organization sustainedly and develop the organization.
For this purpose, it is necessary to find problems in its growth and develop the human resources
and organizational climate necessary for correct interpretation and problem solution.
According to P2M, the most essential strategy for an organization to enable it to realize
innovation and value creation is the “development of professionals who have a broad outlook
------------------------------
*4 Such complexity that is hard to understand for the parties concerned is called “dynamic complexity.” On the
other hand, complexity that makes it possible to expect planned outputs to be gained from complicated but
stable inputs is called “technical complexity.”
6
and an elevated viewpoint.” Solutions to today’s issues require management human resources
that can freely use broad and deep knowledge, especially through the accumulation of various
human resources not by individuals, but by the organization.
Today’s world can change significantly over a short period of time span. The P2M
Guidebook has focused on and systematized the essential ways of thinking that will not change
substantially with the passage of time. True success requires the sustained learning and growth
of the organization and each manager, using knowledge on P2M as the basis and responding to
business requirement and the market environment.
In the past century, professionals have typically focused on narrow and specialised expertise,
for example, lawyers, accountants, engineers and doctors. There are qualification systems for
these experts. However, the number of complex problems has been increasing in various fields,
such as the political, social, and industrial fields. Coping with complex problems across two or
more fields – for example, the “creation of a new business” and the “solution of an
environmental problem – requires broader knowledge, across engineering, finance,
management, legal, and other fields. Such human resources are typified by owners and
entrepreneurs. However, when the economy and society are becoming considerably more
complex and rapidly changing, the human resources necessary for coping with this situation
include not only the owners, but also the cross-discipline professionals who can understand the
essentials of complex problems and initiate actions to solve the problems from a standpoint of
the workplace.
P2M calls such human resources “mission-performing professionals.” They can provide the
image of complex problems as a whole in an easy-to-understand way for experts in each field,
write highly feasible scenarios, create various mechanisms for gaining success, and producing
values by the use of them. Based on their expertise and practical experience in related fields,
they have both the ability to “see from a higher position” and the ability to organize people with
various special capabilities to meet the challenges. As one of its activities, P2M appropriately
evaluates the capabilities of such human resources and certifies their qualifications.
4. Innovation and Human Development through P2M

Because technologies are rapidly advancing and markets are quickly shifting, any
business soon slackens if it lacks innovation. However, as in the high-growth era, if new
technologies are developed only from the current ones, this may result in wasting time,
capabilities, and funds. In advanced economies, customers do not merely want to possess
things. The requirements for new large markets are efficiency, effectiveness, satisfaction, a
pleasant experience, convenience, and other aspects that match the prices. Of course,
because many companies give customer satisfaction through concrete products, this does
not mean a decrease in the importance of the products themselves and innovations in the
ways of manufacturing them.
However, as before, if the existing performance is simply improved on, if a function
that is a little more convenient is added, or if the cost is lowered a little, it is difficult to
continue to satisfy customers. Partial optimization of the technologies and products does
not work. It is necessary to create true value for customers as a form of total optimization.
7
(1) Essential Innovation

In the Japanese society, human mobility is relatively low. This has a significant impact on
the effective management and unification of an organization through the sharing of implicit
knowledge. On the other hand, the sharing of “common knowledge” and a uniform sense of
values within an organization gives stability, but decreases ability to respond to change.
Although there are exceptions, this tendency becomes stronger as the size of an organization
becomes larger. What innovations should be made by increasing sensitivity to changes? How
should innovation occur? What value should be provided to customers by such innovation? The
first issue is to find out the nature and goal of each innovation.
(2) Business Model and the Creation of Systems
How does a company gain results from a realized customer value? This requires the
establishment of ingenious systems for gaining profits (a business model) at an earlier stage and
the rapidly repeated innovation of the mechanism. Rival companies think in the same way and
knowledge is highly fluid. If a company is behind its rivals, it will lose the market and waste
innovations made through considerable effort. This does not mean gaining no profit, but means
losing the amount of the investments and great opportunities. It is essential not only to innovate
regarding products, but also to create various systems for supporting the business model and
opening up a market, such as the production process, supply chains, distribution channels, and
service networks. Public organizations also need to create various systems for carrying out
policies. The processes for creating each system are usually carried out as a project.
(3) Development of Human Resources (Mission-performing Professionals)
The most important element of the prosperity of a company or organization is human
beings all through the ages. From the ages of Henry Ford and Konosuke Matsushita to the age
of Steve Jobs, many famous industrialists themselves illustrate the importance of human
beings as management resources. In the case of Japanese-style organizations, what is highly
important as management resources is the power of their human networks, including not only
top executives, but also senior and middle managers. To adapt themselves to the changing times,
companies need to ensure that these people understand strategic issues designed by
industrialists and improve their practical ability to understand innovations and create systems
as described in (1) and (2) above.
An operational project, which repeatedly manufactures a certain product or provides a
certain service every day, is important as the basis for production activities. With regard to such
business activities, the importance of the “administrator” who controls deviation from standard
procedures and norms is clear. If business activities center on a project, although such
administrative work is important in a sense, mission-oriented professional managers are
essential to preparing a zero-based plan from no standards and to change the policy flexibly if
needed during the processes of carrying out the plan.
The original meaning of “innovation” is not so much “producing something new (object)” as
“making myself (subject) new.”2) In other words, “creation is nothing other than
self-transformation.” In this sense also, P2M’s viewpoint on the development of human
resources-that is, requesting program managers to assume an attitude of study for improving
themselves-is important.
8
P2M translated a program mission indicated by an organization’s strategy into a guide to

establishing guidelines for developing processes for essential innovation, a way of thinking and
method for creating systems, and methods for developing the human resources necessary for
current business performance.
5. Fields Where P2M Can Be Used

P2M can be used for not only traditional infrastructure and the construction of facilities, but
also industries and public services. Exhibit 1-1-2 summarizes the main fields.
Field Main concrete examples
Classification by industry
National traffic and transport systems; lifeline (electricity, water, gas,

telecommunications) systems; national safety and defense facilities; public and
1 Infrastructure social service facilities; urban and regional development; flood control, disaster
prevention, and environmental conservation systems; reconstruction from
disasters
Oil, natural gas, electric power development; mineral resources development; oil
Resources and
refining, petrochemical, chemical, metal refining, electric power, nuclear power
2 energy
plants; storage and distribution systems; renewable energy plants; seabed
resources development; energy saving
Machinery manufacture; electronic equipment manufacture; steel and metal

3 Manufacturing manufacture; chemical manufacture; food manufacture; medicinal chemical
manufacture
Retailing; transport and distribution; Internet shopping services;

Selling, distribution, telecommunication network services; various online services; games and
4
services electronic books; entertainment and sports events; various charge systems; new
business models
Social and industrial Social development; energy and resources development; planning, design,
5
engineering construction, operation, maintenance of production facilities
Government agencies; local government policies, development strategies, and

6 Administration industrial strategies that require high mobility; multiple issues across government
agencies, etc.
Official development assistance; technology transfer; economic and social

International
7 development of developing countries through international cooperative
cooperation
development; development of human resources; organization reinforcement, etc.
Education, medical
8 University reform; educational reform; medical care and hospital systems
care
Classification by program mission (or issue)
Management reform; organization reform; reengineering; corporate merger;

Business creation,
9 business separation/combination; creation of new businesses; creation of new
management reform
markets; PFI; ventures
Product
Product development; drug development; materials development; open-modular
10 development,
production; supply chain reform
production reform
Various production plants/facilities; distribution system; production system reform

11 Production facilities
(automation/intelligence systems, virtual factory)
Research and Advanced research (e.g. supercomputers, use of super conductivity, iPS cell
12
development research/application, driverless driving); space exploration; nuclear fusion, etc.
Various events; life support projects; management of volunteer groups; regional

13 Community
development/revitalization; disaster prevention security systems
Systems development; systems integration; creation of IT solutions; various

14 Digital information
financial systems
Exhibit 1-1-2 Main fields where P2M can be used
9
Chapter 2 Structure of the P2M Guidebook (3rd Edition)
Chapter 2 Structure of the P2M Guidebook
The P2M tree in Exhibit 1-2-1 shows the structure of the P2M Guidebook. Compared with
the last edition, this version has updated the knowledge domains to make some domains clear
and increase domains and to make the structure easier-to-understand.
(1) Part 2, Program Management, more clearly explains the processes for integration
management (such as mission profiling) and the mutual relationships among strategic
management, risk management, and value assessment management, all of which are closely
related to integration management.
(2) The structure of Part 3, Project Management, has been considerably revised by reference to
trends in ISO’s international standardization.*5
This makes it easier for project managers who want to study P2M Project Management to
understand the relationship between programs and projects.
(3) The P2M Guidebook further provides three domains of knowledge to support the planning
and management of program management and project management. They are: Part 4,
Business Management Base, explains strategies, organization, funds, and information systems
as business management infrastructures. Part 5, Knowledge Base, explains the basic
knowledge that project or program managers need to know to achieve their mission based on
the knowledge described in Parts 2, 3, and 4, professional knowledge, and practical experience.
(4) Moreover, project/program managers are high-tier professionals who have practical abilities
supported not only by knowledge, but also by behavior. Programs and projects can be carried out
only if they are based on such management talents. Part 6, Competence Bases of Human
Resources, explains the concept of practical management ability, the most basic leadership and
communication ability for supporting excellent organizational activities, and the basic attitude
that managers should assume when confronted with business issues.
------------------------------
*5 ISO21500 “Guidance on Project Management”
10
Chapter 2 Structure of the P2M Guidebook (3rd Edition)
Exhibit 1-2-1 P2M tree
11
Chapter 3 Business, Program, Project
Chapter 3 Business, Program and Project
Because programs and projects correspond to business as not usual parts – that is, strategic
or transformative parts – of business activities, it is important to understand them in relation to
the whole business context.
This chapter explains the relations among business, programs, projects, and operations.
Business, programs, and projects each have a hierarchy and are activities that have missions
and strategies. In addition, this chapter elaborates roles and characteristics of the management
of programs and projects.
1. Business Management
Whether private or public, any company has the mission of the foundation such as
founder’s belief non-profit organizations and government agencies also declare the mission to be
carried out. That is, a mission is a declaration of the functions to be performed of that particular
organization in the society.
With a business company, its mission is to become useful in society directly through the
creation of customer value and indirectly through securing the work and welfare of the
employees, the payment of dividends to shareholders and taxes from profits, and other social
and environmental contributions. Of course, what customer value is to be created varies among
companies and reflects each company’s uniqueness.
The direct mission of not-for-profit bodies and other non-profit organizations (NPOs) is to
create value and provide it to the members, while their indirect mission is to make a
contribution to the society and the environment. The central mission of government agencies is
to protect the life of its nationals, enhance economic growth, and all in all support the
maintenance and development of the society. They construct and provide the infrastructure
through public investment and provide education, welfare and other social maintenance
services through public consumption.
Organizations that have not concretely clarified any mission should have a certain role in
society. If not, it is difficult for them to continue to exist. Conversely, it can be said that an
organization is a means to achieve a mission.
Generally, companies achieve their mission on the assumption that they can continue to
exist and grow. This is the reason why they are called “ongoing concerns.” As part of this
sustainable existence and growth, companies start, carry out, or discontinue each business in
accordance with their mission. This is also true for nonprofit organizations and government
agencies.
Business refers to a group of activities that produce tangible or intangible value by
inputting funds and labor. Types of business include: for-profit, not-for-profit, governmental,
public-private partnerships and NGOs. The following are examples of a business:
12
● Manufacturing and selling a group of products (profit-making)

● Building a bridge and having the users pass over it free of charge (public)
● The cooperation of several companies in developing a new market or technology (joint)
Among the activities that constitute a business, those that should be repeated stably are
called operations. For example, the production, distribution, and sales carried out by
manufacturers are operations.
If operations are repeated, resulting in the accumulation of learning effects and knowledge,
the efficiency and performance of the business will be improved. Therefore, the sustainability
and stability of the business are most important. It can be considered that operations are “work
in which efforts are made that do not finish.”
There are three main factors that directly surround a business.
● Target demand (market)
● Available resources and capabilities
● Rivals
To make business sustainable in constantly changing circumstances, it is necessary to be
able to accurately assess the state of the above-described three factors at any one time and carry
out measures to ensure they are advantageous for the business. Concretely, such measures
include the development of new demand, the acquisition of resources and capabilities, and the
establishment of a competitive advantage.
Such activities require characteristics that are not repetitive but innovative – that is,
unprecedented and creative. Business strategies give these activities guidelines and direction
(for details, see Part 4).
Activities that greatly change the business situation and solve issues are temporary in
principle. They themselves end when the goal is achieved. Such a type of activity is called a
“program” or a “project.” It can be said that a program or project is “a group of activities
undertaken to achieve set results.” Of course, when a program is completed, new issue or goals
may arise. However, each activity ends and the temporary organization established for the
activity is disorganized.
Although small improvement activities are incorporated into an operation, the operation
itself cannot achieve great innovation to solve issues. Innovation requires temporary enterprise
called a program. However, the operation department can temporally take charge of a certain
part of program implementation.
In this way, a business can continue to exist and grow through the combination of
operations and programs/projects for dealing with changes.
2. Hierarchy of Business Activities

Companies, nonprofit organizations, and government agencies (hereinafter collectively
referred to as “business entities”) carry out various businesses to realize their mission. Business
entities classify their businesses into certain groups and manage them. For example, for the
purpose of management, a manufacturer classifies its businesses into machinery
manufacturing, electrical manufacturing, and raw materials manufacturing and further
13
classifies machinery manufacturing into transport machinery manufacturing and construction

machinery manufacturing. The whole image of a company’s businesses can be expressed in the
form of a tree (tree diagram). However, because the classification or the hierarchy of the
businesses is not equivalent to the company’s division of departments and ranks, such as
department chiefs, division chiefs, and section chief, one must not be confused with the other.
Each business has a mission and management issues, depending on the hierarchical level.
Management problems mean the gaps between “to-be” and “as-is.” A program involves activities
carried out positively for the solution of problems and innovation to achieve the mission of the
business.
A company plans a program according to the overall strategy and clarifies its mission
through the program activities (mission profiling; see Part 2, Chapter 2). In addition, if needed,
subordinate programs and projects are produced from the scenario for realizing the mission.
Each subordinate program or project also has a mission. In this way, missions have a hierarchy.
The expression of something using a tree diagram makes it possible to indicate the position
by number. In the case of the example above, machinery manufacturing can be indicated as its
level-1 business, and transport machinery manufacturing can be indicated as a level-2 business.
In the same way, the whole business entity’s common management issues can be called level-1
issues, subordinate issues can be called level-2 issues, further subordinate issues can be called
level-3 issues, and so forth.*6
When discussing a business or a program, it is important to discern at what level it is being
discussed. For example, when discussing a level-1 problem, such as the establishment of an
overseas plant, it is managerially unreasonable to be particular about a level-4 problem, such as
how large the plant manager’s office should be.
Some readers may feel that such a hierarchy is similar to WBS for a project (see Part 3,
Chapter 4). This is because both adopt a structured approach whereby a huge object is
hierarchically divided into easy-to-understand and controllable small parts.
3. Program Management and Project Management
3-1. Definition of Program and Project

As described above, a program involves temporary activities produced positively according
to a business strategy to support the sustainability of the business. The purpose of a program is
to produce a certain business value in a complexly changing environment, adjusting the
expectations and demands of many stakeholders. This is like a challenge aimed at a “moving
target” and its governing properties are complexity, ambiguity, and difficult-to-measure
uncertainty. Project management requires a style that is flexibly adaptive to changes in the
situation and is innovative. The effectiveness that produces valuable results and the
sustainability of the results is most important for program management.
------------------------------
*6 To express levels, some debaters use not numbers but such terms as policy, strategy, tactics, etc. According to
14
P2M, strategies have various hierarchies.

A project is work that extracts deliverables from a program and carries them out somewhat
autonomously. A project clarifies the mission and the scope more than a program does. Because
of this, it is easy to outsource it and measure risks. In addition, management skills have been
sufficiently established to control the cost, quality, and time. Therefore, not only effectiveness,
but also the efficiency and fairness of the implementation are important for project
management.
From the viewpoint of the projects it produces, a program has a lifecycle that contains the
following three modes along the time axis. The created project model differs according to the
mode. (See Part 2, Chapter 2, Paragraph 2-2-2)
● Definition project (scheme model)

● Implementation project (system model)
● Result (resources, capabilities, market) materialization project (service model)*7
The methods whereby a program puts the subordinate projects in motion can be roughly
divided into the sequential type and simultaneous type.*8 The sequential type puts projects in
motion one after another and aims to improve adaptability to uncertainty and minimize losses
in the case of a failure. This type is suitable for emergent strategy realization. The simultaneous
type carries out two or more projects in line with each other at the same time and aims at faster
decision-making and the dispersion of risks through the division and empowerment of
large-scale business. This type is suitable for deliberative strategy realization.
3-2. Purpose of Program Management and the Characteristics of P2M

The purpose of program management under P2M is to realize useful and stable results
efficiently and fairly through a combination of the autonomy of the subordinate projects, also
calls component projects, and their organic integration with the whole.
There are also several program management standards in the world. However, thus, too
much importance is attached to simultaneous-type programs. While some standards regard a
program as a “huge project” that has high affinity with a top-down organizational and
deliberative strategy, other standards center on sequential-type programs and place importance
on the “acquisition of capabilities” and change management.
------------------------------
*7 There are two types of service models. In the first model, when the service model project ends, all the
businesses substantially end. Typical examples are the Olympics and other large-scale events, temporary
business activities accompanying management innovation, and large-scale R&D programs, such as space
development. This type also includes cases where it is necessary to shift to new systems one after another in a
short time due to rapid changes in IT technology. On the other hand, there are many programs where, after
the completion of a system model, a service model project, such as a trial run, training, or test marketing, is
carried out for a certain period and then the business is transferred to the operational system.
*8 In Part 2, the “cycle type” method is mentioned in addition to the “sequential type” and “parllel type.” The
“cycle type” method can be thought as a kind of sequential type. After the completion of a series of the
sequential type (first), they are shifted to a new series of the sequential type (second) in the same field.
15
The key points of P2M are to balance between the autonomy of projects and their organic
integration through the inheritance of the characteristics of Japan’s business culture, where
middle management is highly autonomous, and to be conscious of the lifecycle for their
balancing from the viewpoint of a project model.
According to P2M, the following equation holds here:
Value of program > ∑ (sum values of component projects)
This means “the whole exceeds the sum total of the parts.” If the whole shows a new
property that is unpredictable from its elements, this is called “emergence.” By accurately
combining several projects, a program makes it possible to create a value that cannot be realized
by each of the projects. Projects can be classified into two types: “internal projects,” that are
devised and carried out by the performing organization itself, and “external projects,” that are
carried out at the request of a customer. There are many companies that do not carry out any
projects until they receive an order. This classification exists because projects (especially, system
model projects) are suitable for outsourcing.
In the case of an external project, if the results are accomplished according to the contract,
and the project is completed, no work is left to the contractor. If something is left, the project
management should be criticized as being “inefficient,” and the client will be dissatisfied.
On the other hand, in the case of an internal project, when the project is completed, it
ends with the delivery of the realized results to the operation. If the operations “after the project”
are entirely the same as before, the project will be criticized as a failure.
The contractor monetarily evaluates an external project by the profit, which is calculated by
deducting the cost from the contract amount (total sales until completion). That is, it is possible
to evaluate the project within the project period.
This is not true in the case of an internal project. To evaluate an internal project, it is
necessary to take into consideration the profits from the operations after the service model
project. The monetary value of an internal project cannot be measured unless consideration is
given not only to the project itself, but also the whole lifecycle of the program.
Even in the case of an external project, however, if the developmental element is substantial,
or if it is a non-physical project that cannot clarify the effects and contents of the results
beforehand, customer satisfaction is based on the effects or value of the results. To put it the
other way around, because an external project is an internal project for the business entity,
collaboration between the business entity and the contractor is important for making efforts to
acquire the final results all through the lifecycle.
Generally, a program is a broader concept of a project and is understood as having two or
more subordinate projects. However, if an external project does not have the three modes of
lifecycle (definition, implementation, result), no superior program*9 exists in principle from the
standpoint of the contractor. On the contrary, even if a program does not have any subordinate
project, adaptive and innovative value-creation activities should be considered to be the same as
a program.
16
[ External Projects ] *************************************************************

Constructors, plant and heavy machinery manufacturers, space development equipment
manufacturers, and ICT system architects run their businesses by concluding project contracts.
These companies have technical knowledge and experience in various specialized fields and
project management capabilities to carry out projects without fail. If a company plans to
construct a plant, equipment, and an ICT system and, by using them gains profits from the
mass production and selling of a product or provides a service to the customers, the company
usually outsources the construction of the facilities and systems to external professional
companies without constructing them by itself due to a lack of technical capabilities and
experience. Such a project or program is called an external project (program) from the viewpoint
of the contractor. On the other hand, from the viewpoint of a company that outsources the
construction of systems, the outsourced portions are system model projects in the strategic
program, and the completed systems are used for operations that create the values planned in
the program through the company’s service model project or operations. In such a case, the
ordering company’s program or project may be distinguished from the contractor’s and called
“the owner’s program (project).” In the case of an internal program (project), because it may be
completed in-house, it does not necessarily always include outsourced projects.
****************************************************************************************
3-3. Scope and Hierarchy of Project Management

There is a relationship between the above-described hierarchy of activities and the scope of
management. For example, although the project manager is responsible for the whole project,
he or she does not give instructions about the internal process of the work package located at
the lowest level of WBS (see Part 3, Chapter 4). How to carry out each work package is the duty
of the department in charge of expertise in principle. Only if the problem to be solved occurs at
the project level, does the project manager intervene.
In contrast, project managers ordinarily do not have the power to decide whether the
mission given to each project from the superior program is appropriate and whether to
discontinue the project. Therefore, the direct scope of project management is between the
mission and work package of each project. In many large-scale projects, the project manager
appoints mid-level managers (such as the engineering manager) and transfers subordinate
management to them.
In the same way, the scope of program management is between the project problem (goal of
change) and the subordinate projects. The inside of each project is left to the autonomy of the
project. The program side only establishes, monitors, and ends the projects through integrated
governance. Only when a problem occurs and affects the program level, does the program side
intervene in the project to solve the problem.
------------------------------
*9 However, there are many cases where, because of a company’s superior strategy about the direction in which
the company should develop as a project contractor, a superior program exists to judge whether to conclude a
contract about the project and what technology to use for carrying out the project. In addition, such a project
often becomes an object of multi-project management
17
Exhibit 1-3-1 Scope of project management and levels of activities
3-4. Goals of Program Management and Project Management
Although both programs and projects aim to create values, the two differ in their
management goal. Exhibit 1-3-2 explains a conceptual model of the difference between them.
In the case of a program, a program mission is materialized and detailed first to clarify how
to realize what value in what timeline. This is carried out at the stage of a scheme model project
in the Exhibit. Next, the plan is put into practice and a system is created to realize the mission
through system model projects. This is usually carried out by combining plural projects. When
the system is completed, the created system is used for production, sales, or service and finally
realizes value through the service model projects (and operations). At the stage of program
design, such a target value to be realized is specified and makes it possible to establish a
program goal baseline. Because the initial stage of this curve is investment, the value to be
realized (cash flow) is negative.
Program management consists of activities that, at the planning stage, aim to draw up a
plan as to how to make this baseline curve higher and feasible and, at the implementation stage,
aim to maintain this curve by appropriately coping with great environmental changes and
improve it whenever the occasion arises.
On the other hand, at the actual stage of implementation, for many various reasons, such
as environmental changes, schedule delay, or increasing costs, the value to be realized usually
does not reach the goal baseline as shown by the dashed line. (If the value can be realized
without any effort, it can be said that the object baseline was set optimistically.) In this situation,
project management activities are carried out for the principal goal of matching each project’s
outputs with the planned program goal baseline.
18
Exhibit 1-3-2 Program management and project management
Exhibit 1-3-3 Continuous value realization by programs
19
Next, because the value that can be realized by a program decreases with the passage of
time, it will be necessary to take measures (a program) for creating new value. Exhibit 1-3-3
shows the relationships required for realizing values continuously. An investment is made in
Program 2 at the stage where Program 1 actively produces value (T in the Exhibit), and
Program 1 is shifted to Program 2 before the value produced by Program 1 decreases. This
Exhibit indicates a case where a product or service is renewed to become a more competitive one,
such as a car model change or a series of Windows, a personal computer OS. When a product or
service of a related but different type is inputted to sustain or expand the realized value, such as
a complementary relationship between the sales of mobile digital music equipment and the
provision of an online music sale service, the programs progress in line with each other without
being replaced and aim to achieve both results and synergistic effects between the programs.
20
The main characteristic of P2M Program Management is to clarify the strategy proposition
at the initial stage of a program under the leadership of not the top executive but the program
manager.
1. Multiplicity of Contexts of a Program
P2M specified four basic attributes of a program: multiplicity of context, scalability,

complexity, and uncertainty (Part 2, Charter 2). In many cases, organizations (such as
companies and government agencies) carry out programs to implement strategies aiming at
their medium- to long-term success. Organizations also use programs to carry out large-scale
project-type business that has a great influence on their fate. As described above, P2M calls the
former strategic programs and the latter operational programs.
For example, consider a strategic program that aims to realize the strategy proposition of “a
new product A’s big success in the market.” The concrete form of the success varies. Various
approaches can be adopted, such as the acquisition of a market share at a considerable low price,
the acquisition of a high-end market share by offering high quality, the achievement of
supremacy by the establishment of sales bases, the attraction of customers in cooperation with
excellent manufacturers of supplementary products, and the conclusion of special relationships
with manufacturers of key components.
The above-described multiplicity of context of a program means that, in this way, a program
includes various different contents at the initial stage. Under P2M, the program manager plays
the leading role in finding out the essentials of success from among the various possibilities,
such as what is and should be success in the program.*10 Of course, the principle is to
understand from the viewpoint of the organization that this behavior is based on instructions or
delegation from an executive or other superior, who has the official decision-making authority.
2. Sense of the Knowledge Necessary for Managers
In Japanese organizations, it can be often seen that executives (such as the president and
directors) direct subordinate managers to commercialize an innovative product or reform the
organization as a multiple and ambiguous concept, such as problem consciousness, an ideal, a
desire, or a “wish.”
------------------------------
*10 From the viewpoint of top-down program management, which differs from P2M, the program manager does
not participate in decision-making on the concrete purpose and goal of the program, but is responsible for
realizing the purpose and goal determined by the top executive and other top-level executives of the
organization.
21
Managers think how to interpret the ambiguous directions and what concrete measures to
carry out to achieve the mission. Nonaka et al. 3) assert that Japanese people’s traditional sense
of knowledge places emphasis on the “whole personality” and that knowledge means wisdom
that cannot be separated from an individual as a part of the whole personality. Western science
has been developed with clearly defined conceptual knowledge – that is, formal knowledge and
systematic logic separated from individuals. Both business economics and management exist in
this tradition. On the other hand, Japanese management emphasizes “field sites” because it
places importance on the direct experience and implicit knowledge of the individual concerning
the recognition of knowledge.
In this case, to establish a strategy, the top executive him- or herself selects one from among
various possible strategic measures and directs a manager familiar with field sites to establish
the strategic measure by the use of the manager’s wisdom. This is because the top executive
thinks it difficult to know the situation of the field sites as clearly defined knowledge. The role of
managers is to show the concrete direction of and carry out the strategic measure to realize the
top executive’s ambiguous wish and produce valuable results, watching various complicated
matters (such as the market, customers, competition, technology, risks, and the organization)
that are difficult to use to create formal knowledge at the field sites and putting various
first-rate types of wisdom together. Nonaka et al. have named such a management style
“middle-up-down management” 4), which is different from typical top-down or bottom-up
styles.*11
3. Essentials of Program Management
This way of thinking is the basis for the Processes of P2M Program Management. However,
P2M is a program management method that is not the same as middle-up-down management,
which has a general management style. Although P2M Program Management has been
explained as a series of processes that begins with the top executive’s multiple and value
strategic mission concept, it is applicable to processes whereby an entrepreneur or the top
executive of a small organization develops or carries out concrete strategic measures from the
standpoint of program manager to realize his or her own vague ideal, idea, or other concept.
Such cases may often seem top-down activities from their outward appearance.
The essentials of P2M Program Management are not strategic purposes or goals clearly
defined but the program organization’s setting up of strategic objectives and goals from a
multiple mission concept under the leadership of the program manager and designing and
carrying out a concrete program.
------------------------------
*11 Within the scope of P2M Program Management, a “middle” manager is not an executive, but is usually a
top-class manager with a high level of authority in the workplaces that are familiar with the object of the
program (such as the operations department).
22
Needless to say, some Japanese companies have adopted a middle-up-down management

style, while others have adopted a top-down management style. In the case of P2M, the concept
of top-down program management is to begin program management at the stage of “program
design” by omitting the upstream processes. On the other hand, some foreign organizations
have adopted a program management style similar to P2M.
[ Case: Southwest Airlines ] ***********************************************

Southwest Airlines (SWA) is a large US airline that has about 550 airplanes and runs 3,300
flights a day. The company is one of the first low-cost carriers (LCC). The soundness of its
management is outstanding in the US and has been adopted as an excellent strategic case
according to many business books. The company’s strategy has been explained as strategic
measures that are excellent in terms of various methods, such as the following: its direct routes
are point-to-point, not hub-and-spoke, which has been adopted by other large airlines; the costs
are reduced by the use of a single type of airplane – Boeing 737; and the operating rate of the
airplanes is greatly increased by a substantial reduction in the time between landing and
takeoff, which is sometimes exaggeratedly called the ten-minute turn around. However, this is
second guessing made after the company’s success.
In reality, around 1967, when SWA was inaugurated, airplanes were regarded as “vehicles
only for people who could pay high airfares.” At that time, three executives, including Mr. H.
Kelleher (now CEO), had the idea of providing airline services that the general public could use
at ease and purchased three B737 airplanes left unsold, and founded an airline business with
three routes within the State of Texas. Therefore, SWA did not establish its strategy in a
top-down way and started the business based on the strategy as told now. At first, there was
nothing but a considerably uncertain dream at that time – that is, the provision of airline
serviced with low airfares. To fulfill the mission that SWA itself established to realize the dream,
the founding executives and the field workers practically developed essential measures for
solving challenges at various stages, putting their wisdom and eagerness together. Today’s
so-called “SEA’s strategy” was the total of the measures put together afterwards. Although
many airlines were founded by imitating this strategy, the number of successful airlines is not
so high. This is because they imitated the strategy only superficially. SWA is famous also as an
extremely rare company that has publicly declared “the employees are the most important
component.”
****************************************************************************
23
1. Qualifications for Program Managers and Project Managers
A program manager and a project manager formulate an appropriate project organization

and accomplish the mission by the full use of expertise in program and project management.
For this purpose, as shown in Exhibit 1-5-1, the manager needs to have the capability to carry
out the program/project effectively and efficiently and achieve results without fail, using fair
means.
(1) Due Diligence

Due diligence refer to the program/project performing organization’s implementation of the
program/project, taking into consideration conventional wisdom, ethical standards, and social
receptivity, complying with the laws, regulations, and professional standards, and carrying out
procedures that conform to international norms and standards. This makes it possible to fulfill
social accountability.
(2) Effective Performance*12

Effectiveness is related to the benefits or results gained from a program/project. In the case
of a company, a result means an increase in sales, the performance of a newly developed product,
the production capacity of a constructed plant, etc. At the stage of planning, what matters is how
to plan feasible and high target results by devices made during the process of designing the
program/project. At the stage of implementation, what matters is the ratio of achieved results to
the planned results.
(3) Efficient Performance

Efficiency is related to the ratio of the resources inputs to the outputs. The main issue of a
program/project is how to achieve the defined mission through the input of fewer resources. It is
important to determine how to reduce unreasonableness, waste, and unevenness concerning
various resources and time.
Exhibit 1-5-1 Qualifications for program/project managers
------------------------------
*12 Drucker explains the relationship between effectiveness and efficiency using the following famous words:
“Efficiency is concerned with doing things right. Effectiveness is doing the right things.” (P. F. Drucker,
“Management: Tasks, Responsibilities, Practices,” Harper & Row, 1974, pp45)
24
2. Manager’s Work
Professionals necessary for P2M as described in the preceding section are high-caliber
managers who challenge the solution of multiple disciplinary and complex problems, responding
to the demands of the present age. This requires the recognition of new values demanded by the
customers and society, the planning of measures for realizing them, and moving the
organization to realize them as real values. In many cases, it is necessary to move many related
people directly or indirectly and carry out the measures efficiently and effectively in a short
period. Therefore, the contents of a manager’s work can be summarized as shown in the
following page. Among others, program managers are expected to have both broad background
knowledge and deep expert knowledge about their work.
● Determine and indicate the direction of the organization.

● Make and carry out a plan to move the organization
● Utilize people and their abilities.
Exhibit 1-5-2 Manager’s Work
A program/project manager’s work is to have experts in various fields carry out

activities in the same direction. These experts are sometimes not included in the system
under the direct command of the manager. In this sense, it is especially important not only
to make and carry out a plan, but also have the wisdom and skills to utilize various people’s
abilities.
3. Capability
For the purpose of P2M, capability is an individual’s ability necessary for satisfying the
qualifications for program/project managers shown in Exhibit 1-5-1 and the
above-described work of a manager.
The most fundamental basics are “systemic domains of systematic knowledge,” such as
expert knowledge in the business domain and basic knowledge on program/project
management, and “critical thinking ability,” which makes various inferences and
judgments based on systematic knowledge. At the same time, important abilities are “skill
in management activities” to move the organization – that is, many people – by the use of
knowledge and the “basic attitude” of the individual concerning responsibility for the
results and strongly-motivated activities. To make full use of these abilities, it is important
to have experience in carrying out activities by using them and gaining the predicted
results. It is the repeat of higher-level experience that brings about confidence in the
manager’s own judgment and leads to the acquisition of high-level abilities.
The objectives of P2M are innovation and the creation of new value. Therefore, abilities
related to creativity and the ability to deal with implicit knowledge and formal knowledge
are included extensively in the framework of the above-described capabilities.
For the details of these capabilities, see Part 6.
25
[ Ethical Guidelines for P2M Professionals ] **********************************************

Program managers and project managers are responsible for not only grappling with
operations from a high viewpoint and a wide perspective but also achieving results for
society and customers and acting according to ethical norms.
The Project Management Association of Japan (PMAJ) has specified “Professionals’
Ethics and Responsibilities” (improvement of trustworthiness, ethical responsibility,
accountability, and responsibility for achievement) in its “Capability-based Professional
Certification Guidelines (CPC Guidelines),” which concern the qualifications for project
managers registered (PMR) (established in 2004).
Ethical responsibility especially includes conscientiousness, fairness, maintenance of
expertise, duty of due care, and duty of secrecy. Although the rules govern persons certified
as PMR, these are program managers, project managers, and persons engaged in the
practical affairs of a program/project.
PMAJ continuingly reviews and revises the ethical guidelines, monitoring the
changing social and global situation.
Check for more information on the homepage of “Project Management Association of
Japan(PMAJ)”
**********************************************************************************
[ References ]
1) Carliss Baldwin and Kim Clark. (2004). Dezain Ruuru [Design Rules]. Tokyo Japan. Toyo Keizai.
2) Yamaguchi. (2013) Sekaide Mottomo Inobeitibu na Soshiki no Tukurikata. [How to Form the
Most Innovative Organization in the World]. Tokyo, Japan: Kobunsha. p. 296
3) Nonaka & Takeuchi. (1996) Chishiki Souzou Kigyou [The Knowledge Creating Company]. Tokyo,
Japan: Toyo Keizai. p. 8
4) ditto., p. 24
26
Program & Project Management for Enterprise Innovation
Part 2
Program
Management
Introduction Outline
Chapter 1 Programs and Program Management
Chapter 2 Program Integration Management
Chapter 3 Program Strategy and Risk Management
Chapter 4 Value Assessment Management
Copyright © 2017 Project Management Association of Japan
27
Part 2 Program Management
Introduction
Introduction Outline
Part 2, Program Management, discusses program integration management, which is carried

out according to the program mission*1 established by the corporate strategy or the business
strategy. Program integration management is a series of management processes that are
carried out one after another in chronological order. It consists of three processes: mission
profiling,*2 program design,*3 and program execution integration management. The processes of
program integration management require appropriate decision-making by the program
manager in various situations. Regarding this decision-making as core knowledge and skills
that support the program throughout the program period, this part describes strategies, risks,
and value assessment in relation to the processes of program integration management.
Chapter 1, Program and Program Management, discusses the relationship between the
program and the management and business strategies and the outline corporate strategy,
program mission, and program execution.
After describing basic items, such as the definition and classification of programs, basic
attributes, and the definition of program management, program management attributes, such
as lifecycle,*4 phases,*5 phase gates,*6 and program organization are given.
Exhibit 2-0-1 Structure of program management
------------------------------
*1 Program mission: what should be realized by the program
*2 Mission profiling: creation of a scenario to clarify the program mission, describe what the program should be,
and specify how to reach there from what it is now.
*3 Program design: the process where the program architecture (structure of a group of projects) is designed
based on the results of the mission profiling
*4 Program lifecycle: the whole set of phases that constitute the entire process of conceiving, planning, designing
and carrying out the program
28
Introduction
Chapter 2, Program Integration Management, discusses the processes of program

management by dividing the whole into three sections: mission profiling, program design, and
the integration management of program execution.
The first section outlines mission profiling and describe the mission statement, an analysis
of relations among values, and the scenario statement.
The next section profiles program design and explains the program architecture*7 and the
program plan that combines the design and the architecture. The basic process is explained
using cases about the processes of creating two types of programs: strategic and operational
ones.
The third section describes the process of the integration management of program
implementation. What have been mentioned heretofore are the basic processes of program
integration management. In addition, the key points of multi-project management will be
described by its comparison with program management.
Chapter 3, Program Strategy and Risk Management, explains program strategic
management and program risk management among the common elements that support the
process of program management. Program strategic management deals with how to incorporate
the program strategy into the program goal and how to carry out the program strategically. In
program risk management, the characteristics of program risks and risk management are
summarized.
Chapter 4, Management of Value Assessment, discusses program values: ways of thinking
about program values, corporate accounting, present values, the process of evaluating
intangible assets, and value assessment indicators to deepen your understanding of values and
value assessment.
------------------------------
*5 Phases: periods divided by milestones at the stage of carrying out the program
*6 Phase gate: a checkpoint that enables the program to pass on to the next phase if the prescribed conditions are
fulfilled, or an official decision-making process that the organization carries out to check whether it is
appropriate to advance to the next phase
*7 Program architecture: structural form allotted to two or more projects to carry out the process of achieving the
mission
29
This chapter describes the basics of programs and program management. A business
strategy is an expression of what value an organization provides to society and how the
organization provides it according to its philosophy. A program is established to carry out the
business strategy. Therefore, this chapter will begin with a description of the relationship
between an organization’s strategy and its programs. Then, the definition and classification of
programs, an outline of program management, program lifecycle, and the concept of program
organization will be described. Although there are several patterns of program creation
processes, depending on each organization’s role and type of industry, the most ordinary pattern
will be described.
Exhibit 2-0-1 Structure of program management (redisplay)
1. Organization’s Strategy and Program

1-1. Toward the Presistent Growth of the Organization
Whether profit-making or not-for-profit, any organization has a certain raison d’être.
In the case of a company, the organization’s reason for or purpose of its existence is called
the corporate philosophy or management philosophy (hereinafter referred to as “philosophy”).
Philosophy is an expression of the founder’s long-range plan, which incorporates the
organization’s wish for a semi-permanent contribution and growth in society. The top executive
carries out programs to put the philosophy into practice, using the organization’s advantages
and devising strategies for keeping with up or being ahead of occasional environmental changes.
Therefore, the organization, mechanism, and systems for putting strategies into practice also
need to be newly created according to changes in the times and be developed and revised.
30
Like corporate organizations, non-profit-making organizations also carry out their

strategies according to their circumstances as programs, based on their philosophies. If the
results create social value, it can be said that organizations have continuous existential value.
Exhibit 2-1-1 Corporate strategy, environment, and strategy
1-2. Relationship between the Strategy and the Program

A program is a set of several projects organically combined to realize the program mission.
To realize the business strategy, it is necessary to appropriately carry out a program that
consists of several projects, identifying the program mission from the coporate strategy and the
business strategy.
Programs carried out by companies can be largely classified into two types: projects whose
concept gradually becomes clear from an ambiguous and abstract initial concept of corporate
strategy and projects whose concept is clearly shared among the stakeholders from the outset.
Under P2M, the former type is called a strategic program, while the latter type is called an
operational program.
Generally, a company’s strategies can be divided into a coporate strategy and a business
strategy. The coporate strategy concerns how to allocate the management resources into the
business fields. The top executive determines how to input resources to realize the philosophy,
considering total optimization. If a business is regarded as a combination of a market (or
customers) and the product/service provided, many companies simultaneously manage several
businesses and always need to decide how to allocate limited management resources. In
addition, if a company is carrying out many businesses, it may have established a headquarters
and branches as subordinate bodies. In such a case, a strategy is needed to allocate the
management resources to relevant executives of the headquarters and the branches.
Exhibit 2-1-2 Relationship between the coporate strategy and the programs
31
After management resources are allocated to the headquarters and the branches through
these processes, each business department develops a business strategy. Generally, to put the
whole corpoate strategy into practice, the business departments plan and carry out strategies
for carrying out the businesses on the assumption that it is possible to use the management
resources allocated by the superior management. What are concretely put into practice are the
selection and creation of markets and customers, the ensuring of the superiority of the product
or service provided, and improvement in the excellence of the operational processes and in the
levels of the organization, the staff, and the resources. That is, strategies are carried out after
the establishment of the most appropriate measures from the limited available resources.
After program mission is gained from the business strategy as a concept, a program is
created to carry out the program strategy. A program is a large group of innovative enabling
mechanisms and means composed as a concrete and practical process to realize the program
mission.
1-3. Relationship between the Program and the Projects

The other side of the coin is that the strategy is the most basic plan of an organization
whose purpose is to optimize long-term success. The essence of a strategy is to narrow
down what should be done, inputting its own limited resources most effectively and making
efforts to achieve the management purpose through their efficient use. In addition, a
strategy needs to change flexibly to keep up with environmental changes, such as these on
customers and competition. The program encourages the program stakeholders to
participate in the implementation of the strategy, clarifying a group of projects as
mechanisms to be carried out according to the essence of the strategy through program
design and visualizing their architecture. In this process, the necessary management
resources must be examined carefully and inputted effectively and efficiently.
Exhibit 2-1-3 Process image of a strategic program
32
Exhibit 2-1-3 shows a series of processes based on the corporate strategy, including the
business strategy, the program mission, the programs, the architecture for the formation of a
group of projects, the creation of programs to be executed, program execution, and the results
and the evaluation of them. The implementation of these processes requires organizational
ability, including governance.
A program is a set consisting of several projects organically combined to realize the program
mission.
Although the organization’s management philosophy is not changed, the management
environment changes. Therefore, the corporate strategy should always keep up with the
changes.
Programs can be classified into the operational type, whose concept is clearly shared among
the stakeholders from the outset, and the strategic type, whose concept is made clear gradually
from the ambiguous and abstract initial corporate strategy.
A strategy creates programs, deriving an intended concept as several program missions. A
program is a large group of measures visualized as a concrete and practical process to realize
the program mission.
2. Definition and Classification of Programs
2-1. Definition of a Program

A program is a set of several projects organically combined to realize the program mission.
A program consists of activities whose mission is the creation of values and requires
management that includes not only the construction or development of complicated or huge
systems but also the total evaluation of even the values realized during the process of using
these systems regularly.
In other words, although a program necessarily includes several project operations, it may
also include operations regarded as regular operations instead of projects from the viewpoint of
the traditional project management.
Under P2M, the operations are modeled as a service model project, and a form that
combines the preceding scheme model project for establishing a concrete project plan with the
system model project for developing and constructing systems is defined as a typical model of
program.
For example, a product or service should always be most appropriate through management
evaluation in relation to changes in customer needs and competition instead of being developed
and completed according to the initial plan. In addition, continuous innovation is necessary for
organizational power, including operational processes, systems, human resources, and other
aspects necessary for producing a product or service and providing it to customers. In this way, it
is necessary to carry out the scheme model project and the system model project to create new
value continuously from the value found through the regular operations – that is, the service
model project.
33
Although leads to concern that a program must have a certain scale, this is not necessarily
true. Although the business strategy often takes environmental changes into consideration and
has the organization participate in the achievement of the assumed ideal according to plan, as
shown in the initial stage for the creation of a new business for example, there is a “creative”
type that starts with noticing something at a workplace or a customer finding small needs and
then develops it into the creation of a large business.
Even if this creative activity is small in scale, but has a mission that greatly affects
management activities and consists of several projects, management is necessary as a program.
2-2. Classification of Programs

As described in 1-2, Relation between the Strategy and the Program, programs can be
classified into a strategic program and an operational program. “Exhibit 2-1-4 Types and
Examples of Programs” shows concrete examples.
As a strategic program can be called a creative or reformative program, the program has to
start from situation in which there is no experience in carrying out similar programs. Therefore,
it is often necessary to elucidate the program in accordance with the business strategy at an
earlier stage. On the other hand, in the case of an operational program, the parties concerned
often have experience in carrying out similar programs and generally have a common
understanding.
Exhibit 2-1-4 Types and examples of programs
2-3. Basic Attributes of a Program

A program aims to solve problems by developing several projects from the program mission
about which the top executive has complicatedly intertwined interests and demands. Such a
program has the following four basic attributes:
34
Exhibit 2-1-5 Basic attributes of a program
The multiplicity of contexts of a program means that the mission concept of the initial
program includes variously intertwined ideas. Political, economic, social, technological, ethical,
and various other elements are integrated into a program, reflecting the complicated social
environment in which the organization exists.
Because of the combination of these elements, programs usually have their scale, domain,
and structural scalability.
Although a program starts with an abstract concept of the program mission, the concept
gradually become concrete with the progress of the program lifecycle. At the same time, because
of the combination of many projects, the program internally has highly detailed complexity. On
the other hand, during the long-term process of execution, the program is greatly influenced by
dynamic complexity caused by the interaction between the program and external environments,
such as the market and competition.
Moreover, the program becomes highly uncertain because the program is planned to bring
about some changes in the current situation and is exposed to environmental changes for a long
time.
A program is a set of several projects combined organically.

A program may include operations.
A program has four basic attributes: “multiplicity of contexts,” “scalability,” “complexity,” and
“uncertainty.”
Multiplicity of contexts means that the concept of the program mission is complicated and
includes various ideas and demands.
Scalability refers to the possibility that the scale, domain, and structure of the program will
expand or may shrink.
Complexity refers to the structure’s becoming complicated because of the combination of and
interaction among many projects or the behavior’s becoming complicated because of the
effects of external environments, such as the market and competition, during the long-term
process of program execution.
Uncertainty is caused by the planning of the program mission (changes) and the long-term
effects of environmental changes.
35
3. Program Management
3-1. What is Program Management?

Program management aims at achieving the program mission for the implementation of
the business strategy. Because of this, program management consists of a series of processes to
define and carry out several relevant projects and achieve the creation of value.
First, the program mission is multiple and ambiguous and it is uncertain as to what should
be concretely achieved. In addition, it is unclear how to deal with environmental changes.
Program management starts with such an initial stage, constructs a program, which is a
mechanism for autonomous decentralization and integration, defines projects as concrete
enabling units based on the program, and draws up and carries out an implementation plan for
each project and the whole program.
In the case of a strategic program, program management starts with the derivation of the
program mission through the analysis of the external macro-environments in which the
program exists (such as political, economic, social, and technological environments), the market
environment, and the competition environment as well as the inspection of the compatibility
with the company’s internal governance (including product or service power, sales power,
production power, organizational power, mechanisms, and systems).
3-2. Program Integration Management

Program integration management is to plan and design projects and control their
implementation so that each of them can be managed autonomously and be put together to
achieve the program mission. Program integration management can be divided into three
stages: the stage of identifying the program mission clearly to deal with the external
environments; the stage of establishing the structure and encouraging the participation of the
parties concerned to carry out the program; and the stage of carrying out the program. These
processes are greatly influenced by the internal environment, such as the organization’s
management resources. In addition, a strategic approach is necessary for adaptation to external
environments.
Exhibit 2-1-6 Concept of program integration management
36
In P2M, as shown in Exhibit 2-1-6, the concept of program integration management

consists of three processes: 1) mission profiling for the concrete identification of the program
mission; 2) program design for the clarification of the program structure; and 3) integration
management of program implementation for the implementation of the program.
Details of the program integration management processes are given in Chapter 2.
3-2-1. Mission Profiling

Mission profiling is a process that is carried out at an earlier stage of a program and
consists of the following: analyzing the business strategy; clarifying the program mission to
carry out the strategy; and developing a scenario as to how to reach “what the program should
be” from “what it is” now.
At this stage, the concept of value to be created by the program gradually becomes concrete
from the abstract concept at the initial stage. In the case of a strategic program, the program
mission starts with an extremely abstract expression, such as the “reform of XX business” or the
“creation of a new business.” Based on this, “an image of the reformed business” or “an image of
the created business” is produced and develops into a concrete scenario that reflects the strategy.
If mission profiling is revised due to an environmental change during the progress of the
program, it should be repeated to maintain the program mission.
3-2-2. Program Design

Program design is the design of program architecture (structure of projects) based on the
results of the mission profiling. Each of the component projects and the relationships among
them are designed so that the program mission can be achieved, taking also into consideration
the uncertainty likely to be caused by structural or situational changes in the program
environments. The program design starts with the definition of the period and processes of the
final scenario developed and examined through the mission profiling. Thereafter, a group of
necessary projects is created and structured so that the whole structure of the program becomes
visible. Subsequently, the feasibility of the program is examined and a program plan is
compiled.
The program plan clarifies the concrete goal of the program and the necessary activities. In
addition, the plan enables the participants in each project and the surrounding participants to
understand their roles, their positions in the program, and the relationships with the others.
3-2-3. Integration Management of Program Implementation

The integration management of program implementation is planned during the mission
profiling. It is a process that aims to ensure the realization of the value planned during the
program design. Because a program takes a longer time than a project, it is accompanied by
environmental changes. Therefore, it is necessary to incorporate a strategic approach in the
program itself. The results of program implementation should be confirmed in comparison with
the initial plan at the end of the program.
37
3-3. Guidelines for Program Integration Management Activities

Effective performance of program integration management requires the strategic
management, risk management, and evaluation management of the program. This will be
described in Chapters 3 and 4.
Program integration management activities are based on the following four basic
guidelines:
(1) Zero-Base Idea

Program integration management often requires the construction of a framework based on
new ideas to solve complicated problems. For example, the idea of what the program should be
requires a discontinuous approach that is not a mere expansion of the present condition, and
necessitates a zero-base idea.
(2) Flexibility toward Changes

Program integration management requires a rapid and timely response to changes by
shifting to alternatives and making a decision about suspension or discontinuance through
quick responses to environmental changes.
Exhibit 2-1-7 Guidelines for program integration management activities
(3) Sharing of Knowledge and Information

Program integration management needs to enable the stakeholders to communicate with
each other openly and share knowledge and information so that the program staff members can
improve their practical abilities. For this purpose, it is also important to understand the
differences in organizational culture among the stakeholders.
(4) Confirmation of Values

Program integration management needs to evaluate timely how the needed program
values are created while responding to environmental changes, and take appropriate measures
based on the assessment results. Therefore, it is necessary to construct systems for such
evaluation and measures.
38

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Third Edition

Project Management Association of Japan

Project Management Association of Japan

©2017 by Project Management Association of Japan[PMAJ]

First published 2017

The features of P2M are:

Impact of the Knowledge Society

Knowledge Society and the Necessity of Professionals

Applications of P2M and Prospective Readers

The prospective readers of this guidebook are executives, managers, professionals,

P2M 3rd Edition English Version

Revision Committee Member (and Writing)

Writing Committee Member

Secretariat (and Writing)

Chapter 2 Structure of the P2M Guidebook 10

Chapter 4 Characteristics of P2M Program Management 21

Chapter 5 Capabilities for P2M 24

Chapter 2 Program Integration Management 43

Chapter 3 Program Strategy and Risk Management 84

Chapter 4 Value Assessment Management 104

2. Basic Attributes of Project 132

3. Stepwise Refinement and Rolling Wave Planning 133

4. Definition of Project Management 133

5.Requirements of Project Managementt. 133

6.Concepts Related to Project Management 134

7.Project Activities 138

Chapter 2 Integration management 141

2. Developing a Project Charter 143

3. Develop Project Plan 145

4. Execute Project 148

5. Project Operation Management 149

6. Change Control 151

7. Closing Project Phase or Project 153

Chapter 3 Stakeholder Management 155

2. Identify Stakeholders 157

3. Stakeholder Management 159

Chapter 4 Scope Management 162

2. Scope Plan 163

3. Definition of Scope 164

4. Preparation of WBS 165

5. Scope Change Control 170

Chapter 5 Resource Management 171

2. Identification of Resources 173

3. Development of a Resource Plan 175

4. Implementation of the Resource Plan 178

5. Monitoring and Control of Resources 179

6. Improvement/Correction Plan 180

7. Accumulation of Resources 182

Chapter 6 Time Management 188

2. Develop Schedule 190

3. Project Progress Control 196

4. Progress Trend Analysis and Forecasting 196

5. Adjustment to Achieve the Goal 197

6. Relevant Knowledge for Critical Chain Management 197

2. Cost Estimation 204

3. Budget Compilation 208

4. Cost Management 213

Chapter 8: Risk Management 219

2. Development of Policy 228

3. Risk Identification 231

4. Risk Analysis and Evaluation 232

5 Preparation of Risk Countermeasures 235

6. Implementation, Monitoring, and Evaluation of Countermeasures 238

Chapter 4　Value Assessment Management 104

Chapter 2　Integration management 141

　:　Shaded areas are not translated