BBA (IV Semester)

PROJECT MANAGEMENT

UNIT 1

Syllabus UNIT I Introduction : Meaning and characteristics of project; Meaning, scope ,

characteristics, need & importance of project management; Project Management: Forms of
Project Organization, Project Planning, Project Control, Human Aspects of Project Management,
Pre- Requisites for Successful Implementation

SUGGESTED READINGS
Project Management Vasant Desai
Project Management K.Nagarajan
Fundamentals of Project Management James P Lewis

Meaning and characteristics of project

The word ‘project’ came from the Latin word projectum from the Latin verb proicese (to throw
something forwards) which in turn comes from ‘pro’ which denote something that proceeds the
action of the next part of the word. A project is a combination of interrelated activities with well
defined objectives to be completed in a specific time period. Project is something special which
is different from routine and regular activities. According to Project Management Institute
(PMI), “Project can be defined as a temporary endeavor undertaken to accomplish a unique
objective at goal”. In the words of Harrison - A project is defined as ‘a non-routine, non-
repetitive, one-off undertaking normally with—discrete time, financial and technical
performance goals. A project can be considered to be a series of activities and tasks that have a
specific objective to be completed within certain specifications & have defined start and end
dates, have funds limitation and consume some resources. Construction of a house, Writing a
book, Building a dam, Introducing a new product in the market, Construction of a new bridge
over a river, A Politician contesting an election, Organizing a seminar etc are few examples of
projects.

Characteristics of a Project: Project characteristics include following features

(a) Project has a owner, who, in the private sector, can be an individual or a company etc.,
in the public sector, a government undertaking or a joint sector organisation, represent-
ing a partnership between public and private sector.

(b) Project has a set objective to achieve within a distinct time, cost and technical
performance.
(c) Project is planned, managed and controlled by an assigned team the project team planted
within the owner’s organisation to achieve the objectives as per specifications.

(d) Project, in general, is an outcome in response to environments economies and

opportunities. As an example, we find that considering the changing pattern of modern living
the domestic appliances small e.g. grinders, mixers etc., and large, e.g. refrigerators, washing
machines etc. are on ever-increasing demand. This generates responses to avail opportunity
to produce such appliances.

(e) Project is an undertaking involving future activities for completion of the project within
estimates and, «s such, involves complex budgeting procedure with a mission. (f)
Implementation of the project involves a co-ordination of works/supervisions by project
team/manager.

(g) Project involves activities to be carried out in future. As such, it has some inherent risk
and, in reality, the process of implementation may necessitate certain changes in the plan
subject to limitations and concurrence of the project owner.

(h) Project involves high-skilled forecasting with sound basis for such forecasting.

(i) Projects have a start and an end a characteristic of a life cycle. The organisation of
project changes as it passes through this cycle the activities starting from—
conception stage, mounting up to the peak during implementation and, then, back to
zero level on completion and delivery of the project.

Need & importance of project management for a continuous growth of economy

or a country a regular and fruitful chain of implementation of different projects is essential.
Merely starting any project is not enough as it will give results only after successful
completion of the same. But for a successful completion an effective project management is
needed which is quite different from business management. The PM is significant because of
following reasons
Provides a Clear Project Plan and Process

The more multifaceted the project, there is more scope for chaos in the organization. That is
where proper planning and the importance of project management comes in. The primary
function of project management is to avoid confusion by outlining a clear plan and a process
from the beginning to the end.

Establishes Plan and Schedule

Having agreed on a project schedule, sticking to it inculcates discipline required to avoid

delays. A pre-determined process through the project lifecycle gives the project a clear path.

Teamwork

People are made to work in a team on a project, due to the benefits that accrue through
sharing and knowledge of skills. It inspires team members to collaborate on a project.

Maximizes Resource utilization

It is well known that human and financial resources are quite expensive and project tracking
with regular reporting ensure economic and efficient use of all the resources.

Project risk management

All projects are risk prone . A good PM system can anticipate various risks well in advance
and as such remedial measures can be easily implemented to safe guard the interest to the
maximum.

Keeps Control of Costs

Based on the project scope, some projects may incur high costs. So, it is essential to keep a
track on the budget. Incorporating project management strategies eases the budget overrun
risks.

Builds on Knowledge

When businesses embark on more projects, they will acquire more experience over time.
Project management serves as a knowledge asset to a company and helps to build on both
experience and knowledge.

Manages Quality

It is crucial to ensure top-quality results. Project management identifies, controls, and

manages standards. This results in a high-quality product/ service and a satisfied client.

Continuous Oversight
 Project management methods ensure that organizations gain control over on-going projects
and make sure they are on the right track and within the stipulated budget. Project
deliverables should be managed well so that not to lose track over the progress of the
project.

Forms of Project Organization

Project management structure is very vital to the success of any project team; an organization or
project team that is structured gives support to the work that’s being done. Misaligned project
management teams create a negative impact on the outcome of a project. This is simply because
the organizational structure has an influence on the authority of the project manager, thereby
affecting how the projects are run. It goes without saying that non-structured project
management teams often lack guidance and a well guided team always drives successful
projects.

An organization is defined as a group of persons who come together to accomplish set goals; in
order to successfully achieve those set goals, a project manager would need to familiarize
himself with the project management organization. An organizational structure could be
described as the official line of authority and control within an organization. Project management
structures reveals the reporting relationships work in a particular organization.

Depending on the environment the organization works , the goals they set for themselves and the
nature of work being done, there may be three main types of structures of organizations

-Functional Organizational Structure

-Matrix Organizational Structure – This can be further broken down into – Balanced matrix,
Strong Matrix, and Weak Matrix

-Projectized Organization Structure

Functional Organizational Structure

In a functional organizational structure, the components of a hierarchy system where authority-
driven decisions on budget, schedule, and equipment rest on the shoulders of the functional
manager who possesses a significant level of expertise in the same field. This way the project
manager, in this type of organization, has little to no authority here and sometimes in some
functional organizations, that position does not even exist. As such, the work is broken down
into departments such as the human resource department, sales department, finance, public
relations, administration, etc. It is more traditional system where staff is presided over by a
supervisor, based on their functions within the organization and communication is most often
done through the department heads to senior management. The fascinating aspect about this type
of structure is that employees appear to be more skilled in their respective departments, thereby
leading to greater work efficiency. Everyone knows who to hold accountable if something were
to go wrong as responsibilities are predetermined. On the downside, the work may prove
monotonous over time, which could result in less enthusiasm and reduced loyalty to the
organization. In addition to that, cross-departmental communication becomes poor and the high
level of bureaucracy could affect decision-making negatively.

Projectized Organizational Structure

The projectized organizational structure is the complete opposite of the functional organizational
structure even though the organization may still group staff according to their work functions.

In this case, the project management team structure is organized in such a way that the project
manager has project authority. He has jurisdiction over the project’s budget, schedule, and the
project team. The PM is at the top of the hierarchical structure, having all powers; with
employees playing supporting roles for the project. At the end of the project, the project team
members are released and resources directed towards more relevant areas. The good aspect
about this kind of structure is that there is a clear, established line of authority; resulting in faster
decision-making and approval. Communication becomes easier and more effective and project
team members gain more experience working on different types of projects as the need for them
arises.

A major disadvantage to this type of organizational structure, however, would be that

employees could see themselves being under a lot of pressure most of the time, especially if they
happen to work on multiple projects at the same time. This often leads to poor communication
amongst the team members as everyone is left more or less playing “catch-up”.

Matrix Organizational Structure

The matrix organizational structure can be found lying somewhere between the functional
organizational structure and the projectized organizational structure depending on what type of
matrix structure is being run.

For instance, the strong matrix organizational structure has some similarities with that of a
projectized organizational structure in the sense that the project manager is responsible for a
project. If the organization is running a weak matrix structure, then the project authority would
fall to the hands of a functional manager – as it is in a functional organization. Interestingly
enough, in a balanced matrix organization, both the project manager and the functional manager
shares equal authority for the project.

If an organization finds itself working in a dynamic environment, then this might be the right
structure to run with it and it promotes greater efficiency, helping the organization respond to
customer demands or changes in the marketplace, faster.

This is easily achieved because the project manager exhibits project authority in a horizontal
manner, the functional manager does so in a vertical, flowing downwards. For example, the
project manager could be responsible for handling project schedule or budget while the
functional manager would be responsible for outlining and distributing responsibilities,
overseeing the performance of the equipment, etc.

Project Management:

Project Planning:
A project plan, also known as the project management plan, is the document that describes how
the project will be executed, monitored, and controlled, and closed. This outlines the objectives
and scope of the project and serves as an official point of reference for the project team, larger
company, and stakeholders.

It’s created during the project planning phase and is a compilation of several other documents. It
is more than just a schedule or a task list, though it does include those things. The project
management plan is formally approved at the beginning of the project and then progressively
updated throughout the course of the project.

Project planning is a crucial stage that comes right after initiation in project management phases.
Through proper planning, entire project is streamlined into a series of steps and ensure the
availability of all the resources on time.

Here project constraints such as time, scope, and costs are discussed in the project planning
process, and mitigation plans are developed after the identification of potential risks. The main
components of planning include various activities , tasks and resources.

Project Control:
 Controlling Project Work involves tracking the actual project performance with the planned
project management activities. It can mainly be looked as a Control function that takes place at
all stages of a project i.e. from Initiation through Closing. For small projects, monitoring and
control project work is comparatively an easy task but for large projects it is more stringent &
the project manager requires a formal effort to monitor and control how the processes are going.

Some of the outputs of the Monitor and Control Project Work include:

Changes needed as a corrective and preventive actions

Updates to the project management plan

Updates to project documents

This process of controlling project work is extremely important as it enables to complete the
project on-time, however, sometimes the quality of work may not be as per predetermined level.
Similarly, sometimes the project has increased scope, which lead to enhancement of limits of
time and cost. The project manager needs to balance the requirements of different knowledge
areas to control the project through Monitor and Control project work.. Monitoring and
Controlling project work involve monitoring any other performance measure that the project
manager has created or used for this project. Actually monitoring and controlling process is a
measuring against the project management plan.

Human Aspects of Project Management, \

For the successful execution of a project, a satisfactory human relation is must without such a
system other systems of project management do not work well. A project is temporary in that it
has a defined beginning and end in time, and therefore defined scope and resources. Project
management is the application of knowledge, skill, and techniques to execute projects effectively
and efficiently. To achieve satisfactory human relations in the project setting, the project
manager must successfully handle problems and challenges related to:

Authority Orientation

Motivation

Group functioning or team work

In the words of Dale Carnegie “When dealing with people, remember you are not dealing with
creatures of logic, but creatures of emotion.” ….a statement which reveals the significance of
human relations in a very comprehensive way.

Project management is built around structured methodology – usually – and best practices.
Project managers function in a global atmosphere and work on joint projects characterized by
cultural variety. There are processes to follow, procedures to implement and documentation to
create and deliver. One of the biggest challenges to successful project implementation is the
evolution of the project team. Cooperation is the key to project success. One of the human
aspects that should be particularly measured in the project team is the motivation of the project
team members.

Pre-Requisites for Successful Implementation

The implementation phase is where project team really do the project work to construct the
deliverables. Project implementation is the stage where visions and plans become a reality. So to
ensure the trouble free implementation some precautions specially actions to minimize time and
cost over-run,s are needed to improve the prospects of the successful completion of the project
and these can be summarized as under:

Adequate formulation:

Generally the project formulation is found deficient because of one or more of the following
shortcoming:

Superficial field investigation;

A cursory assessment of input requirements;

Slip-shod methods used for estimating costs and benefits;

An omission of project linkages;

Flawed judgments because of the lack of experience of expertise;

Undue hurry to get started;

Deliberate over-estimation of benefits and under-estimation of costs.

So all efforts must be taken to avoid any factor which makes the formulation deficient

Sound project organization:

A sound organization for implementing the project is critical to its success. The characteristics of
such an organization are:

It is led by a competent leader who is accountable for the project performance;

The authority of the project leader and his team is commensurate with their responsibility;

Adequate attention is paid to the human side of the project;

Systems and methods are clearly defined;

Rewards and penalties to individuals are related to performance.

Project implementation planning:

Once the investment decision is taken and often even while the formulation and appraisal are
being done, it is necessary to do detailed implementation planning before commencing the actual
implementation. Such planning should seek to:

-develop a comprehensive time plan for various activities like land acquisition, tender evaluation,
recruitment of personnel, constriction of the building, erection of plant, arrangement for utilities,
trial production run, run, etc.

-estimate meticulously the resources requirements (manpower, materials, money, etc.) for each
period to realize the time plan;

-define properly the inter-linkages between various activities of the project;

-specify cost standards.

Advance action:

When the project appears prima facie to be variable and desirable, advance action on the
following activities may be initiated:

a) Acquisition of land,

b) Securing essential clearance,

c) Identify technical collaborators/consultants,

d) Arranging for infrastructure facilities,

e) Preliminary design and engineering, and,

f) Calling of tenders.

Timely availability of funds:

Once a project is approved, adequate funds must be made available to meet its requirements as
per the plan of implementation, it would be highly desirable if funds are provided even before
the final approval to initiate advance action.

Judicious equipment tendering and procurement:

To minimize time over-runs, it may appear that a turnkey contract has obvious advantages. Since
these contracts are likely to be bagged by foreign suppliers, when global tenders are floated, a
very important question arises. How much should we rely on foreign suppliers and how much
should we depend on indigenous suppliers is a good example of this class