Understanding Project and

International Context
Project Management: A Managerial Approach (4/e)
By Jack R. Meredith and Samuel J. Mantel, Jr.

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Projects in Contemporary Organizations

 Project Management has emerged because the

characteristics of our turn-of-the-century society
demands the development of new methods of
management
 Many forces have fostered the emergence and
expansion of Project Management

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Forces Of Project Management

 Three Paramount Forces driving Project

Management:
1. The exponential expansion of human knowledge
2. The growing demand for a broad range of complex,
sophisticated, customized goods and services
3. The evolution of worldwide competitive markets for the
production and consumption of goods and services
 All 3 forces combine to mandate the use of teams to
solve problems that used to be solvable by
individuals

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Objectives of a Project

 Three Project Objectives:

 Performance
 Time
 Cost
 Expectations of clients are not an additional target, but an
inherent part of the project specifications

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Objectives of a Project

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The Professionalism of Project Management

 Complexity of problems facing the project manager

 Growth in number of project oriented organizations
 The Project Management Institute (PMI) was established in 1969
 By 1990 it had 7,500 members
 5 years later, over 17,000 members
 And by 1998, it had exploded to over 44,000 members
 This exponential growth is indicative of the rapid growth in
the use of projects
 Also reflects the importance of PMI as a force in the
development of project management as a profession

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Project Management Institute

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Recent Changes in Managing Organizations
 The process of managing organizations has been
impacted by three revolutionary changes
1. Accelerating replacement of traditional,
hierarchical management by participatory
management
2. Currently witnessing the adoption of the “systems
approach” (sometimes called “systems
engineering”)
3. Organizations establishing projects as the preferred
way to accomplish the many specific changes that
must be made when the organization attempts to
alter its strategy

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 The Definition of a “Project”
 Must make a distinction between terms:
 Program - an exceptionally large, long-range objective
that is broken down into a set of projects
 Task - set of activities comprising a project
 Work Packages - division of tasks
 Work Units - division of work packages
 In the broadest sense, a project is a specific,
finite task to be accomplished

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 Characteristics of a Project

 Have a purpose
 Have a life cycle
 Interdependencies
 Uniqueness
 Conflict

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Why Project Management?

 Companies have experienced:

 Better control
 Better customer relations
 Shorter development times
 Lower costs
 Higher quality and reliability
 Higher profit margins
 Sharper orientation toward results
 Better interdepartmental coordination
 Higher worker morale

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Why Project Management?

 Companies have also experienced some negatives:

 Greater organizational complexity
 Increased likelihood of organizational policy violations
 Higher costs
 More management difficulties
 Low personnel utilization

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The Project Life Cycle

 Stages of a Conventional Project:

 Slow beginning
 Buildup of size
 Peak
 Begin a decline
 Termination

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The Project Life Cycle

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The Project Life Cycle
 Time distribution of project effort is characterized by slow-
rapid-slow

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The Project Life Cycle

 Other projects also exist which do not follow the

conventional project life cycle
 These projects are comprised of subunits that have little
use as a stand alone unit, yet become useful when put
together

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The Project Life Cycle
 Unlike the more conventional life cycle, continued inputs of effort
at the end of the project produce significant gains in returns

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The Project Life Cycle

 It is essential for the Project Manager to

understand the characteristics of the life cycle
curve for his project

 The distinction between the two life cycles plays

a critical role in the development of budgets and
schedules for the project

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The Project Life Cycle

 Risk during project life cycle

 With most projects there is some
uncertainty about the ability to meet project
goals
 Uncertainty of outcome is greatest at the
start of a project
 Uncertainty decreases as the project moves
toward completion

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Projects in Contemporary Organizations

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Risk During Project Life Cycle
 Uncertainty decreases as the project moves toward completion

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International Project Analysis
 Its normative analysis
 Examines characteristics, relationships and actions that should
exist
 May not be empirically based
 Its objective is to maximize profit
 Decision making is more amenable to modeling
 The rational model
 The bounded-rational model
 The political model
 The garbage can model

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Rational Model of Decision Making
 Decision maker search for all possible courses of action,
to compare and to evaluate them and to choose the
optimal solution.
 Recognition
 Diagnosis
 Search
 Design
 Evaluate
 Choice
 Authorization
 implementation

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The Bounded-Rational Model
 Actual decisions are made in the real world with
incomplete information, under time pressure and/or with
possible disagreement over goals
 The optimal solution may not always be achieved –
rationality is bounded.

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The Bounded-Rational Model
1. It involves problematic search rather than complete
alertness
2. Cognitive limits exist in the search process
3. Time pressure often cut short the full search process
4. Incrementalism and disjointedness often occcur
5. Intuition and judgement often play important role
6. Satisficing rather than optimal solution

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Political Model
 The political model of decision making involves shifting
coalitions of interests and temporary alliances of decision
makers who may, for the purpose of dealing with a
particular problem, come together and sufficiently forget
their differences in order to make a decision.
 Bargaining
 Guile
 Coalition building
 biasing

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Garbage Can Model
 Events and decisions are not at all systematic and
organized anarchy.

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FDI - Motivation
 Market Imperfection
 Transaction cost theory
 Internalization and Firm Specific Advantages
 Location specific advantages
 The Product Life Cycle

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Eclectic paradigm
 The eclectic paradigm is a theory in economics and is also
known as the OLI-Modeling, by John H. Dunning
 The theory of internalization itself is based on the transaction
cost theory. This theory says that transactions are made within
an institution if the transaction costs on the free market are
higher than the internal costs. This process is called
internalization
 Ownership advantages: (trademark, production technique,
entrepreneurial skills, returns to scale)[2]
 Locational advantages (existence of raw materials, low wages,
special taxes or tariffs)
 Internalisation advantages (advantages by producing through a
partnership arrangement such as licensing or a joint venture)

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Globalization

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