Project Management Chapter 2 Quiz

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Questions and Answers

What is the primary purpose of demonstrating project contributions to senior management?

To minimize the communication with stakeholders

To establish authority over project teams

To ensure ongoing support for the project (correct)

To solicit funding for unrelated projects

Which of the following best describes the first activity of the strategic management process?

Implement strategies through projects

Review and define the organizational mission (correct)

Set objectives to achieve strategies

Analyze and formulate strategies

Why is it important to explain project objectives to stakeholders?

To secure buy-in on contentious trade-off decisions (correct)

To avoid conflicts in project timelines

To facilitate project cancellations when necessary

To provide incentive bonuses for stakeholders

What does the strategic management process primarily aim to accomplish?

Develop a long-term plan of action Signup and view all the answers

What is a key aspect of strategy formulation in the strategic management process?

Determining and evaluating alternatives Signup and view all the answers

The objectives within the strategic management process translate strategies into what?

Specific, measurable terms Signup and view all the answers

What do the internal responses to new action programs aim to enhance within a firm?

Competitive position of the firm Signup and view all the answers

Which aspect is crucial for implementing strategies through projects?

Answering how strategies will be realized with available resources Signup and view all the answers

What does the Payback Model primarily measure?

The time taken to recover the initial investment Signup and view all the answers

Which of the following is NOT a characteristic of the Net Present Value (NPV) method?

It ignores the time value of money Signup and view all the answers

Which of the following is an example of a nonfinancial criterion in project selection?

Capturing larger market share Signup and view all the answers

What do multi-weighted scoring models help with in the selection criteria process?

Evaluating projects based on both financial and nonfinancial criteria Signup and view all the answers

Which financial criterion is the simplest and most widely used model?

Payback Model Signup and view all the answers

What is one major limitation of the Payback Model?

It only focuses on cash inflows during the investment period Signup and view all the answers

In the context of financial criteria, what does a negative Net Present Value indicate?

The project's return is less than the minimum desired rate of return Signup and view all the answers

Which option best represents a financial criterion for project selection?

Achieving a certain payback period Signup and view all the answers

Why is it important for project managers to understand their organization’s strategy?

To make appropriate decisions and adjustments. Signup and view all the answers

What is one significant role that projects contribute to the strategic direction of an organization?

They translate strategic objectives into actionable tasks. Signup and view all the answers

What is the purpose of a project priority system?

To determine which projects are most aligned with strategic goals. Signup and view all the answers

Which of the following distinguishes among different kinds of projects?

Project classification relevant to strategic goals. Signup and view all the answers

How does the phase gate model apply to project management?

It introduces checkpoints to assess project viability at different stages. Signup and view all the answers

What criteria should be applied to assess the value of projects?

Both financial and nonfinancial criteria. Signup and view all the answers

How can multi-criteria models be beneficial in project selection?

They allow for a comprehensive evaluation using multiple factors. Signup and view all the answers

Why is it necessary to manage the project portfolio?

To align projects with the overall organizational strategy. Signup and view all the answers

What is a primary disadvantage of Checklist Models in project selection?

They do not allow for comparison with other projects. Signup and view all the answers

Which of the following is a feature of Multi-Weighted Scoring Models?

They help to reduce wasteful projects. Signup and view all the answers

What is one of the main purposes of applying a selection model in project management?

To determine if a project aligns with strategic objectives. Signup and view all the answers

How do Multi-Weighted Scoring Models assist project managers?

They provide a basis for understanding project selection. Signup and view all the answers

What is a method for soliciting project proposals from external sources?

Request for Proposal (RFP) Signup and view all the answers

In the context of project ranking and selection, which of the following is NOT a consideration?

Historical success of the project manager Signup and view all the answers

Why are weighted scoring criteria considered advantageous for project selection?

They clarify project goals and selection rationale. Signup and view all the answers

What is one of the roles of senior management in project selection?

To prioritize projects based on selection criteria. Signup and view all the answers

What are the responsibilities of the governance team in project management?

Publish project priorities and ensure selection process integrity. Signup and view all the answers

Which type of project represents revolutionary commercial advances using proven technology?

Pearls Signup and view all the answers

What is a key feature of bread-and-butter projects?

Are evolutionary improvements to existing products. Signup and view all the answers

Which of the following best describes a white elephant project?

It showed promise at one time but is no longer viable. Signup and view all the answers

What aspect does senior management NOT provide guidance on?

Assessing the technical feasibility of each project. Signup and view all the answers

Which term refers to the rate of return required to make a project worthwhile?

Payback Signup and view all the answers

What is the purpose of the priority system in project management?

To dictate the resource allocation among projects. Signup and view all the answers

What does the implementation gap refer to?

The difference between project selection and execution. Signup and view all the answers

What is the primary purpose of a project priority system linked to strategy?

To minimize the implementation gap among managers. Signup and view all the answers

What does the term 'sacred cow' refer to in project selection?

A project strongly advocated by a high-ranking official. Signup and view all the answers

What common issue arises due to resource sharing in a multi-project environment?

Increased multitasking among team members. Signup and view all the answers

What does the Phase Gate Model primarily assess at each gate?

Whether to proceed, cancel, or revise the project. Signup and view all the answers

Which of the following describes the implementation gap?

The absence of agreement on the organizational strategy. Signup and view all the answers

Why might project selection be influenced by organization politics?

Powerful advocates can sway decisions regardless of project facts. Signup and view all the answers

Which result can occur at a gate in the Phase Gate Model?

Decision to kill, proceed, or recycle the project. Signup and view all the answers

How does multitasking affect project management in a multi-project environment?

It disrupts focus and can decrease productivity. Signup and view all the answers

Study Notes

Chapter Two: Organization Strategy and Project Selection

The chapter focuses on the importance of understanding organizational strategy for project managers.
Two key reasons project managers need to understand strategy are to make appropriate decisions and adjustments and to act as effective advocates for their projects.
Project managers need to understand how their project contributes to the firm's overall mission and strategy to gain continued support.
Project managers are responsible for explaining project objectives and priorities to stakeholders.

Strategic Management Defined

Strategic management is the process of assessing current status and determining future direction, implementing how to get there.
It's an ongoing, iterative process for developing an integrated and coordinated, long-term action plan.
Critical components include a strong relationship between mission, goals, objectives, strategies, and implementation.

Two Major Dimensions of Strategic Management

Strategic management actively responds to external environment changes, allocating resources for better competitiveness.
Internal responses to new actions are designed to enhance the firm's competitive position.

Four Activities of the Strategic Management Process

Review and define the organizational mission: Describes what the organization aims to become, including its product and service scope.
Analyze and formulate strategies: Determines the actions needed to achieve objectives, including selecting the best possible alternative.
Set objectives to achieve strategies: Translates strategy into concrete, measurable terms, indicating goals and timelines.
Implement strategies through projects: Specifies how strategies will be executed, given available resources.

Why Project Managers Need to Understand Strategy

To make appropriate decisions and adjust for strategic considerations.
To be effective project advocates and prove their projects support the organizational strategy.

The Need for a Project Priority System

Implementation gap: Lack of understanding or consensus on organizational strategy among management levels.
Organization politics: Project selection influenced by individuals' persuasiveness and power, not solely on facts.
Resource conflicts and multitasking: Managing multiple projects, sharing resources can lead to disruptions and priority conflicts.

Project Classification

Strategic projects: Projects critical for the organization’s future direction.
Operational projects: Projects supporting current operations.
Compliance projects: Projects mandated by regulations and compliance needs.

Phase Gate Model

A series of stages or "gates" through which a project must pass to completion.
It ensures the organization is investing resources on worthwhile projects aligning with its mission and strategy.
Each gate represents a decision point.
Possible outcomes at each gate are go (proceed), kill (cancel), or recycle (revise).

Selection Criteria

Financial criteria: Methods such as payback and net present value (NPV).
Nonfinancial criteria: Strategic importance, value to the organization.
Multi-Criteria Selection Models: Checklist Models and Multi-Weighted Scoring Models are used for comparisons.

Multi-Weighted Scoring Models

Provides a matrix using various criteria and weights to score different projects.

Project Screening Process

Proposing projects involves screening and evaluation.
The goal is to match proposed projects with organizational strategies.

Priority Screening Analysis

A structured approach to assess projects emphasizing both 'Must' and 'Want' objectives.

Managing the Portfolio System

Senior management input: Provides guidance, establishes criteria aligned with the organization.
Governance team responsibility: Ensures a transparent and fair selection process, manages risks, and evaluates progress.
Balancing organizational resources: Addresses allocation of resources across project types and priorities.

Balancing the Portfolio for Risks and Types of Projects

Project types (Bread & Butter, Pearls, Oysters, and White Elephants) offer a classification scheme to manage organizational portfolios for risk evaluation.

Key Terms

A list of crucial words and phrases related to project portfolio management.

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Description

This quiz assesses your understanding of organizational strategy and project selection as outlined in Chapter Two. Discover the essential elements that project managers must grasp to effectively align their projects with the company's strategic goals. Test your knowledge on strategic management and the role of project managers in advocating for their initiatives.