School’s Vision, Mission, Goals and Objectives

Visions are statements indicating what you dream to see in the future.

“Bestlink College of the Philippines is committed to provide and promote quality education with a unique, modern and
research-based curriculum with delivery system geared towards excellence”.

Mission are what you want to accomplish.

“To produce self-motivated and self-directed individuals who aim for academic excellence, God-fearing, peaceful, healthy,
productive and successful citizens”.

Goals are long range objectives that need to be accomplished for specific time.

 Instruction
 Research
 Extension
 Productivity

Objectives are the purposes to be done for a shorter period of time.

In adherence with the constitution and imploring the aid of divine providence, Bestlink College of the Philippines
aims to:

 Provide needed and excellent instructions within reach of learners and which market.
 Produce graduates who are skilled, competent, self-motivated and directed, ready to face the challenges of a fast
paced life.
 Supply the world with a human, God fearing, values laden and progressive graduates to be ideal citizens of the
community of men.
 Contributes its endeavor in research furtherance of the quality education BCP delivers through the academe.
 Facilitate extension services to less fortunate community, partner/s, for sustainable return to the enjoyment of a
better life.
 Maintain manpower of expert dedicated to operationalize the VMG of BCP.

The Core Values of the School - Core values are important to students as a controlling factor to do what is right, what is
just, and what is proper. The Core Values of the School are:

 Faith
 Reason and
 Peace

SELF-DISCIPLINE-Do the right thing at the right time in the right place in the right manner with the right person or People.

DILIGENCE - Preparedness before, during, and after sessions is most expected and asked of. The course syllabus is a
study guide that contains the topics to be covered per week or for two weeks. Supplementary readings may be added to
the learning materials for additional acquired learning. Assignments and projects have to be submitted or accomplished
on or before set deadline. Rubrics are provided for self, peer and/or teacher evaluation. External links are included in the
learning plans for access to these grading platforms.

COMMITMENT TO SELF-PACED LEARNING - Personal commitment to independent learning with minimal teacher
supervision is what is asked of in the ‘new normal’ of availing the best of what education can offer. Digital technology is at
hand for every serious and dedicated learner as educational aid. Social media platforms will be resorted to whenever
possible for communication but should not be abused.

OPENNESS TO CHANGES, MODIFICATIONS OR REVISIONS IF NECESSARY - Democratic process shall be

exercised that opinions be expressed should there be points for clarification or objections to be presented. Questions are
welcome and so are suggestions or recommendations.
Traditional and Innovation Project Management

Project management is a practice that can be found everywhere. Project management does not belong to any specific
domain or a field. It is a universal practice with a few basic concepts and objectives. Regardless of the size of the
activities or effort, every 'project' requires project management.
There are many variations of project management that have been customized for different domains. Although the basic
principles are the same among any of these variations, there are unique features present to address unique problems and
conditions specific to each domain. There are two main types of project management:
 Traditional Project management
 Modern Project management
Definition of Traditional Project Management - First of all, having an idea of the project management definition is
required when it comes to discussing traditional project management. Following is a definition for traditional project
management. PMBOK defines the traditional project management as 'a set of techniques and tools that can be applied to
an activity that seeks an end product, outcomes or a service'. If you Google, you will find hundreds of definitions given by
many project management 'gurus' on traditional project management. But, it is always a great idea to stick to the standard
definitions such as PMBOK.
Traditional Project Management Example
You are working for a company where everyone has a desktop or a laptop computer. Currently, the company uses
Windows XP as the standard operating system across the company. Since Windows XP is somewhat outdated and there
is a newer version called Windows 7, the management decides on upgrading the OS. The objective of the upgrade is to
enhance the productivity and reduce the OS security threats.
If you have one office with about 100 computers, it could be considered as a medium scale project. In case if your
company has 10-15 branches, then the project is a large scale one with high complexity. In such case, you will be
overwhelmed by the tasks at hand and will feel confused. You may have no clue of how to start and proceed. This is
where traditional project management comes in.
Traditional project management has everything required for managing and successfully executing a project like this. Since
this type of project does not require any customizations, modern project management methods are not required. The
company can hire or use an existing project manager to manage the OS upgrade project. The project manager will plan
the entire project, derive a schedule, and indicate the required resources. The cost will be elaborated to the higher
management, so everyone knows what to expect in the project. Usually, a competent project manager knows what
processes and artifacts are required in order to execute a project. There will be frequent updates coming from the project
manager to all stakeholders. In addition to the regular project activities, project manager will attend to risk management as
well. If certain risks have an impact on the business processes, the project manager will suggest suitable mitigation
criteria.
Definitions for Innovation
There are conflicting views on what innovation means. Some people argue that innovation is standing in the future (rather
than the present) and helping others see it. Another view of innovation (to paraphrase Martha Graham) states that
innovation teams, and innovators, are not ahead of their time in what they see. They are in real time, and the rest of the
world hasn’t caught up to them yet because they are still focusing on the past.
There is no universally agreed-on definition for innovation, but two common definitions are:

1. Innovation is the transformation of knowledge or intellectual property into commercialization.

2. Innovation is not necessarily invention; it can be the creation of something new, as in a new application.

Innovation is finding a new or better solution to market needs in a manner that creates long-term shareholder value.
Externally, it is seen by customers as improved quality, durability, service, and/or price. Internally, it appears as positive
changes in efficiency, productivity, quality, competitiveness, and market share.
To understand the difficulty in defining innovation, we will look first at the reasons for performing innovation:

 To produce new products or services with long-term profitable growth potential

 To produce long-term profitable improvements to existing products and services
 To produce scientific knowledge that can lead to new opportunities, better ways to conduct business (i.e., process
improvements and business models), or improved problem solving

There are many forms of process innovation. Capturing and implementing best practices, whether project management or
business related, is process innovation. Process innovation can also include changing some of the key operations such as
in manufacturing to reduce cost, add business value, or speed up time-to-market. Process innovation overcomes the
misbelief that innovation occurs only with technical solutions for designing a new product. The output from strategic
innovation can create sustainable business value in the form of:
 New products
 Enhancements in brand value
 Additional services
 Efficiencies and/or improved productivities
 Improvements in quality
 Reduction in time-to-market
 An increase in competitiveness
 An increase in market share
 New processes
 New technologies
 Reduction in labor or material costs
 Reduction in energy consumption
 Conformance to regulations
 New platforms
 New strategic partnerships or acquisitions
The Business Need
Global business is susceptible to changes in technology, demographics, a turbulent political climate, industrial maturity,
unexpected events, and other factors that can affect competitiveness. Taking advantage of these changes will be
challenging. Companies need growth for long-term survival. Companies cannot grow simply through cost reduction and
reengineering efforts that are more aligned to a short-term solution. Also, companies are recognizing that brand loyalty
accompanied by a higher level of quality does not always equate to customer retention unless supported by some
innovations. According to management guru Peter Drucker, there are only two sources for growth: marketing and
innovation (Drucker 2008).
Innovation is often viewed as the Holy Grail of business and the primary driver for growth. Innovation forces companies to
adapt to an ever-changing environment and to be able to take advantage of opportunities as they arise. Companies are
also aware that their competitors will eventually come to market with new products and services that will make some
existing products and services obsolete, causing the competitive environment to change. Continuous innovation is
needed, regardless of current economic conditions, to provide firms with a sustainable competitive advantage and to
differentiate themselves from their competitors. The more competitive the business environment, the greater the
investment needed for successful innovation. Companies with limited resources can take on strategic business partners
and focus on co-creation. Co-creation innovation project management result in faster time-to-market, less risk exposure,
greater customer satisfaction, a greater focus on value creation, and better technical solutions (DeFillippi and Roser
2014). With co-creation, the project manager must learn how to manage group diversity not just of race, religion, ethnic
background, or sex, but also the diverse personal interests in prestige, benefits they might gain, and the degree of
importance attached to the project. Investors and stockholders seek information on the innovation projects in the firm’s
pipeline. This gives them an indication of possible success in the future. Influential stockholders and stakeholders can put
pressure on innovation activities by asking for:

 Shorter product development life cycles

 An increase in product competitiveness
 Faster time to market
 Execution with fewer resources
 Higher performance requirements that the competitors
 Better product quality

Stockholder pressure to shorten development time must not be at the expense of product liability. For years, project
management and innovation management were treated as separate disciplines. Innovation requires an acceptance of
possibly significant risk, fostering of a creative mindset, and collaboration across organizational boundaries. Innovation
management, in its purest form, is a combination of the management of innovation processes and change management. It
refers to products, services, business processes, and accompanying transformational needs whereby the organization
must change the way they conduct their business. It includes a set of tools that allow line managers, project managers,
workers, stakeholders, and clients to cooperate with a common understanding of the innovation processes and goals.
Innovation management allows the organization to respond to external or internal opportunities, and use its creativity to
introduce new ideas, processes, or products (Kelly and Kranzburg 1978). It requires a different mindset than the linear
thinking model that has been used consistently in traditional project management practices. Innovation management tools
allow companies to grow by utilizing the creative capabilities of its workforce (Clark 1980). However, there are still
industries and types of projects that require linear thinking.
Strategic innovation follows other processes such as strategizing, entrepreneurship, changing, and investing (de Wit
and Meyer 2014). But now, companies are realizing that innovation strategy is implemented through projects. Simply
stated, we are managing our business as though it were a series of projects. Project management has become the
delivery system for innovation, but only if the rigidity of some project management processes is removed. Without some
degree of flexibility, creativity and brainstorming may suffer. Today’s project managers are seen more as managing part of
a business rather than managing just a project. Project managers are now treated as market problem solvers and
expected to be involved in business decisions as well as project decisions.
End-to-end project management is now coming of age. In the past, project managers were actively involved mainly in
project execution, with the responsibility of providing a deliverable or an outcome. Today, with end-to-end project
management, the project manager is actively involved in all life-cycle phases including idea generation and product
commercialization. The end of the project could be a decade or longer after the deliverables were created.
For decades, most project managers were trained in traditional project management practices and were ill-equipped to
manage many types of innovation projects. Projects with a heavy focus on achieving strategic business objectives were
managed by functional managers. Project managers handled the more operational or tactical projects and often had little
knowledge about strategic plans and strategic objectives that required innovation activities. Project management and
innovation management are now being integrated into a single profession, namely, innovation project management (IPM),
whereby project managers are provided with strategic information. Project managers are now the new strategic leaders.
IPMs now focus heavily on the long-term business or strategic aspects rather than the operational aspects that encourage
a mindset of “getting the job done.”
Several years ago, a Fortune 500 company hired consultants from a prestigious organization to analyze its business
strategy and major product lines, and to make recommendations as to where the firm should be positioned in 5 and 10
years, and what it should be doing strategically. After the consultants left, the executives met to discuss what they had
learned. The conclusion was that the consultants had told them “what” to do, but not “how” to do it. The executives
realized quickly that the “how” would require superior project management capabilities, especially for innovation. The
marriage between business strategy, innovation and project management was now clear in their minds. Figure 1-1
illustrates how strategic planning was often seen in the C-suite. All the boxes in Figure 1-1 were considered important,
except often not the last box, namely the implementation of the strategy. Therefore, senior management did not see the
link between project management and strategic planning activities because it was not recognized as part of their job
description. Project management is now recognized as the delivery system by which an organization meets it strategic
business objectives. If innovation activities are required, then project managers must undergo training in innovation
project management.
Innovation project management is now being recognized as a career path discipline that may be more complex and
challenging than traditional project management practices. Innovation projects have a high degree of risk because of the
unpredictability of the markets, unstable economic conditions, and a high impact on human factors that may force an
organization to change the way that it does business (Filippov and Mooi 2010). Innovation project managers may need a
different skill set than traditional project managers.
Organizations need the ability to manage a multitude of innovation projects concurrently to be successful, and therefore
innovation project management is being supported by corporate-level portfolio management practices. IPM cannot
guarantee that all projects will be successful, but it can improve the chances of success and provide much-needed
guidance on when to “pull the plug,” reassign resources, and minimize losses.
INNOVATION TARGETING
Successful innovation must be targeted, and this is the weakest link because it requires a useful information system and
knowledge about the company’s long-term business strategy. Creating the business strategy requires the interactions
shown in Figure 1-3. The organization identifies the need for innovation and provides funding and competent people with
the necessary skills. Marketing provides insight about consumers’ needs and what they might be willing to pay for the
product or service. Marketing also provides insight into what market segments should be targeted. Innovations require
technology. In the past, business needs focused on repetitive tasks, improving efficiencies, and productivity. There was a
heavy focus on these factors:

 Profitability
 Elimination of variations
 Maintaining authority through command and control
 Overreliance on utilization of business metrics
 Six Sigma to improve quality

Today, we face challenges and crises due to competition, unstable economies, disruptive technologies, and sustainability.
“Business as usual” is no longer an option. “We will build it and they will come” does not work. We must be willing to break
away from traditional thinking. There are greater risks, but greater opportunities. We must work closely with our customers
using prototypes or risk that the idea will be a loser.

THREE CRITICAL INNOVATION INTERACTIONS

We must focus on long-term spending, which requires the answering of critical linkage questions:

 In what direction should we grow?

 Should we change our image and, if so, what should it be?
 How well do we understand the customers’ needs and wants?

We must listen to the voices: the voice of technology and the voice of the customers. Three questions must be answered:

 What do the customers need?

 What will they pay for?
 What value will they receive?

Confronting Failure: Antecedents and Consequences of Shared Beliefs about

Failure in Organizational Work Groups
The ability to learn from failure has been heralded as essential for organizational innovation, adaptation, and success in a
changing environment (Starkey, 1998). For example, Sitkin (1992) argued that failure is more important than success for
organizational learning; Nonaka and Takeuchi (1995) reported that Honda engineers understand that success is born of
mistakes, and Leonard-Barton (1995) suggested that learning from intelligent failure is a hallmark of innovative
companies.
Failure Defined
We conceptualize failure as deviation from expected and desired results. This includes both avoidable errors and
unavoidable negative outcomes of experiments and risk taking. It also includes interpersonal failures such as
misunderstanding and conflict. Our conceptualization is deliberately broad, encompassing failures of diverse types and
magnitude, because we propose that opportunities for learning exist in both minor misunderstandings and major mishaps.
We note also that the amount or significance of learning is not necessarily proportional to the size or scope of a failure.
Clearly, learning can emerge from major failures such as launching a highly visible product only to have it rejected by the
market, or implementing a new technology that cannot be made to work in the intended context.
The Process of Learning from Failure in Organizations
The process of learning from failure involves identifying failures, discussing and analyzing them, and dealing with conflict
and disagreement productively. Identifying failure is an essential first step to learning from it: discussion and analysis are
needed to understand and communicate the relevant lessons, and the ability to cope with conflict becomes necessary
when discussion of failure involves controversy or disagreement about its causes.

1. Seeking to Identify Failure

Opportunities to learn from failure cannot materialize if mistakes are covered up. Identification of minor and major failure is
thus an essential first step to learning from it. Failures can range in importance and include loss of life such as in the
Challenger disaster or in a medication error in a hospital, to weak sales of a newly launched product, to something as
seemingly unimportant as not understanding another person's ideas expressed in a meeting. Effective identification of
failure entails exposing failures as early as possible, to allow learning in an efficient and cost effective way and minimize
the unproductive investment of time and other resources.
2. Discussing and Analyzing Errors
One of the revolutions in manufacturing, the drive to reduce inventory to the lowest possible levels, was stimulated as
much by the desire to make mistakes quickly visible as by the desire to avoid other inventory-associated costs (e.g.
Hayes et al., 1988). Just as surfacing errors before they are compounded, incorporated into larger systems, or made
irrevocable is an essential step in achieving high quality, one of the core themes of the total quality management
movement is turning analysis of error and failure into a positive act that is recognized and valued for its contribution to
overall performance. Implicit in this is the assumption that high quality arises from an organizational system that actively
seeks out problems and determines how they may be avoided in the future. Although mistakes may be traced to
individuals, the emphasis is on creating a system that eliminates the possibility of future repetition, rather than on personal
blame (MacDuffe, 1997; Leape, 1994; Ryan and Oestreich, 1991).

3. Handling Conflict Productively

Poor handling of conflict can lead to a hostile environment in which trust and interpersonal relationships break down.
Under these conditions, fear of being ridiculed or blamed, or fear that others will use knowledge of their failure against
them may keep people from discussing their failures or disagreements (Argyris, 1982; Jehn, 1995). Alternatively,
productive handling of conflict can serve constructive purposes, especially when people are brought together across
disciplines to share different perspectives and to challenge others' ideas.
Antecedents and Consequences of Shared Beliefs about Failure in Work Group
Under what conditions will members of work groups have learning-oriented beliefs about mistakes and problems,
encouraging behaviors necessary for learning from failure? As a preliminary answer to the question of what factors enable
these often counter-cultural beliefs and behaviors, a research on work teams, in which a set of supportive conditions have
been shown to promote team effectiveness (Hackman, 1990). Argues that three conditions identified by Hackman and
colleagues are particularly relevant for promoting constructive beliefs about failure ± effective coaching, clear direction,
and a supportive work context.

1. Coaching By Managers Or Team Leaders

To foster the unconventional set of attitudes and behaviors that individuals need to learn from failure,
Proximal managers need to act as effective coaches of the people with whom they work. Vision statements or corporate
values articulated by senior management, although potentially inspiring, are likely to be insufficient for enabling behavior
needed to learn from failure than the example and receptivity of an employee's proximal manager or team leader. The
managers and group leaders who work as a face-to-face presence in the workplace are in a position to deliberately
reframe failure as something that is essential to learning.
2. Clear Direction
A clear direction can facilitate work group performance (Cohen et al., 1999). It also may enable identification and
discussion of failure. It can clarify what is or is not a failure, such that deviations from the path toward the goal are more
noticeable. In contrast, without a clear direction, the potential for confusion and ambiguity may create a kind of insecurity
that discourages people from identifying and discussing failure. A clear direction can also help group members stay
focused on the task and reduce the potential for them to come into conflict around issues that are not directly related to
the immediate task, such as quarrelling over competing agendas for the team's direction. This is likely to reduce
opportunities for unproductive personal conflict (Jehn, 1995) and to help to keep conflict within constructive bounds so
that people feel less threatened about disclosing and discussing failure. A clear direction also can provide people with
some assurance that the risks they are taking with failure are likely to be worthwhile because the results of these
interpersonal risks can be assessed against a desired end-state.
3. Supportive Work Context
The extent of group context support in the form of access to information, resources and rewards may reduce insecurity
and defensiveness in a work group, making it somewhat easier to discuss mistakes and other failures. A supportive work
environment may enable employees to believe that they will be fairly treated, such that admitting or calling attention to
failure is less likely to be penalized.
Characteristics of Change
Change Management has been defined as ‘the process of continually renewing an organization’s direction, structure,
and capabilities to serve the ever-changing needs of external and internal customers’ (Moran and Brightman, 2001: 111).
According to Burnes (2004) change is an ever-present feature of organizational life, both at an operational and strategic
level. Therefore, there should be no doubt regarding the importance to any organization of its ability to identify where it
needs to be in the future, and how to manage the changes required getting there. Consequently, organizational change
cannot be separated from organizational strategy, or vice versa (Burnes, 2004; Rieley and Clarkson, 2001). Due to the
importance of organizational change, its management is becoming a highly required managerial skill (Senior, 2002).
Main Characteristics of Change

1. Change Characterized by the Rate of Occurrence

The early approaches and theories to organizational change management suggested that organizations could not be
effective or improve performance if they were constantly changing (Rieley and Clarkson, 2001). It was argued that people
need routines to be effective and able to improve performance (Luecke, 2003). However, it is now argued that it is of vital
importance to organizations that people are able to undergo continuous change (Burnes, 2004; Rieley and Clarkson,
2001). While Luecke (2003) suggests that a state of continuous change can become a routine in its own right, Leifer
(1989) perceives change as a normal and natural response to internal and environmental conditions.
Table 1 identifies the main types of change categorized by the rate of occurrence to be discontinuous and incremental
change. However, different authors employ different terminology when describing the same approach. While Burnes
(2004) differentiates between incremental and continuous change, other authors do not.
Furthermore, to make it even more confusing, Grundy (1993) and Senior (2002) distinguish between smooth and bumpy
incremental change. Grundy (1993: 26) defines discontinuous change as ‘change which is marked by rapid shifts in either
strategy, structure or culture, or in all three’. This sort of rapid change can be triggered by major internal problems or by
considerable external shock (Senior, 2002). According to Luecke (2003) discontinuous change is onetime events that take
place through large, widely separated initiatives, which are followed up by long periods of consolidation and stillness and
describes it as ‘single, abrupt shift from the past’ (Luecke, 2003: 102). Advocates of discontinues change argue this
approach to be cost-effective as it does not promote a never-ending process of costly change initiatives, and that it
creates less turmoil caused by continuous change (Guimaraes and Armstrong, 1998). Nelson (2003: 18) states that
‘Change cannot be relied upon to occur at a steady state, rather there are periods of incremental change sandwiched
between more violent periods of change which have contributed to the illusion of stability once assumed to be the case.

Although the discontinuous approach to change is still employed in recent change initiatives (Duncan et al., 2001)
there seems to be a consensus among contemporary authors that the benefits from discontinuous change do not last
(Bond, 1999; Grundy, 1993; Holloway, 2002; Love et al., 1998; Taylor and Hirst, 2001). According to Luecke (2003) this
approach allows defensive behavior, complacency, inward focus, and routines, which again creates situations where
major reform is frequently required. What is suggested as a better approach to change is a situation where organizations
and their people continually monitor, sense and respond to the external and internal environment in small steps as an
ongoing process (Luecke, 2003).
Therefore, in sharp contrast to discontinuous change, Burnes (2004) identifies continuous change as the ability to change
continuously in a fundamental manner to keep up with the fast-moving pace of change. Burnes (2004) refers to
incremental change as when individual parts of an organization deal increasingly and separately with one problem and
one objective at a time. Advocates of this view argue that change is best implemented through successive, limited, and
negotiated shifts (Burnes, 2004). Grundy (1993) suggests dividing incremental change into smooth and bumpy
incremental change. By smooth incremental change Grundy (1993) identifies change that evolves slowly in a systematic
and predictable way at a constant rate. This type of change is suggested to be exceptional and rare in the current
environment and in the future (Senior, 2002). Bumpy incremental change, however, is characterized by periods of relative
peacefulness punctuated by acceleration in the pace of change (Grundy, 1993; Holloway, 2002). Burnes’ (2004) and
Balogun and Hope Hailey’s (2004) term for this type of change is punctuated equilibrium. The difference between Burnes’
(2004) understanding of continuous and incremental change is that the former describes departmental, operational,
ongoing changes, while the latter is concerned with organization-wide strategies and the ability to constantly adapt these
to the demands of both the external and internal environment.
2. Change Characterized By How It Comes About
When characterized by how change comes about, there are several different approaches, as identified in Table 3.
However, the literature is dominated by planned and emergent change (Bamford and Forrester, 2003). Even though there
is not one widely accepted, clear and practical approach to organizational change management that explains what
changes organizations need to make and how to implement them (Burnes, 2004) the planned approach to organizational
change attempts to explain the process that bring about change (Burnes, 1996; Eldrod II and Tippett, 2002).
Furthermore, the planned approach emphasizes the importance of understanding the different states which an
organization will have to go through in order to move from an unsatisfactory state to an identified desired state (Eldrod II
and Tippett, 2002). The planned approach to change was initiated in 1946 by Lewin (Bamford and Forrester, 2003), who
was a theorist, researcher and practitioner in interpersonal, group, intergroup, and community relationships (Eldrod II and
Tippett, 2002). Lewin (1946 in Burnes, 2004) proposed that before change and new behavior can be adopted
successfully, the previous behavior has to be discarded.
According to Lewin (1952 in Eldrod II and Tippett, 2002) a successful change project must, therefore, involve the three
steps of unfreezing the present level, moving to the new level and refreezing this new level. This model of change
recognizes the need to discard old behavior, structures, processes and culture before successfully adopting new
approaches (Bamford and Forrester, 2003).

3. Change Characterized by Scale

According to Dunphy and Stace (1993), change identified by scale can be divided into four different characteristics:

 Fine-Tuning,
 Incremental Adjustment,
 Modular Transformation,
 Corporate Transformation.

Fine-tuning, also known as convergent change (Nelson, 2003), describes organizational change as an ongoing
process to match the organization’s strategy, processes, people and structure (Senior, 2002). It is usually manifested at a
departmental or divisional level of the organization. The purpose of fine-tuning is, according to Dunphy and Stace (1993),
to develop personnel suited to the present strategy, linking mechanisms and create specialist units to increase volume
and attention to cost and quality, and refine policies, methods and procedures. Furthermore, the fine-tuning should foster
both individual and group commitment to the excellence of departments and the organization’s mission, clarify established
roles, and promote confidence in accepted beliefs, norms, and myths (Dunphy and Stace, 1993).
According to Senior (2002) Incremental Adjustment involves distinct modifications to management processes and
organizational strategies, but does not include radical change.
Modular Transformation is change identified by major shifts of one or several departments or divisions. In contrast to
incremental adjustment this change can be radical. However, it focuses on a part of an organization rather than on the
organization as a whole (Senior, 2002).
If the change is corporate-wide and characterized by radical alterations in the business strategy it is described
as Corporate Transformation (Dunphy and Stace, 1993). According to Dunphy and Stace (1993) examples of this type
of change can be reorganization, revision of interaction patterns, reformed organizational mission and core values, and
altered power and status.
Managing Change for Organizations
Managing change requires strong leadership and an understanding of how organizational change occurs. Leaders are in
the unique role of not only designing change initiatives but enacting and communicating them to subordinates. Managing
change requires more than simple planning: the significant human element of change resistance needs to be addressed
to ensure success.
Leadership Strategies for Change
Successful change management is more likely if leaders:

1. Create a definable strategy – Define measurable stakeholder aims, create a business case for their achievement
(and keep it continuously updated), monitor assumptions, risks, dependencies, costs, return on investment, and
cultural issues affecting the progress of the associated work.
2. Communicate effectively – Explain to stakeholders why the change is being undertaken, what the benefits of
successful implementation will be, and what how the change is being rolled out.
3. Empower employees – Devise an effective education, training, or skills upgrading scheme for the organization.
4. Counter resistance – Identify employee issues and align them to the overall strategic direction of the organization.
Adapt the change initiative when necessary to mitigate discontentment.
5. Support employees – Provide personal counseling (if required) to alleviate any change-related fears.
6. Track progress – Monitor the implementation and fine-tuning as required.

The reengineering process: Change management is often termed a “re-engineering process.” This flowchart shows the
reciprocal relationships involved in each step: the mission defines and is accomplished via work processes, which execute
and are guided by decisions, which consider and are supported by information, which employs and are processed via
technology.

These six components of change are the responsibility of management to create and implement.

Six Leadership Styles for Change

Conner (1998) identified six distinct leadership styles related to change: anti-change, rational, panacea, bolt-on,
integrated, and continuous. Each leadership style “represents a unique set of perceptions, attitudes, and behaviors
regarding how organizational disruption should be addressed.” Stopper (1999) characterizes each of Conner’s leadership
styles in this way:

1. The anti-change leader – A leader embracing this style seeks to avoid change as much as possible. The message
is, “Stay the course. Keep adjustments small. No need to change in any major way.”
2. The rational leader – This leader focuses on how to constrain and control change with logical planning and clearly
defined steps.
3. The panacea leader – The panacea leader believes that the way to respond to pressure for change is to
communicate and motivate. These leaders understand the resilience to change they are likely to encounter as well
as the inevitability of change as organizations evolve. They tend to focus on fostering enthusiasm for change.
4. The bolt-on leader – This leader strives to regain control of a changing situation by attaching (bolting on) change
management techniques to ad-hoc projects that are created in response to pressure for change. This manager is
more concerned about helping others change than creating a strategy for the actual change itself.
5. The integrated leader – The integrated leader searches for ways to use the structure and discipline of what Harding
and Rouse (2007) called “human due diligence” (the leadership practice of understanding the culture of an
organization and the roles, capabilities, and attitudes of its people) as individual change projects are created and
implemented. The concept is simply to combine, or integrate, human and cultural concerns with the strategy itself.
6. The continuous leader – The continuous leader works to create an agile and quick-responding organization that
can quickly anticipate threats and seize opportunities as change initiatives are designed and implemented.
Continuous leaders believe that to disruption is continuous, and adaptability a necessary organizational
competency.

Conner says that these six leadership styles are related to two different types of organizational change: first-order change
and second-order change. First-order change is incremental, piecemeal change. According to Conner, second-order
change is “nonlinear in nature and reflects movement that is fundamentally different from anything seen before within the
existing framework.”
Conner identifies the first four leadership styles as appropriate for managing first-order change. When an organization is
engaging in discontinuous, transformational change, however, integrated and continuous leadership styles are more
appropriate.
Types of Organizational Change
There are three main categories of change: business process re-engineering, technological change, and incremental
change.
Change management is an approach to shifting or transitioning individuals, teams, and organizations from their current
state to a desired future state. It is an organizational process aimed at helping stakeholders accept and embrace change
in their business environment. In some project management contexts, change management refers to a project
management process wherein changes to a project are formally introduced and approved.
Kotter defines change management as the utilization of basic structures and tools to control any organizational change
effort. Change management’s goal is to maximize organizational benefit, minimize impacts on workers, and avoid
distractions. There are different types of change an organization face.
Business Process Re-Engineering
Business process re-engineering (BPR) is a business management strategy first pioneered in the early 1990s that
focuses on the analysis and design of workflows and processes within an organization. BPR aims to help organizations
fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and
become world-class competitors. In the mid-1990s, as many as 60% of the Fortune 500 companies claimed to have either
initiated re-engineering efforts or begun planning for it.
BPR helps companies radically restructure their organizations by focusing on their business processes from the ground
up. A business process is a set of logically related tasks performed to achieve a defined business outcome. Re-
engineering emphasizes a holistic focus on business objectives and how processes relate to them, encouraging full-scale
recreation of processes rather than iterative optimization of sub-processes.
Business process re-engineering is also known as business process redesign, business transformation, and business
process change management.
Incremental Change
Incremental change is a method of introducing many small, gradual (and often unplanned) changes to a project instead of
a few large, rapid (and extensively planned) changes. Wikipedia illustrates the concept by building an encyclopedia bit by
bit. Another good example of incremental change is a manufacturing company making hundreds of small components that
go into a larger product, like a car. Improving the manufacturing process of each of these integral components one at a
time to cut costs and improve process efficiency overall is incremental change.
Technological Change
Technological change (TC) describes the overall process of invention, innovation, and diffusion of technology or
processes. The term is synonymous with technological development, technological achievement, and technological
progress. In essence, TC is the invention of a technology (or a process), the continuous process of improving a
technology (which often makes it cheaper), and its diffusion throughout industry or society. In short, technological change
is based on both better and more technology integrated into the framework of existing operational processes.
Inside and Outside Forces for Organizational Change
Inside forces include strategic and human resource changes, while outside forces include macroeconomic and
technological change.
Change management is an approach to shifting or transitioning individuals, teams, and organizations from their existing
state to a desired future state. Examples of organizational change can include strategic, operational, and technological
changes coming from inside or outside the organization. Understanding key internal and external change catalysts is
critical to successful change management for organizational leaders.
Outside Forces
While there are seemingly endless external considerations that can motivate an organization to change, a few common
considerations should be constantly monitored. These include economic factors, competitive dynamics, new technology,
globalization, and legislative changes:
 1. Economics – The 2008 economic collapse is a strong example of why adaptability is important. As consumers
tightened their belts, organizations had to either do the same and lower supply to match lowered demand, or come
up with new goods to entice them. Migrating from one volume to another can financially challenging, and change
strategies such as creating new affordable product lines or more efficient operational paradigms are key to
changing for success.
2. Competition – Changes in the competitive landscape, such as new incumbents, mergers and acquisitions, new
product offerings, and bankruptcies, can substantially impact a company’s strategy and operations. For example, if
a competitor releases a new product that threatens to steal market share, an organization must be ready to change
and adapt to retain their customer base.
3. Technology – Technological changes are a constant threat, and embracing new technologies ahead of the
competition requires adaptability. When media went digital, adaptable companies found ways to evolve their
operations to stay competitive. Many companies that could not evolve quickly failed.
4. Globalization – Capturing new global markets requires product, cultural, and communicative adaptability. Catering
to new demographics and identifying opportunities and threats as they appear in the global market is integral to
adapting for optimal value.
5. Legislation – New laws and legislation can dramatically change operations. Companies in industries that impact
the environment must constantly strive to adapt to cleaner and more socially responsible operating methodologies.
Failing to keep pace can result in substantial fines and financial detriments, not to mention negative branding.

Inside Forces
There are many inside forces to keep in mind as well, ranging from employee changes to cultural reform to operational
challenges. Understanding where this change is coming from is the first step to timely and appropriate change
management.

1. Management Change – New CEOs or other executive players can significantly impact strategy and corporate
culture. Understanding the risks associated with hiring (or promoting for) new upper management is key to making
a good decision on best fit.
2. Organizational Restructuring – Organizations may be required to significantly alter their existing structure to
adapt to the development of new strategic business units, new product lines, or global expansion. Changing
structure means disrupting hierarchies and communications, which must then be reintegrated. Employees must be
trained on the change and the implications it will have for their everyday operations.
3. Intrapreneurship – New ideas come from inside the organization as well as outside the organization, and
capitalizing on a great new idea will likely require some internal reconsideration. Integrating a new idea may require
reallocation of resources, new hires and talent management, and new branding.

Common Targets of Organizational Change

Change management can be implemented to change an organization’s mission, strategy, structure, technology, or
culture.
When an organization requires changes to address counterproductive aspects of organizational culture, the process can
be daunting. Cultural change is usually necessary to reduce employee turnover, influence employee behavior, make
improvements to the company, refocus the company objectives, rescale the organization, provide better customer service,
or achieve specific company goals and results. Cultural change can be impacted by a number of elements, including the
external environment and industry competitors, changes in industry standards, technology changes, the size and nature of
the workforce, and the organization’s history and management.
Assessing Change Needs
Prior to launching a cultural change initiative, a company should carry out a needs assessment to examine the existing
organizational culture and operations. Careful and objective consideration of what is working and what is not, as well as
what is parallel with the broader organizational objectives and what is not, are critical to success here.
Areas that need to change can be identified through interviews, focus groups, observation, and other methods of internal
and external research. A company must clearly identify the existing culture and then design a change process to
implement the desired culture.
Common Areas of Change
Common areas of organizational change include:
 Mission
 Strategy
 Operational changes, including structure and hierarchies
 Technology
 Culture
 Employees and/or management
 Work flows (particularly relevant in manufacturing)
 Branding
Organizational change management should begin with a systematic diagnosis of the existing situation in order to
determine the organization’s need for and ability to change. The objectives, content, and process of change should be
specified as part of the change management plan.
Change management processes can benefit from creative marketing to facilitate communication between change
audiences and a deep social understanding of leadership styles and group dynamics. To track transformation projects,
organizational change management should align group expectations, communicate, integrate teams, and manage and
train people. Change management should also make use of performance metrics including financial results, operational
efficiency, leadership commitment, communication effectiveness, and the perceived need for change in order to design
appropriate strategies that make the change in organizational culture as smooth and as efficient as possible.
Organizational Development
Organizational development is a deliberately planned effort to increase an organization’s relevance and viability.
Organization development (OD) is a deliberately planned effort to increase an organization’s relevance and viability.
Vasudevan has referred to OD as a systemic learning and development strategy intended to change the basics of beliefs,
attitudes, and relevance of an organization’s values and structure. This process helps the organization to better absorb
disruptive technologies, market opportunities, and ensuing challenges and chaos. Essentially, organizational development
is the framework for a change process that is designed to produce desirable and positive results for all stakeholders and
the environment.
The Nature of Organizational Development
Organizational development is a lifelong, built-in mechanism to improve an organization internally. This is often done with
the assistance of a “change agent” or “catalyst” who enables appropriate theories and techniques from applied behavioral
sciences, anthropology, sociology, and phenomenology. The terms “change agent” and “catalyst” suggest a leader who is
engaged in transformation leadership as opposed to management (management being a more incremental or efficiency-
based change methodology).
Although behavioral science provided the basic foundation for the study and practice of OD, new and emerging fields of
study have made their presence felt. Experts in systems thinking and organizational learning have also emerged as OD
catalysts. These emergent perspectives view the organization as the holistic interplay of a number of systems, all of which
impact the processes and outputs of the entire organization.
Applications of Organizational Development
The purpose of OD is to address the evolving needs of successful organizations. It represents a concerted collaboration
of internal and external experts in the field to discover the processes an organization can use to become more effective.
Organizational development aims to improve an organization’s capacity to handle its internal and external functioning and
relationships. This includes improving interpersonal and group processes; communication; the organization’s ability to
cope with problems; decision-making processes; leadership styles; conflict and trust; and cooperation among
organizational members.
Weisbord
Weisbord presents a six-box model for understanding—and thereby changing and improving—an organization:

1. Purposes: Are employees clear about the organization’s mission, purpose, and goals? Do they support the
organization’s purpose?
2. Structure: How is the organization’s work divided? Is there an adequate fit between the purpose and the internal
structure?
3. Relationships: What are the relationships between individuals, units, or departments that perform different tasks?
What are the relationships between the people and the requirements of their jobs?
4. Rewards: For what actions does the organization formally reward or punish its members?
5. Leadership: Does leadership watch for “blips” among the other areas and maintain balance among them?
6. Helpful mechanisms: Do planning, control, budgeting, and other information systems help organization members
accomplish their goal?

Lewin - Lewin’s description of the process of change involves three steps:

1. Unfreezing: Faced with a dilemma or issue, the individual or group becomes aware of a need to change.
2. Changing: The situation is diagnosed and new models of behavior are explored and tested.
3. Refreezing: Application of new behavior is evaluated, and if it proves to be reinforcing, the behavior is adopted.

Effectiveness of Organizational Development

The efficacy of organizational development is predicated on the adaptability of the organization and the overall successful
integration of new ideas and strategies within an existing framework. Resistance to change is a fundamental
organizational problem as all organizations have a degree of general inertia. This is further complicated by the difficulty in
quantitatively measuring changes in areas that are generally intangible (i.e., culture). To remedy this, organizations
pursuing OD must set clear and measurable objectives prior to committing to a change initiative. An important role of the
leader is to analyze and assess the effectiveness of this developmental process and motivate the organization to achieve
developmental targets.
Requirements for Successful Organizational Change
Cummings and Worley (Organization Development and Change, 1995) describe a comprehensive, five-phase,
general process for managing change, including: 1) motivating change, 2) creating vision, 3) developing political support,
4) managing the transition and 5) sustaining momentum. That process seems suitable for organizing and describing
general guidelines about managing change. Whatever model you choose to use when guiding organizational change, that
model should include the priorities and areas of emphasis described in the following five phases of change. The
collaborative consulting model described integrates highlights from all of the five phases.
Motivating Change
This phase includes creating a readiness for change in your client organization and developing approaches to overcome
resistance to change. General guidelines for managing this phase include enlightening members of the organization about
the need for change, expressing the current status of the organization and where it needs to be in the future, and
developing realistic approaches about how change might be accomplished. Next, organization leaders need to recognize
that people in the organization are likely to resist making major changes for a variety of reasons, including fear of the
unknown, inadequacy to deal with the change and whether the change will result in an adverse effect on their jobs.
People need to feel that their concerns are being heard. Leaders must widely communicate the need for the change and
how the change can be accomplished successfully. Leaders must listen to the employees – people need to feel that the
approach to change will include their strong input and ongoing involvement.
Creating Vision
Leaders in the organization must articulate a clear vision that describes what the change effort is striving to accomplish.
Ideally, people in the organization have strong input to the creation of the vision and how it can be achieved. The vision
should clearly depict how the achievement of the vision will improve the organization. It is critically important that people
believe that the vision is relevant and realistic. Research indicates that cynicism is increasing in organizations in regard to
change efforts. People do not want to hear the need for the latest “silver bullet” that will completely turn the organization
around and make things better for everyone all the time. They want to feel respected enough by leaders to be involved
and to work toward a vision that is realistic, yet promising in the long run. Often the vision is described in terms of overall
outcomes (or changes) to be achieved by all or parts of the organization, including associated goals and objectives to
achieve the outcomes. Sometimes, an overall purpose, or mission, is associated with the effort to achieve the vision, as
well.
Developing Political Support
This phase of change management is often overlooked, yet it is the phase that often stops successful change from
occurring. Politics in organizations is about power. Power is important among members of the organization when striving
for the resources and influence necessary to successfully carry out their jobs. Power is also important when striving to
maintain jobs and job security. Power usually comes from credibility, whether from strong expertise or integrity. Power
also comes from the authority of one’s position in the organization. Some people have a strong negative reaction when
talking about power because power often is associated with negative applications, for example, manipulation, abuse or
harassment. However, power, like conflict, exists in all human interactions and is not always bad. It is how power and
conflict are used and managed that determine how power and conflict should be perceived. Matters of power and politics
are critically important to recognize and manage during organizational change activities. Change often means shifts in
power across management levels, functions and groups. To be successful, the change effort must recruit the support of
all key power players, for example, senior management, subject matter experts and others who are recognized as having
strong expertise and integrity. A strong mechanism for ensuring alignment of power with the change effort is to develop a
network of power-players who interact and count on each other to support and guide the change effort. Means to manage
power can include ensuring that all power-players are involved in recognizing the need for change, developing the vision
and methods to achieve the vision, and organization-wide communication about the status of change. Any
recommendations or concerns expressed by those in power must be promptly recognized and worked through.
Managing Transition
This phase occurs when the organization works to make the actual transition from the current state to the future state. In
consultations, this phase usually is called implementation of the action plans. The plans can include a wide variety of
“interventions,” or activities designed to make a change in the organization, for example, creating and/or modifying major
structures and processes in the organization. These changes might require ongoing coaching, training and enforcement of
new policies and procedures. In addition, means of effective change management must continue, including strong, clear,
ongoing communication about the need for the change, status of the change, and solicitation of organization members’
continuing input to the change effort. Ideally, the various actions are integrated into one overall Change Management Plan
that includes specific objectives, or milestones, that must be accomplished by various deadlines, along with
responsibilities for achieving each objective. Rarely are these plans implemented exactly as planned. Thus, as important
as developing the plan, is making the many ongoing adjustments to the plan with key members of the organization, while
keeping other members up-to-date about the changes and the reasons for them.
Sustaining Momentum
Often, the most difficult phase in managing change is this phase when leaders work to sustain the momentum of the
implementation and adjustment of plans. Change efforts can encounter a wide variety of obstacles, for example, strong
resistance from members of the organization, sudden departure of a key leader in the organization, or a dramatic
reduction in sales. Strong, visible, ongoing support from top leadership is critically important to show overall credibility and
accountabilities in the change effort. Those participating in the change effort often require ongoing support, often in the
form of provision of resources, along with training and coaching. The role of support cannot be minimized – despite its
importance during organizational change, the role of support is often forgotten. At this point in a consulting project, it may
be wise for you to ensure you have ongoing support (often from other consultants) that can provide you ongoing
objectivity, affirmation, provision of resources and other forms of support. Employee performance management systems
play a critical role in this phase of organizational change, including in setting goals, sharing feedback about
accomplishment of goals, rewarding behaviors that successfully achieve goals and accomplish change, and addressing
performance issues.
Structure and Expectations of Project Management
What is Project Management Organizational Structure?

Your project management organizational structure tells you who has authority over a project. The simplest way to think
about it is to picture an org chart. Project managers have a different amount of authority in each structure.
Organizational structure determines how the team spends their time and who makes the final decisions. The project
manager roles and responsibilities will be a little different depending on the structure you choose.
All of these structures work with most of your existing agile practices. Strategies like work breakdown structures and well-
planned workflows still apply.
Organizational Structure types – pros and cons
There are 3 main project management organizational structures:

 Project Organizational Structure

 Functional Organizational Structure
 Matrix Organizational Structure

1. Project Organizational Structure

In this structure, the project manager is the decision-maker. Members of the team are dedicated to the project, and they
report directly to the project manager. Picture the project team as its own department with the project manager as its
leader. This structure gives project managers the most authority. Project management organizational structure works well
for companies that have enough resources to dedicate an entire team to a single project. Working this way can be
expensive, though. That means there’s more pressure to perform.
PROS CONS
Dedicated teams can produce stellar results Dedicated teams take resources away from
business-as-usual functions. This is expensive
Because the project manager is the decision-maker, Depending on the length of the project, companies
results are driven by project needs. There’s less may need to backfill positions. Team members may
noise from other business needs to influence the not have a job at the end of the project
end result
The project timeline can be more aggressive since Project managers are often responsible for
resources are fully focused managing the transition back to non-project work
after delivery
There’s no conflict between project work and Because resources are dedicated, companies must
business-as-usual work on fewer projects at a time
It’s easier for the project manager to schedule work
because they don’t need to account for non-project
work
Creating a team culture is easiest in this structure

2. Functional Organizational Structure

In a functional organization structure, the project team works within an existing department. The functional manager (such
as the IT manager or director of marketing) has the ultimate authority, and the project manager reports to the functional
manager. This structure gives project managers the least amount of authority.
The team works closely together every day, just as they did before. Each team member is expected to complete their
regular job responsibilities in addition to project tasks. This is a good structure for projects that don’t need a ton of input
from multiple departments. It’s also attractive for smaller teams that already expect everyone to multitask. If your culture is
built around the idea that everyone wears many hats, this might work great for you.
PROS CONS
There’s less disruption because team members It can be difficult getting help from other
continue working in their regular jobs departments
The project may be more aligned with company Business-as-usual work may slow progress on
priorities project work
The project team has deep expertise in their subject Since the functional manager holds the authority,
routine work likely takes priority over project
completion
Team members have already worked together and Project results may be skewed towards a single
know each other point of view because idea-sharing across
 departments is limited
Resource allocation is clear — you know exactly Project managers may struggle to meet
what you have and don’t have expectations without authority to make some
decisions
Success is very visible, so it opens paths for
advancement
HR issues are probably handled by the functional
manager, not the PM
3. Matrix Organizational Structure
In the other two structures, authority is clearly placed with either the project manager or the functional manager. Matrix
organizational structure is almost like a blend between project and functional structures. Authority is shared. The project
manager is responsible for project-related decisions, and the functional manager is responsible for business-as-usual
decisions. Team members report to both.
You see this most often when a company wants to pull resources from multiple departments to complete a project, but
those people still need to continue working on their regular job responsibilities. It can even be used to share resources
between multiple projects at the same time.
PROS CONS

This is the most flexible structure There may be some competition for resources
between project needs and business-as-usual
needs
Resources can be allocated as needed and team Team members might be less productive as they try
size can be scaled up or down at any time to split their time between multiple demands
There’s less disruption to business as usual This structure may create a feeling of competition
between managers
Team members get a chance to showcase their Team members may feel that they are stretched too
skills and earn recognition thin to the point where morale is affected
Ideas can be easily shared across departments Communication issues can arise when multiple PMs
and functional managers have different priorities
It’s possible to work on many projects at the same It’s harder to build a team culture when people share
time despite limited resources time between many projects
Expectations of Project Management
A project is a task with a defined end target. Project management is the management of the change process required to
achieve that end target, within certain time and cost parameters. There are five distinct steps in effectively managing a
change process—in doing project management:

 Defining the change objective.

 Developing a strategy and plans to achieve that objective.
 Creating a project management group to effect the change.
 Installing a control process to monitor progress.
 Managing the project by implementing the above four steps.

The Change Objective

An organization's objectives are the single most important factors shaping its structure and behavior. The objectives
define the function (purpose) of the organization. As a result, the primary and secondary organization systems are
defined—with consequent major organizational groupings, relationships, information routing requirements and so on.
In defining the purpose of the change, the change objective has a clear impact on the strategy and plans required to
achieve the change. The objective defines the what, why, how, when, and who. Without its objectives adequately defined,
a project will run into major problems. Managers will develop their own objectives and projects will achieve inappropriate
ends; resources will be committed without due analysis of their availability; and action will be carried out without taking full
account of other important factors.
Several examples illustrate other factors necessary for the success of projects:
The HUD new communities program was an attempt by the U.S. federal government to become a major force in the
development of new communities in the USA at the beginning of the 1970's. The results of the program have been
disappointing, largely because the objectives of the program were unclear, suffered widely different interpretation, and
were over-ambitious. There was no clear definition of the program's goals. As a result, different staff members managed
the program toward different ends. Some administrators treated the program as a social one and so approved projects
that were not economically feasible. Further, the program was too big for the resources of the real estate industry. There
were not the management and technical skills available to support the program.
Project management in the British building industry suffers substantially because the official process description (or
project manual) is overly architect oriented (it is published by the Royal Institute of British Architects. The manual is so
skewed to the “design is paramount” viewpoint that construction planning and costing is not even considered until the
design is complete and out to bid. Thus even enlightened building designers in the United Kingdom tend to significantly
underestimate the importance of project strategy, organization and controls.
A city to house 60,000 people is being developed as part of the construction of a new, large steel mill in central Brazil. The
project faced considerable difficulty in its early stages from lack of clear objectives. Although the project management of
the steel mill was well executed, the city construction was, in some ways, almost an afterthought and several steps,
including definition of objectives, were not adequately executed. As a result some individuals involved in the project
adopted their own objectives. As construction of the initial element of the city commenced it became clear that there were
conflicts between many of the assumed objectives, and that planning had ignored many necessary areas of city
development. With no clearly defined financial and social objectives, the project as initially planned and implemented was
not economically feasible and the company was committing itself to a large financial loss.
Each of the above examples reinforce the idea that for a project to run successfully, the objective of the project must:

 Be clearly understood by all, especially the principle actors,

 Be committed to, and
 Be attainable.

The Change Strategy And Plans

A strategy defining how the project's objectives are to be achieved must be established as one of the very first project
tasks. The strategy must take into account a number of major factors:

 The political environment: relationships with government or other major organizations constraining the range of
options open to the project, such as funding, licensing, import/export restrictions, employment considerations,
marketing dictates,
 Financial requirements: such as the funding available and special associated requirements, such as the use of
contractors or equipment manufacturers of certain nations,
 The complexity of the change: those projects that are less complex will present less challenge than the more
complex. Complexity is used here to cover:
 Technical complexity,
 Size,
 Schedule tightness (i.e., project speed),
 Contractual relationships and potential penalties,
 Geographical factors (isolation, spread, etc.),
 Impact of other projects,
 Organizational complexity, and
 Most important of all, the organization's ability to manage the change. If the organization is not geared up to handle
the change it will in all likelihood have to hire outside assistance.

The development projects being undertaken on a massive scale by the developing world offer clear examples of how a
project's complexity, political and financial factors, and the organization's ability to manage the project, can affect project
strategy. Major projects in many developing countries have a direct and vital impact on the rate of development of the
nation as a whole. Such projects are thus subject to enormous pressure to conform to governmental regulations and to
finish on schedule. At the same time, they are often constructed in locations where the infrastructure is not sufficiently
developed; housing, access roads, communications, etc. may all have to be developed to support the project. The
projects are generally technically complex and large; locally trained rsources are often scarce and expatriate assistance in
manufacture, construction and implementation is therefore often required. This may bring associated difficulties in
arranging hardcurrency financing, as well as dangers of cultural confrontations and risks once the expatriates begin work.
Above all, there will be the uneasy sense of being overdependent on another nation or organization. These factors have a
direct impact on questions of contracting strategy, project schedule and financing, training needs, marketing and sales
plans, etc.
Political campaigning is a project-oriented process that is severely dependent on the political and financial exigencies of
the election in general and the candidate in particular. The strategy for successful accomplishment of the project (i.e.,
winning the election) must consider all of the various political relationships among candidates, organizations, and
institutions. The same candidate may choose entirely different strategies for a campaign depending upon the positions
and strategies of the other candidates. The likely amount and timing of receipt of funds is critical. If funds will be difficult to
obtain, then the strategy would emphasize low cost campaign methods such as precinct walking and speeches.
Availability of adequate funding may dictate extensive use of media rather than direct voter contact. For example, a
strategy for a campaign with financial constraints would be for the candidate to differentiate himself from the opposition by
taking a unique position on an issue or raising a new, controversial issue in the campaign.
From the strategy, detailed plans are developed covering the technical, organizational, financial and managerial
requirements for implementing the project. All must be developed in parallel with each other. All are interdependent; it is
crucial to realize that none operate independently of the other.
A large computer system was recently installed in a project management organization without adequate consideration of
the interplay between technical, organizational, financial and managerial factors. The system, budgeted at around
$250,000, was technically very advanced and capable. Unfortunately, few project personnel had sufficient time to learn
the details of the system adequately. Management was never sufficiently on top of the ongoing facility project for
personnel to take enough time off for training. Progress in implementation was consequently very slow. The system was
eventually installed, about two years late at around twice the desired cost.
The design, construction and operation of a recent hotel development project were each well executed, but the hotel was
a financial disaster. The developing company deemed that the hotel was a necessary addition of a larger development.
Little guidance was given to the architect other than the number of rooms required. Upon completion of design, the project
was constructed on schedule. An operating contract was then signed with a hotel management firm which on the surface
appeared to be very advantageous to the owner and was the best arrangement possible. Unfortunately, the income
generated from operations was not sufficient to even cover the interest payments on the construction financing charges.
Evaluation of the financial and operational requirements concurrent with the development of design and construction
plans would have either resulted in a more appropriate facility, or have led to the abandonment of the project altogether.
In developing strategies and plans, trade-offs between scope, cost and schedule factors must be thoroughly considered.
Each has an impact on the other; the better the quality, the more expensive the product. The relationship between project
cost and schedule is clearly more subtle, however. The longer the project, the greater the opportunity cost of the money
required to implement it; the sooner the project is completed, the quicker revenue will flow. But there are limits to that
thinking; speed costs money.
Trade-off analysis is used extensively in the housing industry. Large scale housing construction is inherently a very risky
business in which a builder must coordinate a great number of variables, many of which are outside his control. In
developing plans the builder must evaluate what the market wants, what his financing costs and requirements will be, and
what construction schedule is required. Builders are most sensitive to the market requirements. A housing development is
oriented toward a specific market segment which has price, location, style, material and amenity requirements. These
must be traded off against material, location and construction costs. The project schedule is driven by market factors such
as seasonal selling and potential sales rate, financial factors such as the cost of financing and inflation, and other factors
such as weather and potential political delays. Failure by developers to evalute all of these factors have resulted in failure
of projects.
The Project Management Group
Projects deal with two kinds of organization, the “transition (or project) organization” and the “objective organization.” The
objective organization is the organization that will manage the thing being produced by the project. Objective
organizations are, as a rule, steady state. As such they are well covered in the literature. The following refers to the
management of transition organizations.
Most change processes require a full time management effort; major ones always do. There is a scale of increasing
project management effort:

 Part-time responsibility shared between managers

 Part-time liaison
 Part-/full-time task forces
 Part-/full-time integrators/coordinators
 Part-/full-time project managers

Research has shown that the amount of project management effort required is a function of 3 characteristics of the project
: (1) Size, because generally the larger the change, the greater the management effort required to control it; (2) Speed,
because the rate of change around an organization is recognized as one of the major factors determining organization
structure— a flexible, organic structure is more appropriate in conditions of high rate of change and uncertainty, whereas
a more rigid type is more appropriate in more stable environments; and (3) Complexity, because the structure of an
organization is dependent on a number of factors in addition to size and speed, which may be grouped under the label
“complexity”. These additional factors include:

 Degree of uncertainty,
 Technical complexity,
 Pattern of technical, contractual, geographical and schedule differentiation, and
 Type of interdependence between major project groups.

The management group for any change process divides into three subgroups. These three must be kept separate from
one other. They are:

 The independent project manager,

 The independent planning and control group, and
 Functional groups.

In film making, the producer/director may be likened to the project management group. There are a number of planning
and control groups ranging from continuity to floor management. Functional groups cover a wide spectrum of
personalities, from production to actors, from editing to the camera crews.
The project organization will change as the project develops. In managing the change process towards its defined change
objective, different skills located in different organizational units must be employed at different stages of the project. For
example,
On large facility projects, early work focuses on site preparation, employing large firms with special earth moving
equipment and skills. Later, different firms are employed for construction and equipment erection.
In urban development, as the project unfolds there is a move from site selection, design and finance (and frequently
political) concerns, to construction and property marketing.
In all design-build projects (R&D, telecommunications, defense, aerospace, construction) there is a move from conceptual
design/research work by certain specialized groups, through detailed design and production by quite different groups.
The extent of project management authority varies, both between projects and, as shall be seen shortly, as a project
develops. In most long established process companies, the project manager has considerable ultimate responsibility and
authority. In many newer companies, however, the project manager may have a much weaker role and, in effect, may act
only as an integrator. The degree of authority given to a project manager depends on the size of the project task faced
(project size, speed, and complexity), the availability of experienced project managers, and the tradition of the company.
Matrix organizations offer a blend of direct project management and functional management authority. The essence of a
matrix organization is that specialists report functionally to their functional/technical managers, but to project managers for
overall project guidance. The functional managers take the “who” and “how” decisions on specific technical decisions
within the ambit of his own functional expertise — the engineering manager for engineering decisions for instance. The
functional manager “sells” his resources to project teams. The project manager has responsibility for planning,
coordinating and cajoling his team to produce work of the required quality and cost, to schedule.
Matrices apply to many “steady-state” organizations, such as manufacturing, insurance, etc., which have a need for a
cross-functional product focus. Most project organizations, like construction, have matrices, usually strongly biased in
favor of the overriding project oriented organization which dominates the company. An interesting feature of project matrix
organizations is that as the project develops from design through production, there is usually a swing from a strong
functional input as the project's strategic parameters are shaped (design parameters, budget, contracting details), to a
greater project once these strategic issues becomes more closed and the project's scope, cost and schedule targets more
defined. This matrix “swing” tends to be more pronounced on the project matrices of new matrix organizations. For
example,
The project management organization of a new $4.5 billion steel mill employed over 1,000 people organized into five
functional areas. Six project teams provided the cross-functional project management focus. The authority of the project
managers was initially weak, more akin to an integrative role, since in the early phases of this enormous project there was
a clear need for very strong top management leadership in getting the project successfully launched. About 12-18 months
into the project, however, as contracts were signed, the quantity of work grew so quickly that authority naturally devolved
to the project teams. The devolution was not instantaneous, however — a swing not a switch — and was resented by
some functional managers. In achieving the swing, organizational development techniques were used to help staff more
easily perceive and better handle the change in authority.
As projects develop and responsibilities change, the project manager plays a key role in ensuring:

 Organizational boundaries are accurately defined contractually,

 Groups correctly perceive their organizational boundaries, and
 Relationships between groups work smoothly.

The development of the “objective organization” that is to operate the thing being produced by the project is also an
integral part of the total project change process. However, it is too often completely overlooked. While the development of
the objective organization generally evolves toward a scheduled “start-up” date, there is rarely a full-time management
group developing and tracking integrated plans simultaneously for both the product and the objective organization. The
success of the enterprise as a whole is dependent on all the management activities being accomplished by the time the
product is ready for operation. For example,
A major European motor manufacturer recently opened a large new plant in Latin America. The plant represented a major
investment risk insofar as a brand new market had to be developed, service and distribution centers had to be established
throughout the country, and considerable training of the local new-hires was required in order for the investment to be
successful. Furthermore, each of these major management activities had to be developed and managed in
synchronization with the plant construction program and the organization development process of developing systems,
plans, hiring, etc. To ensure all these activities were happening on schedule, management reviewed progress for each of
the principal management activities in parallel. Interactions between each of the major management streams were closely
controlled so that when the plant opened the operating company as a whole was ready to begin production successfully.
The Control Process
Project planning and control are inextricably linked. Control may be defined as measuring actual progress against that
planned. The classic control cycle, which forms the basis of the science of cybernetics, is that:

 Plans are formulated,

 Actual performance is measured,
 Performance is compared against the plan, and
 Where necessary, adjustments are made (to performance and/or plans).

Given the close interrelationship of plans and actual performance, it is essential that the control group be intimately
familiar with the plans, and be able to make or facilitate adjustments to plans or performance with the minimum of
difficulty. For this reason, the planning and control group should be organizationally integrated.
As already noted, the planning and control group should be organizationally independent of other groups. If it is not, there
is a high likelihood of bias creeping into the control data; construction departments may overemphasize the physical
progress made, engineering departments may underestimate the marginal cost of their designs.
The main types of control data required in nearly all change situations are:

 Technical (progress, problems)

 Schedule (to date, completion date)
 Cost (to date, to go)
 Cash requirements

Revenue forecasts are also frequently required.

To ensure effective control, information must be provided for each of these data classes broken out by:

 Targets,
 Current actual,
 Estimated final, and
 Projected variance from target.

Control information must be appropriate to the user's needs. Obvious though this may seem, a surprisingly large number
of inappropriate control systems are sold to users who ultimately become disillusioned.
The control information must be appropriately oriented, detailed and timely. Each organizational unit has its own needs
and hence its own data perspective. For example,
As a plant is built, the construction manager will want to know physical units installed; the cost engineer the measured
value erected and so the value “liberated” for payment to subcontractors; the accounting manager, the cash flow
projections and the value of fixed assets installed. Senior project management will want a blend of data on installed
quantities to date, value, plus a number of other data on engineering and materials progress. The client (or senior
company management) will want an overview of all this, fitted to other key company data. The data for each of these
differing viewpoints arises more or less at the same place, the site and project offices. In serving management it must be
combined and sorted in a number of ways.
A well structured control system is the key to allowing multi-level and functional sorting. The file structure and project
(data) code must fit the detailed data needs and data aggregation requirements of the users.
The timeliness of (or frequency of presenting) control data varies with the level of management and stage of the project.
Control information must be as up-to-date as the real life situation requires. For example,
For the site manager, controlling hundreds of men over a large piece of ground, daily and weekly reports are necessary;
for senior management, monthly reports are quite adequate.
While shooting films, time is very expensive; the producer must therefore have daily control on the production process. In
scripting and editing, however, monthly reporting or even the odd telephone call may suffice.
In political campaigns the timeliness of control data is critical due to the short timeframe involved. Information on fund
raising must be as current as possible so expenditure plans can be constantly updated. There is no greater error in a
campaign than to lose the election and still have unexpended funds.
In many projects, initial plans and targets must be modified and updated as the project progresses. Targets will change
due to changes in environment, changed objectives for the project, or inability to achieve targets. The control process
must provide data so that plans and targets can be constantly reviewed and updated as necessary. This is especially
important on projects which span a long time period. The timing of the review and update of plans can vary significantly
depending on the size, length and scope of the project.
For example, Irvine, a large town development in Southern California, experienced major changes in the plans
developed in the mid 1960's. These changes were the result of major shifts in the political environment and the market.
As an example, the ultimate size of the city has at various times been planned at 100,000, 400,000 and 250,000 in
response to changing political factors. To cope with these changes, the local municipal government adopted a systematic
procedure for annual review of the master development plan. The speed, phasing and type of development are
considered during these review sessions and the plan is modified as necessary. While many projects undergo review
much more often, several factors dictated this annual review process. Since progress at the master plan level is relatively
slow, changes at less than one year increments would not be significant enough to provide sufficient information to
evaluate implementation. An annual review process also helps insulate the plan from political pressures, provides forward
looking planning, and ensures that the plan is reviewed as a whole.
Ongoing project review can alert management to the need to change other plans. Power stations typically take four to
seven years to build. During that time, electricity prices and load demands may change substantially. Between 1972 and
1978, electricity doubled in price in the USA while the average cost of power stations increased seven to eight times.
During this same period there were major changes in demand; many utilities found themselves with too little capacity,
albeit a few had too much. Overall monitoring of the supply-demand equation, rate of facility construction and construction
costs can enable utility executives to manage demand to better fit forecast supply, arrange alternative financing, or seek
changes in the pace of construction.
The Implementation Of The Project Management Effort
Implementing the project requires a person of special outlook and skills, primarily, skills in managing people and a keen
analytical ability in the exercise of project control. These skills are required across the whole project from inception to
completion, and in each of the phases discussed above.
On projects which may significantly impact people's way of life, a commitment plan should be developed to ensure
maximum support for the project. Key individuals who will back the project should be identified. The “critical mass”
required to ensure success should be identified. The organization's readiness for change should be assessed. It may well
be that time will have to be spent unfreezing old, inappropriate attitudes, establishing new priorities and goals, and helping
people learn new skills. For example,
The steel mill city in Brazil is an example of a change situation requiring a “commitment plan.” The development of the city
required significant modification to the existing project management organization. Major changes in reporting relationships
and responsibilities were required to manage the city development process as a separate project. Realignment of
organizations at any level can cause conflicts, and in this case the conflicts could have prevented successful
implementation of the new management organization. To avoid this and to help ensure orderly transition, a major effort
was made to gain commitment to the plan by all of the relevant managers. Managers were brought together to review and
determine objectives and policies for the city project. Involving the managers in this way made them part of the project
and more interested in its success. From that perspective, the need for organizational change became more clear and
easier to accept. Had the change simply been imposed, the managers would have been in an adversary position with no
“stake” in the project's success and might well have resisted the change.
Organizational Development (OD) techniques can help people prepare for and adapt to organizational change. OD skills
are drawn primarily from psychology and small group theory. OD can help by:

 Providing a common language for helping individuals view interpersonal behavior,

 Increasing motivation by getting people to work better together and build team spirit,
 Explaining the process of organizational change that is happening or will occur, and
 Helping individuals and groups resolve specific problems.

In the project matrix discussed earlier, OD techniques were used extensively to facilitate the project swing, specifically by
articulating what was to happen and why, mounting workshops and group sessions to clarify problems and reduce
tension, and ensuring senior management overtly supported the switch of power from the functional groups to the project
teams. Transactional analysis concepts were explained to project personnel to help managers better understand and deal
with the tensions that were running through the organization as the matrix grew and the project teams became more
important.
Projects go through definite life cycles. Roughly, four principal phases can be identified: start-up, build-up, main phase,
close-out. As the project moves through these phases there are changes not only in staffing levels and type of work, but in
the relative power of groups and individuals, in the degree of delegation, and in issues which cause conflict. As a project
develops there is a move first from a more creative, innovative state characterized by a fairly loose organizational form
with maybe even too little project control. Second, there is often a change towards a weaker functional bias and a stronger
project/production bias once the design/bid specifications become firmed-up. Third, sources of conflict change from being
centered on planning priorities and schedules, to schedule and, increasingly, personality/manpower issues.
Such changes can be relatively traumatic and inevitably generate conflict. Conflict management has been used fairly
extensively to help managers better deal with the conflicts inherent in most projects. Minimizing potential personality
conflict and generally treating conflict head-on2 have been found to be the most beneficial methods for dealing with
project conflict.
5 Phases of Project Management
Managing a project is no easy feat, no matter what the scale and scope are. From planning the minutia to handling the
ever-changing demands of clients to shipping the deliverables on time, there’s a lot that can go wrong. When you divide
the project into manageable stages, each with its own goals and deliverables, it’s easier to control the project and the
quality of the output.
Five Phases of Project Management
A project management life cycle consists of 5 distinct phases including initiation, planning, execution, monitoring, and
closure that combine to turn a project idea into a working product.

Phase 1: Project Initiation

The project initiation phase is the first stage of turning an abstract idea into a meaningful goal. In this stage, you need to
develop a business case and define the project on a broad level. In order to do that, you have to determine the need for
the project and create a project charter.
The project charter is an important document consisting of details like the project constraints, goals, appointment of the
project manager, budget, expected timeline, etc.
Once you have the project goals and project scope, identify key project stakeholders–the people who are to be involved in
the project. Create a stakeholder register with the roles, designation, communication requirements, and influence. While a
clear goal of the project is established in this phase, a project charter does not contain any technical details that happen in
the planning stage.
Phase 2: Project Planning
The project planning stage requires complete diligence as it lays out the project’s roadmap. Unless you are using a
modern project management methodology like agile project management, the second phase of project management is
expected to take almost half of the entire project’s timespan.
In this phase, the primary tasks are identifying technical requirements, developing a detailed project schedule, creating a
communication plan, and setting up goals/deliverables.
There are several methods of setting up the project’s goals but S.M.A.R.T. and C.L.E.A.R. are the most popular.
The ‘SMART’ criteria ensure that the goals you set for your project are critically analyzed. It is an established method that
reduces risk and allows managers to make clearly defined and achievable goals.
The ‘CLEAR’ method of setting up goals is designed to cater to the dynamic nature of a modern workplace. Today’s fast-
paced businesses require flexibility and immediate results and CLEAR can help you with that.

During the planning stage, the scope of the project is defined. There is a possibility of changing the scope of the project
demands it but the project manager must approve the change. Project managers also develop a work breakdown
structure (WBS), which clearly visualizes the entire project in different sections for the team management.
A detailed project timeline with each deliverable is another important element of the planning stage. Using that timeline,
project managers can develop a communication plan and a schedule of communication with the relevant stakeholders.
Risk mitigation is another important aspect of project management that is a part of the planning stage. The project
manager is responsible for extrapolating past data to identify potential risks and develop a strategy to minimize them.
Phase 3: Project Execution
The project execution stage is where your team does the actual work. As a project manager, your job is to establish
efficient workflows and carefully monitor the progress of your team.
Another responsibility of the project manager during this phase is to consistently maintain effective collaboration between
project stakeholders. This ensures that everyone stays on the same page and the project runs smoothly without any
issues.
You can take help from collaboration software available in the market. They’ll not only make your life easier but also
improves efficiency and increase the productivity of your team.
Phase 4: Project Monitoring and Controlling
In the project management process, the third and fourth phases are not sequential in nature. This phase runs
simultaneously with project execution, thereby ensures that objectives and project deliverables are met.
As a project manager, you can make sure that no one deviates from the original plan by establishing Critical Success
Factors (CSF) and Key Performance Indicators (KPI).
During the monitoring phase of project management, the manager is also responsible for quantitatively tracking the effort
and cost during the process. This tracking not only ensures that the project remains within the budget but also is important
for future projects.
Phase 5: Project Closing
This is the final phase of the project management process. The project closure stage indicates the end of the project after
the final delivery. There are times when external talent is hired specifically for the project on contract. Terminating these
contracts and completing the necessary paperwork is also the responsibility of the project manager.
Most teams hold a reflection meeting after the completion of the project in order to contemplate on their successes and
failures during the project. This is an effective method to ensure continuous improvement within the company to enhance
the overall productivity of the team in the future.
The final task of this phase is to review the entire project complete a detailed report that covers every aspect. All of the
necessary data is stored in a secure place that can be accessed by project managers of that organization.
Characteristics of a Project

1. A single definable purpose, end-item or result. This is usually specified in terms of cost, schedule and
performance requirements.
2. Every project is unique. It requires the doing of something different, something that was not done previously.
Even in what are often called “routine” projects such as home construction, the variables such as terrain, access,
zoning laws, labor market, public services and local utilities make each project different. A project is a one-time,
once-off activity, never to be repeated exactly the same way again.
3. Projects are temporary activities. A project is an ad hoc organization of staff, material, equipment and facilities
that is put together to accomplish a goal. This goal is within a specific time-frame. Once the goal is achieved, the
organization created for it is disbanded or sometimes it is reconstituted to begin work on a new goal (project).
4. Projects cut across organizational lines. Projects always cut across the regular organizational lines and
structures within a firm. They do this because the project needs to draw from the skills and the talents of multiple
professions and departments within the firm and sometimes even from other organizations. The complexity of
advanced technology often leads to additional project difficulties, as they create task interdependencies that may
introduce new and unique problems.
5. Projects involve unfamiliarity. Because a project differs from what was previously done, it also involves
unfamiliarity. And oft time a project also encompasses new technology and, for the organization/firm undertaking
the project, these bring into play significant elements of uncertainty and risk.
6. The organization usually has something at stake when undertaking a project. The unique project “activity”
may call for special scrutiny or effort because failure would jeopardize the organization/firm or its goals.
7. A project is the process of working to achieve a goal. During the process, projects pass through several distinct
phases, which form and are called the project life cycle. The tasks, people, organizations, and other resources will
change as the project moves from one phase to the next. The organizational structure and the resource
expenditures build with each succeeding phase; peak; and then decline as the project nears completion.

Project Selection Methods

Consider this scenario: the organization you are working for has been handed a number of project contracts. Due to
resource constraints, the organization can’t handle all the projects at once, so they need to decide which project(s) will
maximize profitability.
This is where project selection methods come into play. There are two categories of project selection methods:

 Benefit Measurement Methods

 Constrained Optimization Methods
Although time-consuming, employing these methods is essential for an effective business plan. There are a variety of
documented methods for selecting a project, but the basic thumb rule is: for small projects that aren’t very complex, the
Benefit Measurement Model is useful, whereas if it’s a large, complex project, the Constrained Optimization Method is a
better fit. Let’s take a look at both these methods in further detail.
Various Project Selection Methods

1. Benefit Measurement Methods

Benefit Measurement is a project selection technique based on the present value of estimated cash outflow and inflow.
Cost benefits are calculated and then compared to other projects to make a decision. The techniques that are used in
Benefit Measurement are as follows:

2. Benefit/Cost Ratio
Cost/Benefit Ratio, as the name suggests, is the ratio between the Present Value of Inflow or the cost invested in a project
to the Present Value of Outflow, which is the value of return from the project. Projects that have a higher Benefit-Cost
Ratio or lower Cost-Benefit Ratio are generally chosen over others.
3. Economic Model
EVA, or Economic Value Added, is the performance metric that calculates the worth-creation of the organization while
defining the return on capital. It is also defined as the net profit after the deduction of taxes and capital expenditure. If
there are several projects assigned to a project manager, the project that has the highest Economic Value Added is
picked. The EVA is always expressed in numerical terms and not as a percentage.
4. Scoring Model in Project Management
The scoring model in project management is an objective technique: the project selection committee lists relevant criteria,
weighs them according to their importance and their priorities, and then adds the weighted values. Once the scoring of
these projects is completed, the project with the highest score is chosen.
5. Payback Period
Payback Period is the ratio of the total cash to the average per period cash. It is the time necessary to recover the cost
invested in the project. The Payback Period is a basic project selection method. As the name suggests, the payback
period takes into consideration the payback period of an investment. It is the time frame that is required for the return on
an investment to repay the original cost that was invested. The calculation for payback is fairly simple:

When the Payback period is used as the Project Selection Method, the project that has the shortest Payback period is
preferred since the organization can regain the original investment faster. There are, however, a few limitations to this
method:

 It does not consider the time value of money.

 Benefits accrued after the payback period are not considered; it focuses more on the liquidity while profitability is
neglected.
 Risks involved in individual projects are neglected.

6. Net Present Value

Net Present Value is the difference between the project’s current value of cash inflow and the current value of cash
outflow. The NPV must always be positive. When picking a project, one with a higher NPV is preferred. The advantage of
considering the NPV over the Payback Period is that it takes into consideration the future value of money. However, there
are limitations of the NPV, too: There isn’t any generally accepted method of deriving the discount value used for the
present value calculation.
The NPV does not provide any picture of profit or loss that the organization can make by embarking on a certain project.
7. Discounted Cash Flow
It’s well-known that the future value of money will not be the same as it is today. For example, $20,000 won’t have the
same worth ten years from now. Therefore, during calculations of cost investment and ROI, be sure to consider the
concept of discounted cash flow.
8. Internal Rate of Return
The Internal Rate of Return is the interest rate at which the Net Present Value is zero—attained when the present value of
outflow is equal to the present value of inflow. Internal Rate of Return is defined as the “annualized effective compounded
return rate” or the “discount rate that makes the net present value of all cash flows (both positive and negative) from a
particular investment equal to zero.” The IRR is used to select the project with the best profitability; when picking a project,
the one with the higher IRR is chosen.
When using the IRR as the project selection criteria, organizations should remember not to use this exclusively to judge
the worth of a project; a project with a lower IRR might have a higher NPV and, assuming there is no capital constraint,
the project with the higher NPV should be chosen as this increases the shareholders’ profits.
9. Opportunity Cost
Opportunity Cost is the cost that is given up when selecting another project. During project selection, the project that has
the lower opportunity cost is chosen.
10. Constrained Optimization Methods
Constrained Optimization Methods, also known as the Mathematical Model of Project Selection, are used for larger
projects that require complex and comprehensive mathematical calculations. The techniques that are used in Constrained
Optimization Methods are as follows:

11. Non-Financial Considerations

There are non-financial gains that an organization must consider; these factors are related to the overall organizational
goals. The organizational strategy is a major factor in project selection methods that will affect the organization’s choice in
the choice of project. Customer service relationships are chief among these organizational goals. An important necessity
in today’s business world is to build effective, cordial customer relationships.
Project Stakeholder
What is the definition of a project stakeholder?
According to the Project Management Institute, project stakeholders are defined as:

 “Individuals and organizations who are actively involved in the project, or whose interests may be positively or
negatively affected as a result of project execution or successful project completion.”
 In other words, your project’s stakeholders are the people or groups who have something to gain (or lose) from your
project’s outcome.

A stakeholder is anyone with an interest or investment in your project. But when you actually start to map that out, you
might be surprised by how long the list can be.
That’s because investment in your project can take a number of different forms. It can be the company’s money, an
executive’s sponsorship or a manager’s resources. It can also apply to the end user or customer, as their needs are a
critical consideration when it comes to steering your project.
Types of Stakeholders in Project Management
There are two main types of stakeholders in project management, internal and external.

 Internal stakeholders These stakeholders are coming from within the house!!! Internal stakeholders are people or
groups within the business, such as team members, managers, executives, and so on.
 External stakeholders External stakeholders are — as you can probably guess — people or groups outside the
business. This includes customers, users, suppliers, and investors. As you can see, stakeholders don’t always work
for the project manager. Needless to say, this can add an extra layer of complexity, as you need to be able to
 communicate with people at all different levels of the business and with varying degrees of engagement, influence,
and interest.

Examples of stakeholders in a project

The stakeholders in each particular project will vary depending on the type of project and industry, but here are a few
examples of the types of stakeholders in project management you might need to consider:

 · Project manager
 · Team members
 · Managers
 · Resource managers
 · Executives
 · Senior management
 · Company owners
 · Investors
 · Sponsors
 · Financiers
 · Suppliers
 · Vendors
 · Consultants
 · Customers
 · End users

How to do a stakeholder analysis

As soon as your project charter is complete and the scope of your project is defined, you can use it to start mapping out
your stakeholders. Here’s how to get the ball rolling with a basic stakeholder analysis process.
1. Identify your stakeholders
First step, you need to identify who your stakeholders actually are. To do this, draw on your project charter and any other
project plans and documentation to compile a full list of your project stakeholders, both internal and external.
Bear in mind that some stakeholders won’t come into play until later in the project lifecycle — but if you can anticipate who
they’ll be in advance, you can start to get their buy-in, build the relationship from the outset, and help them to feel involved
from the beginning.
2. Prioritize your stakeholders
Once you’ve identified all of your stakeholders, you can start to prioritize them. Prioritizing your stakeholders is important
because it helps you understand where to invest your resources. In other words, it helps you — as the project manager —
to identify who the key decision makers are at any given moment, so you can ensure that you’re talking to the right
people, at the right time.
There are a few methods of doing this stakeholder prioritization, but one simple way is to plot them out using a
power/interest (or power/influence, or impact/influence) grid. The power/interest grid helps you to identify your key
stakeholders by answering two key questions that help you to group them into one of four categories:

What level of power do they have?: How important is it that they’re happy with the project’s progress and results? How
integral are they to the project’s success? How influential are they to the project, to other stakeholders, to the team, and
so on? (Remember: a stakeholder’s influence can be positive or negative!)
What level of interest do they have?: Is this project super important to them, or are they only tangentially connected to it?
Is it something they’re directly accountable for? Are they reliant on it for other work or results? Are they opposed to the
project or concerned about it in some way?
As we can see from the (highly technologically-advanced) matrix above, stakeholders who fall into the top-right quadrant
(powerful + interested) are the ones you should be giving extra attention to, because they’re the ones who can have the
most impact on your project — for better or for worse.
3. Understand your stakeholders
Now that you know who the key players are and which ones to prioritize, you need to get a full grasp of their expectations
for the project.
For key stakeholders, this might involve meeting up for a short face-to-face interview or conversation where you discuss
things like:

 What their definition of project success looks like

 Any concerns or reservations they have about the project or its outcomes
 What their expectations for the project are
 What impact a positive or negative project outcome would have on them
 Whether there are any anticipated conflicts of interest with other stakeholders that you need to be aware of

Not only will these conversations help you to understand each stakeholder’s involvement in, and outlook on, the project,
but it also helps you to build a bigger picture of your stakeholder network and how each stakeholder interrelates.
And on a personal level, meeting with the key stakeholders at the beginning of the project helps you to feel out some
basic interpersonal preferences (like communication style), as well as start building your relationships with each
stakeholder.