PLANNING THE INTERNATIONAL PROJECT IN TERMS OF TIME, COST, AND QUALITY Chapter 5 THE CHALLENGE OF PLANNING AN INTERNATIONAL PROJECT Why planning a project?  Planning reduces uncertainty and brings structure into chaos. Issues with planning in international project.  Planning needs to be constantly revised due to a fast changing international environment.  The international environment is complex and difficult to predict.  More factors need to be included into project planning than for planning standard projects. 2 THE PLANNING PROCESS The planning process can be divided into four major tasks: 1. Planning time. 2. Scheduling under resource constraints. 3. Planning cost. 4. Planning quality. The objective of planning is to:  Minimize project duration.  Minimize the resource availability cost.  Maximize quality. 3 Required inputs: 1 3 2 4 Planning Time Scheduling under resource constraints Planning Cost Planning Quality Planning Time, Cost, Quality of the International Project 1. Work Breakdown Structure 2. Organizational Breakdown Structure 3. Analysis of skill sets of available staff beyond academic and job titles (based on CVs and interviews) 4. Overview of holiday entitlements of international staff in different locations Main output: Gantt chart or network diagram Required tools and techniques: - Project Network Diagram, mainly Activity on Arrow (AoA) as basis for CPM, CPA, PERT, PDM etc. - Gantt chart or bar chart 1. Project Scope Statement 2. Work Breakdown Structure 3. Estimates for activity duration 4. Establishment of relationships between single activities in form of precedence 5. Calendar with international holidays relevant to the international project Main output: Resource loaded Gantt chart Required tools and techniques: - Loaded Gantt chart Required inputs: 1. Financial objective / available budget 2. Cost estimates 3. Overview of international locations involved in the project 4. Overview of salaries, facilities, equipment and other costs in the relevant international locations 5. Cost for risk mitigation or contingency plans (cf. Chapter 4) 6. Development of currency fluctuations Required tools and techniques: - Step counting cost-estimating techniques - Exponential cost-estimating techniques - Parametric cost-estimating techniques - Even-loading, front-loading, back-loading budget methods - Periodic cost spreadsheet - Cumulative cost spreadsheet Required inputs: Required inputs: 1. Project scope statement incl. cross-check of customer’s expectation level 2. Cultural gap analysis regarding perception of quality in involved countries and cultures 3. Functionality of product/service/project result Not discussed in this book Main output: Budget spreadsheets Required tools and techniques: - Standard quality control techniques - Pareto diagrams - Checklists for pa.

1. PLANNING THE INTERNATIONAL
PROJECT IN TERMS OF TIME,
COST, AND QUALITY
Chapter 5
THE CHALLENGE OF PLANNING AN INTERNATIONAL
PROJECT
Why planning a project?
chaos.
Issues with planning in international project.
changing international environment.
predict.
ng than
for planning standard projects.
2

2. THE PLANNING PROCESS
The planning process can be divided into four major tasks:
1. Planning time.
2. Scheduling under resource constraints.
3. Planning cost.
4. Planning quality.
The objective of planning is to:
3
Required inputs:
1
3
2
4
Planning
Time

3. Scheduling
under
resource
constraints
Planning
Cost
Planning
Quality
Planning
Time, Cost,
Quality of the
International
Project
1. Work Breakdown Structure
2. Organizational Breakdown
Structure
3. Analysis of skill sets of
available staff beyond
academic and job titles (based
on CVs and interviews)

4. 4. Overview of holiday
entitlements of international
staff in different locations
Main output: Gantt chart or network
diagram
Required tools and
techniques:
- Project Network Diagram,
mainly Activity on Arrow
(AoA)
as basis for CPM, CPA,
PERT, PDM etc.
- Gantt chart or bar chart
1. Project Scope Statement
2. Work Breakdown Structure
3. Estimates for activity duration
4. Establishment of relationships
between single activities in form of
precedence
5. Calendar with international holidays
relevant to the international project
Main output:
Resource loaded Gantt chart

5. Required tools and
techniques:
- Loaded Gantt chart
Required inputs:
1. Financial objective / available budget
2. Cost estimates
3. Overview of international locations
involved in the project
4. Overview of salaries, facilities,
equipment and other costs in the
relevant international locations
5. Cost for risk mitigation or contingency
plans (cf. Chapter 4)
6. Development of currency fluctuations
Required tools and techniques:
- Step counting cost-estimating techniques
- Exponential cost-estimating techniques
- Parametric cost-estimating techniques
- Even-loading, front-loading, back-loading budget

6. methods
- Periodic cost spreadsheet
- Cumulative cost spreadsheet
Required inputs:
Required inputs:
1. Project scope statement incl. cross-check of
customer’s expectation level
2. Cultural gap analysis regarding perception of quality
in involved countries and cultures
3. Functionality of product/service/project result
Not
discussed
in this book
Main output:
Budget spreadsheets
Required tools and techniques:
- Standard quality control techniques
- Pareto diagrams
- Checklists for partner selection

7. - Spider diagrams for training assessments
Main output:
Definition of quality known to all project
members
Water-tight specification sheets
Final output of cycle: project master
plan (additional input needed for master
plan: OBS/responsibility chart cf. Chapter
6)
Cf.
Chapter
6
Not discussed in this
book
Not
discussed
in this
book
4

8. CULTURAL IMPACT ON PLANNING
National culture determines the attitude of a project member
or stakeholder towards the effectiveness of planning.
It also has an influence on the detail level and structure of
the plans.
The attitude towards planning is influenced by the external
environment, e.g. frequency of natural disasters, reliability of
infrastructure.
The following two slides will use the cultural gap tool and
apply it to the area of project planning.
5
Project managers who are rather hierarchy-
oriented tend to create a plan on their own.
More equality-oriented PMs will tend to involve
their team.
Equality Hierarchy
Project managers and members who are
afraid of risk tend to put more effort on
planning details than risk embracing project

9. managers and teams.
Embracing
Risk
Avoiding
Risk
Project managers and other stakeholders with
a universal background tend to create a
Master Plan which is to be applied at all sites
and to situations. Circumstantial people tend
to stick to high-level planning with flexibility.
Universal
Circumstan-
tial
Project managers and other stakeholders who
are task-oriented tend to create Work
Breakdown Structures and to-do lists.
Relationship-oriented individuals tend to
spend much more time on networking with

10. main stakeholders than on creating a plan.
Task Relationship
CULTURAL GAP TOOL FOR PLANNING (1 )
6
Achievement
Standing /
Status
Project managers and members with a
sequential approach tend to follow the
planning process, with the creation of
estimates of time, cost, and links to resource
availability. People from synchronic cultures
may put less effort in sequencing.
Sequential Synchronic
Project managers and members who are more
oriented towards theory tend to attach more
importance and put more effort into planning.
People from pragmatic cultures may tend to

11. focus on learning by doing and spend less
time on the creation of plans.
Theoretical Pragmatic
Project managers who are more
achievement-oriented tend to ‘follow the
textbook’ in order to obtain the given targets.
Project managers and members with a
stronger status orientation might have a
separate agenda partially contradictory to the
project goal.
CULTURAL GAP TOOL FOR PLANNING (2)
7
SCHEDULING
Scheduling comprises of the following activities:
Breakdown Structure.
the sequence of these activities.

12. overall duration of the project.
Tools used for scheduling:
The prerequisite of scheduling is the assumption that time can
be measured, and duration needs to be minimized. This
prerequisite is not given in all local cultures.
8
Integration
start
0
Finalize
new
strategy
10
Decide on
new
processes

13. 5
Test pilot
10
Roll out
new
processes
30
Integration
end
0
Build new
intranet
14
Feed with
new
processes
7
Identify key

14. users among
personnel
5
Language
trainings
15
General
process
trainings
8
9
Estimating activity durations in an activity on arrow network
diagram
Activity 1 Activity 2
Activity 1 Activity 2
Activity 1 Activity 2
10
After durations have been estimated, the logical
relation between activities needs to be determined.

15. Determining relations between activities
Activity Name
Earliest
Start Time
Latest
Start Time
Latest
Finish Time
Earliest
Finish Time
Float or Slack
Activity Duration
1 2
34 5
11
The structure of a node of a network diagram

16. Integration
start
0
Finalize
new
strategy
0
0 10
1010
-
Decide on
new
process
10
10 15
155
-
Test pilot

17. 15
15 25
2510
-
Roll out
new
process
25
25 55
5530
-
Integration
end
55
55 55
550
Build new
intranet

18. 0
4 18
1414
4
Feed with
new
processes
15
18 25
227
3
Identify key
personnel
0
27 32
155
17
Language

19. trainings
15
32 47
3015
17
General
process
trainings
30
47 55
388
17
12
The complete network diagram with duration, float, and
interdependencies
Factors
impacting
international
project

20. scheduling
Additional time for
coordination,
communication and
training
Additional time for
local adaptations (of
processes, products,
or services)
Additional time for
team building
activities
Consideration of
different public
holidays and
vacation time
Consideration of
different calendars
and auspicious days
13
Particularities of scheduling international
projects

21. ADDING RESOURCES TO SCHEDULING (1)
To finalize the scheduling activities, the project manager has to
take quantitative and qualitative aspects of resources into
account:
human resources need to be available to carry out the tasks
as depicted in the WBS.
international projects:
14
ADDING RESOURCES TO SCHEDULING (2)
Staff planning involves the following main activities:
am members are 100 per cent
dedicated to the project.
-commitment of
resources:
-schedule tasks.
-prioritize tasks.

22. 15
Peak Units:
Calendar week
Calendar week
TL: Team leader
Over-allocated
resources
Allocated
resources
16
Example of resource-loaded Gantt chart
PLANNING COST
Purpose of cost planning:
realize the

23. project’s objective.
Cost planning activities:
where necessary.
Types of costs:
ct the budget is planned for.
such as general administrative costs.
17
EXAMPLES OF COST COMPONENTS
Labour
Materials
Plant and equipment
Travel and transportation

24. Subcontract
Training
Legal support
Investment cost
Rent
Overhead and administration
Fees and taxation
Inflation
Contingency (covers oversights or unknowns as a sort of buffer)
18
Simplified Cumulative Cost Spreadsheet: Production Transfer
from Europe to China
P = Plan
Total Budget € 1 million A = Actual
Cost
categories
Period to date in months
1 2 3 4 5 6 7 8 9 10

25. Labour
P 20,000 45,000 75,000 115,000 200,000 260,000 330,000
410,000 480,000 550,000
A
Travel /
expenses
P 16,000 32,000 64,000 96,000 130,000 170,000 200,000
240,000 300,000 380,000
A
Others
(consulting,
supplier
dev.,
prototypes,
logistics
etc.)
P 0 3,000 7,000 14,000 20,000 28,000 35,000 43,000 61,000
70,000
A
Total 36,000 80,000 146,000 225,000 350,000 458,000 565,000

26. 693,000 841,000 1,000,000
19
Example of budget for international project
PARTICULARITIES OF INTERNATIONAL PROJECTS
REGARDING COST
AND TIME ESTIMATES
Fluctuations of currency rates need to be closely monitored.
Travel expenses
international projects.
Selection of sites involved
additional
costs and delays.
afety. These
may incur additional costs, e.g. required translations of
documents.
20
PARTICULARITIES OF INTERNATIONAL PROJECTS
REGARDING
QUALITY PLANNING

27. There needs to be a common understanding about quality
among the major project stakeholders.
Never take things for granted
product/service is used?
Pay special attention to training needs and the selection of co-
operation partners.
21
ORGANIZING THE
INTERNATIONAL PROJECT
Chapter 6
THE CHALLENGE OF ORGANIZING AN INTERNATIONAL
PROJECT
Purpose of organizing international projects:
xity by simplification of structure and

28. organizational design.
Forms of organizing an international project:
‘Organizing the project’ is a set of activities that have to be
finished in the planning phase of the project.
2
SELECTION OF SUITABLE PROJECT STRUCTURE
The following factors need to be considered with regard to the
selection of the most suitable project structure:
ect.

29. 3
Chief Executive
Head of Production Head of MarketingHead of R&D
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional

30. Manager
Project
Project coordination 4
Example of a functional
project structure
Chief Executive
Head of Production Head of MarketingHead of R&D
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager

31. Functional
Manager
Functional
Manager
Project Manager
PM Team
Member
PM Team
Member
PM Team
Member
Project
Team
Member
5
Example of a ‘projectized’ structure
Chief Executive

32. Engineer-
ing
Finance Marketing
Human
Resources
Others
Consul-
tants
Suppliers
Project 1
Operations Controlling
Project 2
Project 3
Project
Manager
F
u
n
c
ti
o

33. n
a
l
re
s
p
o
n
s
ib
il
it
y
Project responsibility
6
Example of a matrix structure
CULTURAL IMPACT ON PROJECT ORGANIZATION (1)
Organizational structures have the following purposes:
hierarchies, and

34. reporting lines.
differ
between individuals, but also between national cultures.
Keep in mind the cultural embeddedness of matrix structures
and
responsibility charts, both based on:
7
Individuals from equality-oriented cultures tend to
prefer flat and lean organizational structures. People
from hierarchy-oriented cultures tend to favour
pyramid-like tall organizations with a high degree of
formalization and centralization.

35. Equality Hierarchy
Individuals from group-oriented cultures tend to work
better in permanent functional organizational
structures because of the continuity to work in the
same group. People from individualistic cultures tend
to welcome temporary organizational structures like
projects.
Individual Group
Individuals from cultures with high uncertainty
avoidance tend to welcome structure as an
orientation frame. They tend to accept precise
guidelines for co-ordination and rules. People from
low uncertainty cultures tend to feel at ease with
matrix organizations offering more flexibility, but also
ambiguity.
Embracing
risk
Avoiding risk
Individuals from status-oriented cultures tend to see

36. and use an organizational structure to show and
increase their personal standing. Tall organizations
with many hierarchy levels are preferred because
they offer good opportunities to be perceived as
important. In achievement-oriented cultures,
structures tend to be tailored to suit best
organizational objectives.
Achievement
Standing /
status
8
Cultural impact on project organization (2)
INTERNAL AND EXTERNAL CO-ORDINATION OF AN
INTERNATIONAL PROJECT
Means of internal project co-ordination:
pion.

37. Means of external project co-ordination:
.
-level meetings.
9
Project Manager
Quality Assurance
Controlling
Human Resource/
Change Management

38. Administration
Engineering Assembly Logistics
Process
Reengineering
Software
Development
Manufacturing
Procurement
Project Management
Project Realisation (depending on the nature of the project)
Project Office
10
Example of a mechanism for internal co-ordination:
The Project Office
Firm Fixed Price
(FFP)
Cost Reimburse-

39. ment
Cost Plus Fixed
Fee (CPFF)
Incentive
Contracting
high
low high
Involvement
of customer
Degree of risk for customer
11
Contracts as special forms of external co-
ordination
CONTRACTS IN INTERNATIONAL PROJECTS
It is recommended to use industry-wide global standards if
available.
A good starting point is the United Nations Commission on
International Trade Law (UNCITRAL).

40. It is also recommended to refer to INCOTERMS as a common
language and reference frame in order to reduce
misunderstandings.
12
PARTICULARITIES OF ORGANIZING INTERNATIONAL
PROJECTS
Size of team:
projects, bigger
teams are more difficult to manage than smaller teams.
this
depends on the nature of the project).
-projects.
nal contributions and outsource them.
Using structure to overcome language and cultural barriers.
functional
language.

41. 13
LINKING STRUCTURES, TASKS, AND PEOPLE
The structures provide the frame of co-ordinating the activities
of
project members and stakeholders.
The Work Breakdown Structure contains all activities the
project
members need to carry out in order to obtain the project result.
The responsibility chart of responsibility matrix combines
structures,
activities, and people:
WBS.
project. Basic
roles can be summarized by the RASIC system as illustrated on
the
next slide.
14
esponsible
pproval

42. upport
nformed
onsulted
R
C
A
S
I
Responsibility
for work
Responsibilities
for management
Responsibilities
for communication
15
R I A
R S A

43. R C A
R C A
R C A
R A
R A
R A
R S A
R A
R A
I R A
C R A
R A
S R A
Assembly Function Tests
Generation of working plans
Material ordering process
Functions/Roles
Logistics

44. Manufacturing
Packaging
Returned Goods
Documentation - export
Specification and validation of packaging
S
u
b
-P
ro
je
c
t
M
g
r
B
Change Mgmt Assembly Drawings
Assembly Facility Layout
Goods Receipt
Warehouse Layout
Commissioning

45. Interim Storage
Dangerous Goods
Commodity Codes
M
a
rk
e
ti
n
g
P
ro
c
u
re
m
e
n
t
S
Q
P
ro
c
u

46. re
m
e
n
t
P
Q
A
R
&
D
T
D
L
e
g
a
l
A
ff
a
ir
s
S
u
b
-P

47. ro
je
c
t
M
g
r
A
L
o
g
is
ti
c
s
G
R
P
ro
je
c
t
M
a
n
a

48. g
e
r
S
a
le
s
Project: Production Transfer to China
PROJECT RESPONSIBILITY CHART
Sub-Project Description of work packages
R
&
D
M
a
te
ri
a
l
P
ro
d
u
c

49. ti
o
n
Q
A
P
ro
d
u
c
ti
o
n
A
s
s
e
m
b
ly
16
Example of a responsibility matrix
MANAGING RISK AND
UNCERTAINTY IN AN

50. INTERNATIONAL PROJECT
Chapter 4
WHAT IS RISK IN THE CONTEXT OF PROJECT
MANAGEMENT?
Risk is an uncertain event that, if it occurs, can have a
positive or negative impact on the project.
There are risks that can be anticipated (known-unknown),
and risks that emerge during the project (unknown-unknown).
Sources of risks that can be anticipated:
Risk management is influenced by the local cultures project
members were socialized in (see next slide).
2
Individuals from equality-oriented cultures
may involve the whole project team to identify
and monitor risk. They also may involve all
relevant group members into the decision on

51. countermeasures. Project managers from
hierarchy-oriented cultures may identify risk
on their own and be the only one responsible
for taking countermeasures. Group members
may be very comfortable not having any
responsibility for this ‘dangerous’ task.
Equality Hierarchy
Individuals from cultures with high risk
avoidance tend to fear unfamiliarity and
ambiguous situations. They may try to ignore
risk. People from risk-embracing cultures may
be more actively seeking for risk, also to turn it
into an opportunity.
Embracing
Risk
Avoiding
Risk
People from individualistic cultures might be

52. more inclined to take decisions on their own in
risky and urgent situations, whereas persons
from group-oriented cultures may want to
consult with other group or network members
which is time-consuming.
Individual Group
THE IMPACT OF CULTURE ON RISK MANAGEMENT
3
THE RISK MANAGEMENT PROCESS
Risk that can be anticipated needs to be planned for.
Risk planning means identification of risk, analysis of risk
impact, planning responses to risk, monitoring and controlling
the project for risks that may occur.
These activities are also referred to as risk management.
Each step of the process contains the following sub-activities
(see next slide):
4
Required inputs:

53. Required Tools & Techniques:
1. Project status meetings
2. Environment scanning tools
1
3
2
4
Identifying
Risks
Analyzing &
Prioritizing
Risks
Performing
Risk
Planning
Monitoring &
Controlling
Risks
The Risk

54. Management
Process
1. Assess of impact of risks on main project
objectives
2. Combine impact of risks with probability
of risk occurrence
3. Prioritize risks in terms of ‘high risk’,
‘medium risk’ and ‘low risk’
Main Output: Risk register outline
Required Tools & Techniques:
1. Documentation reviews, including
lessons learnt from previous projects
2. Information gathering techniques
3. Diagramming techniques
4. Risk checklists
5. Tools to systematically analyse project
and organizational environment
1. Project scope statement
2. Work breakdown structure
3. Analysis of organization’s environment

55. Main Output:
Risk register with classification of risks, risk triggers,
assumptions, and risk owners
Required Tools & Techniques:
1. Probability and impact matrix
2. Probability distribution calculations
3. Sensitivity analysis
4. Expected monetary value analysis EMV
Required activities:
1. Select of risk response strategies for
identified risks
2. Compile of contingency plans
3. Estimate of cost and time for
contingency measures
Required Tools & Techniques:
Scheduling and costing for contingencies (cf. Chapter 5)
Required activities:
Required inputs:
1. Extended risk register with contingency plans

56. 2. Change requests
3. Stakeholder management analysis
Not
discussed
in this book
Main Output:
Extended risk register including contingency plans (with budget
and estimated time)
Required activities:
1. Monitor risk status
2. Ensure appropriateness of response
plans
3. Monitor project environment for
emerging risks
4. Ensure proper execution of risk
management plan
Main Output: Updated risk register
5
RISK IDENTIFICATION TOOLS

57. PESTEL
technological, environmental and legal environment of a project
for ONE geographical market, typically a country.
with
the analysis of the sociocultural environment.
Examples of industry specific tools:
of
process systems, equipment and procedures to identify potential
hazards to people/project stakeholders and the environment.
impacts of
fire in the context of the project.
the
construction plan.
6
Country
•Similarity of cultural norms
with organization’s home

58. country
•Religious habits and customs
•Quality of education
•Demographic development
•Language skills
•(Social) mobility
•Public opinion (e.g. on
environmental protection)
•Work-life balance
•Level of transportation and
communication infrastructure
•Level of innovation
•Technology clusters
•Environmental protection laws
•Availability of natural resources
•Use and reuse of energy
•Antitrust law
•Tax regime

59. •Health and Safety
•Labour law
•Product liability law
•Social insurance law
•Protection of intellectual
property
•Reliability of law
enforcement
•Political systems and its
stability
•Security risks like social unrest
•Sovereign risks like
expropriation
•Level and acceptance of
corruption
•Tariff and non-tariff barriers to
trade
•GNP trends

60. •Level of interest rates
•Inflation rate
•Volatility of currency
•Purchasing power
•Employment rate
•Capital supply
Legal Socio-
cultural
EXAMPLES OF FACTORS TO BE CHECKED WITH THE
PESTEL TOOL
7
RISK ANALYSIS
Probability and impact matrix.
-tech tool for risk prioritization.
the risk
will have on the project objectives.

61. three
stage (low, medium, high) or five stage (insignificant, minor,
moderate, major, horrible).
use
colour coding:
on the project.
and/or medium to
low likelihood of occurrence.
impact on the
project’s objectives.
8
STRATEGIES TO COPE WITH
FORESEEABLE RISK
1. Risk avoidance.
2. Risk mitigation.
3. Risk acceptance.
4. Risk transfer.
5. Risk absorption or pooling.

62. 9
Risk register
Risk
No.
Risk description
Cause of
risk
Probability
of occur-
rence
Impact
on
project
Contin-
gency
measure
Cost in

63. Yen
Date of
entry
Example of risk register
First, the risk needs to be identified (field ‘risk description’).
To analyse the risk and
to plan for counter measures or contingency measures, the cause
of the risk has to
be known (field ‘cause of risk’). Information on risk propensity,
impact on project
results, cost of potential counter measures, and date of risk
occurrence has to be
added
10