Satish Kumar Kotthapally Discussion 6 2 hours ago Project Management is stated as planning, organizing, directing and controlling of resources for a relatively short term and long term objective that can be established for completion of specific goal and objective. Project manger is the key for whole project. he/she is responsible for coordinating and integrating activities across multiple lines. key duties of project manager include in building the integrating activities to develop the project plan, execute the plan and also make changes to the plan when project needs. communication skills will also play critical role in the project management for project manager. he/she needs to communicate with the lower and higher management to define the project capabilities. Herb can be chosen as a project manager based on his experience and also his ideas towards conducting meetings weekly once and discussing different topics. His involvement with the previous teammates is very less and I hope he is not able to make the meetings successfully. From the given situation we can observe major problems such as, bob has given some ideas to perform tests for their techniques, instead herb changed those ideas and provided his ideas and he didn't even tell bob about the new proposal. we can clearly see bob and herb are not in a same page and the technicians may confuse about the results and which may lead to failure of the project. Alice wants to be a project manager but there are no recommendations by herb. I hope if someone has a potential skills in learning the project and drive through the company profits, then they should be given a chance to prove themselves. References Glenwright, E. (2002). Updating the Project Management Bodies of Knowledge. Project Management Journal, 33(2), 64-64. doi: 10.1177/875697280203300215 Frame, J. (2003). Book Review: Project Management: A Systems Approach to Planning, Scheduling, and Controlling. 8TH Edition. Project Management Journal, 34(4), 59-59. doi: 10.1177/875697280303400409 Nancy Gubbala Discussion 6 7 hours ago 1. How important are communication skills in project management? The importance of communication is the understanding of the verbal and the non-verbal communication. This is used for the transmission of the message. The communication skills are mandatory for the relaying of the information, receiving information and expressing of the change in situation (Heldman, 2018). The aid in resolving conflicts in the companies and also increases amiability. It is imperative for the project manager to have a grasp of the issues and help the stakeholders to derive cohesive solutions. 2. Was Herb the right person to be assigned as the project manager? From a personal standpoint, Herb will not be an effective project manager. He does not have the involvement in handling tasks that require soft skills. He is adept in the technical skills such as research and assembly. He is also not actively involved in team gathering and.

1. Satish Kumar Kotthapally
Discussion 6
2 hours ago
Project Management is stated as planning, organizing, directing
and controlling of resources for a relatively short term and long
term objective that can be established for completion of specific
goal and objective.
Project manger is the key for whole project. he/she is
responsible for coordinating and integrating activities across
multiple lines. key duties of project manager include in building
the integrating activities to develop the project plan, execute the
plan and also make changes to the plan when project needs.
communication skills will also play critical role in the project
management for project manager. he/she needs to communicate
with the lower and higher management to define the project
capabilities.
Herb can be chosen as a project manager based on his
experience and also his ideas towards conducting meetings
weekly once and discussing different topics. His involvement
with the previous teammates is very less and I hope he is not
able to make the meetings successfully.
From the given situation we can observe major problems such
as, bob has given some ideas to perform tests for their
techniques, instead herb changed those ideas and provided his
ideas and he didn't even tell bob about the new proposal. we can
clearly see bob and herb are not in a same page and the
technicians may confuse about the results and which may lead
to failure of the project.
Alice wants to be a project manager but there are no
recommendations by herb. I hope if someone has a potential
skills in learning the project and drive through the company
profits, then they should be given a chance to prove themselves.
References
Glenwright, E. (2002). Updating the Project Management

2. Bodies of Knowledge. Project Management Journal, 33(2), 64-
64. doi: 10.1177/875697280203300215
Frame, J. (2003). Book Review: Project Management: A
Systems Approach to Planning, Scheduling, and Controlling.
8TH Edition. Project Management Journal, 34(4), 59-59. doi:
10.1177/875697280303400409
Nancy Gubbala
Discussion 6
7 hours ago
1. How important are communication skills in project
management?
The importance of communication is the understanding of the
verbal and the non-verbal communication. This is used for the
transmission of the message. The communication skills are
mandatory for the relaying of the information, receiving
information and expressing of the change in situation (Heldman,
2018). The aid in resolving conflicts in the companies and also
increases amiability. It is imperative for the project manager to
have a grasp of the issues and help the stakeholders to derive
cohesive solutions.
2. Was Herb the right person to be assigned as the project
manager?
From a personal standpoint, Herb will not be an effective
project manager. He does not have the involvement in handling
tasks that require soft skills. He is adept in the technical skills
such as research and assembly. He is also not actively involved
in team gathering and picking Herb as a project manager will
cause a lot more issues. Herb needs more training in people
management, articulation, project management and also need to
gain more knowledge in these aspects. Project management
practice also is required. Hence Herb needs to gain these skills
and grow into this role before becoming a project manager
(Heldman, 2018)..

3. 3. There were communications issues with Alice, Bob, Betty,
and Frank. For each communication issue, where was the
breakdown in communications: encoding, decoding, feedback,
and so on?
Herb faced the issues of weight unraveling when he had to trade
details with Alice. Alice, Bounce, Betty, Frank were not able to
communicate their issues and Herb was not able to decode their
communication. This has created a lag or gap causing issues.
Alice did not take initiative in discussing with Herb, which in
turn made Herb not send the proposal letter for her progress. It
is clear that Alice was not able to encode her issues with Herb.
Bob, on the other hand, has unsuited dispatch and Betty was
feeling apprehensive along with this Frank had a dispute with
decoding. These showcases that Herb’s team were not able to
discuss and derive solutions. These were the main issues that
were determined from the analysis.
References:
Heldman, K. (2018). PMP: project management professional
exam study guide. John Wiley & Sons.
ffirs.qxd 1/3/13 3:48 PM Page i
PROJECT
MANAGEMENT
ffirs.qxd 1/3/13 3:48 PM Page i

4. Dr. Kerzner’s 16 Points to Project
Management Maturity
1. Adopt a project management methodology and use it
consistently.
2. Implement a philosophy that drives the company toward
project
management maturity and communicate it to everyone.
3. Commit to developing effective plans at the beginning of
each project.
4. Minimize scope changes by committing to realistic
objectives.
5. Recognize that cost and schedule management are
inseparable.
6. Select the right person as the project manager.
7. Provide executives with project sponsor information, not
project
management information.
8. Strengthen involvement and support of line management.
9. Focus on deliverables rather than resources.
10. Cultivate effective communication, cooperation, and trust to
achieve
rapid project management maturity.
11. Share recognition for project success with the entire project
team and
line management.

5. 12. Eliminate nonproductive meetings.
13. Focus on identifying and solving problems early, quickly,
and cost
effectively.
14. Measure progress periodically.
15. Use project management software as a tool—not as a
substitute for
effective planning or interpersonal skills.
16. Institute an all-employee training program with periodic
updates based
upon documented lessons learned.
ffirs.qxd 1/3/13 3:48 PM Page ii
P RO J E C T
MANAGEMENT
A Systems Approach to
Planning, Scheduling,
and Controlling
E L E V E N T H E D I T I O N
H A R O L D K E R Z N E R , P h . D .
Senior Executive Director for Project Management
The International Institute for Learning
New York, New York

6. ffirs.qxd 1/3/13 3:48 PM Page iii
Cover illustration: xiaoke ma/iStockphoto
This book is printed on acid-free paper.
Copyright © 2013 by John Wiley & Sons, Inc. All rights
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Library of Congress Cataloging-in-Publication Data:
Kerzner, Harold.
Project management : a systems approach to planning,
scheduling, and controlling / Harold Kerzner, Ph. D. Senior
Executive
Director for Project Management, the International Institute for
Learning, New York, New York. — Eleventh edition.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-02227-6 (cloth); ISBN 978-1-118-41585-6
(ebk); ISBN 978-1-118-41855-0 (ebk); ISBN 978-1-118-43357-
7
(ebk); ISBN 978-1-118-48322-0 (ebk); ISBN 978-1-118-48323-
7 (ebk) 1. Project management. 2. Project management—Case
studies. I. Title.
HD69.P75K47 2013
658.4’04 —dc23

9. 2012026239
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
ffirs.qxd 1/3/13 3:48 PM Page iv
http://www.copyright.com
http://www.wiley.com/go/permissions
http://www.wiley.com
http://booksupport.wiley.com
To
Dr. Herman Krier,
my Friend and Guru,
who taught me well the
meaning of the word “persistence”
ffirs.qxd 1/3/13 3:48 PM Page v
ffirs.qxd 1/3/13 3:48 PM Page vi
Contents
Preface xxiii

10. 1 OVERVIEW 1
1.0 Introduction 1
1.1 Understanding Project Management 2
1.2 Defining Project Success 7
1.3 Success, Trade-Offs, and Competing Constraints 8
1.4 The Project Manager–Line Manager Interface 9
1.5 Defining the Project Manager’s Role 14
1.6 Defining the Functional Manager’s Role 15
1.7 Defining the Functional Employee’s Role 18
1.8 Defining the Executive’s Role 19
1.9 Working with Executives 19
1.10 Committee Sponsorship/Governance 20
1.11 The Project Manager as the Planning Agent 23
1.12 Project Champions 24
1.13 The Downside of Project Management 25
1.14 Project-Driven versus Non–Project-Driven Organizations
25
1.15 Marketing in the Project-Driven Organization 28
1.16 Classification of Projects 30
1.17 Location of the Project Manager 30
1.18 Differing Views of Project Management 32
1.19 Public-Sector Project Management 34
1.20 International Project Management 38
1.21 Concurrent Engineering: A Project Management Approach
38
1.22 Added Value 39
1.23 Studying Tips for the PMI® Project Management
Certification Exam 40
Problems 42
Case Study
Williams Machine Tool Company 44
vii

11. ftoc.qxd 1/3/13 3:50 PM Page vii
2 PROJECT MANAGEMENT GROWTH: CONCEPTS
AND DEFINITIONS 47
2.0 Introduction 47
2.1 General Systems Management 48
2.2 Project Management: 1945–1960 48
2.3 Project Management: 1960–1985 49
2.4 Project Management: 1985–2012 55
2.5 Resistance to Change 59
2.6 Systems, Programs, and Projects: A Definition 64
2.7 Product versus Project Management: A Definition 66
2.8 Maturity and Excellence: A Definition 68
2.9 Informal Project Management: A Definition 69
2.10 The Many Faces of Success 70
2.11 The Many Faces of Failure 73
2.12 The Stage-Gate Process 76
2.13 Project Life Cycles 78
2.14 Gate Review Meetings (Project Closure) 83
2.15 Engagement Project Management 84
2.16 Project Management Methodologies: A Definition 85
2.17 Enterprise Project Management Methodologies 87
2.18 Methodologies Can Fail 91
2.19 Organizational Change Management and Corporate
Cultures 94
2.20 Project Management Intellectual Property 100
2.21 Systems Thinking 101
2.22 Studying Tips for the PMI® Project Management
Certification Exam 104
Problems 107

12. Case Study
Creating a Methodology 108
3 ORGANIZATIONAL STRUCTURES 111
3.0 Introduction 111
3.1 Organizational Work Flow 113
3.2 Traditional (Classical) Organization 114
3.3 Developing Work Integration Positions 117
3.4 Line-Staff Organization (Project Coordinator) 121
3.5 Pure Product (Projectized) Organization 122
3.6 Matrix Organizational Form 125
3.7 Modification of Matrix Structures 132
3.8 The Strong, Weak, or Balanced Matrix 136
3.9 Center for Project Management Expertise 136
3.10 Matrix Layering 137
viii CONTENTS
ftoc.qxd 1/3/13 3:50 PM Page viii
3.11 Selecting the Organizational Form 138
3.12 Structuring the Small Company 143
3.13 Strategic Business Unit (SBU) Project Management 146
3.14 Transitional Management 147
3.15 Barriers to Implementing Project Management in Emerging
Markets 149
3.16 Seven Fallacies that Delay Project Management Maturity
156
3.17 Studying Tips for the PMI® Project Management
Certification Exam 159
Problems 161

13. Case Studies
Jones and Shephard Accountants, Inc. 166
Coronado Communications 168
4 ORGANIZING AND STAFFING THE PROJECT OFFICE
AND TEAM 171
4.0 Introduction 171
4.1 The Staffing Environment 172
4.2 Selecting the Project Manager: An Executive Decision 174
4.3 Skill Requirements for Project and Program Managers 178
4.4 Special Cases in Project Manager Selection 184
4.5 Selecting the Wrong Project Manager 184
4.6 Next Generation Project Managers 188
4.7 Duties and Job Descriptions 189
4.8 The Organizational Staffing Process 193
4.9 The Project Office 199
4.10 The Functional Team 204
4.11 The Project Organizational Chart 205
4.12 Special Problems 208
4.13 Selecting the Project Management Implementation Team
210
4.14 Mistakes Made by Inexperienced Project Managers 213
4.15 Studying Tips for the PMI® Project Management
Certification Exam 214
Problems 216
5 MANAGEMENT FUNCTIONS 223
5.0 Introduction 223
5.1 Controlling 225
5.2 Directing 225
5.3 Project Authority 230

14. 5.4 Interpersonal Influences 237
5.5 Barriers to Project Team Development 240
5.6 Suggestions for Handling the Newly Formed Team 243
Contents ix
ftoc.qxd 1/3/13 3:50 PM Page ix
5.7 Team Building as an Ongoing Process 246
5.8 Dysfunctions of a Team 247
5.9 Leadership in a Project Environment 250
5.10 Life-Cycle Leadership 252
5.11 Value-Based Project Leadership 255
5.12 Organizational Impact 257
5.13 Employee–Manager Problems 259
5.14 Management Pitfalls 262
5.15 Communications 265
5.16 Project Review Meetings 274
5.17 Project Management Bottlenecks 275
5.18 Cross-Cutting Skills 276
5.19 Active Listening 277
5.20 Project Problem-Solving 278
5.21 Brainstorming 288
5.22 Project Decision-Making 293
5.23 Predicting the Outcome of a Decision 301
5.24 Facilitation 303
5.25 Handling Negative Team Dynamics 306
5.26 Communication Traps 307
5.27 Proverbs and Laws 309
5.28 Human Behavior Education 311
5.29 Management Policies and Procedures 312
5.30 Studying Tips for the PMI® Project Management
Certification Exam 313

15. Problems 318
Case Studies
The Trophy Project 327
Communication Failures 329
McRoy Aerospace 332
The Poor Worker 333
The Prima Donna 334
The Team Meeting 335
Leadership Effectiveness (A) 337
Leadership Effectiveness (B) 341
Motivational Questionnaire 347
6 MANAGEMENT OF YOUR TIME AND STRESS 355
6.0 Introduction 355
6.1 Understanding Time Management 356
6.2 Time Robbers 356
6.3 Time Management Forms 358
x CONTENTS
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6.4 Effective Time Management 359
6.5 Stress and Burnout 360
6.6 Studying Tips for the PMI® Project Management
Certification Exam 362
Problems 363
Case Study
The Reluctant Workers 364

16. 7 CONFLICTS 365
7.0 Introduction 365
7.1 Objectives 366
7.2 The Conflict Environment 367
7.3 Types of Conflicts 368
7.4 Conflict Resolution 371
7.5 Understanding Superior, Subordinate, and Functional
Conflicts 372
7.6 The Management of Conflicts 374
7.7 Conflict Resolution Modes 375
7.8 Studying Tips for the PMI® Project Management
Certification Exam 377
Problems 379
Case Studies
Facilities Scheduling at Mayer Manufacturing 382
Telestar International 383
Handling Conflict in Project Management 384
8 SPECIAL TOPICS 391
8.0 Introduction 392
8.1 Performance Measurement 392
8.2 Financial Compensation and Rewards 399

17. 8.3 Critical Issues with Rewarding Project Teams 405
8.4 Effective Project Management in the Small Business
Organization 408
8.5 Mega Projects 410
8.6 Morality, Ethics, and the Corporate Culture 411
8.7 Professional Responsibilities 414
8.8 Internal Partnerships 417
8.9 External Partnerships 418
8.10 Training and Education 420
8.11 Integrated Product/Project Teams 422
8.12 Virtual Project Teams 424
8.13 Breakthrough Projects 427
Contents xi
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xii CONTENTS
8.14 Managing Innovation Projects 427
8.15 Agile Project Management 430
8.16 Studying Tips for the PMI® Project Management
Certification Exam 431
Problems 437
Case Study
Is It Fraud? 440
9 THE VARIABLES FOR SUCCESS 443
9.0 Introduction 443
9.1 Predicting Project Success 444
9.2 Project Management Effectiveness 448

18. 9.3 Expectations 449
9.4 Lessons Learned 450
9.5 Understanding Best Practices 451
9.6 Best Practices versus Proven Practices 458
9.7 Studying Tips for the PMI® Project Management
Certification Exam 459
Problems 460
Case Study
Radiance International 460
10 WORKING WITH EXECUTIVES 463
10.0 Introduction 463
10.1 The Project Sponsor 464
10.2 Handling Disagreements with the Sponsor 474
10.3 The Collective Belief 475
10.4 The Exit Champion 476
10.5 The In-House Representatives 477
10.6 Stakeholder Relations Management 478
10.7 Politics 486
10.8 Studying Tips for the PMI® Project Management
Certification Exam 487
Problems 488
Case Studies

19. Corwin Corporation 491
The Prioritization of Projects 499
The Irresponsible Sponsors 500
Selling Executives on Project Management 502
ftoc.qxd 1/3/13 3:50 PM Page xii
11 PLANNING 505
11.0 Introduction 505
11.1 Validating the Assumptions 508
11.2 Validating the Objectives 509
11.3 General Planning 510
11.4 Life-Cycle Phases 513
11.5 Proposal Preparation 516
11.6 Kickoff Meetings 516
11.7 Understanding Participants’ Roles 519
11.8 Project Planning 519
11.9 The Statement of Work 521
11.10 Project Specifications 526
11.11 Milestone Schedules 528
11.12 Work Breakdown Structure 529
11.13 WBS Decomposition Problems 536
11.14 Work Breakdown Structure Dictionary 540
11.15 Role of the Executive in Project Selection 541
11.16 Role of the Executive in Planning 546
11.17 The Planning Cycle 546
11.17 Work Planning Authorization 547
11.19 Why Do Plans Fail? 548
11.20 Stopping Projects 549
11.21 Handling Project Phaseouts and Transfers 550

20. 11.22 Detailed Schedules and Charts 551
11.23 Master Production Scheduling 554
11.24 Project Plan 556
11.25 Total Project Planning 561
11.26 The Project Charter 565
11.27 Project Baselines 566
11.28 Verification and Validation 570
11.29 Requirements Traceability Matrix 571
11.30 Management Control 572
11.31 The Project Manager–Line Manager Interface 575
11.32 Fast-Tracking 577
11.33 Configuration Management 578
11.34 Enterprise Project Management Methodologies 579
11.35 Project Audits 582
11.36 Studying Tips for the PMI® Project Management
Certification Exam 583
Problems 586
12 NETWORK SCHEDULING TECHNIQUES 597
12.0 Introduction 597
12.1 Network Fundamentals 600
Contents xiii
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12.2 Graphical Evaluation and Review Technique (GERT) 604
12.3 Dependencies 605
12.4 Slack Time 606
12.5 Network Replanning 612
12.6 Estimating Activity Time 616
12.7 Estimating Total Project Time 617

21. 12.8 Total PERT/CPM Planning 618
12.9 Crash Times 620
12.10 PERT/CPM Problem Areas 623
12.11 Alternative PERT/CPM Models 626
12.12 Precedence Networks 627
12.13 Lag 630
12.14 Scheduling Problems 632
12.15 The Myths of Schedule Compression 632
12.16 Understanding Project Management Software 634
12.17 Software Features Offered 634
12.18 Software Classification 636
12.19 Implementation Problems 637
12.20 Critical Chain 638
12.21 Studying Tips for the PMI® Project Management
Certification Exam 640
Problems 643
Case Studies
Crosby Manufacturing Corporation 656
The Invisible Sponsor 658
13 PROJECT GRAPHICS 661
13.0 Introduction 661
13.1 Customer Reporting 662
13.2 Bar (Gantt) Chart 663
13.3 Other Conventional Presentation Techniques 670
13.4 Logic Diagrams/Networks 673
13.5 Studying Tips for the PMI® Project Management
Certification Exam 674
Problems 675
14 PRICING AND ESTIMATING 677

22. 14.0 Introduction 677
14.1 Global Pricing Strategies 678
14.2 Types of Estimates 679
14.3 Pricing Process 682
14.4 Organizational Input Requirements 684
14.5 Labor Distributions 686
xiv CONTENTS
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14.6 Overhead Rates 690
14.7 Materials/Support Costs 692
14.8 Pricing Out the Work 695
14.9 Smoothing Out Department Man-Hours 696
14.10 The Pricing Review Procedure 698
14.11 Systems Pricing 700
14.12 Developing the Supporting/Backup Costs 701
14.13 The Low-Bidder Dilemma 705
14.14 Special Problems 705
14.15 Estimating Pitfalls 706
14.16 Estimating High-Risk Projects 707
14.17 Project Risks 708
14.18 The Disaster of Applying the 10 Percent
Solution
to Project Estimates 712
14.19 Life-Cycle Costing (LCC) 714
14.20 Logistics Support 719

23. 14.21 Economic Project Selection Criteria: Capital Budgeting
720
14.22 Payback Period 720
14.23 The Time Value of Money 721
14.24 Net Present Value (NPV) 722
14.25 Internal Rate of Return (IRR) 723
14.26 Comparing IRR, NPV, and Payback 724
14.27 Risk Analysis 724
14.28 Capital Rationing 725
14.29 Project Financing 726
14.30 Studying Tips for the PMI® Project Management
Certification Exam 728
Problems 730
Case Study
The Estimating Problem 734
15 COST CONTROL 737
15.0 Introduction 737
15.1 Understanding Control 741
15.2 The Operating Cycle 744
15.3 Cost Account Codes 745
15.4 Budgets 750

24. 15.5 The Earned Value Measurement System (EVMS) 752
15.6 Variance and Earned Value 754
15.7 The Cost Baseline 773
15.8 Justifying the Costs 775
15.9 The Cost Overrun Dilemma 778
15.10 Recording Material Costs Using Earned Value
Measurement 779
15.11 The Material Accounting Criterion 782
Contents xv
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15.12 Material Variances: Price and Usage 783
15.13 Summary Variances 784
15.14 Status Reporting 785
15.15 Cost Control Problems 792
15.16 Project Management Information Systems 793
15.17 Enterprise Resource Planning 793
15.18 Project Metrics 794
15.19 Key Performance Indicators 800
15.20 Value-Based Metrics 806
15.21 Dashboards and Scorecards 812

25. 15.22 Business Intelligence 815
15.23 Infographics 816
15.24 Studying Tips for the PMI® Project Management
Certification Exam 816
Problems 820
Case Studies
The Bathtub Period 838
Franklin Electronics 839
Trouble in Paradise 841
16 TRADE-OFF ANALYSIS IN A PROJECT ENVIRONMENT
845
16.0 Introduction 845
16.1 Methodology for Trade-Off Analysis 848
16.2 Contracts: Their Influence on Projects 865
16.3 Industry Trade-Off Preferences 866
16.4 Conclusion 869
16.5 Studying Tips for the PMI® Project Management
Certification Exam 869

26. 17 RISK MANAGEMENT 871
17.0 Introduction 872
17.1 Definition of Risk 873
17.2 Tolerance for Risk 875
17.3 Definition of Risk Management 876
17.4 Certainty, Risk, and Uncertainty 877
17.5 Risk Management Process 883
17.6 Plan Risk Management (11.1) 884
17.7 Risk Identification (11.2) 885
17.8 Risk Analysis (11.3, 11.4) 892
17.9 Qualitative Risk Analysis (11.3) 897
17.10 Quantitative Risk Analysis (11.4) 903
17.11 Probability Distributions and the Monte Carlo Process
904
17.12 Plan Risk Response (11.5) 913
xvi CONTENTS
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17.13 Monitor and Control Risks (11.6) 919

27. 17.14 Some Implementation Considerations 920
17.15 The Use of Lessons Learned 921
17.16 Dependencies Between Risks 925
17.17 The Impact of Risk Handling Measures 930
17.18 Risk and Concurrent Engineering 933
17.19 Studying Tips for the PMI® Project Management
Certification Exam 936
Problems 940
Case Studies
Teloxy Engineering (A) 948
Teloxy Engineering (B) 948
The Risk Management Department 949
18 LEARNING CURVES 953
18.0 Introduction 953
18.1 General Theory 954
18.2 The Learning Curve Concept 954
18.3 Graphic Representation 956
18.4 Key Words Associated with Learning Curves 958
18.5 The Cumulative Average Curve 958
18.6 Sources of Experience 960
18.7 Developing Slope Measures 963

28. 18.8 Unit Costs and Use of Midpoints 964
18.9 Selection of Learning Curves 965
18.10 Follow-On Orders 966
18.11 Manufacturing Breaks 966
18.12 Learning Curve Limitations 968
18.13 Prices and Experience 968
18.14 Competitive Weapon 970
18.15 Studying Tips for the PMI® Project Management
Certification Exam 971
Problems 972
19 CONTRACT MANAGEMENT 975
19.0 Introduction 975
19.1 Procurement 976
19.2 Plan Procurements 978
19.3 Conducting the Procurements 981
19.4 Conduct Procurements: Request Seller Responses 983
19.5 Conduct Procurements: Select Sellers 983
19.6 Types of Contracts 987
19.7 Incentive Contracts 991
19.8 Contract Type versus Risk 994
Contents xvii

29. ftoc.qxd 1/3/13 3:50 PM Page xvii
19.9 Contract Administration 995
19.10 Contract Closure 998
19.11 Using a Checklist 999
19.12 Proposal-Contractual Interaction 1000
19.13 Summary 1003
19.14 Studying Tips for the PMI® Project Management
Certification Exam 1004
Case Studies
The Scheduling Dilemma 1009
To Bid or Not to Bid 1011
The Management Reserve 1012
20 QUALITY MANAGEMENT 1015
20.0 Introduction 1016
20.1 Definition of Quality 1017
20.2 The Quality Movement 1019
20.3 Comparison of the Quality Pioneers 1022
20.4 The Taguchi Approach 1023

30. 20.5 The Malcolm Baldrige National Quality Award 1026
20.6 ISO 9000 1027
20.7 Quality Management Concepts 1029
20.8 The Cost of Quality 1032
20.9 The Seven Quality Control Tools 1035
20.10 Process Capability (CP) 1052
20.11 Acceptance Sampling 1054
20.12 Implementing Six Sigma 1054
20.13 Lean Six Sigma and DMAIC 1056
20.14 Quality Leadership 1057
20.15 Responsibility for Quality 1058
20.16 Quality Circles 1058
20.17 Just-In-Time Manufacturing (JIT) 1059
20.18 Total Quality Management (TQM) 1061
20.19 Studying Tips for the PMI® Project Management
Certification Exam 1065
21 MODERN DEVELOPMENTS IN PROJECT MANAGEMENT
1069
21.0 Introduction 1069
21.1 The Project Management Maturity Model (PMMM) 1070
21.2 Developing Effective Procedural Documentation 1074
21.3 Project Management Methodologies 1078
21.4 Continuous Improvement 1079

31. 21.5 Capacity Planning 1080
21.6 Competency Models 1082
21.7 Managing Multiple Projects 1084
21.8 End-of-Phase Review Meetings 1085
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Case Study
Honicker Corporation 1086
22 THE BUSINESS OF SCOPE CHANGES 1089
22.0 Introduction 1089
22.1 Need for Business Knowledge 1091
22.2 Timing of Scope Changes 1092
22.3 Business Need for a Scope Change 1093
22.4 Rationale for Not Approving a Scope Change 1094
Case Study
Kemko Manufacturing 1094

32. 23 THE PROJECT OFFICE 1097
23.0 Introduction 1097
23.1 Present-Day Project Office 1098
23.2 Implementation Risks 1099
23.3 Types of Project Offices 1100
23.4 Networking Project Management Offices 1101
23.5 Project Management Information Systems 1101
23.6 Dissemination of Information 1103
23.7 Mentoring 1104
23.8 Development of Standards and Templates 1105
23.9 Project Management Benchmarking 1105
23.10 Business Case Development 1106
23.11 Customized Training (Related to Project Management)
1107
23.12 Managing Stakeholder Relations 1108
23.13 Continuous Improvement 1109
23.14 Capacity Planning 1109
23.15 Risks of Using a Project Office 1110
23.16 Project Portfolio Management 1111
Case Study
The Project Management Lawsuit 1116
24 MANAGING CRISIS PROJECTS 1119

33. 24.0 Introduction 1119
24.1 Understanding Crisis Management 1119
24.2 Ford versus Firestone 1121
24.3 The Air France Concorde Crash 1122
24.4 Intel and the Pentium Chip 1123
24.5 The Russian Submarine Kursk 1123
24.6 The Tylenol Poisonings 1124
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24.7 Nestlé’s Marketing of Infant Formula 1127
24.8 The Space Shuttle Challenger Disaster 1129
24.9 The Space Shuttle Columbia Disaster 1130
24.10 Victims Versus Villains 1131
24.11 Life-Cycle Phases 1132
24.12 Project Management Implications 1133
25 FUTURE OF PROJECT MANAGEMENT 1135
25.0 Changing Times 1135

34. 25.1 Complex Projects 1139
25.2 Complexity Theory 1144
25.3 Scope Creep 1145
25.4 Project Health Checks 1151
25.5 Managing Troubled Projects 1155
26 THE RISE, FALL, AND RESURRECTION OF IRIDIUM:
A PROJECT MANAGEMENT PERSPECTIVE 1167
26.0 Introduction 1167
26.1 Naming the Project “Iridium” 1169
26.2 Obtaining Executive Support 1170
26.3 Launching the Venture 1170
26.4 The Iridium System 1172
26.5 The Terrestrial and Space-Based Network 1172
26.6 Project Initiation: Developing the Business Case 1173
26.7 The “Hidden” Business Case 1175
26.8 Risk Management 1175
26.9 The Collective Belief 1177
26.10 The Exit Champion 1177
26.11 Iridium’s Infancy Years 1178
26.12 Debt Financing 1181
26.13 The M-Star Project 1182
26.14 A New CEO 1183
26.15 Satellite Launches 1183

35. 26.16 An Initial Public Offering (IPO) 1184
26.17 Signing Up Customers 1184
26.18 Iridium’s Rapid Ascent 1185
26.19 Iridium’s Rapid Descent 1187
26.20 The Iridium “Flu” 1191
26.21 Searching for a White Knight 1192
26.22 The Definition of Failure (October, 1999) 1192
26.23 The Satellite Deorbiting Plan 1193
26.24 Iridium is Rescued for $25 Million 1194
26.25 Iridium Begins to Grow 1194
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26.26 Shareholder Lawsuits 1195
26.27 The Bankruptcy Court Ruling 1195
26.28 Autopsy 1196
26.29 Financial Impact of the Bankruptcy 1197
26.30 What Really Went Wrong? 1198
26.31 Lessons Learned 1200
26.32 Conclusion 1202

36. Appendix A.