Marking Criteria(The marks for each criterion are to illustrate .docx

Marking Criteria
(The marks for each criterion are to illustrate where the main
effort should be spent and are not meant to be a strict marking
scheme)
30% - Application of Frameworks and models
The required frameworks and models introduced in the
assignment task should be applied correctly to identify the key
issues emerging relevant to the business example selected.
60% - Depth of Strategic Evaluation.
Key strategic factors should be critically evaluated to develop
the required depth of analysis of the business example selected.
A strong analysis needs to be evidence based rather than appear
to be personal opinion so must draw on relevant sources e.g.
news & media, industry publications, company web pages and
documentation
10% - Clarity of Structure and Presentation
The report is well organised and logically constructed,
following the layout indicated in the assignment task. The
quality of writing, spell checking, grammar and referencing
need to demonstrate accuracy to ensure the reader can focus on
the analysis provided
Please remember that an assignment is not meant to DESCRIBE
what you have found. Analysis means commenting on your
findings and EXPLAINING what the evidence suggests about
the company.
General Guidance
Structure
· The introduction should be brief. It is not meant to provide a
history of General Electric.
· The Conclusion needs to draw the analysis to a close and
comment on the sustainability of General Electric’s strategic
position. Remember you do not introduce new findings into the
Conclusion.

· If you include Appendices you must refer to them in the
relevant section of the report findings.
· References should clearly list all the material that has been
referred to in the report and set out using Harvard style.
Models/Content
· Remember to use the models in a ‘dynamic’ way i.e. place
relevant examples onto the models. Do not simply copy and
paste ‘generic’ examples from the lecture slides.
· Words in the models are included in the word limit. The
models lose their value if they are full of text. They should aid
understanding not confuse the reader because too much has been
stuffed into them.
· Models should be included in the main body of the report.
Only place them in the appendices if they are close to a full
page.
· You may well refer to points made in earlier parts of the
report to show the connections in the analysis. This shows an
awareness of the links between themes
· You will struggle to stay within the word limit so focus on the
KEY DRIVERS in your analysis
· You will not be able to use all of the examples if you have
done the level of reading required so ‘cherry pick’ those that
best illustrate the key drivers
· Facts and figures need to be supported with sources clearly
referenced.
Presentation
· Be your own independent work and free from plagiarism by
ensuring that work that is not your own is clearly referenced
· Use Harvard style citation and referencing using the Drop-in
centre published guidelines
· Be written in appropriate academic style
· Be professionally presented
· Be word processed using font size 12 for the main text and 1.5
line spacing
· Have numbered pages

· Have been spell checked and proof-read
· Be anonymous and have your Student Enrolment number on
every page
· Have a clearly labelled front page detailing the module code
and title, title of the
· assignment, tutors name and the date of submission
ISBN 978 0 470 27870 3
PROJECTPROJECT
MANAGEMENTMANAGEMENT
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AND CONTROLL ING
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HAROLD KERZNER, PH.D.
K E R Z N E R T E N T H E D I T I O N
THE LANDMARK PROJECT MANAGEMENT
REFERENCE, NOW IN A NEW EDITION
Now in a Tenth Edition, this industry-leading project
management “bible” aligns its streamlined approach to the latest
release of
the Project Management Institute’s Project Management Body
of
Knowledge (PMI’s PMBOK® Guide), the new mandatory source

of
training for the Project Management Professional (PMP®)
Certifi cat-
ion Exam. This outstanding edition gives students and
professionals
a profound understanding of project management with insights
from
one of the best-known and respected authorities on the subject.
From the intricate framework of organizational behavior and
structure
that can determine project success to the planning, scheduling,
and
controlling processes vital to effective project management, the
new
edition thoroughly covers every key component of the subject.
This
Tenth Edition features:
■ New sections on scope changes, exiting a project, collective
belief, and managing virtual teams
■ More than twenty-fi ve case studies, including a new case
on the Iridium Project covering all aspects of project
management
■ 400 discussion questions
■ More than 125 multiple-choice questions
Other powerful tools by Harold Kerzner:
Project Management Workbook and PMP®/CAPM® Exam
Study Guide, Tenth Edition
(978-0-470-27872-7)
Project Management Case Studies, Third Edition (978-0-470-
27871-0)

Project Management
T E N T H
E D I T I O N
HAROLD KERZNER,
PH.D., is Senior Executive
Director for Project,
Program and Portfolio
Management at
International Institute of
Learning, Inc. (IIL), a global
learning solutions company
that conducts training
for leading corporations
throughout the world.
ffirs.qxd 1/21/09 4:44 PM Page vi
PROJECT
MANAGEMENT
ffirs.qxd 1/21/09 4:44 PM Page i
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.
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 1/21/09 4:44 PM Page ii
PROJECT
MANAGEMENT
A Systems Approach to
Planning, Scheduling,
and Controlling
T 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 Managenment
The International Insitute for Learning New York,
New York
John Wiley & Sons, Inc.
ffirs.qxd 1/21/09 4:44 PM Page iii

This book is printed on acid-free paper. �
Copyright © 2009 by John Wiley & Sons, Inc. All rights
reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any
form or by any means, electronic, mechanical, photocopying,
recording, scanning or otherwise,
except as permitted under Section 107 or 108 of the 1976
United States Copyright Act, without
either the prior written permission of the Publisher, or
authorization through payment of the
appropriate per-copy fee to the Copyright Clearance Center, 222
Rosewood Drive, Danvers, MA
01923, (978) 750-8400, fax (978) 646-8600, or on the web at
www.copyright.com. Requests to the
Publisher for permission should be addressed to the Permissions
Department, John Wiley & Sons, Inc.,
111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax
(201) 748-6008, or online at
http://www.wiley.com/go/permission.
Limit of Liability/Disclaimer of Warranty: While the publisher
and author have used their best efforts
in preparing this book, they make no representations or
warranties with respect to the accuracy or
completeness of the contents of this book and specifically
disclaim any implied warranties of merchantability
or fitness for a particular purpose. No warranty may be created
or extended by sales representatives or

written sales materials. The advice and strategies contained
herein may not be suitable for your situation.
You should consult with a professional where appropriate.
Neither the publisher nor author shall be liable
for any loss of profit or any other commercial damages,
including but not limited to special, incidental,
consequential, or other damages.
For general information about our other products and services,
please contact our Customer Care
Department within the United States at (800) 762-2974, outside
the United States at (317)
572-3993 or fax (317) 572-4002.
Wiley also publishes its books in a variety of electronic
formats. Some content that appears in print may not
be available in electronic books. For more information about
Wiley products, visit our web site at www.wiley.com.
Library of Congress Cataloging-in-Publication Data:
Kerzner, Harold.
Project management : a systems approach to planning,
scheduling, and conrolling/Harold Kerzner.—10th ed.
p. cm.
Includes index.
ISBN 978-0-470-27870-3 (cloth : acid-free paper) 1. Project
management. I. Title.
HD69.P75K47 2009
658.4�04—dc22
2008049907
Printed in the United States of America.

10 9 8 7 6 5 4 3 2 1
ffirs.qxd 1/21/09 4:44 PM Page iv
www.wiley.com
www.wiley.com/go/permissions
To
Dr. Herman Krier,
my Friend and Guru,
who taught me well the
meaning of the word “persistence”
ffirs.qxd 1/21/09 4:44 PM Page v
ffirs.qxd 1/21/09 4:44 PM Page vi
Contents
Preface xxi
1 OVERVIEW 1
1.0 Introduction 1
1.1 Understanding Project Management 2
1.2 Defining Project Success 7

1.3 The Project Manager–Line Manager Interface 8
1.4 Defining the Project Manager’s Role 12
1.5 Defining the Functional Manager’s Role 14
1.6 Defining the Functional Employee’s Role 17
1.7 Defining the Executive’s Role 17
1.8 Working with Executives 18
1.9 The Project Manager as the Planning Agent 19
1.10 Project Champions 20
1.11 The Downside of Project Management 21
1.12 Project-Driven versus Non–Project-Driven Organizations
22
1.13 Marketing in the Project-Driven Organization 24
1.14 Classification of Projects 26
1.15 Location of the Project Manager 27
1.16 Differing Views of Project Management 29
1.17 Concurrent Engineering: A Project Management Approach
30
1.18 Studying Tips for the PMI® Project Management
Certification Exam 30
Problems 33
Case Study
Williams Machine Tool Company 35
vii
ftoc.qxd 1/19/09 2:27 PM Page vii
2 PROJECT MANAGEMENT GROWTH: CONCEPTS AND
DEFINITIONS 37
2.0 Introduction 37
2.1 General Systems Management 38

2.2 Project Management: 1945–1960 38
2.5 Resistance to Change 50
2.6 Systems, Programs, and Projects: A Definition 54
2.7 Product versus Project Management: A Definition 57
2.8 Maturity and Excellence: A Definition 58
2.9 Informal Project Management: A Definition 59
2.10 The Many Faces of Success 60
2.11 The Many Faces of Failure 63
2.12 The Stage-Gate Process 66
2.13 Project Life Cycles 68
2.14 Gate Review Meetings (Project Closure) 74
2.15 Project Management Methodologies: A Definition 74
2.16 Organizational Change Management and Corporate
Cultures 76
2.17 Project Management Intellectual Property 81
2.18 Systems Thinking 82
Problems 88
3 ORGANIZATIONAL STRUCTURES 91
3.0 Introduction 91
3.1 Organizational Work Flow 94
3.2 Traditional (Classical) Organization 95
3.3 Developing Work Integration Positions 98
3.4 Line–Staff Organization (Project Coordinator) 102
3.5 Pure Product (Projectized) Organization 103
3.6 Matrix Organizational Form 106
3.7 Modification of Matrix Structures 113
3.8 The Strong, Weak, Balanced Matrix 117
3.9 Center for Project Management Expertise 117
3.10 Matrix Layering 118

3.11 Selecting the Organizational Form 119
3.12 Structuring the Small Company 125
3.13 Strategic Business Unit (SBU) Project Management 128
3.14 Transitional Management 129
Problems 133
viii CONTENTS
ftoc.qxd 1/19/09 2:27 PM Page viii
Case Study
Jones and Shephard Accountants, Inc. 138
4 ORGANIZING AND STAFFING THE PROJECT OFFICE
AND
TEAM 141
4.0 Introduction 141
4.1 The Staffing Environment 142
4.2 Selecting the Project Manager: An Executive Decision 144
4.3 Skill Requirements for Project and Program Managers 148
4.4 Special Cases in Project Manager Selection 154
4.5 Selecting the Wrong Project Manager 154
4.6 Next Generation Project Managers 158
4.7 Duties and Job Descriptions 159
4.8 The Organizational Staffing Process 163
4.9 The Project Office 169
4.10 The Functional Team 174
4.11 The Project Organizational Chart 175
4.12 Special Problems 178
4.13 Selecting the Project Management Implementation Team

180
Problems 185
5 MANAGEMENT FUNCTIONS 191
5.1 Controlling 193
5.2 Directing 193
5.3 Project Authority 198
5.4 Interpersonal Influences 206
5.5 Barriers to Project Team Development 209
5.6 Suggestions for Handling the Newly Formed Team 212
5.7 Team Building as an Ongoing Process 216
5.8 Dysfunctions of a Team 217
5.9 Leadership in a Project Environment 220
5.10 Life-Cycle Leadership 221
5.11 Organizational Impact 225
5.12 Employee–Manager Problems 227
5.13 Management Pitfalls 230
5.14 Communications 233
5.15 Project Review Meetings 242
5.16 Project Management Bottlenecks 243
5.17 Communication Traps 244
Contents ix
ftoc.qxd 1/19/09 2:27 PM Page ix
5.18 Proverbs and Laws 245
5.19 Human Behavior Education 248
5.20 Management Policies and Procedures 249

Problems 254
Case Studies
The Trophy Project 264
Leadership Effectiveness (A) 266
Leadership Effectiveness (B) 271
Motivational Questionnaire 277
6 MANAGEMENT OF YOUR TIME AND STRESS 285
6.1 Understanding Time Management 286
6.2 Time Robbers 286
6.3 Time Management Forms 288
6.4 Effective Time Management 289
6.5 Stress and Burnout 290
Problems 293
Case Study
The Reluctant Workers 294
7 CONFLICTS 295
7.1 Objectives 296
7.2 The Conflict Environment 297
7.3 Conflict Resolution 300
7.4 Understanding Superior, Subordinate, and Functional
Conflicts 301

7.5 The Management of Conflicts 303
7.6 Conflict Resolution Modes 304
Problems 308
Case Studies
Facilities Scheduling at Mayer Manufacturing 311
Telestar International 312
Handling Conflict in Project Management 313
x CONTENTS
ftoc.qxd 1/19/09 2:27 PM Page x
8 SPECIAL TOPICS 319
8.1 Performance Measurement 320
8.2 Financial Compensation and Rewards 327
8.3 Critical Issues with Rewarding Project Teams 333
8.4 Effective Project Management in the Small Business
Organization 336
8.5 Mega Projects 338
8.6 Morality, Ethics, and the Corporate Culture 339
8.7 Professional Responsibilities 342
8.8 Internal Partnerships 345
8.9 External Partnerships 346
8.10 Training and Education 348
8.11 Integrated Product/Project Teams 350
8.12 Virtual Project Teams 352
8.13 Breakthrough Projects 354

Problems 361
9 THE VARIABLES FOR SUCCESS 365
9.1 Predicting Project Success 366
9.2 Project Management Effectiveness 370
9.3 Expectations 371
9.4 Lessons Learned 372
9.5 Understanding Best Practices 373
Problems 381
10 WORKING WITH EXECUTIVES 383
10.1 The Project Sponsor 384
10.2 Handling Disagreements with the Sponsor 393
10.3 The Collective Belief 394
10.4 The Exit Champion 395
10.5 The In-House Representatives 396
Problems 398
Contents xi
ftoc.qxd 1/19/09 2:27 PM Page xi

xii CONTENTS
Case Study
Corwin Corporation 401
11 PLANNING 411
11.1 Validating the Assumptions 414
11.2 General Planning 415
11.3 Life-Cycle Phases 418
11.4 Proposal Preparation 421
11.5 Kickoff Meetings 421
11.6 Understanding Participants’ Roles 424
11.7 Project Planning 424
11.8 The Statement of Work 426
11.9 Project Specifications 431
11.10 Milestone Schedules 433
11.11 Work Breakdown Structure 434
11.12 WBS Decomposition Problems 440
11.13 Role of the Executive in Project Selection 444
11.14 Role of the Executive in Planning 449
11.15 The Planning Cycle 449
11.16 Work Planning Authorization 450
11.17 Why Do Plans Fail? 451
11.18 Stopping Projects 452
11.19 Handling Project Phaseouts and Transfers 453
11.20 Detailed Schedules and Charts 454
11.21 Master Production Scheduling 457
11.22 Project Plan 459
11.23 Total Project Planning 464
11.24 The Project Charter 468
11.25 Management Control 469
11.26 The Project Manager–Line Manager Interface 472
11.27 Fast-Tracking 474

11.28 Configuration Management 475
11.29 Enterprise Project Management Methodologies 476
11.30 Project Audits 479
Problems 483
12 NETWORK SCHEDULING TECHNIQUES 493
12.1 Network Fundamentals 495
ftoc.qxd 1/19/09 2:27 PM Page xii
12.2 Graphical Evaluation and Review Technique (GERT) 500
12.3 Dependencies 501
12.4 Slack Time 502
12.5 Network Replanning 508
12.6 Estimating Activity Time 512
12.7 Estimating Total Project Time 513
12.8 Total PERT/CPM Planning 514
12.9 Crash Times 516
12.10 PERT/CPM Problem Areas 519
12.11 Alternative PERT/CPM Models 522
12.12 Precedence Networks 523
12.13 Lag 526
12.14 Scheduling Problems 528
12.15 The Myths of Schedule Compression 528
12.16 Understanding Project Management Software 530
12.17 Software Features Offered 530
12.18 Software Classification 532
12.19 Implementation Problems 533
12.20 Critical Chain 534

Problems 539
Case Study
Crosby Manufacturing Corporation 552
13 PROJECT GRAPHICS 555
13.1 Customer Reporting 556
13.2 Bar (Gantt) Chart 557
13.3 Other Conventional Presentation Techniques 564
13.4 Logic Diagrams/Networks 567
Problems 569
14 PRICING AND ESTIMATING 571
14.1 Global Pricing Strategies 572
14.2 Types of Estimates 573
14.3 Pricing Process 576
14.4 Organizational Input Requirements 578
14.5 Labor Distributions 580
14.6 Overhead Rates 584
Contents xiii
ftoc.qxd 1/19/09 2:27 PM Page xiii

14.7 Materials/Support Costs 586
14.8 Pricing Out the Work 589
14.9 Smoothing Out Department Man-Hours 590
14.10 The Pricing Review Procedure 592
14.11 Systems Pricing 594
14.12 Developing the Supporting/Backup Costs 595
14.13 The Low-Bidder Dilemma 599
14.14 Special Problems 599
14.15 Estimating Pitfalls 600
14.16 Estimating High-Risk Projects 601
14.17 Project Risks 602
14.18 The Disaster of Applying the 10 Percent
Solution
to Project Estimates 605
14.19 Life-Cycle Costing (LCC) 606
14.20 Logistics Support 613
14.21 Economic Project Selection Criteria: Capital Budgeting
614
14.22 Payback Period 614
14.23 The Time Value of Money 615
14.24 Net Present Value (NPV) 616
14.25 Internal Rate of Return (IRR) 617
14.26 Comparing IRR, NPV, and Payback 618
14.27 Risk Analysis 618
14.28 Capital Rationing 619
14.29 Project Financing 620

Problems 624
15 COST CONTROL 629
15.1 Understanding Control 633
15.2 The Operating Cycle 636
15.3 Cost Account Codes 637
15.4 Budgets 644
15.5 The Earned Value Measurement System (EVMS) 645
15.6 Variance and Earned Value 647
15.7 The Cost Baseline 666
15.8 Justifying the Costs 668
15.9 The Cost Overrun Dilemma 671
15.10 Recording Material Costs Using Earned Value
Measurement 672
15.11 The Material Accounting Criterion 675
15.12 Material Variances: Price and Usage 676
15.13 Summary Variances 677
15.14 Status Reporting 678
15.15 Cost Control Problems 685

xiv CONTENTS
ftoc.qxd 1/19/09 2:27 PM Page xiv
Problems 689
Case Studies
The Bathtub Period 708
Franklin Electronics 709
Trouble in Paradise 711
16 TRADE-OFF ANALYSIS IN A PROJECT ENVIRONMENT
715
16.1 Methodology for Trade-off Analysis 718
16.2 Contracts: Their Influence on Projects 735
16.3 Industry Trade-off Preferences 736
16.4 Conclusion 739

17 RISK MANAGEMENT 741
17.1 Definition of Risk 743
17.2 Tolerance for Risk 745
17.3 Definition of Risk Management 746
17.4 Certainty, Risk, and Uncertainty 747
17.5 Risk Management Process 753
17.6 Plan Risk Management 753
17.7 Risk Identification 755
17.8 Risk Analysis 761
17.9 Qualitative Risk Analysis 766
17.10 Quantitative Risk Analysis 771
17.11 Probability Distributions and the Monte Carlo Process
772
17.12 Plan Risk Response 782
17.13 Monitoring and Control Risks 788
17.14 Some Implementation Considerations 788
17.15 The Use of Lessons Learned 790
17.16 Dependencies between Risks 793
17.17 The Impact of Risk Handling Measures 798
17.18 Risk and Concurrent Engineering 801

Problems 808
Case Studies
Teloxy Engineering (A) 815
Teloxy Engineering (B) 815
Contents xv
ftoc.qxd 1/19/09 2:27 PM Page xv
18 LEARNING CURVES 817
18.1 General Theory 818
18.2 The Learning Curve Concept 818
18.3 Graphic Representation 820
18.4 Key Words Associated with Learning Curves 822
18.5 The Cumulative Average Curve 822
18.6 Sources of Experience 824
18.7 Developing Slope Measures 827
18.8 Unit Costs and Use of Midpoints 828

18.9 Selection of Learning Curves 829
18.10 Follow-on Orders 830
18.11 Manufacturing Breaks 830
18.12 Learning Curve Limitations 832
18.13 Prices and Experience 832
18.14 Competitive Weapon 835
Problems 836
19 CONTRACT MANAGEMENT 839
19.1 Procurement 840
19.2 Plan Procurement 842
19.3 Conducting the Procurements 845
19.4 Conduct Procurements: Request Seller Responses 847
19.5 Conduct Procurements: Select Sellers 847
19.6 Types of Contracts 851
19.7 Incentive Contracts 855
19.8 Contract Type versus Risk 858
19.9 Contract Administration Cycle 859
19.10 Contract Closure 862
19.11 Using a Checklist 863

19.12 Proposal-Contractual Interaction 864
19.13 Summary 867
20 QUALITY MANAGEMENT 873
20.1 Definition of Quality 875
20.2 The Quality Movement 877
20.3 Comparison of the Quality Pioneers 880
20.4 The Taguchi Approach 881
xvi CONTENTS
ftoc.qxd 1/19/09 2:27 PM Page xvi
20.5 The Malcolm Baldrige National Quality Award 884
20.6 ISO 9000 885
20.7 Quality Management Concepts 887
20.8 The Cost of Quality 890
20.9 The Seven Quality Control Tools 893
20.10 Process Capability (CP) 910

20.11 Acceptance Sampling 912
20.12 Implementing Six Sigma 912
20.13 Lean Six Sigma and DMAIC 914
20.14 Quality Leadership 915
20.15 Responsibility for Quality 916
20.16 Quality Circles 916
20.17 Just-in-Time Manufacturing (JIT) 917
20.18 Total Quality Management (TQM) 919
21 MODERN DEVELOPMENTS PROJECT MANAGEMENT
927
21.1 The Project Management Maturity Model (PMMM) 928
21.2 Developing Effective Procedural Documentation 932
21.3 Project Management Methodologies 936
21.4 Continuous Improvement 937
21.5 Capacity Planning 942
21.6 Competency Models 943
21.7 Managing Multiple Projects 945
21.8 End-of-Phase Review Meetings 947
22 THE BUSINESS OF SCOPE CHANGES 949

22.1 Need for Business Knowledge 951
22.2 Timing of Scope Changes 952
22.3 Business Need for a Scope Change 953
22.4 Rationale for Not Approving a Scope Change 954
23 THE PROJECT OFFICE 955
23.1 Present-Day Project Office 956
23.2 Implementation Risks 957
23.3 Types of Project Offices 958
23.4 Networking Project Management Offices 959
23.5 Project Management Information Systems 959
23.6 Dissemination of Information 961
23.7 Mentoring 962
Contents xvii
ftoc.qxd 1/19/09 2:27 PM Page xvii
23.8 Development of Standards and Templates 963

23.9 Project Management Benchmarking 963
23.10 Business Case Development 964
23.11 Customized Training (Related to Project Management)
965
23.12 Managing Stakeholders 966
23.13 Continuous Improvement 967
23.14 Capacity Planning 967
23.15 Risks of Using a Project Office 968
24 MANAGING CRISIS PROJECTS 971
24.1 Understanding Crisis Management 971
24.2 Ford versus Firetone 973
24.3 The Air France Concorde Crash 974
24.4 Intel and the Pentium Chip 975
24.5 The Russian Submarine Kursk 975
24.6 The Tylenol Poisonings 976
24.7 Nestlé’s Marketing of Infant Formula 979
24.8 The Space Shuttle Challenger Disaster 981
24.9 The Space Shuttle Columbia Disaster 982
24.10 Victims versus Villains 983
24.11 Life-Cycle Phases 984
24.12 Project Management Implications 985

25 THE RISE, FALL, AND RESURRECTION OF IRIDIUM:
A PROJECT MANAGEMENT PERSPECTIVE 987
25.1 Naming the Project “Iridium” 989
25.2 Obtaining Executive Support 990
25.3 Launching the Venture 990
25.4 The Iridium System 992
25.5 The Terrestial and Space-Based Network 992
25.6 Project Initiation: Developing the Business Case 993
25.7 The “Hidden” Business Case 995
25.8 Risk Management 995
25.9 The Collective Belief 997
25.10 The Exit Champion 997
25.11 Iridium’s Infancy Years 999
25.12 Debt Financing 1001
25.13 The M-Star Project 1002
25.14 A New CEO 1003
25.15 Satellite Launches 1003
xviii CONTENTS
ftoc.qxd 1/19/09 2:27 PM Page xviii

25.16 An Initial Public Offering (IPO) 1004
25.17 Signing up Customers 1004
25.18 Iridium’s Rapid Ascent 1005
25.19 Iridium’s Rapid Descent 1007
25.20 The Iridium “Flu” 1012
25.21 Searching for a White Knight 1012
25.22 The Definition of Failure (October, 1999) 1012
25.23 The Satellite Deorbiting Plan 1013
25.24 Iridium Is Rescued for $25 Million 1014
25.25 Epilogue 1015
25.26 Shareholder Lawsuits 1015
25.27 The Bankruptcy Court Ruling 1016
25.28 Autopsy 1016
25.29 Financial Impact of the Bankruptcy 1018
25.30 What Really Went Wrong? 1018
25.31 Lessons Learned 1020
25.32 Conclusion 1023
Appendix A.

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