LECTURE HANDOUT-1

CHAPTER –INTRODUCTION
COURSE - PROJECT MANAGEMENT
BBA PROGRAM, UIU

Dr. Farid A. Sobhani1

CHAPTER OBJECTIVES:
1.1 Understanding the Concept of Project
1.2 Identifying the characteristics of a Project
1.3 Classifying Projects
1.4 Defining Project Management
1.5 Why Project Management
1.6 Functions and Skill Set in Project Management
1.7 Project Life Cycle
1.8 McKinsey 7S Framework in Project Management

DISCUSSION ON THE ISSUES:

1.1 Concept of Project
The word “Project” is derived from the Latin word “projicere” meaning “to throw
forth”. (Chadha, 1989: p. 8). The original meaning of project has been modulated over
the years. Nowadays the term ‘project’ is loosely used to express any undertaking or
assignment. But any initiative or task should not be referred to mean a project. Project
means a set of activities to be performed within a specific period of time under a
prescribed budget to achieve a specific goal or objective. It may also be defined as the
deployment of manpower, material and financial resources to achieve a preset objective
within a prescribed time period.

There are a number of widely used definitions of the term ‘project’. Project
Management Institute (PMI) is a reputed project-oriented organization in the USA to
foster the growth of project management as well as building professionalism in this field
throughout the world. PMBOK i.e. Project Management Body of Knowledge defines
project as a temporary endeavor undertaken to create a unique product or service or
result. It also describes a project as ‘a combination human and non-human resources
pooled together in a temporary organization to achieve a specific purpose.’ United
Nations Industrial Development Organization (UNIDO) in its publication- ‘Manual for
Evaluation of Industrial Projects’ gives a comprehensive definition of project. According
to UNIDO a project is a proposal for an investment to create and or develop certain
facilities in order to increase the production of goods and or services in a community
during a certain period of time. (UNIDO, 1998: P.4).

The examples of different projects are as follows:

❑ Designing a software
❑ Developing a new office lay-out
❑ Implementing a new decision support system

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Professor, School of Business and Economics, UIU
 ❑ Introducing a new product to the market
❑ Designing an airplane or a workstation
❑ Opening a new store
❑ Publishing a book or journal
❑ Constructing a bridge, dam or highway
❑ Relocating an office or factory
❑ Performing a major maintenance or repair
❑ Starting up a new manufacturing facility
❑ Producing and directing a movie
❑ Organizing a scientific workshop etc.

The following interventions should not be considered as projects, these are programs2 :
❑ Poverty alleviation
❑ Food for work
❑ Adult literacy movement
❑ Islamization of knowledge
❑ Family planning
❑ Birth control
❑ Immunization campaign
❑ Quality education
❑ Campus development
❑ Social responsibility
❑ Maintaining law & order situation
❑ National election3

The following entities should not be treated as projects, rather as institutions4 or

organizations:
❑ Beximco Pharma (Beximco Pharmaceutical Ltd.)
❑ UNDP (United Nations Development Program)
❑ UIU (United International University)
❑ Nitol Motors (Nitol Motors Ltd.)
❑ Chittagong cement (Chittagong Cement Ltd)
❑ GSK (Glaxosmithkline Ltd.)
❑ Unilever (Lever Brothers Ltd.)
❑ PHP (PHP Group)

1.2 Characteristics of a Project

A project has the following chrematistics or features by which it can be identified:
▪ A set of activities
▪ Deployment of manpower, material and financial resources
▪ To be performed within a prescribed timeframe
▪ One-time activity
▪ Has a life cycle

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Program is a set of similar projects
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Election of a particular territory is a govt. project
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Most of the projects are initiated by an institution

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 ▪ Has a beginning & end
▪ Flexibility in process
▪ An investment proposal
▪ Exposed to risk & uncertainty
▪ Has a prescribed budget
▪ Two projects never be similar
▪ Objective oriented

1.3 Classification of Projects

Project may be classified from different points of view. It can be divided in view
of goal, phase, ownership, region, period, volume of activities, sector and professional
segmentation.

a. In terms of goal / profit generation Examples

➢ Commercial / profit making project Forming a partnership business
➢ Social / development / non-profit project Establishing hospital

b. In terms of phase:
➢ Greenfield project Pre-investment project
➢ Growing project Projects earning profit
➢ Sick project5 Required finance for BMRE
➢ Closure project Lay-off project

c. In terms of ownership:
➢ Public project Govt. project
➢ Private project Project under NGOs

d. In terms of region / geographical location:

➢ Local project Construction of a bridge
➢ National project Preparation of a national budget
➢ International project Signing MOU between two countries

e. In terms of period:
➢ Short term projects (<1 yr in duration) Construction of a bridge
➢ Medium-term projects (<5 yr in duration) Developing computer software
➢ Long-term projects (>5 yr in duration) Construction a big project

f. In view of volume of activities:

➢ Small scale project Formation of a proprietorship firm
➢ Medium scale project Forming a limited company
➢ Large scale project Development of an airport

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While a project incurs losses in three consecutive years or closure to lay-off

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 g. In terms of sector6 :
➢ Agricultural project Irrigation projects
➢ Industrial project Development of a power plant
➢ Urban project Real estate project
➢ Rural project Sanitation project, Digging pond
h. In terms of professional segmentation:
➢ Engineering project Construction projects
➢ Health project Nutritional project, Immunization
campaign
➢ Education & training project Organizing a workshop
➢ Judicial project Filing a criminal case
1.4 Defining Project Management:
Project management (PM) is receiving much attention nowadays. Almost
everyday newspapers carry advertisements asking for project managers. It is now being
recognized as a valuable ‘career path’ in many organizations as well as a way to gain
valuable experience within the organization. The scenario was not so bright a few years
ago. However, let us know what the project management is. The notion of ‘project
management’ emerged at the beginning of 1960s with NASA7 space program. (Coudere,
2001:p.2). This term was later used in respect of major civil engineering works, gradually
spreading over other sectors including development projects.
It is also said that project management is what a project manager does. A project
manager does many things where a big portion of total activities is not related to a
project. So it is a misleading conception about project management.
Simply project management means managing all the activities of a project from
conception to completion. It provides a manager with powerful managerial tools and
techniques in planning, directing and controlling a project in order to meet various
resource constraints. On the other hand, project management is a well established
integrated course with a number of developed techniques to ensure successful
implementation of a project through efficient control of different inputs required, which
include human resources, financial resources and material resources. These techniques
also ensure that the project achieves the specific targets set out for it. Finally, we can say
that project management is a recognized subject of managerial tools and techniques to the
deployment of human, material and financial resources and to get a project done by
others most effectively and efficiently to achieve pre-determined objectives within an
established period of time.

1.5 Why Project Management:

Project management may be treated as the best way to accomplish certain goals.
The main objective of project management is to meet specified performance within cost
and schedule. Specifically, the project form of organization allows a manager to be

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Projects may also be originated from sectors like State, Market and Civil Society
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NASA stands for National Aeronautic Space Administration.

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responsive to: (a) the client and the environment, (b) identify and correct problems at an
early time, (c) make timely decisions about trade-offs between conflicting project goals,
and (d) ensure that project team works for total optimization of the project, not for sub-
optimization of individual tasks.

A significant proportion of users report that project management is used for

shortening development times, costs, and enhancing quality, reliability, and profit
margins. Other advantages include a sharper orientation towards results, better
interdepartmental coordination, and higher worker morale. Three primary forces behind
project management are: (i) the growing demand for complex & customized goods &
services; (ii) the exponential expansion of human knowledge; and (iii) the global
production consumption environment. (Meredith et al, 2000)

Project can be said as a cake piece of ‘Development Cake’. Project has a diversity
effects towards economic development. The importance of project management can be
realized from the following points:

i) PM is indispensable for economic development or growth of a country or an

enterprise.
ii) It ensures effective and efficient resources utilization and management.
iii) It leads to GDP growth.
iv) It leads to increase of per capita income and enhancement of standard of living.
v) It helps to overcome the problems of time and cost overruns.
vi) It leads to optimum use of available resources.
vii) It increases international competitiveness.
viii) It is the key to cost management of producing goods and services.
ix) It is an essential condition for getting assistance and loan.
x) It impacts have been long term and hence has a temporal spread.
xi) It helps to achieve self-reliance in the country.
xii) It is base to implementing national development strategies.
xiii) It is a precondition of transfer of technology.
xiv) It may lead to a balanced growth of agriculture and industry.
xv) It is helpful towards exploration of resources, innovations and researchers and
discoveries.
xvi) It brings not only economic prosperity but also honor and prestige to a nation
because economic prosperity means economic power.
xvii) It will lead to a capacity to render financial assistance to other poor and least
developed countries.

1.6 Functions or Skills Set in Project Management

Some researches indicate that the following fifteen functions are essential for
effective project management which are listed below:
1. Define project scope
2. Identify stakeholders, decision makers and escalation procedures
3. Develop details of task list (Work-Break Down Structures - WBS)
4. Estimate time requirement

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 5. Develop initial project management flow chart
6. Identify required resources and budget
7. Evaluate project requirements
8. Identify and evaluate risk
9. Prepare contingency plans
10. Identify interdependencies
11. Identify and track critical milestones
12. Participate in project phase review
13. Assemble needed resources
14. Manage the change control process
15. Report project status

1.7 Project Life Cycle

A project life cycle is similar with a product life cycle. Most of the projects go
through a similar stage on the path from origin to end. A standard concept of a product or
project life cycle wherein it goes through start-up phase, building phase, maturing
phase and termination phase. The pattern slow-rapid-slow progress towards the project
goal is common. Anyone who has watched the construction of a home or a building has
observed this phenomenon. For the most part, it is a result of the changing levels of
resources used during the successive stages of the life cycle.

The life cycle must not be the same for all projects. To understand the difference,
let us consider baking a cake. Once the ingredients are mixed, we are instructed to bake
the cake in a 3500 (F) for 35 minutes. At what point in the baking process do we have a
cake? Experienced bakers know that the mixture changes from ‘goop’ (a technical term
well known to bakers and cooks (to ‘cake’ quite rapidly in the last few minutes of the
baking process. A number of actual projects have a similar life cycle, for example some
computer software projects, or chemical engineering plants. However, it is necessary for
a project manager (PM) to estimate the precise shape of he life cycle curve, but the PM
must know whether the later part of the curve is concave or convex to the baseline.
Meredith et al. 2000: P.13-16).

The four phases of a project are also known as initiation, planning, executive, and
closure. Initiation involves starting up the project, by documenting a business case,
feasibility study, terms of reference, appointing the team and setting up a Project Office.
Planning involves setting out the roadmap for the project by creating the following
plans: project plan, resource plan, financial plan, quality plan, acceptance plan and
communications plan. Execution involves building the deliverables and controlling the
project delivery, scope, costs, quality, risks and issues. Closure involves winding-down
the project by releasing staff, handing over deliverables to the customer and completing a
post implementation review.

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A more detailed description of the Project Management Methodology and Life Cycle
follows:

Project Initiation: Project Initiation is the first phase in the Project Life Cycle and
essentially involves starting up the project. You initiate a project by defining its purpose
and scope, the justification for initiating it and the solution to be implemented. You will
also need to recruit a suitably skilled project team, set up a Project Office and perform an
end of Phase Review. The Project Initiation phase involves the following six key steps:

Project Planning: After defining the project and appointing the project team, you're
ready to enter the detailed Project Planning phase. This involves creating a suite of
planning documents to help guide the team throughout the project delivery. The Planning
Phase involves completing the following 10 key steps:

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Project Execution: With a clear definition of the project and a suite of detailed project
plans, you are now ready to enter the Execution phase of the project. This is the phase in
which the deliverables are physically built and
presented to the customer for acceptance. While
each deliverable is being constructed, a suite of
management processes are undertaken to monitor
and control the deliverables being output by the
project. These processes include managing time,
cost, quality, change, risks, issues, suppliers,
customers and communication. Once all the
deliverables have been produced and the customer
has accepted the final solution, the project is ready
for closure.

Project Closure: Project Closure involves

releasing the final deliverables to the customer,
handing over project documentation to the
business, terminating supplier contracts, releasing
project resources and communicating project
closure to all stakeholders. The last remaining
step is to undertake a Post Implementation
Review to identify the level of project success and
note any lessons learned for future projects.

1.8 McKinsey 7S Framework in Project Management

The McKinsey 7S framework developed in the early 1980s by Tom Peters and
Robert Waterman, two consultants working at the McKinsey & Company consulting
firm, the basic premise of the model is that there are seven internal aspects of an
organization that need to be united if it is to be successful.
The 7S model can be used in a wide variety of situations where an alignment perspective
is useful, for example to help you:
• Improve the performance of a project;
• Examine the likely effects of future changes within a project;
• Align departments and processes during a merger or acquisition; or
• Determine how best to implement a proposed strategy.

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The model ensures all parts of a project are working in harmony

The Seven Elements

The McKinsey 7S model involves seven interdependent factors which are
categorized as either "hard" or "soft" elements:

Hard Elements Soft Elements

Strategy Shared Values
Structure Skills
Systems Style
Staff

“Hard” elements are easier to define or identify and management can directly
influence them: These are strategy statements; organization charts and reporting lines;
and formal processes and IT systems. “Soft” elements, on the other hand, can be more
difficult to describe, and are less tangible and more influenced by culture. However, these
soft elements are as important as the hard elements if the organization is going to be
successful. The way the model is presented in Figure 1 below depicts the
interdependency of the elements and indicates how a change in one affects all the others.

Let’s look at each of the elements specifically:

• Strategy: The plan devised to maintain and build competitive advantage over the
competition.
• Structure: The way the organization is structured and who reports to whom.
• Systems: The daily activities and procedures that staff members engage in to get
the job done.

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 • Shared Values: Called “superordinate goals” when the model was first
developed, these are the core values of the company that are evidenced in the
corporate culture and the general work ethic.
• Style: the style of leadership adopted.
• Staff: the employees and their general capabilities.
• Skills: the actual skills and competencies of the employees working for the
company.
Placing Shared Values in the middle of the model emphasizes that these values are
central to the development of all the other critical elements. The company’s
structure, strategy, systems, style, staff and skills all stem from why the
organization was originally created, and what it stands for. The original vision of
the company was formed from the values of the creators. As the values change, so
do all the other elements.

Key Points:
The McKinsey 7S model is one that can be applied to almost any organizational
or team effectiveness issue. If something within your organization or team isn’t working,
chances are there is an inconsistency between some of the elements identified by this
classic model. Once these inconsistencies are revealed, you can work to align the internal
elements to ensure they all contribute to the shared goals and values.

Analyzing where you are right now in terms of these elements is worthwhile in and of
itself. But by taking this analysis to the next level and determining the ultimate state for
each factor, you can move your organization or team forward.

REFERENCES:
1. Meredith et al (10th edition), Project Management- A managerial approach, USA.
2. Chadha, Skylark (1989), Managing Projects in Bangladesh, Dhaka.
3. Chowdhury (1998), Project Management, India.
4. Coudere, Hugo (2001), Course Materials on Management of Development
Projects, University of Antwerp (IDPM), Belgium.
5. UNIDO (1998), Manual for Evaluation of Industrial Projects, New York.
6. Chase, Aquilano and Davis, Operations Management, USA

[N. B. Students are advised to follow the deliberations in the classes for doing well in
examinations]

COURSE TEACHER:
PROF. F. A. SOBHANI
[email protected]
Cell: 01767887261

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