Management Aspects in Project Management

2136 words (9 pages) Business Assignment

9th Jun 2020 Business Assignment Reference this

Tags: Business AssignmentsManagementBusinessProject ManagementBusiness Strategy

Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Business Assignment Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of BusinessTeacher.org.

Introduction

This paper explores various elements that were taught in this Applied Project Management course and how they will help out in future professional fields. The course covered many business related topics that have far reaching implications. The following elements are The Organizational Context, Risk Management, Cost Estimation and Budgeting, Project Scheduling, and Resource Management. All of the elements play a significant role in how project managers tackle projects and objectives in there respective company but also how smaller departments work through these elements to reach there own objectives.

The Organizational Context: Strategy, Structure, and Culture

Project management is contextual within any organization. The strategy, structure, and culture of the organization matters and together they create the environment in which projects can be successful. The first variable is strategy, which stated in the book “is the science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives (Pinto, p.35)”. This consists of the following:

  1. Developing vision statements and mission statements. These statements establish a sense of what the organization hopes to accomplish.
  2. Formulating, implementing, and evaluating. “Projects, as the key ingredients in strategy implementation play a crucial role in the basic process model of strategic management (Pinto, p. 35)”. Firms devote time and resources to evaluate their business opportunities. Utilizing both of these components helps them with the formulation stage of strategy.
  3. Making cross-functional decisions. These strategies are corporate wide ventures, which require commitment and shared resources from all of the functional areas to meet the overall objective.
  4.  Achieving the objectives. Projects are the most effective tool for optimizing and meeting organizational objectives.

The second variable is structure, which in essence implies organization. Companies organize employees in groups so that their efforts can be channeled for maximum efficiency. There are three key elements to this:

  1. “Organizational structure designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors” (Pinto, p. 44). A certain span of control suggests who reports to whom in the hierarchy of the group.
  2. “Organizational structure identifies the grouping together of individuals into the departments and departments into the total organization” (Pinto, p. 44). Smaller groups are structured with other smaller groups to form a department, and then departments are combined to form an entire organization.
  3. “Organizational structure includes the design of systems to ensure effective communication, coordination, and integration of effort across departments” (Pinto, p. 44). This is the mechanism used by a company to reinforce and promote their structure.

The last variable in how projects are managed effectively in the culture of the organization. This is referred to as, “the unwritten rules of behavior, or norms that are used to shape and guide behavior, that are shared by some subset of organizational members, and that are taught to all new members of the company ” (Pinto, p. 56). All three of these variables have a positive or negative effect on a company’s ability to manage projects.

Risk Management

Projects often operate in an environment of uncertainty, such as project funding, availability of resources, technical problems, and so on. This leads for project managers to engage in risk management which is defined in the book as, “the art and science of identifying, analyzing, and responding to risk factors throughout the life of a project and in the best interests of its objectives” (Pinto, p. 216). All projects have this risk and the difference between successful projects and unsuccessful projects are the plans that have been made to deal with such problems once they arise. Project risk simply is any possible event that has the potential to negatively affect the viability of any project. The book mentions that, “the goal of a risk management strategy is to minimize the company’s exposure to this unpleasant combination of uncertainty and potential negative consequences” (Pinto, p. 217). One risk management strategy the book provides has four steps:

  • Risk identification – This is the process of determining the specific risk factors that can reasonably be expected to affect your project (Financial risk, Technical risk, Commercial risk, Execution risk, and Contractual or legal risk).
  • Analysis of probability and consequences – Which is the potential impact of these risk factors, determined by how likely they are to occur and the effect they would have on the project if they did occur.
  • Risk mitigation strategies – These are steps taken to minimize the potential impact of those risk factors deemed sufficiently threatening to the project (accept risk, minimize risk, share risk, and transfer risk).
  • Control and documentation – This is creating a knowledge base for future projects based on lessons learned (Pinto, p. 219).

Successful project managers know that all projects have potential risks. If the project manager takes an approach like the one listed above then they will have better odds of preventing potential risk, or being able to take the appropriate actions to help minimize the consequences of those risks.

Cost Estimation and Budgeting

For project managers, cost management is important to successfully run projects. Two of the biggest areas are cost estimation and the budgeting of the project. First and foremost, cost estimation is the first determining factor on whether a project is viable or not. The main question being, can the project be done profitably? The book states that the “cost estimation process creates a reasonable budget baseline for the project and identifies project resources (human and material) as well, creating time-phased budget for their involvement in the project” (Pinto, p. 246). A few of the most common cost estimation methods are the following:

  1. Ballpark estimates are used when either information or time is scarce. Companies use them as preliminary estimates for resource requirements or to determine if a competitive bid can be attempted for a project contract (Pinto, p. 250). Ideally, companies want to aim for plus/minus accuracy of 30%, because of the wide variance this type of estimate is not to be used if you have a more precise cost estimation
  2. Comparative estimates are calculated from historical data that can be used as a reference for similar projects. Historical examples give valuable insight to the probable costs of development.
  3. Feasibility estimates are based on real numbers or figures derived after the completion of the preliminary project design (Pinto, p. 251). Typically used for construction, feasibility estimates have published materials cost tables that give more accurate cost estimates.
  4. Definitive estimates are only given with the completion of design work, because the scope and capabilities of the project are more understood. This estimate is expected to have an accuracy plus/minus of 5%; the project’s specifications and steps to completion have been identified and a comprehensive project plan is already in place (Pinto, p. 252).

According to the book, project budget “is a plan that identifies the allocated resources, the project’s goals, and the schedule that allows an organization to achieve those goals” (Pinto, p. 261). One method is top-down budgeting, which takes input from the top management. This is because top managers are experienced with past projects and are in positions to provide the feedback and estimate costs that are accurate. Another method is bottom-up budgeting. This approach has each project manager prepare a budget that identifies project activities and specifies funds that will be needed to support those tasks. This information is then passed up to top managers who merge the information to create a final master budget.

Project Scheduling

Project scheduling is a huge role that project manager’s use on every project. At the heart of project scheduling is project planning and subsequent monitoring and control. Project scheduling take’s the information from the previous sections mentioned in this paper and converts them into an achievable methodology for their completion. Project scheduling is predicated on completing a certain set of goals in a specified time frame, therefore, how the project managers develop the project schedule is vital to it’s success (Pinto, p. 282). One major network that was discussed in this course was something called the forward pass. The book defines this as, “network calculations that determine the earliest start and earliest finish in terms of date for each activity (Pinto, p. 297). This allows the project manager to allocate company resources as early as possible. Project managers can also use another network called the backward pass, this is opposite of the forward pass and is used to determine each activities late start and late finish. Utilizing both of these networks gives project managers a reference to the project’s critical paths and total float time of each projects activity.

Resource Management

Resource management is another key category for project managers. Resources correlate with many of the elements mentioned above in this paper. There is risk associated with resources whether it is material or labor, resources play a role in cost estimation and budgeting for projects, and scheduling determines when and where certain resources are to be allocated. But with resources comes certain resource constraints. The availability of resources has a direct link into the duration of project activities. As stated in the book regarding resource management is that, “one of the defining characteristics of projects is the constraints, or limitations, under which they are expected to operate” (Pinto, p. 381). There are many constraints that project managers will face during any project. The following are a few constraints in detail:

  • Physical constraints – Can be caused due to either environmental or contractual issues.
  • Time constraints – Are when projects need to be finished by a certain time or date, but as efficiently as possible.
  • Resource constraints – Is when a project must not exceed a predetermined level of resources used.

Project managers have to balance scheduling and resource availability. The identification and acquisition of the required resources, and the required scheduling across projects are equally critical challenges that are faced through out projects.

Conclusion

The five elements that are discussed in the paper all have implications into most peoples future work careers. Knowing a company’s organizational context is first and foremost. It is key that you understand the strategy, structure, and culture of the company because these create the environment in which projects are done, and outline how you will go about completing certain projects through out your time with that company. In your time working with that company whether you are the project manager or a smaller group that is working towards an objective, you will be faced with many risks; understanding this and being able to utilize certain strategies can help alleviate potential negative consequences and set backs. Cost estimation and budgeting play a role to anyone in the company whether you are the project manager overseeing or you are a person in a department who is sticking to and implementing the resources that are estimated and budgeted. Project scheduling is certainly the same, whether you are the project manager who is developing or implementing a schedule or someone who must follow that schedule in a smaller group role. The management of resources is faced with any number of constraints. Being the project manager or in a smaller department, it is vital in how you handle and work through these constraints. All of these elements are intertwined in successfully meeting company objectives and completing company projects.

Reference

  • Pinto, J. (2012). Project management: Achieving competitive advantage. Upper Saddle River, NJ: Pearson Hall

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this assignment and no longer wish to have your work published on the UKDiss.com website then please: