GMS 450.docx

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Department
Global Management Studies
Course Code
GMS 450
Professor
Clare Chua

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Description
GMS 450- NOTES FOR MIDTERM Chapter 1: - Project management: each task is a specific and unique with a specific deliverable aimed at meeting a specific need or purpose - Projects are unique, have a specific deliverable, and have a specific due date - Project management institute (PMI) defines a project as: ―a temporary endeavor undertaken to create a unique product or service‖ - Project is reorganization a company into a global enterprise - Should have a multidisciplinary characteristics; unique, specific and have desired completion dates from inputs from people with different kinds of knowledge and expertise. Working as a team, the specialists investigate the problem to discover what information, skills, and knowledge are needed to accomplish the overall task - Secondary effect of using multidisciplinary teams is to deal with complex problems is conflict. The project schedule, budget and specifications conflict with each other. Desires of client conflict with those of the project team, the senior management of the organization conducting the project, and others who may have a less direct stake in the project. Some of the most intense conflicts are those between members of the project team. - The overall activity is called a program, projects are subdivision of programs, projects are composed of tasks, which car further divided into subtasks therefore these subdivisions is to allow the project to be viewed at various levels of detail Trends in project management - Achieving strategic goals: increased use of projects to achieve strategic goals, existing projects screened to make sure objectives support strategy and mission - Achieving routine goals: artificial deadlines and budgets are created to accomplish specific, though, routine, departmental tasks – process called ―projectizing‖ - Improving project effectiveness- PMO project management office; takes responsibility for many of the administrative and specialized tasks of project management. o Pmo evaluation of organizations project management ―maturity‖ or skill and experience o Pmo educate project managers about anxillary goals of the organization - Virtual projects: with increase in globalization of industry, projects involve members in different countries and time zones bringing a unique set of talents to project - Quasi projects – with demands of information technology, project management now being extended into areas where the projects objectives are not well understood, time deadlines unknown and or budget undetermined Project management vs general management - Scope – two meanings – product scope:defines the product, service or result of a project. Project scope detail the work required to deliver the product scope - Win-lose – when buying home, less u pay, less profit seller gets - Win-win – both parties try to understand and fulfill what other party needs What is managed? The three goals of a project - Is the project on time or early, is the project on or under budget, does the project deliver the agreed upon outputs to the satisfaction of the customer - The client must decide what capabilities are required of projects deliverables The life cycle of project - Plc measures project completion by function of either time(schedule) or resources (budget) - Early stage, pm, project reflects wishes of client, ability of project team, consistent with goal and objectives of parent firm - Implementation stage; pm keeps project on budget and on schedule Emterprise project mgmt – multiple, simutaneoulsy ongoing and often interrelated projects in organizations Created to ties projects more closely to the organizations goal and strategy and to integrate and centralize management methods for the growing number of ongoing projects Project portfolio process – the process of strategically selecting the best set of projects for implemenetation Project selection – process of evaluating individual projects or groups of projects and then choosing to implement a set of them so that the objectives of the parent organization are achieved Committee of senior managers, selection process to ensure conditions are met before commitment is made to undertake project; conditions include o Is project profitable; does it meet hurdle rate o Is project required by law or rules of industrial association o Does firm have, or easily aquire the knowledge or skills to carry out project o Does project involve building competencies that are consistent with firms strategic plans o Does organization currently have capacity to carry out the project on schedule o With R&D projects, is it technically successful Nonnumeric selection methods for projects o The sacred cow – o The operating/competitive necessity – this method selects any project that is necessary for continued operation of a group, facility, or the firm itself. o Comparative benefit – there may be list of projects that are complex, difficult to assess, and often noncomparable therefore selection committee that arrange a set of potential projects into ranked order Numeric Selection methods o Financial assessment method –  Select project based on expected economic value to the firm  Assessed through payback period, annual rate of return, internal rate of return; widely used is payback period and discounted cash flow (NPV)  In discounted; rate is hurdle rate may be opportunity cost of capital that is rate of return  Discounted ignore nonmonetary factors except risk and favours short term risk o Financial options and opportunity risk  Financial analysis recognizes value of positioning organization to capitalize on future opportunities  An option an organization or individual acquires to do something but is not required to exercise right. if stock price goes up, worth while to purchase at market value. Vice versa.  Opportunity cost – project a force us to forgo investing in project b  Sometime organizations approve projects to lose money when fully costed, reasons include:  Acquire knowledge concerning a specific or new technology  Get the organization ―foot in the door‖  Obtain the parts, service, or maintenance portion of work  Allow them to bid on a lucrative, follow-on contract  Improve their competitive position  Broaden a product line or line of business o Scoring method  Simplest method – the unweighted 0-1 factor method, lists multiple criteria of significant interest to management, check of for each project which criteria would be satisfied, but all criteria may not be important and various project may satisfy each criterion to different degrees  Weighted factor scoring, Risk analysis – identify potentially uncertain events and the likelihood that any or all may occur The project portfolio process – links organizations project directly to the goal and strategy of the organization. Also means for monitoring and controlling the organizations strategic projects. Shutting down a project prior to completion because risks become excessive. Steps in ppp: - Step 1: establish a project council – establish and articulate a strategic direction for projects - Project - Step 2: indentify project categories and criteria: various project categories are identified so the mix of projects funded by organization will be spread appropriately across those area making major contributions to the organizations goals - 4 categories of projects o Derivative projects: projects or deliverables that are only incrementally different in both product and process from existing offerings. They are often meant to replace current offering or add an extension on current offerings (lower priced, upscale version) o Platform projects- planned outputs of these projects represent major departures from existing offerings in terms of either the product/service itself or the process used to make and deliver it . become platform for next generation of organizational offerings o Breakthrough projects: involve newer technology than platform. Disruptive technology: hybrid gasoline o R and d projects: blue sky, visionary endeavors oriented toward using newely developed technologies or existing technologies in a new manner. Used to acquire new knowledge or new technologies - Step 3: collect project data:for each existing and proposed project, assemble the data appropriate to category criteria, including timing, date and duration, for expected benefits and resources needs. Use criteria score limits or constraints to screen out weaker projects. - Step 4: asses resource availability: assess the availability or both internal and external resources by type, department and timing - Step 5: reduce the project and criteria set – multiple screens are employed to reduce the number or competing projects - Step 6: prioritize the projects within categories – apple scores and criterion weights to rank projects within each category - Step 7: select the projects to be funded and held in reserve – 1. Determine the mix of projects across the various categories and time periods. 2. Leave some percent of company resource capacity free for new opportunities, crisis in existing projects, errors in estimates - Step 8: implement process – pg 35 - A project manager is the person responsible for accomplishing the stated project objectives. Key project management responsibilities include creating clear and attainable project objectives, building the project requirements, and
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