1 PROJECT management KERZNER T E N T H E D I T I O N. THE LANDMARK PRO JECT management . PROJECT . M A NAGEMENT. REFERENCE, NOW I N A NEW EDITION. N ow 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 HAROLD KERZNER, PH .D., is Senior Executive Director for PROJECT , Knowledge (PMI's PMBOK Guide), the new mandatory source of Program and Portfolio training for the PROJECT management Professional (PMP ) Certi cat- management at ion Exam. This outstanding edition gives students and professionals International Institute of PROJECT . a profound understanding of PROJECT management with insights from Learning, Inc. (IIL), a global one of the best-known and respected authorities on the subject. learning solutions company From the intricate framework of organizational behavior and structure that conducts training that can determine PROJECT success to the planning, scheduling, and for leading corporations controlling processes vital to effective PROJECT management , the new throughout the world.
2 Edition thoroughly covers every key component of the subject. This Tenth Edition features: New sections on scope changes, exiting a PROJECT , collective management . A N D CO N T R O L L I N G. S C H E D U L I N G, TO P L A N N I N G, A S YS T E M S A P P R OAC H. belief, and managing virtual teams More than twenty- ve case studies, including a new case on the Iridium PROJECT covering all aspects of PROJECT management 400 discussion questions A S YS T E M S A P P R OAC H. More than 125 multiple-choice questions Other powerful tools by Harold Kerzner: TO P L A N N I N G, S C H E D U L I N G, PROJECT management Workbook and PMP /CAPM Exam Study Guide, Tenth Edition (978-0-470-27872-7) A N D CO N T R O L L I N G. PROJECT management Case Studies, Third Edition (978-0-470-27871-0). T E N T H. E D I T I O N. HAROLD KERZNER, P 1/21/09 4:44 PM Page vi 1/21/09 4:44 PM Page i PROJECT . management . 1/21/09 4:44 PM Page ii Dr. Kerzner's 16 Points to PROJECT management Maturity 1.
3 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.
4 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. 1/21/09 4:44 PM Page iii PROJECT . management . A Systems Approach to Planning, Scheduling, and Controlling TENTH EDITION. HAROLD KERZNER, Senior Executive Director for PROJECT Managenment The International Insitute for Learning New York, New York John Wiley & Sons, Inc. 1/21/09 4:44 PM Page iv 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.
5 01923, (978) 750-8400, fax (978) 646-8600, or on the web at 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 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.
6 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 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. 2009. 04 dc22. 2008049907. Printed in the United States of America. 10 9 8 7 6 5 4 3 2 1. 1/21/09 4:44 PM Page v To Dr. Herman Krier, my Friend and Guru, who taught me well the meaning of the word persistence . 1/21/09 4:44 PM Page vi 1/19/09 2:27 PM Page vii Contents Preface xxi 1 OVERVIEW 1.
7 Introduction 1. Understanding PROJECT management 2. Defining PROJECT Success 7. The PROJECT Manager Line Manager Interface 8. Defining the PROJECT Manager's Role 12. Defining the Functional Manager's Role 14. Defining the Functional Employee's Role 17. Defining the Executive's Role 17. Working with Executives 18. The PROJECT Manager as the Planning Agent 19. PROJECT Champions 20. The Downside of PROJECT management 21. PROJECT -Driven versus Non PROJECT -Driven Organizations 22. Marketing in the PROJECT -Driven Organization 24. Classification of Projects 26. Location of the PROJECT Manager 27. Differing Views of PROJECT management 29. Concurrent Engineering: A PROJECT management Approach 30. Studying Tips for the PMI PROJECT management Certification Exam 30. Problems 33. Case Study Williams Machine Tool Company 35. vii 1/19/09 2:27 PM Page viii viii CONTENTS. 2 PROJECT management GROWTH: CONCEPTS AND. DEFINITIONS 37. Introduction 37. General Systems management 38.
8 PROJECT management : 1945 1960 38. PROJECT management : 1960 1985 39. PROJECT management : 1985 2009 45. Resistance to Change 50. Systems, Programs, and Projects: A Definition 54. Product versus PROJECT management : A Definition 57. Maturity and Excellence: A Definition 58. Informal PROJECT management : A Definition 59. The Many Faces of Success 60. The Many Faces of Failure 63. The Stage-Gate Process 66. PROJECT Life Cycles 68. Gate Review Meetings ( PROJECT Closure) 74. PROJECT management Methodologies: A Definition 74. Organizational Change management and Corporate Cultures 76. PROJECT management Intellectual Property 81. Systems Thinking 82. Studying Tips for the PMI PROJECT management Certification Exam 85. Problems 88. 3 ORGANIZATIONAL STRUCTURES 91. Introduction 91. Organizational Work Flow 94. Traditional (Classical) Organization 95. Developing Work Integration Positions 98. Line Staff Organization ( PROJECT Coordinator) 102. Pure Product (Projectized) Organization 103.
9 Matrix Organizational Form 106. Modification of Matrix Structures 113. The Strong, Weak, Balanced Matrix 117. Center for PROJECT management Expertise 117. Matrix Layering 118. Selecting the Organizational Form 119. Structuring the Small Company 125. Strategic Business Unit (SBU) PROJECT management 128. Transitional management 129. Studying Tips for the PMI PROJECT management Certification Exam 131. Problems 133. 1/19/09 2:27 PM Page ix Contents ix Case Study Jones and Shephard Accountants, Inc. 138. 4 ORGANIZING AND STAFFING THE PROJECT OFFICE AND. TEAM 141. Introduction 141. The Staffing Environment 142. Selecting the PROJECT Manager: An Executive Decision 144. Skill Requirements for PROJECT and Program Managers 148. Special Cases in PROJECT Manager Selection 154. Selecting the Wrong PROJECT Manager 154. Next Generation PROJECT Managers 158. Duties and Job Descriptions 159. The Organizational Staffing Process 163. The PROJECT Office 169. The Functional Team 174.
10 The PROJECT Organizational Chart 175. Special Problems 178. Selecting the PROJECT management Implementation Team 180. Studying Tips for the PMI PROJECT management Certification Exam 183. Problems 185. 5 management FUNCTIONS 191. Introduction 191. Controlling 193. Directing 193. PROJECT Authority 198. Interpersonal Influences 206. Barriers to PROJECT Team Development 209. Suggestions for Handling the Newly Formed Team 212. Team Building as an Ongoing Process 216. Dysfunctions of a Team 217. Leadership in a PROJECT Environment 220. Life-Cycle Leadership 221. Organizational Impact 225. Employee Manager Problems 227. management Pitfalls 230. Communications 233. PROJECT Review Meetings 242. PROJECT management Bottlenecks 243. Communication Traps 244. 1/19/09 2:27 PM Page x x CONTENTS. Proverbs and Laws 245. Human Behavior Education 248. management Policies and Procedures 249. Studying Tips for the PMI PROJECT management Certification Exam 249. Problems 254.