Executing the Project-Activity 12

List of Cases by Chapter

Chapter 1
Development Projects that are Transforming Africa 1
President Obama Signs the Program Management

Improvement and Accountability Act 8
London’s Crossrail: Europe’s Largest Construction Project 10
MegaTech, Inc. 30
The IT Department at Hamelin Hospital 30
Disney’s Expedition Everest 31
“Throwing Good Money after Bad”: the BBC’s Digital

Media Initiative 32

Chapter 2
The Airbus A 380: A Failure of Strategy? 38
Electronic Arts and the Power of Strong Culture in Design

Teams 67
Rolls-Royce Corporation 71
Classic Case: Paradise Lost—The Xerox Alto 72
Project Task Estimation and the Culture of “Gotcha!” 73
Widgets ’R Us 73

Chapter 3
Project Selection Procedures: A Cross-Industry Sampler 80
Project Selection and Screening at GE: The Tollgate Process 100
Keflavik Paper Company 115
Project Selection at Nova Western, Inc. 116

Chapter 4
NASA Taps a Leader with the Right Stuff to Run Their Mars

2020 Project 120
Leading by Example for the London Olympics—Sir John

Armitt 131
The Challenge of Managing Internationally 138
Brazilian Construction Giant Caught in Wide-Spread

Corruption Scandal 143
In Search of Effective Project Managers 146
Finding the Emotional Intelligence to Be a Real Leader 147
Volkswagen and It’s Project to Cheat Emissions Tests 147
Problems with John 149

Chapter 5
Berlin’s Brandenburg Willy Brandt International Airport 156
Statements of Work: Then and Now 164
Defining a Project Work Package 174
Nicaragua’s Canal and Sustainability Challenges 185
Boeing’s Virtual Fence 188
California’s High-Speed Rail Project 190
Project Management at Dotcom.com 192
The Expeditionary Fighting Vehicle 193

Chapter 6
Team-Building Events – Heli-skiing and Zombie

Apocalypses 203
Tele-Immersion Technology Eases the Use of Virtual

Teams 220
Engineers Without Borders: Project Teams Impacting

Lives 225
Columbus Instruments 232
The Bean Counter and the Cowboy 233
Johnson & Rogers Software Engineering, Inc. 234

Chapter 7
Samsung’s Galaxy Note 7 – Failure to Manage a New

Product for Risk 241
Japan Decommissions a $9 Billion Nuclear Reactor That was

Hardly Used 248
Collapse of Shanghai Apartment Building 257
Classic Case: de Havilland’s Falling Comet 263
The Building that Melted Cars 266
Classic Case: Tacoma Narrows Suspension Bridge 267

Chapter 8
New York City’s Second Avenue Subway—Two Miles

Completed for Only $5 Billion Spent 274
The Hidden Costs of Infrastructure Projects—The Case of

Building Dams 303
Sochi Olympics—What’s the Cost of National Prestige? 305

Chapter 9
Preparing for a Major Golf Tournament—It’s a Long Road to

the First Tee 313
Moving the Historic Capen House 345

Chapter 10
Kiruna, Sweden—A Town on the Move! 350
Project Scheduling at Blanque Cheque Construction (A) 379
Project Scheduling at Blanque Cheque Construction (B) 380

Chapter 11
General Electric—Using Agile Methods to Speed New

Product Delivery 387
Eli Lilly Pharmaceuticals and Its Commitment to Critical

Chain Project Management 405
It’s an Agile World 416
Ramstein Products, Inc. 417

Chapter 12
Environmental Concerns and Political Leadership Impact

Fossil Fuel Project Cancellations 420
The Problems of Multitasking 446
“First Come, First Served”: Resource Challenges For Sunrise

Restoration 447

Chapter 13
U.S. Army Can’t Track Spending on its Spending Tracker

Project 452
Earned Value at Northrop Grumman 471
The IT Department at Kimble College 483
The Superconducting Supercollider 484
“Dear Mr. President—Please Cancel our Project!”: The

Honolulu Elevated Rail Project 485

Chapter 14
Amazon’s Golden Touch Fails with a High-Tech Gadget 496
Aftermath of a “Feeding Frenzy”: Dubai and Cancelled

Construction Projects 508
New Jersey Kills Hudson River Tunnel Project 516
The Project That Wouldn’t Die 517
The Navy Struggles to Avoid Cancellation of its Littoral

Combat Ship Program 518

CVR_PINT0332_06_SE_IFC copy.indd 1 11/15/17 8:38 PM

Project ManageMent
achieving coMPetitive advantage

Jeffrey K. Pinto
Pennsylvania State University

New York, NY

F i f t h E d i t i o n

A01_PINT0332_06_SE_FM.indd 1 11/15/17 2:47 PM

To Mary Beth, my wife and best friend, with the most profound thanks and love for her
unwavering support. And, to our children, Emily, AJ, and Joseph—three “projects” that are

definitely over budget but that are performing far better than I could have hoped!

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iii

BRIEF CONTENTS

Preface xiii

Chapter 1 Introduction: Why Project Management? 1
Chapter 2 The Organizational Context: Strategy, Structure, and Culture 38
Chapter 3 Project Selection and Portfolio Management 80
Chapter 4 Leadership and the Project Manager 120
Chapter 5 Scope Management 156
Chapter 6 Project Team Building, Conflict, and Negotiation 203
Chapter 7 Risk Management 241
Chapter 8 Cost Estimation and Budgeting 274
Chapter 9 Project Scheduling: Networks, Duration Estimation, and Critical

Path 313
Chapter 10 Project Scheduling: Lagging, Crashing, and Activity Networks 350
Chapter 11 Advanced Topics in Planning and Scheduling: Agile and Critical

Chain 386
Chapter 12 Resource Management 420
Chapter 13 Project Evaluation and Control 452
Chapter 14 Project Closeout and Termination 496

Appendix A The Cumulative Standard Normal Distribution 528
Appendix B Tutorial for MS Project 2016 529
Appendix C Project Plan Template 539
Glossary 543
Company Index 553
Name Index 555
Subject Index 559

A01_PINT0332_06_SE_FM.indd 3 11/15/17 2:47 PM

iv

CONTENTS

Preface xiii

Chapter 1 INTRODUCTION: WHY PROJECT MANAGEMENT? 1
PROJECT PROFILE: Development Projects that are Transforming Africa 1

The Need for Projects 3
What is a Project? 3

General Project Characteristics 5
PROJECT PROFILE: President Obama Signs the Program Management Improvement

and Accountability Act 8

Why are Projects Important? 9
PROJECT PROFILE: London’s Crossrail: Europe’s Largest Construction Project 10

Project Life Cycles 12
◾ BOX 1.1: Project Managers in Practice 14

Determinants of Project Success 15

◾ BOX 1.2: Project Management Research in Brief 18

Developing Project Management Maturity 19
Employability Skills 23

Communication 23
Critical Thinking 23
Collaboration 23
Knowledge Application And Analysis 23
Business Ethics And Social Responsibility 23
Information Technology Application And Computing Skills 24
Data Literacy 24

Project Elements and Text Organization 24
Summary 28 • Key Terms 29 • Discussion Questions 29
Case Study 1.1 MegaTech, Inc. 30 • Case Study 1.2 The IT Department at
Hamelin Hospital 30 • Case Study 1.3 Disney’s Expedition Everest 31
• Case Study 1.4 “Throwing Good Money after Bad”: the BBC’s Digital
Media Initiative 32 • Internet Exercises 35 • PMP Certification Sample
Questions 35 • Answers 35 • Notes 35

Chapter 2 THE ORGANIZATIONAL CONTEXT: STRATEGY, STRUCTURE,
AND CULTURE  38

PROJECT PROFILE: The Airbus A 380: A Failure of Strategy? 38

Implementing Strategy Through Projects 40
Projects and Organizational Strategy 41
Stakeholder Management 43

Identifying Project Stakeholders 44
Managing Stakeholders 47

Organizational Structure 49
Forms of Organizational Structure 50
Functional Organizations 50
Project Organizations 53
Matrix Organizations 54
Moving to Heavyweight Project Organizations 57

◾ BOX 2.1: Project Management Research in Brief 58
Project Management Offices 59

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Contents v

Organizational Culture 62
How Do Cultures Form? 64
Organizational Culture and Project Management 66
PROJECT PROFILE: Electronic Arts and the Power of Strong Culture in Design Teams 67

Summary 68 • Key Terms 70 • Discussion Questions 70
• Case Study 2.1 Rolls-Royce Corporation 71 • Case Study 2.2 Classic
Case: Paradise Lost—The Xerox Alto 72 • Case Study 2.3 Project Task Esti-
mation and the Culture of “Gotcha!” 73 • Case Study 2.4 Widgets
’R Us 73 • Internet Exercises 74 • PMP Certification Sample
Questions 74 • Answers 75 • Integrated Project—Building Your
Project Plan 76 • Notes 78

  Chapter 3  PROJECT SELECTION AND PORTFOLIO MANAGEMENT  80
PROJECT PROFILE: Project Selection Procedures: A Cross-Industry Sampler 80

Introduction: Project Selection 81
Approaches to Project Screening and Selection 84

Method One: Checklist Model 84
Method Two: Simplified Scoring Models 85
Limitations of Scoring Models 87
Method Three: The Analytical Hierarchy Process 88
Method Four: Profile Models 91

Financial Models 93
Payback Period 94
Net Present Value 95
Discounted Payback 97
Internal Rate of Return 97
Choosing a Project Selection Approach 99
PROJECT PROFILE: Project Selection and Screening at GE: The Tollgate Process 100

Project Portfolio Management 101
Objectives and Initiatives 102
The Portfolio Selection Process 103
Developing a Proactive Portfolio 105
Keys to Successful Project Portfolio Management 108
Problems in Implementing Portfolio Management 108

Summary 110 • Key Terms 111 • Solved Problems 111
• Discussion Questions 112 • Problems 112 • Case Study 3.1 Keflavik
Paper Company 115 • Case Study 3.2 Project Selection at Nova Western,
Inc. 116 • Internet Exercises 118 • Notes 118

  Chapter 4  LEADERSHIP AND THE PROJECT MANAGER  120
PROJECT PROFILE: NASA Taps a Leader with the Right Stuff to Run Their Mars

2020 Project 120

Introduction: Successful Projects Need Leaders 122
Leaders Versus Managers 122
How the Project Manager Leads 124

Acquiring Project Resources 124
Motivating and Building Teams 125
Having a Vision and Fighting Fires 125
Communicating 126

◾ BOX 4.1: Project Management Research in Brief 129
Traits of Effective Project Leaders 129

Conclusions about Project Leaders 130

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vi Contents

PROJECT PROFILE: Leading by Example for the London Olympics—Sir John Armitt 131

Project Champions 132
Champions—Who Are They? 133
What Do Champions Do? 134
How to Make a Champion 135

The New Project Leadership 136

◾ BOX 4.2: Project Managers in Practice 137
PROJECT PROFILE: The Challenge of Managing Internationally 138

Project Management Professionalism 138
Project Management and Ethics 140

Unethical Behaviors in Project Management 142
PROJECT PROFILE: Brazilian Construction Giant Caught in Wide-Spread

Corruption Scandal 143
Summary 144 • Key Terms 145 • Discussion Questions 146
• Case Study 4.1 In Search of Effective Project Managers 146
• Case Study 4.2 Finding the Emotional Intelligence to Be a Real
Leader 147 • Case Study 4.3 Volkswagen and Its Project to Cheat
Emissions Tests 147 • Case Study 4.4 Problems with John 149
• Internet Exercises 152 • PMP Certification Sample Questions 152
• Answers 153 • Notes 153

Chapter 5 SCOPE MANAGEMENT 156
PROJECT PROFILE: Berlin’s Brandenburg Willy Brandt International Airport 156

Introduction: The Importance of Scope Management 158
Conceptual Development 158

The Statement of Work 161
The Project Charter 164
PROJECT PROFILE: Statements of Work: Then and Now 164

The Scope Statement 164
The Work Breakdown Structure 165
Purposes of the Work Breakdown Structure 165
The Organization Breakdown Structure 170
The Responsibility Assignment Matrix 173
PROJECT PROFILE: Defining a Project Work Package 174

Work Authorization 175
Scope Reporting 176

◾ BOX 5.1: Project Management Research in Brief 177
Control Systems 178

Configuration Management 179
Project Closeout 180
Project Management and Sustainability 181

Managing Projects for Sustainability 183
PROJECT PROFILE: Nicaragua’s Canal and Sustainability Challenges 185

Summary 186 • Key Terms 187 • Discussion Questions 188
• Problems 188 • Case Study 5.1 Boeing’s Virtual Fence 188
• Case Study 5.2 California’s High-Speed Rail Project 190 • Case
Study 5.3 Project Management at Dotcom.com 192 • Case Study 5.4 The
Expeditionary Fighting Vehicle 193 • Internet Exercises 195
• PMP Certification Sample Questions 195 • Answers 196
• MS Project Exercises 196 • Appendix 5.1: Sample Project Charter 196
• Integrated Project—Developing the Work Breakdown
Structure 199 • Notes 200

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Contents vii

  Chapter 6  PROJECT TEAM BUILDING, CONFLICT, AND NEGOTIATION  203
PROJECT PROFILE: Team-Building Events – Heli-skiing and Zombie Apocalypses 203

Introduction 205
Building the Project Team 205

Identify Necessary Skill Sets 205
Identify People Who have the required Skills 206
Talk to Potential Team Members and Negotiate with Functional

Heads 207
Build in Fallback Positions 207
Assemble the Team 208

Characteristics of Effective Project Teams 208
A Clear Sense of Mission 208
A Productive Interdependency 209
Cohesiveness 209
Trust 209
Enthusiasm 210
Results Orientation 210

Reasons Why Teams Fail 210
Poorly Developed or Unclear Goals 211
Poorly Defined Project Team Roles and Interdependencies 211
Lack of Project Team Motivation 211
Poor Communication 212
Poor Leadership 212
Turnover Among Project Team Members 212
Dysfunctional Behavior 212

Stages in Group Development 213
Stage One: Forming 213
Stage Two: Storming 214
Stage Three: Norming 214
Stage Four: Performing 214
Stage Five: Adjourning 214
Punctuated Equilibrium 215

Achieving Cross-Functional Cooperation 216
Superordinate Goals 216
Rules and Procedures 217
Physical Proximity 217
Accessibility 217
Outcomes of Cooperation: Task and Psychosocial Results 218

Virtual Project Teams 218
PROJECT PROFILE: Tele-Immersion Technology Eases the Use of Virtual Teams 220

Conflict Management 221
What Is Conflict? 221
Sources of Conflict 222
Methods for Resolving Conflict 224
PROJECT PROFILE: Engineers Without Borders: Project Teams Impacting Lives 225

Negotiation 226
Questions to Ask Prior to the Negotiation 226
Principled Negotiation 227
Invent Options for Mutual Gain 229

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viii Contents

Insist on Using Objective Criteria 230
Summary 231 • Key Terms 232 • Discussion Questions 232
Case Study 6.1 Columbus Instruments 232 • Case Study 6.2 The Bean
Counter and the Cowboy 233 • Case Study 6.3 Johnson & Rogers
Software Engineering, Inc. 234 • Exercise in Negotiation 236
• Internet Exercises 237 • PMP Certification Sample Questions 237
• Answers 238 • Notes 238

Chapter 7 RISK MANAGEMENT 241
PROJECT PROFILE: Samsung’s Galaxy Note 7—Failure to Manage a New Product for Risk 241

Introduction: What is Project Risk? 243

◾ BOX 7.1: Project Managers in Practice 245
Risk Management: A Four-Stage Process 246

Risk Identification 246
PROJECT PROFILE: Japan Decommissions a $9 Billion Nuclear Reactor that

was Hardly Used 248

Risk Breakdown Structures 249
Analysis of Probability and Consequences 249
Risk Mitigation Strategies 252
Use of Contingency Reserves 254
Other Mitigation Strategies 255
Control and Documentation 255
PROJECT PROFILE: Collapse of Shanghai Apartment Building 257

Project Risk Management: An Integrated Approach 259
Summary 261 • Key Terms 262 • Solved Problem 262 • Discussion
Questions 262 • Problems 262 • Case Study 7.1 Classic Case: de
Havilland’s Falling Comet 263 • Case Study 7.2 The Building that Melted
Cars 266 • Case Study 7.3 Classic Case: Tacoma Narrows Suspension
Bridge 267 • Internet Exercises 269 • PMP Certification Sample
Questions 269 • Answers 270 • Integrated Project—Project Risk
Assessment 271 • Notes 273

Chapter 8  COST ESTIMATION AND BUDGETING  274
PROJECT PROFILE: New York City’s Second Avenue Subway – Two Miles Completed for

Only $5 Billion Spent 274

Cost Management 276
Direct Versus Indirect Costs 277
Recurring Versus Nonrecurring Costs 278
Fixed Versus Variable Costs 279
Normal Versus Expedited Costs 279

Cost Estimation 279
Learning Curves in Cost Estimation 283
Software Project Estimation—Function Points 286

◾ BOX 8.1: Project Management Research in Brief 287
Problems with Cost Estimation 289

◾ BOX 8.2: Project Management Research in Brief 290
Creating a Project Budget 291

Top-Down Budgeting 292
Bottom-Up Budgeting 293
Activity-Based Costing 293

Developing Budget Contingencies 295
Summary 297 • Key Terms 298 • Solved Problems 298 • Discussion
Questions 299 • Problems 300 • Case Study 8.1 The Hidden Costs of

A01_PINT0332_06_SE_FM.indd 8 11/15/17 2:47 PM

Infrastructure Projects—The Case of Building Dams 303
• Case Study 8.2 Sochi Olympics—What’s the Cost of National Prestige? 305
• Internet Exercises 307 • PMP Certification Sample
Questions 307 • Answers 308 • Integrated Project—Developing the Cost
Estimates and Budget 309 • Notes 311

Chapter 9 PROJECT SCHEDULING: NETWORKS, DURATION ESTIMATION,
AND CRITICAL PATH  313

PROJECT PROFILE: Preparing for a Major Golf Tournament – It’s a Long Road to the
First Tee 313

Introduction 315
Project Scheduling 315
Key Scheduling Terminology 317
Developing A Network 319

Labeling Nodes 319
Serial Activities 320
Concurrent Activities 320
Merge Activities 321
Burst Activities 321

Duration Estimation 324
Constructing the Critical Path 328

Calculating the Network 328
The Forward Pass 329
The Backward Pass 331
Probability of Project Completion 333
Laddering Activities 335
Hammock Activities 336
Options for Reducing the Critical Path 337

◾ BOX 9.1: Project Management Research in Brief 338
Summary 339 • Key Terms 340 • Solved Problems 340
• Discussion Questions 342 • Problems 342 • Case Study 9.1 Moving
the Historic Capen House 345 • Internet Exercises 347
• MS Project Exercises 347 • Answers 348 • PMP Certification Sample
Questions 348 • Notes 349

Chapter 10   PROJECT SCHEDULING: LAGGING, CRASHING, AND ACTIVITY 
NETWORKS  350

PROJECT PROFILE: Kiruna, Sweden – A Town on the Move! 350

Introduction 352
Lags in Precedence Relationships 352

Finish to Start 352
Finish to Finish 353
Start to Start 353
Start to Finish 354

Gantt Charts 355
Adding Resources to Gantt Charts 356
Incorporating Lags in Gantt Charts 357

◾ BOX 10.1: Project Managers in Practice 357
Crashing Projects 359

Options for Accelerating Projects 359
Crashing the Project: Budget Effects 364

Contents ix

A01_PINT0332_06_SE_FM.indd 9 11/15/17 2:47 PM

Activity-On-Arrow Networks 367
How Are They Different? 367
AOA Versus AON 372

Controversies in the Use of Networks 373
Conclusions 374

Summary 375 • Key Terms 375 • Solved Problems 376 • Discussion
Questions 377 • Problems 377 • Case Study 10.1 Project Scheduling
at Blanque Cheque Construction (A) 379 • Case Study 10.2 Project
Scheduling at Blanque Cheque Construction (B) 380 • MS Project
Exercises 380 • PMP Certification Sample Questions 381
• Answers 382 • Integrated Project—Developing the Project
Schedule 383 • Notes 384

 Chapter 11  ADVANCED TOPICS IN PLANNING AND SCHEDULING: 
 AGILE AND CRITICAL CHAIN  386

PROJECT PROFILE: General Electric – Using Agile Methods to Speed New Project Delivery 387

Introduction 387
Agile Project Management 388

What Is Unique About Agile PM? 389
Tasks Versus Stories 391
Key Terms in Agile PM 391
Steps in Agile 393
Sprint Planning 393
Daily Scrums 393
The Development Work 394
Sprint Reviews 394
Sprint Retrospective 395
Keys to Success with Agile 395
Problems with Agile 396

◾ BOX 11.1: Project Management Research in Brief 397
Extreme Programming (XP) 397
Theory of Constraints and Critical Chain Project Scheduling 398

Theory of Constraints 398
The Critical Chain Solution to Project Scheduling 399

Developing the Critical Chain Activity Network 402
Critical Chain Solutions Versus Critical Path Solutions 404
PROJECT PROFILE: Eli Lilly Pharmaceuticals and Its Commitment to Critical Chain Project

Management 405

Critical Chain Solutions to Resource Conflicts 406
Critical Chain Project Portfolio Management 407

◾ BOX 11.2: Project Management Research in Brief 410
Critiques of CCPM 411

Summary 411 • Key Terms 413 • Solved Problem 413 • D iscussion
Questions 414 • Problems 414 • Case Study 11.1 It’s an Agile
World 416 • Case Study 11.2 Ramstein Products, Inc. 417 • Internet
Exercises 418 • Notes 418

 Chapter 12  RESOURCE MANAGEMENT  420
PROJECT PROFILE: Environmental Concerns and Political Leadership Impact Fossil Fuel

Project Cancellations 420

Introduction 422
The Basics of Resource Constraints 422

Time and Resource Scarcity 423

x Contents

A01_PINT0332_06_SE_FM.indd 10 11/15/17 2:47 PM

Resource Loading 425
Resource Leveling 426

Step One: Develop the Resource-Loading Table 430
Step Two: Determine Activity Late Finish Dates 430
Step Three: Identify Resource Overallocation 432
Step Four: Level the Resource-Loading Table 432

Resource-Loading Charts 435

◾ BOX 12.1: Project Managers in Practice 438
Managing Resources in Multiproject Environments 439

Schedule Slippage 439
Resource Utilization 439
In-Process Inventory 440
Resolving Resource Decisions in Multiproject Environments 440

Summary 442 • Key Terms 443 • Solved Problem 443 • Discussion
Questions 444 • Problems 444 • Case Study 12.1 The Problems of
Multitasking 446 • Case Study 12.2 “First Come, First Served”: Resource
Challenges for Sunrise Restoration† 447 • Internet Exercises 448
MS Project Exercises 448 • PMP Certification Sample Questions 449
• Answers 450 • Integrated Project—Managing Your Project’s
Resources 451 • Notes 451

 Chapter 13  PROJECT EVALUATION AND CONTROL  452
PROJECT PROFILE: U.S. Army Can’t Track Spending on its Spending Tracker Project 452

Introduction 453
Control Cycles—A General Model 454
Monitoring Project Performance 454

The Project S-Curve: A Basic Tool 455
S-Curve Drawbacks 457
Milestone Analysis 457
Problems with Milestones 459
The Tracking Gantt Chart 459
Benefits and Drawbacks of Tracking Gantt Charts 460

Earned Value Management 460
Terminology for Earned Value 461
Creating Project Baselines 462
Why Use Earned Value? 462
Steps in Earned Value Management 464
Assessing a Project’s Earned Value 465

Using Earned Value to Manage a Portfolio of Projects 470
Flow of Earned Value System 470
PROJECT PROFILE: Earned Value at Northrop Grumman 471

Issues in the Effective Use of Earned Value Management 472
Human Factors in Project Evaluation and Control 474

Critical Success Factor Definitions 476
Conclusions 477

Summary 478 • Key Terms 479 • Solved Problem 479 • Discussion
Questions 480 • Problems 481 • Case Study 13.1 The IT Department
at Kimble College 483 • Case Study 13.2 The Superconducting
S upercollider 484 • Case Study 13.3 “Dear Mr. President—Please
cancel our project!”: The Honolulu Elevated Rail Project 485 • Internet
Exercises 487 • MS Project Exercises 487 • PMP Certification Sample
Questions 488 • Answers 489 • Appendix 13.1: Earned
Schedule 489 • Notes 494

Contents xi

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Chapter 14 PROJECT CLOSEOUT AND TERMINATION 496
PROJECT PROFILE: Amazon’s Golden Touch Fails with a High-Tech Gadget 496

Introduction 497
Types of Project Termination 498

◾ BOX 14.1: Project Managers in Practice 498
Natural Termination—the Closeout Process 500

Finishing the Work …