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Contemporary Project Management Timothy J. Kloppenborg Th ird Edition

Contemporary Project M anagem

ent K

loppenborg

Th ird Edition

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Contemporary Project Management, 3e includes both time-tested and cutting-edge project management techniques that are invaluable to you as a student or practitioner. Check out some of the features of this text:

• Agile Approach to Project Planning and Management. The text fully integrates the agile approach and uses a margin icon and alternate font color to emphasize the difference between agile and traditional project management methods.

• PMBOK ® Guide Approach. This edition covers all knowledge areas and processes from the fi fth edition of the PMBOK® Guide and now includes ten PMBOK® Guide-type questions at the end of each chapter. All glossary defi nitions also refl ect the fi fth edition of the PMBOK® Guide.

• Real Project Management Examples. Each chapter contains examples from practitioners at actual companies in the U.S. and abroad.

• Actual Projects as Learning Vehicles. At the end of each chapter, there is an example project with a list of deliverables. Microsoft® Word and Excel templates for many project management techniques are also available on the textbook companion site.

• Full Integration of Microsoft® Project Professional 2013. Using screen captures, the text shows step-by-step instructions for automating project management techniques and processes in Microsoft® Project 2013.

Contemporary Project Management Timothy J. Kloppenborg

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MS Project 2013 Instructions in Contemporary Project Management 3e

Chapter MS Project

4 Introduction to MS Project 2013

Toolbars, ribbons, and window panes

Initialize MS Project for Use

Auto schedule, start date, identifying information, summary row

Create Milestone Schedule

Key milestones, projected finish dates, information

6 Set up Work Breakdown Structure (WBS)

Understand WBS definitions and displays, enter summaries, create the outline, Insert row number column, Hide/show desired amount of detail

7 Set up Schedule in MS Project

Define organization’s holidays, turn off change highlighting, understand types of project data

Build Logical Network Diagram

Enter tasks and milestones, define dependencies, understand network

diagram presentation, verify accuracy

Understand Critical Path

Assign duration estimates, identify critical path

Display and Print Schedules

8 Define Resources

Resource views, max units, resource calendars

Assigning Resources

In split view enter work, select resource, modify assignments

Identify Over allocated Resources

Resource usage and Detailed Gantt views together

Dealing with Over Allocations

Manual leveling and judgment

9 Develop Bottom-up Project Budget

Assignment costs, activity costs, various cost perspectives

Develop Summary Project Budget

11 Baseline Project Plan

14 Report Progress

How MS Project recalculates based upon actual performance, current and future impacts of variances, define the performance update process (what, when, and how)

Update the Project Schedule

Acquire performance data, set and display status date, Enter duration-

based performance data, reschedule remaining work, revise estimates

15 Close Project

Complete schedule, archive schedule, capture and publish lessons learned

 

 

PMBOK® Guide 5e Coverage in Contemporary Project Management 3e The numbers refer to the text page where the process is defined.

Project management (PM) processes and knowledge areas 9 Project life cycle 6-8, 62-64 Projects and strategic planning 28-31 Organizational influences 54-61 Portfolio and program management 31-34 Stakeholders 65-74

PMBOK® Guide 5th ed. Coverage

Knowledge Areas

Initiating Process Group Planning Process Group

Executing Process Group

Monitoring & Controlling Process Group

Closing Process Group

Project Integration Management

Develop Project charter 84-99

Develop Project Management Plan 116-118, 306-308

Direct and Manage Project Work 383-384

Monitor and Control Project Work 385-386 Perform Integrated Change Control 158-160, 386-387

Close Project or Phase 425-430

Project Scope Management

Plan Scope Management 146 Collect Requirements 146-148 Define Scope 148-150 Create WBS 150-158

Validate Scope 422 Control Scope 400-401

Project Time Management

Plan Schedule Management 172 Define Activities 175-176 Sequence Activities 176-181 Estimate Activity Resources 211-212 Estimate Activity Durations 181-184 Develop Schedule 184-192

Control Schedule 172, 401-405

Project Cost Management

Plan Cost Management 246 Estimate Costs 246-256 Determine Budget 256-259

Control Costs 259, 401-405

Project Quality Management

Plan Quality Management 302-306

Perform Quality Assurance 392-393

Control Quality 306, 393-400

Project Human Resources Management

Plan Human Resource Management 212-216

Aquire Project Team 348-350 Develop Project Team 350-364 Manage Project Team 364-367

Project Communications Management

Plan Communications Management 126-130

Manage Communications 388-391

Control Communications 391

Project Risk Management

PlanRiskManagement 270-275 Identify Risks 95, 275-277 Perform Qualitative Risk Analysis 95-96, 277-280 Perform Quantitative Risk Analysis 280 Plan Risk Responses 96, 281-283

Control Risks 387-388

Project Procurement Management

Plan Procurement Management 324-327, 331-333

Conduct Procurements 327-331

Control Procurments 334

Close Procurements 424-425

Project Stakeholder Management

Identify Stakeholders 97, 119-123

Plan Stakeholder Management 124-126

Manage Stakeholder Engagement 123-124, 367-368

Control Stakeholder Engagement 368-369

Source: Adapted from A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 5th ed. (Newtown Square, PA: Project Management Institute, Inc., 2013): 43.

 

 

Contemporary Project Management Organize / Plan / Perform

THIRD EDITION

TIMOTHY J. KLOPPENBORG Xavier University

Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States

 

 

Contemporary Project Management: Organize / Plan / Perform, Third Edition

Timothy J. Kloppenborg

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Brief Contents Project Deliverables xiii Preface xv About the Author xxii

PART 1 Organizing Projects

1 Introduction to Project Management 2

2 Project Selection and Prioritization 26

3 Organizational Capability: Structure, Culture, and Roles 52

4 Chartering Projects 82

PART 2 Planning Projects

5 Stakeholder Analysis and Communication Planning 114

6 Scope Planning 144

7 Scheduling Projects 170

8 Resourcing Projects 208

9 Budgeting Projects 244

10 Project Risk Planning 268

11 Project Quality Planning and Project Kickoff 290

PART 3 Performing Projects

12 Project Supply Chain Management 320

13 Leading and Managing Project Teams 346

14 Determining Project Progress and Results 380

15 Finishing the Project and Realizing the Benefits 420

Appendix A PMP® and CAPM® Exam Prep Suggestions 439 Appendix B Strengths Themes as Used in Project Management (available on the

textbook companion site) Glossary Terms from the PMBOK® Guide 443 Index 451

iii

 

 

Contents

Project Deliverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xv About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxii

PART 1 Organizing Projects

CHAPTER 1 Introduction to Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1 What Is a Project? 4

1.2 History of Project Management 4

1.3 How Can Project Work Be Described? 5 1.3a Projects versus Operations 5 / 1.3b Soft Skills and Hard Skills 5 / 1.3c Authority

and Responsibility 6 / 1.3d Project Life Cycle 6

1.4 Understanding Projects 8 1.4a Project Management Institute 8 / 1.4b Project Management Body of Knowledge

(PMBOK®) 9 / 1.4c Selecting and Prioritizing Projects 10 / 1.4d Project Goals and Constraints 10 / 1.4e Defining Project Success and Failure 11 / 1.4f Using Microsoft Project to Help Plan and Measure Projects 12 / 1.4g Types of Projects 12 / 1.4h Scalability of Project Tools 14

1.5 Project Roles 14 1.5a Project Executive-Level Roles 14 / 1.5b Project Management-Level Roles 14 /

1.5c Scrum Master 15 / 1.5d Project Associate-Level Roles 15

1.6 Overview of the Book 15 1.6a Part 1: Organizing and Initiating Projects 15 / 1.6b Part 2: Planning Projects 17 /

1.6c Part 3: Performing Projects 18

Summary 19

Key Terms from the PMBOK® Guide 19 Chapter Review Questions 20

Discussion Questions 20

PMBOK® Guide Questions 20 Example Project Instructions 21

References 22

Endnotes 22

Project Management in Action: Using Appreciative Inquiry to Understand Project Management 24

CHAPTER 2 Project Selection and Prioritization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

2.1 Strategic Planning Process 28 2.1a Strategic Analysis 28 / 2.1b Guiding Principles 28 / 2.1c Strategic Objectives 31 /

2.1d Flow-Down Objectives 31

2.2 Portfolio Management 31 2.2a Portfolios 32 / 2.2b Programs 32 / 2.2c Projects and Subprojects 33 /

2.2d Assessing an Organization’s Ability to Perform Projects 34 / 2.2e Identifying

iv

 

 

Potential Projects 35 / 2.2f Methods for Selecting Projects 36 / 2.2g Using a Cost-Benefit Analysis Model to Select Projects 36 / 2.2h Using a ScoringModel to Select Projects 38 / 2.2i Prioritizing Projects 40 / 2.2j Resourcing Projects 41

2.3 Securing Projects 41 2.3a Identify Potential Project Opportunities 42 / 2.3b Determine Which Opportunities to

Pursue 42 / 2.3c Prepare and Submit a Project Proposal 43 / 2.3d Negotiate to Secure the Project 44

Summary 44

Key Terms from the PMBOK® Guide 45 Chapter Review Questions 45

Discussion Questions 45

PMBOK® Guide Questions 46 Exercises 46

Example Project Instructions 47

References 47

Endnotes 48

Project Management in Action: Prioritizing Projects at D. D. Williamson 49

CHAPTER 3 Organizational Capability: Structure, Culture, and Roles . . . . . . . . . . . . . . . . . . . . . 52

3.1 Types of Organizational Structures 54 3.1a Functional 54 / 3.1b Projectized 55 / 3.1c Matrix 56

3.2 Organizational Culture and Its Impact on Projects 59 3.2a Culture of the Parent Organization 60 / 3.2b Project Cultural Norms 61

3.3 Project Life Cycles 62 3.3a Define-Measure-Analyze-lmprove-Control (DMAIC) Model 62 / 3.3b Research and

Development (R&D) Project Life Cycle Model 62 / 3.3c Construction Project Life Cycle Model 63 / 3.3d Agile Project Life Cycle Model 63

3.4 Agile Project Management 64

3.5 Project Executive Roles 65 3.5a Steering Team 65 / 3.5b Sponsor 66 / 3.5c Customer 67 / 3.5d Chief Projects

Officer/Project Management Office 69

3.6 Project Management Roles 69 3.6a Functional Manager 69 / 3.6b Project Manager 70 / 3.6c Scrum Master 72 /

3.6d Facilitator 72

3.7 Project Team Roles 73 3.7a Core Team Members 73 / 3.7b Subject Matter Experts 74

Summary 74

Key Terms from the PMBOK® Guide 75 Chapter Review Questions 75

Discussion Questions 76

PMBOK® Guide Questions 76 Exercises 77

Example Project Instructions 77

References 77

Endnotes 78

Project Management in Action: Project Leadership Roles at TriHealth 79

Contents v

 

 

CHAPTER 4 Chartering Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

4.1 What Is a Project Charter? 84

4.2 Why Is a Project Charter Used? 85

4.3 When Is a Charter Needed? 85

4.4 Typical Elements in a Project Charter 87 4.4a Title 87 / 4.4b Scope Overview 87 / 4.4c Business Case 88 /

4.4d Background 88 / 4.4e Milestone Schedule with Acceptance Criteria 88 / 4.4f Risks, Assumptions, and Constraints 89 / 4.4g Resource Estimates 90 / 4.4h Stakeholder List 90 / 4.4i Team Operating Principles 90 / 4.4j Lessons Learned 91 / 4.4k Signatures and Commitment 91

4.5 Constructing a Project Charter 91 4.5a Scope Overview and Business Case Instructions 91 / 4.5b Background

Instructions 92 / 4.5c Milestone Schedule with Acceptance Criteria Instructions 92 / 4.5d Risks, Assumptions, and Constraints Instructions 95 / 4.5e Resources Needed Instructions 96 / 4.5f Stakeholder List Instructions 97 / 4.5g Team Operating Principles Instructions 97 / 4.5h Lessons Learned Instructions 98 / 4.5i Signatures and Commitment Instructions 98

4.6 Ratifying the Project Charter 99

4.7 Starting a Project using Microsoft Project 99 4.7a MS Project 2013 Introduction 99 / 4.7b Initialize Microsoft Project 2013 for General

Use 101 / 4.7c Initialize a Project 102 / 4.7d Construct a Milestone Schedule 104

Summary 105

Key Terms from the PMBOK® Guide 105 Chapter Review Questions 105

Discussion Questions 105

PMBOK® Guide Questions 106 Exercises 107

Example Project 107

References 107

Endnotes 108

Project Management in Action: Information Systems Enhancement Project Charter 108

PART 2 Planning Projects

CHAPTER 5 Stakeholder Analysis and Communication Planning . . . . . . . . . . . . . . . . . . . . . . . . . 114

5.1 Develop the Project Management Plan 116

5.2 Identify Stakeholders 119 5.2a Find Stakeholders 119 / 5.2b Analyze Stakeholders 120 / 5.2c Document

Stakeholders 121

5.3 Build Relationships 123 5.3a Relationship Building within the Core Team 124 / 5.3b Relationship Building with

All Other Stakeholders 124

5.4 Plan Communications Management 126 5.4a Purposes of a Project Communications Plan 126 / 5.4b Communications Plan

Considerations 126 / 5.4c Communications Matrix 128 / 5.4d Knowledge Management 129

vi Contents

 

 

5.5 Project Meeting Management 130 5.5a Improving Project Meetings 130 / 5.5b Issues Management 132

5.6 Communications Needs of Global and Virtual Project Teams 134 5.6a Virtual Teams 134 / 5.6b Cultural Differences 135 / 5.6c Countries and Project

Communication Preferences 135

5.7 Communications Technologies 136 5.7a Current Technology Types 136

Summary 137

Key Terms from the PMBOK® Guide 137 Chapter Review Questions 137

Discussion Questions 138

PMBOK® Guide Questions 138 Example Project 139

References 139

Endnotes 140

Project Management in Action: Project Communication Planning for a Distributed Project 141

CHAPTER 6 Scope Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

6.1 Plan Scope Management 146

6.2 Collect Requirements 146 6.2a Gather Stakeholder Input 147

6.3 Define Scope 148 6.3a Reasons to Define Scope 148 / 6.3b How to Define Scope 149 / 6.3c How to

Define Scope in Agile Projects 150

6.4 Work Breakdown Structure (WBS) 150 6.4a What Is the WBS? 151 / 6.4b Why Use a WBS? 151 / 6.4c WBS Formats 152 /

6.4d Work Packages 154 / 6.4e How to Construct a WBS 155

6.5 Establish Change Control 158

6.6 Using MS Project for Work Breakdown Structures (WBS) 160 6.6a Set Up the WBS 161

Summary 165

Key Terms from the PMBOK® Guide 166 Chapter Review Questions 166

Discussion Questions 166

Exercises 167

PMBOK® Guide Questions 167 Example Project 168

References 168

Endnotes 168

Project Management in Action: Work Breakdown Structure Template 169

CHAPTER 7 Scheduling Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

7.1 Plan Schedule Management 172

7.2 Purposes of a Project Schedule 173

7.3 Historical Development of Project Schedules 173

Contents vii

 

 

7.4 How Project Schedules Are Limited and Created 174

7.5 Define Activities 175

7.6 Sequence Activities 176 7.6a Leads and Lags 179 / 7.6b Alternative Dependencies 180

7.7 Estimate Activity Duration 181 7.7a Problems and Remedies in Duration Estimating 182 / 7.7b Learning Curves 182

7.8 Develop Project Schedules 184 7.8a Two-Pass Method 185 / 7.8b Enumeration Method 189

7.9 Uncertainty in Project Schedules 190 7.9a Program Evaluation and Review Technique 190 / 7.9b Monte Carlo Simulation 191

7.10 Show the Project Schedule on a Gantt Chart 192

7.11 Using Microsoft Project for Critical Path Schedules 193 7.11a Set Up the Project Schedule 194 / 7.11b Build the Logical Network Diagram 196 /

7.11c Understand the Critical Path 199 / 7.11d Display and Print Schedules with MS Project 199

Summary 199

Key Terms from the PMBOK® Guide 200 Chapter Review Questions 200

Discussion Questions 201

Exercises 201

PMBOK® Guide Questions 202 Example Project 203

References 203

Endnotes 204

Project Management in Action: Bank Project Schedule 205

CHAPTER 8 Resourcing Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208

8.1 Abilities Needed when Resourcing Projects 210 8.1a The Science and Art of Resourcing Projects 210 / 8.1b Considerations when

Resourcing Projects 210 / 8.1c Activity- versus Resource-Dominated Schedules 211

8.2 Estimate Resource Needs 211

8.3 Plan Human Resource Management 212 8.3a Identify Potential Resources 212 / 8.3b Determine Resource Availability 213 /

8.3c Decide Timing Issues when Resourcing Projects 214

8.4 Project Team Composition Issues 215 8.4a Cross-Functional Teams 215 / 8.4b Co-Located Teams 215 / 8.4c Virtual

Teams 215 / 8.4d Outsourcing 215

8.5 Assign a Resource to Each Activity 216 8.5a Show Resource Responsibilities on RACI Chart 216 / 8.5b Show Resource

Assignments on Gantt Chart 216 / 8.5c Summarize Resource Responsibilities by Time Period with Histogram 218

8.6 Dealing with Resource Overloads 219 8.6a Methods of Resolving Resource Overloads 219

8.7 Compress the Project Schedule 222 8.7a Actions to Reduce the Critical Path 222 / 8.7b Crashing 223 / 8.7c Fast

Tracking 226

viii Contents

 

 

8.8 Alternative Scheduling Methods 227 8.8a Critical Chain Project Management (CCPM) 227 / 8.8b Reverse Phase

Schedules 228 / 8.8c Rolling Wave Planning 228 / 8.8d Agile Project Planning 229 / 8.8e Auto/Manual Scheduling 229

8.9 Using MS Project for Resource Allocation 229 8.9a Step 1: Defining Resources 229 / 8.9b Setting Up a Resource Calendar 231 /

8.9c Step 2: Assigning Resources 231 / 8.9d Step 3: Finding Overallocated Resources 233 / 8.9e Step 4: Dealing with Overallocations 235

Summary 236

Key Terms from the PMBOK® Guide 237 Chapter Review Questions 237

Discussion Questions 237

Exercises 238

PMBOK® Guide Questions 238 Example Project 239

References 239

Endnotes 240

Project Management in Action: Managing Software Development with Agile Methods and Scrum 240

CHAPTER 9 Budgeting Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

9.1 Plan Cost Management 246

9.2 Estimate Cost 246 9.2a Types of Cost 247 / 9.2b Accuracy and Timing of Cost Estimates 250 /

9.2c Methods of Estimating Costs 251 / 9.2d Project Cost Estimating Issues 253

9.3 Determine Budget 256 9.3a Aggregating Costs 257 / 9.3b Analyzing Reserve Needs 258 / 9.3c Determining

Cash Flow 258

9.4 Establishing Cost Control 259

9.5 Using MS Project for Project Budgets 260 9.5a Develop Bottom-Up Project Budget 260 / 9.5b Develop Summary Project

Budget 261

Summary 263

Key Terms from the PMBOK® Guide 263 Chapter Review Questions 263

Discussion Questions 263

Exercises 264

PMBOK® Guide Questions 264 Example Project 265

References 265

Endnotes 266

Project Management in Action: The Value of Budget Optimization 266

CHAPTER 10 Project Risk Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268

10.1 Plan Risk Management 270 10.1a Roles and Responsibilities 272 / 10.1b Categories and Definitions 272

Contents ix

 

 

10.2 Identify Risks 275 10.2a Information Gathering 275 / 10.2b Reviews 275 / 10.2c Understanding

Relationships 276 / 10.2d Risk Register 276

10.3 Risk Analysis 277 10.3a Perform Qualitative Risk Analysis 277 / 10.3b Perform Quantitative Risk

Analysis 280 / 10.3c Risk Register Updates 280

10.4 Plan Risk Responses 281 10.4a Strategies for Responding to Risks 281 / 10.4b Risk Register Updates 283

Summary 284

Key Terms from the PMBOK® Guide 284 Chapter Review Questions 284

Discussion Questions 285

Exercises 285

PMBOK® Guide Questions 285 Example Project 286

References 287

Endnotes 287

Project Management in Action: Risk Management on a Satellite Development Project 288

CHAPTER 11 Project Quality Planning and Project Kickoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

Quality and Risk 291

11.1 Development of Contemporary Quality Concepts 292 11.1a Quality Gurus 292 / 11.1b Total Quality Management/Malcolm Baldrige 293 /

11.1c ISO 9001:2008 293 / 11.1d Lean Six Sigma 295

11.2 Core Project Quality Concepts 296 11.2a Stakeholder Satisfaction 296 / 11.2b Process Management 297 / 11.2c Fact-Based

Management 299 / 11.2d Empowered Performance 301 / 11.2e Summary of Core Concepts 302

11.3 Plan Quality Management 302 11.3a Quality Policy 303 / 11.3b Quality Management Plan Contents 305 /

11.3c Quality Baseline 305 / 11.3d Process Improvement Plan 305 / 11.3e Quality Assurance 305 / 11.3f Control Quality 306

11.4 Project Quality Tools 306

11.5 Develop Project Management Plan 306 11.5a Resolve Conflicts 307 / 11.5b Establish Configuration Management 308 /

11.5c Apply Sanity Tests to All Project Plans 308

11.6 Kickoff Project 308 11.6a Preconditions to Meeting Success 309 / 11.6b Meeting Activities 309

11.7 Baseline and Communicate Project Management Plan 309

11.8 Using MS Project for Project Baselines 311 11.8a Baseline the Project Plan 311 / 11.8b First Time Baseline 312 / 11.8c Subsequent

Baselines 312

Summary 312

Key Terms from the PMBOK® Guide 313 Chapter Review Questions 313

Discussion Questions 314

Exercises 314

PMBOK® Guide Questions 314

x Contents

 

 

Example Project 315

References 316

Endnotes 316

Project Management in Action: Quality Planning at GTC 317

PART 3 Performing Projects

CHAPTER 12 Project Supply Chain Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320

12.1 Introduction to Project Supply Chain Management 322 12.1a SCM Components 323 / 12.1b SCM Factors 323 / 12.1c SCM Decisions 324 /

12.1d Project Procurement Management Processes 324

12.2 Plan Procurement Management 324 12.2a Outputs of Planning 325 / 12.2b Make-or-Buy Decisions 325

12.3 Conduct Procurements 327 12.3a Sources for Potential Suppliers 327 / 12.3b Information for Potential Suppliers 327 /

12.3c Approaches Used When Evaluating Prospective Suppliers 328 / 12.3d Supplier Selection 329

12.4 Contract Types 331 12.4a Fixed-Price Contracts 331 / 12.4b Cost-Reimbursable Contracts 332 /

12.4c Time and Material (T&M) Contracts 333

12.5 Control Procurements 334

12.6 Improving Project Supply Chains 334 12.6a Project Partnering and Collaboration 334 / 12.6b Third Parties 338 / 12.6c Lean

Purchasing 338 / 12.6d Sourcing 338 / 12.6e Logistics 339 / 12.6f Information 339

Summary 339

Key Terms from the PMBOK® Guide 340 Chapter Review Questions 340

Discussion Questions 340

PMBOK® Guide Questions 341 Exercises 341

Example Project 342

References 342

Endnotes 343

Project Management in Action: Implications for Project Management in a Networked Organization Model 343

CHAPTER 13 Leading and Managing Project Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346

13.1 Acquire Project Team 348 13.1a Preassignment of Project Team Members 348 / 13.1b Negotiation for Project Team

Members 349 / 13.1c On-Boarding Project Team Members 350

13.2 Develop Project Team 350 13.2a Stages of Project Team Development 351 / 13.2b Characteristics of High-Performing

Project Teams 353 / 13.2c Assessing Individual Member Capability 355 / 13.2d Assessing Project Team Capability 355 / 13.2e Building Individual and Project Team Capability 358 / 13.2f Establishing Project Team Ground Rules 360

Contents xi

 

 

13.3 Manage Project Team 364 13.3a Project Manager Power and Leadership 364 / 13.3b Assessing Performance of

Individuals and Project Teams 366 / 13.3c Project Team Management Outcomes 366

13.4 Manage and Control Stakeholder Engagement 367

13.5 Managing Project Conflicts 369 13.5a Sources of Project Conflict 369 / 13.5b Conflict Resolution Process and Styles 370 /

13.5c Negotiation 371

Summary 372

Key Terms from the PMBOK® Guide 373 Chapter Review Questions 373

Discussion Questions 374

PMBOK® Guide Questions 374 Example Project 375

References 375

Endnotes 376

Project Management in Action: Centralizing Planning and Control in a Large Company After Many Acquisitions 377

CHAPTER 14 Determining Project Progress and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380

14.1 Project Balanced Scorecard Approach 382

14.2 Internal Project Issues 383 14.2a Direct and Manage Project Work 383 / 14.2b Monitor and Control Project

Work 385 / 14.2c Monitoring and Controlling Project Risk 387 / 14.2d Manage Communications 388 / 14.2e Control Communications 391

14.3 Customer Issues 392 14.3a Perform Quality Assurance 392 / 14.3b Control Quality 393

14.4 Financial Issues 400 14.4a Control Scope 400 / 14.4b Control Schedule and Costs 401 / 14.4c Earned Value

Management for Controlling Schedule and Costs 401

14.5 Using MS Project to Monitor and Control Projects 405 14.5a What Makes a Schedule Useful? 405 / 14.5b How MS Project Recalculates the

Schedule Based on Reported Actuals 405 / 14.5c Current and Future Impacts of Time and Cost Variance 406 / 14.5d Define the Performance Update Process 406 / 14.5e Steps to Update the Project Schedule 406

14.6 Replanning if Necessary 410

Summary 411

Key Terms from the PMBOK® Guide 412 Chapter Review Questions 412

Discussion Questions 412

PMBOK® Guide Questions 413 Exercises 414

Example Project 415

References 415

Endnotes 416

Project Management in Action: Controlling, Monitoring, and Reporting Projects at a Major Medical Center 416

xii Contents

 

 

CHAPTER 15 Finishing the Project and Realizing the Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420

15.1 Validate Scope 422

15.2 Close Procurements 424 15.2a Terminate Projects Early 424

15.3 Close Project 425 15.3a Write Transition Plan 425 / 15.3b Knowledge Management 426 / 15.3c Create

the Closeout Report 430

15.4 Post-Project Activities 430 15.4a Reassign Workers 430 / 15.4b Celebrate Success and Reward Participants 430 /

15.4c Provide Ongoing Support 431 / 15.4d Ensure Project Benefits Are Realized 431

15.5 Using MS Project for Project Closure 431

Summary 432

Key Terms from the PMBOK® Guide 432 Chapter Review Questions 432

Discussion Questions 433

PMBOK® Guide Questions 433 Exercises 434

Example Project 434

References 434

Endnotes 435

Project Management in Action: The Power of Lessons Learned 436

Appendix A PMP® and CAPM® Exam Prep Suggestions . . . . . . . . . . . . . . . . . . . . . . . 439 Appendix B Strengths Themes as Used in Project Management (available on the

textbook companion site) Glossary Terms from the PMBOK® Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451

PROJECT DELIVERABLES CHAPTER

Project Customer Tradeoff Matrix 1

Project Success Definition 1

Project SWOT Analysis 2

Project Elevator Pitch 2

Project Selection/Prioritization 2

Project Resource Assignment 2

Project Source Selection 2

Project Charter 4

Stakeholder Prioritization 5

Stakeholder Register 5

Project Communications Matrix 5

Project Meeting Agenda 5

Project Meeting Minutes 5

Contents xiii

 

 

PROJECT DELIVERABLES CHAPTER

Project Issues Log 5

Project Meeting Evaluation 5

Project Requirements Traceability Matrix 6

Project Scope Statement 6

Work Breakdown Structure 6

Change Request 6

Activity List 7

Network-Based Schedule 7

Gantt Chart Schedule 7

Project RACI Chart 8

Resource Histogram for Resolving Overloads 8

Project Crashing 8

Project Budget Aggregation 9

Project Risk Register 10

Project SIPOC 11

Project Quality Plan 11

Project Supplier Selection 12

Project Member Assessment 13

Project Team Assessment 13

Project Progress Report 14

Earned Value Analysis 14

Project Customer Feedback 15

xiv Contents

 

 

Preface

While project managers today still need to use many techniques that have stood the test of twenty to fifty years, they increasingly also need to understand the business need for a project, sort through multiple conflicting stakeholder demands, and know how to deal with rapid change, a myriad of communication issues, global and virtual project teams, modern approaches to quality improvement, and many other issues that are more chal- lenging than in projects of previous times.

Contemporary project management utilizes the tried-and-true project management techniques along with modern improvements such as the most current versions of Microsoft® Project Professional 2013 and the fifth edition of the Guide to the Project Management Body of Knowledge (PMBOK® Guide). Contemporary project management also uses many tools and understandings that come from modern approaches to quality and communications, expanded role definitions, leadership principles, human strengths, agile planning and execution, and many other sources. Contemporary project manage- ment is scalable, using simple versions of important techniques on small projects and more involved versions on more complex projects.

Distinctive Approach This book covers the topics of contemporary project management. It was also developed using contemporary project management methods. For example, when considering the topic of dealing with multiple stakeholders, every chapter was reviewed by students, practitioners, and academics. This allowed student learning, practitioner realism, and ac- ademic research and teaching perspectives to be simultaneously considered.

The practical examples and practitioner reviewers came from many industries and from many sizes and types of projects to promote the scalability and universality of con- temporary project management techniques.

New to This Edition

• Agile approach. The agile approach to project planning and management in which planning and implementing are done incrementally is introduced in Chapter 1. Throughout the book when the agile approach is different from the traditional, a margin icon and alternate color print are used to emphasize the difference. In this book’s contemporary approach to project management in practice, agile and tradi- tional are both used extensively.

• Updated to reflect the fifth edition of the PMBOK® Guide. All fifth edition PMBOK® Guide knowledge areas and processes are specifically included. The end of each chapter now contains ten PMBOK® Guide-type questions that are typical of what would be seen on PMP® and CAPM® exams. Appendix A gives study suggestions for the CAPM® and PMP® exams.

• New examples throughout the text. Each chapter starts with a motivating example for why the student would want to read the chapter and ends with an example of how a company actually used some tools and/or concepts from the chapter. There are many smaller examples throughout each chapter that illustrate specific points. Many of these are new examples from around the world and from many different industries such as the Fiesta® San Antonio Commission (Texas) and an IT rollout

xv

 

 

within a system of regional schools in Germany (Chapter 5); the rollout of a project management tool to a South African banking group (Chapter 7); the Panama Canal expansion (Chapter 10); the determination of supplier ratings at General Tool Company in Ohio (Chapter 11); and the control, monitoring, and reporting of projects at Cincinnati Children’s Hospital Medical Center (Chapter 14).

• Microsoft® Project Professional 2013 fully integrated into the fabric of eight chapters. Though techniques are demonstrated in a by-hand fashion, a demonstra- tion of how to automate them using Microsoft® Project Professional 2013 is shown in a step-by-step manner with numerous screen captures. On all screen captures, critical path activities are shown in contrasting color for emphasis.

• Project deliverables. A list of project deliverables that can be used for students assignments are included after the expanded table of contents. Many instructors may choose some but not all of these depending on class organization.

• Templates. Electronic templates for many of the techniques (student deliverables) are available on the textbook companion website. These Microsoft® Word and Excel documents can be downloaded and filled in for ease of student learning and for consistency of instructor grading.

Distinctive Features • PMBOK® Guide approach. This consistency with the established standard gives

students a significant leg up if they decide to become certified Project Management Professionals (PMPs®) or Certified Associates in Project Management (CAPMs®). All glossary definitions are from the PMBOK® Guide.

• Actual project as learning vehicle. One section at the end of each chapter lists deliverables for students to create (in teams or individually) for a real project. These assignments have been refined over the last decade while working with the local PMI® chapter, which provides a panel of PMP® judges to evaluate projects from a practical point of view. Students are encouraged to keep clean copies of all deliver- ables so they can demonstrate their project skills in job interviews. A listing of these deliverables is included after the detailed table of contents.

• Student oriented, measurable learning objectives. Each chapter begins with a listing of the most important points students should learn and identifies the PMBOK® topics covered in the chapter. The chapter material, end-of-chapter questions and problems, PowerPoint® slides, and test questions have all been updated to correlate to specific objectives.

• Blend of classical and modern methods. Proven methods developed over the past half century are combined with exciting new methods that are emerging from both industry and research.

• Executive, managerial, and associate roles. This book covers the responsibilities of many individuals who can have an impact on projects so aspiring project managers can understand not only their own roles, but also those of people with whom they need to deal.

• Balanced scorecard approach. Many factors are included in how project success is measured and how project results are determined. An adaptation of the balanced scorecard helps students understand how these fit together.

• Integrated example project. An example project has been developed to demonstrate many of the techniques throughout the book. That way students can see how the various project planning and control tools develop and work together.

xvi Preface

 

 

Organization of Topics The book is divided into three major parts. Part 1, Organizing Projects, deals with both the environment in which projects are conducted and getting a project officially approved.

• Chapter 1 introduces contemporary project management by first tracing the history of project management, then discussing what makes a project different from an ongoing operation. Various frameworks that help one understand projects—such as the PMBOK® Guide—are introduced, as well as the executive-, managerial-, and associate-level roles.

• Chapter 2 discusses how projects support and are an outgrowth of strategic plan- ning, how a portfolio of projects is selected and prioritized, how a client company selects a contractor company to conduct a project, and how a contractor company secures project opportunities from client companies.

• Chapter 3 deals with organizational capability issues of structure, life cycle, culture, and roles. The choices parent organizations make in each of these provide both opportunities and limitations to how projects can be conducted.

• Chapter 4 presents project charters in a step-by-step fashion. Short, powerful char- ters help all key participants to develop a common understanding of all key project issues and components at a high level and then to formally commit to the project. Charters have become nearly universal in initiating projects in recent years. Micro- soft® Project Professional 2013 is used to show milestone schedules within charters.

Part 2, Planning Projects, deals with all aspects of project planning as defined in the PMBOK® Guide. • Chapter 5 introduces methods for understanding and prioritizing various stake-

holder demands and for building constructive relationships with stakeholders. Since many projects are less successful than desired due to poor communications, detailed communication planning techniques are introduced along with meeting management.

• Chapter 6 helps students understand how to determine the amount of work the project entails. Specifically covered are methods for determining the scope of both the project work and outputs, the work breakdown structure (WBS) that is used to ensure nothing is left out, and how the WBS is portrayed using Microsoft® Project Professional 2013.

• Chapter 7 is the first scheduling chapter. It shows how to schedule activities by identifying, sequencing, and estimating the durations for each activity. Then critical path project schedules are developed, methods are shown for dealing with uncer- tainty in time estimates, Gantt charts are introduced for easier communications, and Microsoft® Project Professional 2013 is used to automate the schedule development and communications.

• Chapter 8 is the second scheduling chapter. Once the critical path schedule is de- termined, staff management plans are developed, project team composition issues are considered, resources are assigned to activities, and resource overloads are iden- tified and handled. Schedule compression techniques of crashing and fast tracking are demonstrated and multiple alternative scheduling techniques including Agile are introduced. Resource scheduling is demonstrated with Microsoft® Project Profes- sional 2013.

• Chapter 9 deals with project budgeting. Estimating cost, budgeting cost, and establishing cost controls are demonstrated. Microsoft® Project Professional 2013 is used for developing both bottom-up and summary project budgets.

Preface xvii

 

 

• Chapter 10 demonstrates project risk planning. It includes risk management plan- ning methods for identifying risks, establishing a risk register, qualitatively analyzing risks for probability and impact, quantitatively analyzing risks if needed, and decid- ing how to respond to each risk with contingency plans for major risks and aware- ness for minor risks.

• Chapter 11 starts by covering project quality planning. This includes explaining the development of modern quality concepts and how they distill into core project quality demands. Then the chapter covers how to develop a project quality plan and how to utilize the simple project quality tools. It then ties all of the planning chap- ters together with discussions of a project kick-off meeting, a baselined project plan, and the ways Microsoft® Project Professional 2013 can be used to establish and maintain the baseline.

Part 3, Performing Projects, discusses the various aspects that must be managed simultaneously while the project is being conducted.

• Chapter 12 deals with project supply chain management issues. Some of these issues, such as developing the procurement management plan, qualifying and selecting vendors, and determining the type of contract to use are planning issues, but for simplicity they are covered in one chapter with sections on how to conduct and control procurements and to improve the project supply chain.

• Chapter 13 deals with leading and managing both the project team and stakeholders. It includes acquiring and developing the project team, assessing both potential and actual performance of team members and the team as a whole, various types of power a project manager can use, and how to deal productively with project conflict.

• Chapter 14 is concerned with determining project results. This chapter starts with a balanced scorecard approach to controlling projects. Internal project issues covered include risk, change, and communication. Quality is the customer issue. Financial issues are scope, cost, and schedule, including how to use Microsoft® Project Pro- fessional 2013 for control.

• Chapter 15 deals with how to end a project—either early or on time. Included are validating to ensure all scope is complete, formally closing procurements and the project, knowledge management, and ensuring the project participants are rewarded and the clients have the support they need to realize intended benefits when using the project deliverables.

Instructor Resources To access the instructor resources go to www.cengage.com/login, log in with your faculty account username and password, and use ISBN 9781285433356 to search for and to add instructor resources to your account. Key support materials—instructor’s manual with solutions, test bank, data set solutions, regular and exhibit-only Power- Point® presentations—provide instructors with a comprehensive capability for customizing their classroom experience. All student resources are also available on the instructor companion site.

• Instructor’s Manual with Solutions. Prepared by Tim Kloppenborg and based on his years of experience facilitating the student learning experience in his own project management classes (undergraduate, MBA, hybrid, and continuing education on six continents), each chapter of the instructor’s manual includes an overview of learning objectives, detailed chapter outlines, teaching recommendations, and many detailed suggestions for implementing community-based projects into your project management class. Solutions are also provided for all of the end-of-chapter content.

xviii Preface

 

 

• Microsoft® Word Test Bank. Prepared for this edition by Joyce D. Brown, PMP® and Thomas F. McCabe, PMP® of the University of Connecticut, this compre- hensive test bank builds upon the original test bank created by Kevin Grant of the University of Texas at San Antonio. The test bank is organized around each chapter’s learning objectives. All test questions are consistent with the PMBOK®. Every test item is labeled according to its difficulty level and the major topical heading within the textbook that it relates to, allowing instructors to quickly construct effective tests that emphasize the concepts most significant for their courses. The test bank includes true/false, multiple choice, essay, and quantitative problems for each chapter. All question content is now tagged according to Tier I (Business Program Interdisciplinary Learning Outcomes), Bloom’s Taxonomy, and difficulty level.

• Cognero™ Test Bank. Cengage Learning Testing Powered by Cognero™ is a flexi- ble, online system that allows you to author, edit, and manage test bank content from multiple Cengage Learning solutions; create multiple test versions in an instant; deliver tests from your LMS, your classroom, or wherever you want. The Cognero™ test bank contains the same questions that are in the Microsoft® Word test bank.

• PowerPoint Presentation. Prepared by Deborah Tesch of Xavier University, the PowerPoint presentations provide comprehensive coverage of each chapter’s essential concepts in a clean, concise format. Key exhibits from the textbook are also included as an exhibit-only presentation to enhance in-class illustration and discussion of important concepts. Instructors can easily customize the PowerPoint presentation to better fit the needs of their classroom.

Student Resources Students can access the following resources by going to www.cengagebrain.com and searching 9781285433356

• Student Data Sets. The data sets contain Excel data that is used in the completion of select end-of-chapter problems. There are also templates in Word and Excel for completing various project planning and control tools.

• Other Project Management Resources. Additional material on the website includes definitions of strengths written from a project management perspective as assessed by Gallup’s StrengthsFinder assessment and classic examples that were used in previous editions of this text.

Acknowledgments A book-writing project depends on many people. Through the last three decades of project work I have been privileged to learn from thousands of people including students, faculty members, co-trainers, co-consultants, co-judges, clients, research partners, and others. Hundreds of individuals who have provided help in research and developing teaching methods are members of the Southwest Ohio and Miami Valley chapters of the Project Management Institute and of the Cincinnati and Louisville sections of the Center for Quality of Management. Many individuals have provided wonderful examples and those who wish to be acknowledged are named with their contributions.

I also want to acknowledge the wonderful help of various professionals at Cengage Learning including Clara Goosman (Product Manager), Kendra Brown (Content Devel- oper), and Chris Valentine (Media Developer). I also want to thank Charles McCormick,

Preface xix

 

 

Jr., retired Senior Acquisitions Editor, for his extensive help and guidance on the first and second editions of Contemporary Project Management.

Other individuals who have provided significant content are Lynn Frock, PMP®, of Lynn Frock and Company, who provided the Microsoft® Project material, Debbie Tesch of Xavier University, who provided the PowerPoint slides, Joyce D. Brown, PMP® and Thomas F. McCabe, PMP® of University of Connecticut, who revised the test bank and provided addi- tional PMBOK® questions to each chapter, and Kathryn N. Wells, Independent Consultant, CAPM® who provided the Chapter Review and Discussion Questions.

Special thanks are also due to all of the people whose feedback and suggestions have shaped this edition of Contemporary Project Management as well as the previous two editions:

Carol Abbott, Fusion Alliance, Inc.

Stephen Allen, Truman State University

Vittal Anantatmula, Western Carolina University

Loretta Beavers, Southwest Virginia Community College

Shari Bleure, Skyline Chili

Reynold Byers, Arizona State University

John Cain, Viox Services

Robert Clarkson, Davenport University

Nancy Cornell, Northeastern University

Steve Creason, Metropolitan State University

Jacob J. Dell, University of Texas at San Antonio

Scott Dellana, East Carolina University

Maling Ebrahimpour, Roger Williams University

Jeff Flynn, ILSCO Corporation

Jim Ford, University of Delaware

Lynn Frock, Lynn Frock & Company

Lei Fu, Hefei University of Technology

Patricia Galdeen, Lourdes University

Kathleen Gallon, Christ Hospital

Paul Gentine, Bethany College

Kevin P. Grant, University of Texas–San Antonio

Joseph Griffin, Northeastern University

Raye Guye, ILSCO Corporation

William M. Hayden Jr., University at Buffalo

Sarai Hedges, University of Cincinnati

Marco Hernandez, Dantes Canadian

Bill Holt, North Seattle Community College

Sonya Hsu, University of Louisiana Lafayette

Paul Hudec, Milwaukee School of Engineering

Anil B. Jambekar, Michigan Technological University

Dana Johnson, Michigan Technological University

Robert Judge, San Diego State University

xx Preface

 

 

David L. Keeney, Stevens Institute of Technology

George Kenyon, Lamar University

Naomi Kinney, MultiLingual Learning Services

Paul Kling, Duke Energy

Matthew Korpusik, Six Sigma Black Belt

Sal Kukalis, California State University—Long Beach

Young Hoon Kwak, George Washington University

Laurence J. Laning, Procter & Gamble

Dick Larkin, Central Washington University

Lydia Lavigne, Ball Aerospace

James Leaman, Eastern Mennonite University

Claudia Levi, Edmonds Community College

Marvette Limon, University of Houston Downtown

John S. Loucks, St. Edward’s University

Diane Lucas, Penn State University– DuBois Campus

S. G. Marlow, California State Polytechnic University

Daniel S. Marrone, SUNY Farmingdale State College

Chris McCale, Regis University

Abe Meilich, Walden University

Bruce Miller, Xavier Leadership Center

Ali Mir, William Paterson University

William Moylan, Eastern Michigan University

Warren Opfer, Life Science Services International

Peerasit Patanakul, Stevens Institute of Technology

Joseph Petrick, Wright State University

Kenneth R. Pflieger, Potomac College

Charles K. Pickar, Johns Hopkins University

Chris Rawlings, Bob Jones University

Natalee Regal, Procter & Gamble

Pedro Reyes, Baylor University

Linda Ridlon, Center for Quality of Management, Division of GOAL/QPC

David Schmitz, Milwaukee School of Engineering

Sheryl R. Schoenacher, SUNY Farmingdale State College

Jan Sepate, Kimberly Clark

Patrick Sepate, Summitqwest Inc.

William R. Sherrard, San Diego State University

Brian M. Smith, Eastern University

Kimberlee D. Snyder, Winona State University

Siti Arshad-Snyder, Clarkson College

Rachana Thariani, Atos-Origin

Nate Tucker, Lee University

Guy Turner, Castellini Company

Jayashree Venkatraman, Microsoft Corporation

Nathan Washington, Southwest Tennessee Community College

Kathryn N. Wells

And I especially want to thank my family members for their love and support: Bet, Kate Noel, Nick, and Andy.

—Timothy J. Kloppenborg

Preface xxi

 

 

About the Author

Timothy J. Kloppenborg is a Castellini Distinguished Professor of Management at Williams College of Business, Xavier University. He previously held faculty positions at University of North Carolina Charlotte and Air Force Institute of Technology and has worked temporarily at Southern Cross University and Tecnológico de Monterrey. He has over 100 publications including Strategic Leadership of Portfolio and Project Manage- ment, Project Leadership and Managing Project Quality. His articles have appeared in Project Management Journal, Journal of Management Education, Journal of General Management, SAM Advanced Management Journal, Information Systems Education Jour- nal, Journal of Managerial Issues, Quality Progress, Management Research News, and Journal of Small Business Strategy. Tim has been active with Project Management Insti- tute for 30 years and a PMP® since 1991. He is a retired U.S. Air Force Reserve officer who served in transportation, procurement, and quality assurance. Dr. Kloppenborg has worked with over 150 volunteer organizations, many directly and others through super- vising student projects. He has hands-on and consulting project management experience on six continents in construction, information systems, research and development, and quality improvement projects with organizations such Duke Energy, Ernst and Young LLP, Greater Cincinnati Water Works, Kroger, Procter and Gamble, TriHealth, and Texas Children’s Hospital. Dr. Kloppenborg has developed and delivered innovative cor- porate training, undergraduate, MBA, and Executive MBA classes in project manage- ment, leadership, teamwork, and quality improvement and he teaches PMP Prep classes. He holds a B.S. in business administration from Benedictine College, an MBA from Western Illinois University, and a Ph.D. in Operations Management from Univer- sity of Cincinnati.

xxiixxii

 

 

PART1 ORGANIZING PROJECTS organize / plan / perform

Chapter 1 Introduction to Project Management

Chapter 2 Project Selection and Prioritization

Chapter 3 Organizational Capability: Structure, Culture, and Roles

Chapter 4 Chartering Projects

1

 

 

CHA P T E R 1 Introduction to Project Management

I have returned from a successful climb of Mt. Aconcagua in Argentina; at 22,841 feet, it is the highest peak in the world outside of the Himalayas. While there, seven other climbers died; we not only survived, but our experience was so positive that we have partnered to climb together again.

During the three decades that I’ve been climbing mountains, I’ve also been managing projects. An element has emerged as essential for success in both of these activities: the element of discipline. By discipline, I am referring to doing what I already know needs to be done. Without this attribute, even the most knowledgeable and experienced will have difficulty avoiding failure.

The deaths on Aconcagua are an extreme example of the consequences associated with a lack of discipline. The unfortunate climbers, who knew that the predicted storms would produce very hazardous conditions, decided to attempt the summit instead of waiting. They did not have the discipline that

CHAPTER OBJECT I V ES

After completing this chapter, you should be able to:

• Define a project in your own words, using characteristics that are common to most projects, and describe reasons why more organizations are using project management.

• Describe major activities and deliverables at each project life cycle stage.

• List and define the ten knowledge areas and five process groups of the project management body of knowledge (PMBOK®).

• Delineate measures of project success and failure, and reasons for both.

• Contrast predictive or plan-driven and adaptive or change- driven project life cycle approaches.

• Identify project roles and distinguish key responsibilities for each.

© Pr es sm

as te r/S

hu tte rs to ck .c om

2

 

 

Topics:

• Project management introduction

• Project life cycle

• Stakeholders

• Project management processes

we demonstrated to act on our earlier decision to curtail summit attempts after the agreed-to turn-around time or in severe weather.

I’ve experienced similar circumstances in project management. Often I have found myself under pressure to cast aside or shortcut project management practices that I have come to rely on. For me, these practices have become the pillars of my own project management discipline. One of these pillars, planning, seems to be particularly susceptible to challenge. Managing projects at the Central Intelligence Agency for three decades, I adjusted to the annual cycle for obtaining funding. This cycle occasionally involved being given relatively short notice near the end of the year that funds unspent by some other department were up for grabs to whoever could quickly make a convincing business case. While some may interpret this as a circumstance requiring shortcutting the necessary amount of planning in order to capture some of the briefly available funds, I understood that my discipline required me to find a way to do the needed planning and to act quickly. I understood that to do otherwise would likely propel me toward becoming one of the two-thirds of the projects identified by the Standish Group in their 2009 CHAOS report as not successful. I understood that the top 2 percent of project managers, referred to as Alpha Project Managers in a 2006 book of the same name, spend twice as much time planning as the other 98 percent of project managers. The approach that I took allowed me to maintain the discipline for my planning pillar. I preplanned a couple of projects and had them ready at the end of the year to be submitted should a momentary funding opportunity arise.

A key to success in project management, as well as in mountain climbing, is to identify the pillars that will be practiced with discipline. This book offers an excellent set of project management methods from which we can identify those pillars that we will decide to practice with the required levels of discipline. I believe that project management is about applying common sense with uncommon discipline.

Michael O’Brochta, PMP, founder of Zozer Inc. and previously senior project manager at the Central Intelligence Agency

3

PMBOK® Guide

 

 

1-1 What Is a Project? Frequently, a business is faced with making a change, such as improving an existing work process, constructing a building, installing a new computer system, merging with another company, moving to a new location, developing a new product, entering a new market, and so on. These changes are best planned and managed as projects. So, what is a project?

A project is “a temporary endeavor undertaken to create a unique product, service, or result.”1 A project requires an organized set of work efforts that are planned in a level of detail that is progressively elaborated upon as more information is discovered. Projects are subject to limitations of time and resources such as money and people. Projects should follow a planned and organized approach with a defined beginning and ending. Project plans and goals become more specific as early work is completed. The output often is a collection of a primary deliverable along with sup- porting deliverables such as a house as the primary deliverable and warrantees and instructions for use as supporting deliverables. Each project typically has a unique combination of stakeholders—“an individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project.”2 Projects often require a variety of people to work together for a limited time, and all participants need to understand that completing the project will require effort in addition to their other assigned work.

Project management is “the application of knowledge, skills, tools and techniques to project activities to meet project requirements.”3 This includes work processes that initi- ate, plan, execute, control, and close work. During these processes, tradeoffs must be made among the following factors:

• Scope (size) • Schedule • Quality (acceptability of the results) • Resources • Cost • Risks4

When project managers successfully make these tradeoffs, the project results meet the agreed upon requirements, are useful to the customers, and promote the organization. Project management includes both administrative tasks for planning, documenting, and controlling work and leadership tasks for visioning, motivating, and promoting work associates. Project management knowledge, skills, and methods can be applied and modified for most projects regardless of size or application.

1-2 History of Project Management Projects of all sizes have been undertaken throughout history. Early construction projects included the ancient pyramids, medieval cathedrals, and Indian cities and pueblos. Other large early projects involved waging wars and building empires. In the development of the United States, projects included laying railroads, developing farms, and building cities. Many smaller projects have consisted of building houses and starting businesses. Throughout most of history, projects were conducted, but there was very little systematic planning and control. Some early projects were accomplished at great human and financial cost. Others took exceedingly long periods of time to complete.

Project management eventually emerged as a formal discipline to be studied and prac- ticed. In the 1950s and 1960s, techniques for planning and controlling schedules and costs were developed, primarily on huge aerospace and construction projects. During this time, project management primarily involved determining project schedules based

4 Part 1 Organizing Projects

 

 

on understanding the order in which work activities had to be completed. Many large manufacturing, research and development, government, and construction projects used and refined management techniques. In the 1980s and 1990s, several software companies offered ever more powerful and easier ways to plan and control project costs and sche- dules. Risk management techniques that were originally developed on complex projects have increasingly been applied in a simplified form to less complex projects.

In the last few years, people have realized more and more that communication and leadership play major roles in project success. Rapid growth and changes in the informa- tion technology and telecommunications industries especially have fueled massive growth in the use of project management in the 1990s and early 2000s. People engaged in banking, insurance, retailing, hospital administration, and many other service industries are now turning to project management to help them plan and manage efforts to meet their unique demands. Project planning and management techniques that were originally developed for large, complex projects can be modified and used to better plan and manage smaller pro- jects. Now project management is commonly used on projects of many sizes and types in a wide variety of manufacturing, government, service, and nonprofit organizations.

The use of project management has grown quite rapidly and is likely to continue growing. With increased international competition, customers demand to have their pro- ducts and services developed and delivered better, faster, and cheaper. Because project management techniques are designed to manage scope, quality, cost, and schedule, they are ideally suited to this purpose.

1-3 How Can Project Work Be Described? Project work can be described in the following ways:

• Projects are temporary and unique while other work, commonly called operations, is more continuous.

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Library of Congress Cataloging-in-Publication Data on File 10 9 8 7 6 5 4 3 2 1

ISBN 13: 978-1-323-60762-6

 

 

3 Communication Challenges in a Diverse, Global Marketplace LEARNING OBJECTIVES

After studying this chapter, you will be able to

1 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001b6f#P7001012451000000000000000001B75) Discuss the opportunities and challenges of intercultural communication.

2 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001bb4#P7001012451000000000000000001BBA) Define culture, explain how culture is learned, and define ethnocentrism and stereotyping.

3 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001bfb#P7001012451000000000000000001BFF) Explain the importance of recognizing cultural variations, and list eight categories of cultural differences.

4 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001c9b#P7001012451000000000000000001CA0) List four general guidelines for adapting to any business culture.

5 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001cc6#P7001012451000000000000000001CCA) Identify seven steps you can take to improve your intercultural communication skills.

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COMMUNICATION CLOSE-UP AT Kaiser Permanente

kp.org (http://kp.org)

Delivering quality health care is difficult enough, given the complexities of technology, government regulations, evolving scientific and medical understanding, and the variability of human performance. It gets even more daunting when you add the challenges of communication among medical staff and between patients and their caregivers, which often takes place under stressful circumstances. Those communication efforts are challenging enough in an environment where everyone speaks the same language and feels at home in a single cultural context—but they’re infinitely more complex in the United States, whose residents identify with dozens of different cultures and speak several hundred languages.

The Oakland-based health-care system Kaiser Permanente has been embracing the challenges and opportunities of diversity since its founding in 1945. It made a strong statement with its very first hospital when it refused to follow the then-common practice of segregating patients by race. Now, as the largest not-for-profit health system in the United States, Kaiser’s client base includes more than 10 million members from over 100 distinct cultures.

At the core of Kaiser’s approach is culturally competent care, which it defines as “health care that acknowledges cultural diversity in the clinical setting, respects members’ beliefs and practices, and ensures that cultural needs are considered and respected at every point of contact.” These priorities are woven into Kaiser’s organizational culture, structure, and business practices.

 

 

Kaiser Permanente CEO Bernard J. Tyson believes a culturally competent workforce is essential to the health provider’s aim of serving the diverse U.S. population.

REUTERS/Mario Anzuoni

Delivering this standard of care requires a mix of skills and knowledge that range from an awareness of medical issues of concern to specific cultures to language fluency (and translation skills in more than 100 languages) to the awareness needed to handle cultural traditions and values in a sensitive manner. Kaiser’s Centers of Excellence in Culturally Competent Care at facilities around the country are a good example of the extent the company takes to serve its diverse clientele. Each center focuses on one or more cultures prominent in a given locale, with a particular emphasis on improving care outcomes for population segments that have historically been underserved.

Kaiser believes that effectively serving a diverse client base requires an equally diverse staff. As the chairman and CEO Bernard J. Tyson explains, “The rich diversity of our organization reflects the diversity of the people we serve each and every day.” Nearly half the executive team are women, for example, and people of color make up nearly 60 percent of the company’s workforce.

In addition to helping Kaiser communicate more effectively with its customers, the strategic emphasis on diversity and inclusion is good for businesses. Its target market segments also happen to be among the country’s fastest-growing demographic groups, and Kaiser’s ability to connect with these audiences gives it an

important competitive advantage.1

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3.1 Understanding the Opportunities and Challenges of Communication in a Diverse World

LEARNING OBJECTIVE

1 Discuss the opportunities and challenges of intercultural communication.

Diversity includes all the characteristics that define people as individuals.

Kaiser Permanente (profiled in the chapter-opening Communication Close-Up) illustrates the opportunities and the challenges for business professionals who know how to communicate with diverse audiences. Although the concept is often framed in terms of ethnic background, a broader and more useful definition of diversity (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E25) includes

“all the characteristics and experiences that define each of us as individuals.”2

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001ED4) As one example, the pharmaceutical company Merck identifies 19 separate dimensions of diversity, including race, age, military experience, parenting status, marital status, and

thinking style.3 (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001ED6) As you’ll learn in this chapter, these characteristics and experiences can have a profound effect on the way businesspeople communicate.

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Culture Compass offers insights into more than 100 countries around the world.

Intercultural communication (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E35) is the process of sending and receiving messages between people whose cultural backgrounds could lead them to interpret verbal and nonverbal signs differently. Every attempt to send and receive messages is influenced by culture, so to communicate successfully, you need a basic understanding of the cultural differences you may encounter and how you should handle them. Your efforts to recognize and bridge cultural differences will open up business opportunities throughout the world and maximize the contributions of all the employees in a diverse workforce.

OPPORTUNITIES IN A GLOBAL MARKETPLACE

You will communicate with people from many other cultures throughout your career.

Chances are good that you’ll be working across international borders sometime in your career. Thanks to communication and transportation technologies, natural boundaries and national borders are no longer the impassable barriers they once were. Local markets are opening to worldwide competition as businesses of all sizes look for new growth opportunities outside their own countries. Thousands of U.S. businesses depend on exports for significant portions of their revenues. Every year, these companies export hundreds of billions of dollars’ worth of materials and merchandise, along with billions more in personal and professional services. If you work in one of these companies, you may well be called on to visit or at least communicate with a wide variety of people who speak languages other than English and who live in cultures quite different from what you’re used to. Among the United States’s top 10 global trading partners, only

Canada and Great Britain have English as an official language; Canada also has French as an official language.4

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Not surprisingly, effective communication is important to cross-cultural and global business. In a recent survey, nearly 90 percent of executives said their companies’ profits, revenue, and market share would all improve with better international communication skills. In addition, half of these executives said

communication or collaboration breakdowns had affected major international business efforts in their companies.5

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EDA) The good news here is that improving your cultural communication skills could make you a more valuable job candidate at every stage of your career.

ADVANTAGES OF A DIVERSE WORKFORCE

The diversity of today’s workforce brings distinct advantages to businesses:

• A broader range of views and ideas • A better understanding of diverse, fragmented markets • A broader pool of talent from which to recruit

Even if you never visit another country or transact business on a global scale, you will interact with colleagues from a variety of cultures and with a wide range of characteristics and life experiences. Many innovative companies are changing the way they approach diversity, from seeing it as a legal requirement (providing

equal opportunities for all) to seeing it as a strategic opportunity to connect with customers and take advantage of the broadest possible pool of talent.6

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EDC) Smart business leaders recognize the competitive advantages of a diverse workforce that offers a broader spectrum of viewpoints and ideas, helps businesses understand and identify with diverse markets, and enables companies to benefit from a wider range of employee talents. “It just makes good business sense,” says Gord Nixon, the

 

 

CEO of the Royal Bank of Canada.7

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REAL-TIME UPDATES

LEARN MORE BY VISITING THIS WEBSITE

Looking for jobs at diversity-minded companies?

DiversityWorking.com (http://DiversityWorking.com) connects job searchers with companies that recognize the value of diverse workforces. Go to www.real-timeupdates.com/bct14 (http://www.real-timeupdates.com/bct14) and select Learn More in the Students section.

Diversity is simply a fact of life for all companies. The United States has been a nation of immigrants from the beginning, and that trend continues today. The western and northern Europeans who made up the bulk of immigrants during the nation’s early years now share space with people from across Asia, Africa, Eastern Europe, and other parts of the world. Across the United States, the term minority as it is traditionally applied to nonwhite residents makes less and less sense every year. Non-Hispanic white Americans now account for about 60 percent of the overall U.S. population, but that figure will drop below 50 percent in

two or three decades. Caucasian Americans already make up less than half the population in hundreds of cities and counties.8

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However, you and your colleagues don’t need to be recent immigrants to constitute a diverse workforce. Differences in everything from age and gender identification to religion and ethnic heritage to geography and military experience enrich the workplace. Immigration and workforce diversity create advantages—and challenges—for business communicators throughout the world.

REAL-TIME UPDATES

LEARN MORE BY EXPLORING THIS INTERACTIVE WEBSITE

Take a closer look at how the United States is changing

The U.S. population is aging and becoming more diverse; dive into the details with this interactive presentation. Go to www.real-timeupdates.com/bct14 (http://www.real-timeupdates.com/bct14) and select Learn More in the Students section.

THE CHALLENGES OF INTERCULTURAL COMMUNICATION

Today’s increasingly diverse workforce encompasses a wide range of skills, traditions, backgrounds, experiences, outlooks, and attitudes toward work—all of which can affect communication in the workplace. Supervisors face the challenge of connecting with these diverse employees, motivating them, and fostering cooperation and harmony among them. Teams face the challenge of working together closely, and companies are challenged to coexist peacefully with business partners and with the community as a whole.

A company’s cultural diversity affects how its business messages are conceived, composed, delivered, received, and interpreted.

The interaction of culture and communication is so pervasive that separating the two is virtually impossible. The way you communicate is deeply influenced by the culture in which you were raised. The meaning of words, the significance of gestures, the importance of time and space, the rules of human relationships—these and many other aspects of communication are defined by culture. To a large degree, your culture influences the way you think, which

naturally affects the way you communicate as both a sender and a receiver.9

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EE2) Intercultural communication is much more complicated than simply matching language between sender and receiver; it goes beyond mere words to beliefs, values, and emotions.

Culture influences everything about communication, including

• Language • Nonverbal signals • Word meaning • Time and space issues • Rules of human relationships

Elements of human diversity can affect every stage of the communication process, from the ideas a person deems important enough to share to the habits and expectations of giving feedback. In particular, your instinct is to encode your message using the assumptions of your culture. Members of your audience, however,

decode your message according to the assumptions of their culture. The greater the difference between cultures, the greater the chance for misunderstanding.10

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Throughout this chapter, you’ll see examples of how communication styles and habits vary from one culture to another. These examples are intended to illustrate the major themes of intercultural communication, not to give an exhaustive list of the styles and habits of any particular culture. With an understanding of these major themes, you’ll be prepared to explore the specifics of any culture.

 

 

3.2 Developing Cultural Competency

LEARNING OBJECTIVE

2 Define culture, explain how culture is learned, and define ethnocentrism and stereotyping.

Cultural competency requires a combination of attitude, knowledge, and skills.

Cultural competency (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E15) includes an appreciation for cultural differences that affect communication and the ability to adjust one’s communication style to ensure that efforts to send and receive

messages across cultural boundaries are successful. In other words, it requires a combination of attitude, knowledge, and skills.11

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EE6) Kaiser Permanente, profiled at the beginning of the chapter, is a good example of a contemporary organization that values cultural competency so highly that it makes it a high-level strategic imperative.

Achieving cultural competency can take time and effort, but the good news is you’re already an expert in culture—at least the culture in which you grew up. You understand how your society works, how people are expected to communicate, what common gestures and facial expressions mean, and so on. The bad news is that because you’re such an expert in your own culture, your communication is largely automatic; that is, you rarely stop to think about the communication rules you’re following. An important step toward successful intercultural communication is becoming more aware of these rules and the way they influence your communication.

REAL-TIME UPDATES

LEARN MORE BY READING THIS INFOGRAPHIC

How not to behave in 15 countries

These brief and occasionally humorous pointers will help keep you out of trouble. Go to real-timeupdates.com/bct14 (http://real-timeupdates.com/bct14) and select Learn More in the Students section.

UNDERSTANDING THE CONCEPT OF CULTURE

Culture is a shared system of symbols, beliefs, attitudes, values, expectations, and behavioral norms.

Culture (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E21) is a shared system of symbols, beliefs, attitudes, values, expectations, and norms for behavior. Your cultural background influences the way you prioritize what is important

in life, helps define your attitude toward what is appropriate in a given situation, and establishes rules of behavior.12

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You belong to several cultures, each of which affects the way you communicate.

Actually, you belong to several cultures. In addition to the culture you share with all the people who live in your own country, you belong to other cultural groups, including an ethnic group, possibly a religious group, and perhaps a profession that has its own special language and customs. With its large population and long history of immigration, the United States is home to a vast array of cultures (see Figure 3.1

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001bb4#P7001012451000000000000000001BCE) ).13

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EEA) In contrast, Japan is

much more homogeneous, having only a few distinct cultural groups.14

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Members of a given culture tend to have similar assumptions about how people should think, behave, and communicate, and they all tend to act on those assumptions in much the same way. Cultures can vary in their rate of change, degree of complexity, and tolerance toward outsiders. These differences affect the level of trust and openness you can achieve when communicating with people of other cultures.

You learn culture both directly (by being instructed) and indirectly (by observing others).

People learn culture directly and indirectly from other members of their group. As you grow up in a culture, you are taught by the group’s members who you are and how best to function in that culture. Sometimes you are explicitly told which behaviors are acceptable. At other times you learn by observing which values

 

 

work best in a particular group. In these ways, culture is passed on from person to person and from generation to generation.15

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Cultures tend to offer views of life that are both coherent (internally logical) and complete (able to answer all of life’s big questions).

In addition to being automatic, culture tends to be coherent; that is, a culture seems to be fairly logical and consistent when viewed from the inside. Certain norms within a culture may not make sense to someone outside the culture, but they probably make sense to those inside. Such coherence generally helps a culture function more smoothly internally, but it can create disharmony between cultures that don’t view the world in the same way.

Finally, cultures tend to be complete; that is, they provide their members with most of the answers to life’s big questions. This idea of completeness dulls or even

suppresses curiosity about life in other cultures. Not surprisingly, such completeness can complicate communication with other cultures.16

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Figure 3.1 Language Diversity in the United States

Language is one of the distinguishing factors of population diversity. This chart shows the trend in the relative ranking of a number of languages other than English spoken in the United States since 1980.

Source: “Top Languages Other than English Spoken in 1980 and Changes in Relative Rank, 1990-2010,” U.S. Census Bureau, 14 February 2013, www.census.gov (http://www.census.gov) .

OVERCOMING ETHNOCENTRISM AND STEREOTYPING

Ethnocentrism is the tendency to judge all other groups according to the standards, behaviors, and customs of one’s own group.

Ethnocentrism (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E29) is the tendency to judge other groups according to the standards, behaviors, and customs of one’s own group. Given the automatic influence of one’s own culture,

when people compare their culture with others, they often conclude that their own is superior.17

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EF2) An even more extreme reaction is xenophobia (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E41) , a fear of strangers and foreigners. Clearly, businesspeople who take these views are not likely to communicate successfully across cultures.

Stereotyping is assigning generalized attributes to an individual on the basis of membership in a particular group.

Distorted views of other cultures or groups also result from stereotyping (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E3D) , assigning a wide

 

 

range of generalized attributes to an individual on the basis of membership in a particular culture or social group. For instance, assuming that an older colleague will be out of touch with the youth market or that a younger colleague can’t be an inspiring leader would be stereotyping age groups.

Cultural pluralism is the acceptance of multiple cultures on their own terms.

Those who want to show respect for others and to communicate effectively in business need to adopt a more positive viewpoint in the form of cultural pluralism (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E1D) —the practice of accepting multiple cultures on their own terms. When crossing cultural boundaries, you’ll be more effective if you move beyond simple acceptance and adapt

your communication style to that of the new cultures you encounter—even integrating aspects of those cultures into your own.18

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EF4) A few simple habits can help:

You can avoid ethnocentrism and stereotyping by avoiding assumptions, withholding judgment, and accepting differences.

• Avoid assumptions. Don’t assume that others will act the same way you do, use language and symbols the same way you do, or even operate from the same values and beliefs. For instance, in a comparison of the 10 most important values in three cultures, people from the United States had no values in

common with people from Japanese or Arab cultures.19

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• Withhold judgment. When people act differently, don’t conclude that they are in error or that their way is invalid or inferior. • Acknowledge distinctions. Don’t ignore the differences between another person’s culture and your own.

Unfortunately, overcoming ethnocentrism and stereotyping is not a simple task, even for people who are highly motivated to do so. Moreover, research suggests

that people often have beliefs and biases that they’re not even aware of—and that may even conflict with the beliefs they think they have.20

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3.3 Recognizing Variations in a Diverse World

LEARNING OBJECTIVE

3 Explain the importance of recognizing cultural variations, and list eight categories of cultural differences. You can begin to learn how people in other cultures want to be treated by recognizing and accommodating eight main types of cultural differences: contextual, legal and ethical, social, nonverbal, age, gender, religious, and ability.

CONTEXTUAL DIFFERENCES

Cultural context is the pattern of physical cues, environmental stimuli, and implicit understanding that conveys meaning between members of the same culture.

Every attempt at communication occurs within a cultural context (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E19) , which is the pattern of physical cues, environmental stimuli, and implicit understanding that convey meaning between two members of the same culture. However, cultures around the world vary widely in the role that context plays in communication.

High-context cultures rely heavily on nonverbal actions and environmental setting to convey meaning; low-context cultures rely more on explicit verbal communication.

In a high-context culture (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E2D) , people rely less on verbal communication and more on the context of nonverbal signals and environmental setting to convey meaning. For instance, a Chinese speaker often expects

the receiver to discover the essence of a message and uses indirectness and metaphor to provide a web of meaning.21

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EFA) The indirect style can be a source of confusion during discussions with people from low-context cultures, who are more accustomed to receiving direct answers. Also, in high- context cultures the rules of everyday life are rarely explicit; instead, as individuals grow up, they learn how to recognize situational cues (such as gestures and

tone of voice) and how to respond as expected.22

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001EFC) The primary role of

communication in high-context cultures is building relationships, not exchanging information.23

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In a low-context culture (http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001E39) such as the United States, people rely more on verbal communication and less on circumstances and cues to convey meaning. In such cultures rules and expectations are usually

spelled out through explicit statements such as “Please wait until I’m finished” or “You’re welcome to browse.”24

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001F00) The primary task of

communication in low-context cultures is exchanging information.25

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Contextual differences are apparent in the way businesspeople approach situations such as decision making, problem solving, negotiating, interacting among

levels in the organizational hierarchy, and socializing outside the workplace.26

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001F04) For instance, businesspeople in low-context cultures tend to focus on the results of the decisions they face, a reflection of the cultural emphasis on logic and progress (for example, “Will this be good for our company? For my career?”). In comparison, higher-context cultures emphasize the means or the method by which a decision

will be made. Building or protecting relationships can be as important as the facts and information used in making the decisions.27

(http://content.thuzelearning.com/books/Bovee.7626.18.1/sections/p7001012451000000000000000001e0f#P7001012451000000000000000001F06) Consequently, negotiators working on business deals in such cultures may spend most of their time together building relationships rather than hammering out contractual details.

The distinctions between high and low context are generalizations, of course, but they are important to keep in mind as guidelines. Communication tactics that work well in a high-context culture may backfire in a low-context culture and vice versa.

LEGAL AND ETHICAL DIFFERENCES

Cultural context influences legal and ethical behavior, which in turn can affect communication. For example, the meaning of business contracts can vary from culture to culture. Whereas a manager from a U.S. company would tend to view a signed contract as the end of the negotiating process, with all the details resolved, his or her counterpart in many Asian cultures might view the signed contract as an agreement to do business—and only then begin to negotiate the