RAI BUSINESS SCHOOL

ASSIGNMENT

ON

SUBMITTED TO:
Mr. RAMAN SACHDEVA
RAI BUSINESS SCHOOL
NEW DELHI

SUBMITTED BY:
MUKESH KUMAR s/o
Mr. LALLU YADAV
MBA SEM-4th PTU
(IND-INT)
Question No.1: Explain the nature of following portfolio planning tools:

a) BCG product portfolio Matrix

b) General Electric Stoplight Matrix

Answer:

A).Boston Consultancy Group (BCG Matrix):

This product portfolio matrix classifies product lines into four categories. The BCG models
suggest that organizations should have a healthy balance of products within their range. The
Boston Consultancy Group classified these products as following:

Dogs:
These are products which have low market shares and low market growth rates. The
options for many companies is to phase these products out, however some organization do go for
the strategy of re-inventing and injecting new life into the product. (See Heinz Case Study)

Question Mark/Problem Child:

These are products with low market share but operate in high market growth rates. The
company puts a lot of resources in this product in the hope that it will eventually increase market
share and generate cash returns in the future.

Star:
Stars have high market shares that operate in growing markets. The product at this stage
should be generating positive returns for the company.

Cash Cow:
Cash Cow is products at the mature stage of the lifecycle, they generate high amounts of
cash for the company, but growth rate is slowing. There are chances that the product may slip
into decline; appropriate marketing mix strategies should be employed to try to prevent this from
happening.
 B.C.G. analysis is a technique used in brand marketing, product management, and
strategic management to help a company decide what products to add to its product portfolio. It
involves rating products according to their relative market share and market growth rate. The
products are then plotted on a two dimensional map. Products with high market share but low
growth are referred to as "cash cows". Products with high market share and high growth are
referred to as "stars". Products with low market share in a low growth market are referred to as
"dogs" and should usually be managed for value that is as much money should be harvested from
those products with low or no investments. Products with low market share but high market
growth are referred to as "question marks" or "problem children". It is crucial for those products
or brands to improve their market share before the market growth is consumed by the
competition. The technique can also be applied to a portfolio of companies.
 BCG Matrix

b).General Electric Stoplight Matrix

One general approach for evaluating business opportunities is the SWOT analysis
(strengths, weaknesses, opportunities and threats). This compares the strengths and weaknesses
of your company with the opportunities and threats it faces relative to suppliers, customers, and
competitors and complementary / collaborators / allies / partners. One looks for business
opportunities where the company’s strengths and opportunities are highest relative to weaknesses
and threats.
The Stoplight Matrix is a similar, but broader, analysis that has been variously attributed to
General Electric, Shell Oil Co. and McKenzie & Co.* an organization can use this process to
Evaluate diverse opportunities within a common framework. It works as follows:

A “green light” means “go” — the opportunity is good enough to pursue, although there
may be better alternatives. A “yellow light” means “caution” — the opportunity might or
might not be worth pursuing. A “red light” means “stop” — it is a loser.

The Stoplight Matrix is an open-ended procedure in every way. You decide which factors
to evaluate, you decide how to evaluate those factors, and you decide how to combine the
evaluations into an overall score of high, medium, or low. No criterion is fixed. Obviously, the
results are subjective. The procedure is not intended to replace managerial wisdom or to make a
decision. It is simply intended to help consider factors that might otherwise be overlooked when
performing a SWOT analysis. It also provides a relatively uniform and repeatable procedure that
can be used to evaluate many different types of opportunities, and it is a tool that can be
reapplied periodically to review ongoing company performance and to evaluate new or evolving
opportunities and threats.
Question No.2: What are the Pros and Cons of Conglomerate diversification?

Answer:

The pros and cons of diversification

We are all aware of the famous saying: “Don’t put all your eggs in one basket.” When a
firm operates in many businesses, the downs in one can be compensated by the ups in another.
According to portfolio theory, unsystematic risk, the risk particular to a company or an industry,
can be eliminated by building a diversified basket of stocks. In fact, Harry Markowitz, William
Sharpe and Merton Miller won the Nobel prize in 1987 for their theory of portfolio
diversification. But the debate continues. Is it better for companies to be in many businesses or
for investors to maintain a diversified portfolio? For example, as the sub prime crisis has grown
in scale and scope, people are asking whether Citigroup, the global financial conglomerate has
become too unwieldy to manage. In the case of another global bank, analysts are debating
whether investment banking and wealth management can be handled simultaneously by the same
organization. Similar questions have been raised about some of the other global financial
services firms as well.
A bit of history is in order here to understand how our thinking on diversification has
evolved in the past 50 years. In the 1950s, the development of management principles and the
professional education of managers led to the belief that general management skills provided the
justification for diversification. Diversified companies and conglomerates were seen to add
value through the skills of their professional top managers, who applied modern management
techniques and generalized approaches to a wide variety of businesses across different industries.
During the late 1960s, however, the performance of many conglomerates weakened, and
a new approach to the corporate management of diversity was sought. Portfolio planning
techniques helped many companies improve capital allocation across businesses with different
strategic positions, and led to the idea of balanced portfolio management. But managing
businesses facing different strategic issues, this way, proved fairly complex and challenging.
In the 1980s, many consultants and academicians argued that risk reduction could be
better achieved by individual investors. There was no need for companies to diversify as they
were not creating shareholder value. They were in favour of diversified businesses being broken
into smaller units, each of which could concentrate on the industry and activities it knew best.
Poor corporate performance became a critical issue. There was a wave of takeovers, corporate
break-ups, and restructuring back to core businesses driven by a resolve to stick to the knitting.
Two other themes became associated with diversification - synergy and core competences.
Synergy dealt with the fit between the existing and new businesses. By moving into a new
business, could costs be cut or revenues increased? Core competence referred to the bundle of
skills and expertise which an organization had developed over time. Diversification seemed to
make a lot of sense when the core competencies could be leveraged and extended to manage the
new business.
Management gurus also mooted the concept of the dominant strategic logic of a portfolio,
and its compatibility with the approaches of top management. The core of the argument was that
there should be a strategic logic tying all the businesses together. The businesses in the portfolio
had to be worth more under the management of the company in question than they would be
under any other ownership. Achieving this goal, might involve restructuring of portfolios to
allow more uniformity in dominant logic and management style, more effective means of
realizing synergies and more sharing of core competences.
How do we sum up all these arguments? Clearly, even at the risk of sounding bookish, it
would be correct to say that diversification is advisable only if it is likely to have a beneficial
impact on the existing businesses. Benefits may come in various forms - better distribution,
improved company image, defense against competitive threats and improved earnings stability.
When entering a new business, the firm must be able to offer a distinct value proposition in the
form of lower prices, better quality or more attractive features. Alternatively, it should have
discovered a new niche or found a way to market the product in an innovative way. Jumping into
a new business just because it is growing fast or current profitability is high, is a risk that is best
avoided. Indeed, opportunistic diversification has been the main reason for the downfall of
several Indian entrepreneurs in various businesses including financial services, granite.

Question No.3: Discuss the suggestions helpful in scouting for project ideas.

Answer:
SCOUT IDEAS:
Requirement 6 of the Chief Scout Award requires you to plan, report, execute and
summarize your own challenging program in the four activity areas. Remembering that a
challenging program for you might not be an interesting or challenging program for someone
else, check with your ideas parents and troop scouter.

Below are some activities to give you some ideas.

Citizenship ideas
 Demonstrate leadership in your project by making key decisions in selecting a project,
submitting a proposal, getting proper approval, obtaining financing, obtaining other
volunteers if needed, executing your project and following up with a summary.
 Organize work for your patrol at the LDS Bishop’s Storehouse stocking shelves or
cleaning up.
 Work with another organization such as Rotary or CLOCA.
 Volunteer to help a candidate in an election campaign.
 Volunteer to help staff the weekend run to end breast cancer.
 Volunteer to read at the children’s hospital once a week for a month.
 Check with your Alderman for volunteer initiatives in your area.
 Volunteer at the local pool or recreation centre to help run a youth after-school drop-in
program for six weeks.
 Research and write a report on a past prime minister of Canada.
Leadership ideas:
 Plan and run a Troop activity or event of your choosing. Submit your plan to the Troop
Scouter, with details of what, where, when and any costs. Provide a notice of your
activity to other Scouts. Evaluate and provide a summary of your event about what you
did, how it went and what you learned.
 Sit on your student council at school.
 Help run intramurals or other sports at school.
 Attend the town or city council meetings for a month and report on the issues discussed
and leadership styles of the council members.
 Interview your Alderman, MLA or MP about the qualities of a good leader. Report to the
troop about it.
 Demonstrate Active Leadership - Show a consistent ability and good attitude toward
providing active leadership within the Troop. This might include
 wearing the uniform properly;
 providing a good example in language, attitude and behaviour;
 show a willingness to help less experienced Scouts gain confidence in their own abilities;
 Consistently fulfill duties of Patrol Leader, Assistant Patrol Leader or other positions
within the Troop with strong attendance.
 Discuss the topic in your patrol: a great leader is also a great follower.

Personal Development ideas:

• Develop and follow a personal fitness program for at least six months. Document your
program.
• Earn one or more of the Personal Development category badges you have not already
earned.
• Improve your overall grade in school by 5% over two reporting periods.
Outdoor Skills ideas:
Earn one or more of the Outdoors category badges you have not already earned.

Plan your own camp or expedition.

Plan some outdoor patrol activities which will be without your leaders. Please exclude any water
activities.

Develop a skill in an outdoor backwoods sport and report on it to the court of honor.

Volunteer to help plan and run a camp for a younger group.

Collect 50km in hiking camps or equivalents since your Voyageur Level.

Question No.4: How would you characterize the market?

Answer:
 The world of commercial activity where goods and services are bought and sold;
"without competition there would be no market"; "they were driven.
 Engage in the commercial promotion, sale, or distribution of; "The company is marketing
its new line of beauty products"
 The customers for a particular product or service; "before they publish any book they try
to determine the size of the market for it"
 Buy household supplies; "We go marketing every Saturday"
 Grocery store: a marketplace where groceries are sold; "the grocery store included a meat
market"
 Deal in a market.
 The securities markets in the aggregate; "the market always frustrates the small investor"
 Commercialize: make commercial; "Some Amish people have commercialized their way
of life"
 Marketplace: an area in a town where a public mercantile establishment is set up
 A market characterized by falling prices for securities.
 In investing, financial markets are commonly believed to have market trends that can be
classified as primary trends, secondary trends.
 A stock market where a majority of investors are selling ("bears"), causing overall stock
prices to drop.
 A period of generally declining market prices.
 A market that is declining over time (a bear is seen as clawing the market down). The
opposite to a bull market.
 A bear market is a prolonged period when stock prices generally fall.
 A market where prices are declining.
 A market is any one of a variety of different systems, institutions, procedures, social
relations and infrastructures whereby persons trade.
  The Market is a New Zealand drama series set in South Auckland's Otara Markets. The
show is centered on two families.
Question No.5: Discuss various methods of Demand forecasting.
Answer:
Consumers’ survey:
 Complete Enumeration Survey method:
DF = (ID1 + ID2 + ID3+ ….IDn)
Where DF = demand forecast for all households, ID = intended demand of household. Ex.
Census survey
 Simple Random Sampling method:
DF = (ID1 + ID2 + ID3+ ….IDn) N/n where N is population and n is sample picked up.
Advantages: takes less time and money
Disadvantage: unwillingness of consumers to answer, uncertainty, Biased answers

Market Experiment:
 Test Market: This is actual experiment where shops are open in different localities and
then consumers’ reactions are observed and recorded. Ex. Little heart biscuits (Britannia)
 Clinic Method: or Simulation method or laboratory experiment, involves providing
token money to a set of consumers and asking them to shop around in a simulated
market.

End Use Method:

 Steps: identify the use of the intermediate product in the final product
 Identify the demand in the national and international markets.
 Then project the sale of the product under consideration.

Sales Force Opinion Method:

 When any Oil Engines manufacturing companies want to produce trolley, gathering
information from the sales force is Sales force opinion method or collective opinion.
 The men who are closest to the market are questioned and their responses aggregated.

Experts’ Opinion Survey Method:

 Simple Method: Researchers identifies the ‘experts’ on the commodity whose
demand forecast is being attempted and probes with them on the likely demand for
the product in the forecast period.
 Delphi Method:

Statistical Survey method:

 Graphical Method: under this method, a graph of historical data on the variable
under forecasting is drawn, it is then extrapolated visually upto the forecast period.

Moving Averages:
 The level of sales in May, June, July, and August were 84, 92, 83, and 89,
respectively. What is the four-period moving average forecast of sales in September?
 Answer: [(84 + 92 + 83 + 89)/4 = 348/4 = 87]
Smoothing Average:
 S = a (this year’s sales) + (1- a) this year’s forecast
 A is smoothing range which is from 0.0 to 1.0
 Forecasted sales = 350 units, Actual sales = 320 units
 If Smoothing constant is .3.3 (320) + .7 (350) = 341 units of product
 The forecast level of sales for the month of October was 140 units. Actual sales in
October turned out to be 130 units. Use an exponential smoothing coefficient of 0.60
to forecast sales for November.
 Answer: [(130)(0.60) + (140)(0.40) = 134]

Barometric Technique:
 When any economic variable is under forecast, the related leading indicators forecast
are taken. This is based on the idea that future can be predicted from certain events
occurring in the present.
 Ex. Birth rate of children is the leading series for demand of seats in schools.
 There three types of indicators
 Leading indicators, coincident and lagging indicators.

Leading indicators:
These are the variables whose movement precedes the movement of some other related
variable. In the Estimation of GDP the leading indicator is aggregate investment in all the three
sectors.
 The world’s interest rate is the leading indicator for the credit expansion of
contraction in India
Index Numbers:
 To overcome some of problems of leading indicator method, the below two methods
are developed.
 Diffusion indices:
Identify the leading indicators
If there are say 10 proper leading indicators for forecasting, by plotting it was found that 7
indices show a rise,
(7/10 x 100) = 70%. This means that when the index exceeds 50%, all the 7 indices are rising
and so the variable under forecast will also have an upward trend.

Regression Method:
 The objective of the forecast: to estimate the export of good X
 Find the various variables which will influence the export of good X.
 Example National income (a), domestic prices of X (b), International prices of X (d)
and whether (d).
 Regression analysis was used to estimate the following linear trend equation:
 St = 10.5 + 0.25 t
 Use this equation to forecast the value of the dependent variable in time period 10.
 Answer: [10.5 + (0.25)(10) = 13]
Question No.6: What aspects are considered in technical analysis?

Answer: The technical analysis aspects are discussed below:

Psychology:
At first blush technical analysis as applied to the stock market seems to be a bunch of
voodoo. Interpreting chart patterns and attempting to predict future movement based on past
behavior is considered by some to be no less rational than traditional fundamental analysis. One
of the most succinct explanations of why many believe technical analysis works is that
PSYCHOLOGY drives the markets. Buying and selling of stocks, futures, and derivatives sets a
market in motion as participants negotiate a common price point. The exchange of goods is more
or less driven by human psychology and future expectations.
The primal emotions upon which expectations are built are fear and greed, which in
effect compels humans to repeat the mistakes and triumphs of the past. The watershed moment
came as Charles Mackay published his 1841 book Extraordinary Popular Delusions and the
Madness of Crowds in which he detailed the Dutch tulip mania of 1637, and 1720 meteoric rise
in the stock prices of the Mississippi and South Seas Companies. The South Seas bubble was
initially started as the company was given exclusive access to the South American trade and new
world colonies. The frenzy that resulted as both peasants and lords feverishly snapped up shares
inevitably resulted in credit defaults, bankruptcies, and economic hardship. When Sir Isaac
Newton was asked about the continuance of the rising of South Sea stock.....He answered 'that he
could not calculate the madness of people'. (Spence, Anecdotes, 1820, p368) Since then, history
has only to reference the stock mania which gripped the United States in 1929, the 1989
Japanese Nikkei, the 2000 technology bubble, and the 2007 global real estate boom. History is
littered with booms and busts - manias that lead to unsustainable price levels based purely in our
primal emotions.
Charts:
Charts are the heart and soul of technical analysis. Many experienced traders wax
poetically about how 'charts talk to them' and make bold statements about the future direction of
a stock based on examination of price history. Yet to the untrained eye, these same graphs are
but squiggles across a page with no discernible order. Beneath the surface, it is actually an
accumulated history of human behavior, a voting mechanism of sorts. The technician is able to
see how individuals reacted to earnings reports, economic conditions, and political ramifications
over time. There is no need to re-examine those events, since informed market participants have
cast their votes as prices over time reflect different expectations.
A chart represents of the demand and supply of a stock or commodity. The horizontal axis
represents time, with the price drawn as a line connecting consecutive closing values. More
sophisticated charts will show more detail; bar charts also include the range from high to low,
candlestick charts include the open price along with a color and fill which reflects change
relative to the previous close. A chartist will examine clusters of these marks and categorize
them into behavioral patterns. The nomenclature used depends on the chart style as well as the
theory to describe price action.
Trends:
There is a vital piece of information that is revealed when confirming support or
resistance. It is the notion of a trend. An uptrend is a situation in which we experience rising
prices in the form of new highs and shallow pullbacks. Similarly, a downtrend has lower peaks
and prices continue to make new lows. If the price oscillates without any clear direction, it is said
to be range-bound or in consolidation. Decreasing ranges between highs are lows are considered
triangle patterns. - Uptrend / downtrend / oscillating / triangle examples -
At certain junctures, prices seem to accelerate either up or down and go for long stretches
without a pause. This is considered an impulse and often lead to incredible gains or drops in
price. These impulses cannot continue indefinitely, and at some point must pause or reverse
direction. During these periods, it lacks clear direction and is considered in a consolidation
sequence. Even though it seems that prices should continue forever, these pauses are in fact quite
healthy. They serve a vital role in forecasting price targets once the trend continues or reverses.
- Chart delineating impulse vs. consolidation -
Patterns:
Much in the way that stars are strung together in different ways across the sky to create
constellations, price spikes are examined to 'paint a picture' of a known configuration. Some of
the most common patterns are channels and triangles. In both of these cases, a minimum of four
points are required - two spike highs and two spike lows. The lines which connect the extremes
are extended to the right (where no price history exists), so we have some notion of where prices
should be at some time in the future. In some cases, the lines are almost horizontal, which
implies a trading range. Parallel lines which slant up or down indicate a trend direction within a
channel. If lines converge, it is considered a triangle, and there are special cases for each of the
various slant directions - symmetrical, flat-topped or flat-bottomed, ascending or descending
triangles, and rising or falling wedges. - Kiwi examples of theoretical stock movements -
If prices break above or below the bounds of channels or triangles, then it can be said that one set
of market participants have overwhelmed the other side. Traders call these breakouts and
breakdowns. These are particularly relevant if accompanied by an increase in volume. In
essence, it gives credibility to the market direction and signifies that prices are ready to change
their behavior. If prices are heading up, we say the price action is bullish. Tumbling lower is
classified as bearish. In either case, the market is tipping its hat in a particular direction as
investors, traders, and financial institutions pile onto the winning side. This behavior is the
reason that trading desks chant 'the trend is your friend', in other words, don't get in the way of a
mob rushing in either direction - join the winning side and trade in the direction of the trend.
- Examples of triangle breakouts / breakdowns / volume (+ bull vs. bear) -
Targets:
The final step is to put all this information together and examine how the patterns interact
with one another, to determine the price structure and context. If there is a clear impulse leading
into a channel or triangle, we can start talking about pennants, bull flags and bear flags. This is
considered good market structure, since participants need to pause for a bit before resuming an
impulse. The amount of price movement leading into the consolidation can be considered a
target to reach once there is a breakout (in case of rising prices) or breakdown (declines before
pausing). This is known as a measured move and is probably the most common target known to
traders. If a stock appreciates +5 before forming a triangle, when it breaks above the upper
bounds a technical analyst will call for a price target +5 higher from the breakout point.
- Examples of good market structure / price targets - So when can a technician determine that
markets are in a bubble scenario? When it exhibits poor market structure, most often in the form
of prices that seem to defy gravity and logarithmic scale, with little or no pauses for
consolidation. A true one-sided exhibition of delusional behavior that this trend will continue
forever. Psychologically, this is complete lack of fear and greed at its best without any
consideration of reasonable expectations. In the end, for each seller there must be a buyer, and
once the final marginal buyer is in, there is nothing left to buoy prices. A technical trader will
look for the first correction after the meteoric rise to get out; after a pullback the rebound cannot
reach the lofty price experienced at the peak, the first lower-high. Prices collapse in the sheer
panic that ensues as behavior shifts to fear of losing. - Examples of poor market structure / air
lifts.
Trading Approaches:
Trading can be characterized as short-term decisions made in accordance with
information gleaned from technical analysis. Traders usually move in and out of the market at a
rapid pace in hopes of repeatedly extracting small profits. Trading is helpful in that it serves the
useful purpose of enhancing liquidity. Full time traders often use multiple computer screens to
monitor prices closely throughout the trading day. For people who cannot spend all day in front
of a computer monitor, one option is to anticipate substantial price moves so that the associated
risk of taking a position is justified by the upside profit potential.

Question No.7: Explain project planning and project control and the reasons
of ineffective project control.

Answer:

Project Planning:
The key to a successful project is in the planning. Creating a project plan is the first thing you
should do when undertaking any kind of project. Often project planning is ignored in favor of
getting on with the work. However, many people fail to realize the value of a project plan in
saving time, money and many problems.

Step 1 Project Goals:

A project is successful when the needs of the stakeholders have been met. A stakeholder
is anybody directly or indirectly impacted by the project. As a first step it is important to identify
the stakeholders in your project. It is not always easy to identify the stakeholders of a project,
particularly those impacted indirectly. Examples of stakeholders are:
• The project sponsor
• The customer who receives the deliverables
• The users of the project outputs
• The project manager and project team

Step 2 Project Deliverables:

Using the goals you have defined in step 1, create a list of things the project needs to
deliver in order to meet those goals. Specify when and how each item must be delivered.
Add the deliverables to the project plan with an estimated delivery date. More accurate delivery
dates will be established during the scheduling phase, which is next.

Step 3 Project Schedule:

 Create a list of tasks that need to be carried out for each deliverable identified in step 2.
For each task identify the following:
 The amount of effort (hours or days) required to complete the task
 The resource who will carry out the task
Step 4 Supporting Plans:
This section deals with plans you should create as part of the planning process. These can
be included directly in the plan.

Human Resource Plan:

Identify by name the individuals and organizations with a leading role in the project. For
each describe their roles and responsibilities on the project.
Next, describe the number and type of people needed to carry out the project. For each
resource detail start dates, estimated duration and the method you will use for obtaining them.
Create a single sheet containing this information.

Communications Plan:
Create a document showing that needs to be kept informed about the project and how they
will receive the information. The most common mechanism is a weekly/monthly progress,
describing how the project is performing, milestones achieved and work planned for the next
period.

Risk Management Plan:

Risk management is an important part of project management. Although often overlooked, it
is important to identify as many risks to your project as possible and be prepared if something
bad happens.
Here are some examples of common project risks:
 Time and cost estimates too optimistic
 Customer review and feedback cycle too slow
 Unexpected budget cuts
 Unclear roles and responsibilities
 Stakeholder input is not sought or their needs are not properly understood
 Stakeholders changing requirements after the project has started
 Stakeholders adding new requirements after the project has started
 Poor communication resulting in misunderstandings, quality problems and rework
 Lack of resource commitment

Project Control:
Monitoring indicates that:-Project is behind time-schedule, and/or-Project has exceeded
budget, and/or-Quality of materials or finished work is below standard, and/or-Productivity is
lower than as planned, etc.
How can we tell when Project Control is needed?
Performance:
 Unexpected technical problems arise
  Insufficient resources are unavailable when needed
 Quality or reliability problems occur
 Owner/Client requires changes in technical specifications
 Inter functional complications and conflicts arise
 Market changes that increase/decrease the projects value
 Inter functional complications and conflicts arise Inter-Market
changes that increase/decrease the project

How can we tell when Project Control is needed?

Cost:
 Technical difficulties that require more resources
 Technical resources--Scope of work increases Scope increases
 Bid amount (accepted for the contract award) is too low –
 Reporting of the monitoring results are poor/late Reporting late
 Project budgeting for contractor cash flows not done right Project right
 Changes in market prices of the inputs Changes inputs
How can we tell when Project Control is needed?
Time:
 Technical difficulties require more time to solve Technical solve
 Scope of work increases Scope increases--Unexpected utilities needing relocation
 Task sequencing not done right Task right--Required material, labor/equipment
unavailable when needed.
 Key preceding tasks were not completed on time.

Resources for Project Control

1. Money
2. Machinery (Equipment)
3. Materials and Supplies Materials Supplies
4. Manpower (Labor and Supervision)

Elements of Project Control

 Manpower related control
 Machinery related control
 Money related control
 Material related control

Project control serves two major functions:

1. It ensures regular monitoring of performance
2. It motivates project personal to strive for achieving project objectives.

Reasons for ineffective project control:

 Effective control is critical for the realization of project objective. Yet, control of projects
in practice tends to be ineffective. Why? There seems to be three reasons for poor control of
projects.

Characteristics of the project:

Most of the projects are large, complex undertaking involving many originations and
people .this renders the task of control because:
 Keeping track of physical performance and expenditure on hundreds or thousands of
activities which are often non -routine is a stupendous task.

 Coordination and communication problem multiply when several org. are involved in
the project.