Unit- 1

Introduction To Project Management

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 LEARNING GOALS

TO STUDY BASIC PROJECT MANAGEMENT AND

ITS IMPORTANCE
TO STUDY AND ABLE TO UNDERSTAND OF LIFE

CYCLE CONCEPT AND COST COMPONENTS

TO KNOW PROJECT PMBOK AND PMP
•3 •.
 Content
Importance, objectives & functions of management ,
Principles of Management, Categories of project , Project
Failure,
Project- life cycle Concept and Cost Components ,
Project Management Book of Knowledge {PMBOK} –
Different Domain Areas, Project management Institute and
Certified Project Management Professionals (PMP )
Importance of organizational Structure in Management-
Authority / Responsibility Relation

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 What is the Project?

A project is a temporary endeavor undertaken

to create a unique product or service

Projects can be large or small and take a short

or long time to complete

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 Project Attributes or Characteristics
A project:

Has a unique purpose: every project should have a well

defined objective.
each project has a definite beginning and a definite end.

Requires resources, often from various areas

Should have a primary customer or sponsor

Examples

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 What is Project Management?
Project management is “the application of
knowledge, skills, tools and techniques to project
activities to meet project requirements”

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 Introduction to Project management
& organization
Management
Art of getting work done through people with satisfaction of
employer, employees and public.

Management – Art as well as science

Scientific basis – Work done can be measured

Art – getting work done through others.

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 Importance of Management
No enterprise can survive without management – huge
money, excellent m/c, expert manpower lead to confusion.
Guide and control activities
Coordinates different activities of departments
Provide new ideas and vision
Tackles business problems
Meet challenge of change
Provides stability to the enterprise
Helps personality development.

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 Functions of Management
1. Forecasting
2. Planning
3. Organizing
4. Staffing
5. Directing – leadership, communication, motivation,
supervision
6. Coordinating
7. Controlling
8. Decision making

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 1. Forecasting
estimates future work – sales or production
Relates to cost, finance, purchase, profit or loss
1. Planning
Manager anticipates future and discovers alternatives
Systematic way of making decisions
Essential for utilizing available facilities
1. Organizing
Organizing people, materials, jobs, time, etc
Determining activities

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 4. Staffing
Manager select, train, promote and retire their
subordinates
Developing and placing of qualified people in jobs
5. Directing
Motivating, guiding and supervising subordinates
 Leadership
Quality of behaviors of manager
Get max cooperation from subordinate and guide them
 Communication
Process –ideas are transmitted
Verbal, written, orders, reports, instruction
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 Ineffective communication
confusion, misunderstanding, dissatisfaction or strike.
Motivation
Inspiring subordinates – work effectively and efficiently
Supervision
Work is going as plan
Workers are doing as they directed
6. Coordinating
Achieving harmony of individual effect towards the
accomplishment of company objectives
Making plan to coordinate activities of subordinate.

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 7. Controlling
Measures current performance
Controlling set standards, measure job perfection, take
correct action.
8. Decision making
Selecting course of action for getting desired results.

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 Various Definitions of Management
Donald J. Cough defines, "Management is the art and
science of decision making and leadership.”
Henry Fayol defines,“ Management as to manage is to
forecast and to plan, to organize, to command, to co-
ordinate and to control.”
Peter F Drucker defines, “Management is a "multi-
purpose organ that manages a business and manages
managers, and manages worker and work.”

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 Objectives of Management:

Getting Maximum Results with Minimumum

Efforts

To secure maximum outputs with minimum efforts &

resources.
Management is basically concerned with thinking & utilizing human,
material & financial resources in such a manner that would result in
best combination.

16 This combination results in reduction of various costs.

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 Increasing the Efficiency of factors of Production
 Efficiency can be increased to a great extent which can be obtained by
reducing spoilage, wastages and breakage of all kinds, this in turn leads to
saving of time, effort and money which is essential for the growth &
prosperity of the enterprise
 Maximum Prosperity for Employer & Employees
 Management ensures smooth and coordinated functioning of the
enterprise. This in turn helps in providing maximum benefits to the
employee in the shape of good working condition, suitable wage system,
incentive plans on the one hand and higher profits to the employer on the
other hand.
 Human betterment & Social Justice
 Management serves as a tool for the upliftment as well as betterment of the
society. Through increased productivity & employment, management
ensures better standards of living for the society. It provides justice through
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its uniform
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policies
 HENRI FAYOL’S

14 Principles
of Management
the first foundations were laid for
modern scientific management.
 14 Principles of Management
Division of Work Centralization
Authority Scalar Chain
Discipline Order
Unity of Command Equity
Unity of Direction Stability of Tenure of
Subordination of Personnel
Individual Interests To Initiative
The General Interests Espirit De Corps
Remuneration

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 1. Division of Work
Work should be divided among

individuals and groups to ensure

 that effort and attention are focused
on special portions of the task.
 Fayol presented work specialization

as the best way to use the human

resources of the organization.
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 2. Authority
Authority was defined by Fayol as the right to give orders

and the power to exact obedience.

 Responsibility involves being accountable, and is therefore

naturally associated with authority.

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 3. Discipline

A successful organization requires the common effort of

workers.
Penalties should be applied judiciously to encourage this

common effort.      

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 4. Unity of Command

Workers should receive orders from only one manager.

He should not receive instructions from more than one

person .  

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 5. Unity of Direction
The entire organization should be moving towards a

common objective in a common direction.

Without unity of direction, unity of action cannot be

achieved

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 6. Subordination of Individual
Interests To The General
Interests

The interests of one person should not take priority over the

interests of the organization as a whole.

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 7. Remuneration

Remuneration to be paid to the workers should be fair,

reasonable, satisfactory & rewarding of the efforts. It should

accord satisfaction to both employer and the employees.

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 8. Centralization
Centralization means concentration of authority at the top

level.
 In other words, centralization is a situation in which top

management retains most of the decision making authority.

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 9. Scalar Chain

It is chain of superiors ranging from the ultimate authority to

the lowest.
Every orders, instructions etc. has to pass through Scalar

chain.

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 10.Order
For the sake of efficiency and coordination, all materials and

people related to a specific kind of work should be treated as

equally as possible.    

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 11.Equity

All employees should be treated as equally as possible.

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 12.Stability of Tenure of
Personnel

Retaining productive employees should always be a high

priority of management.
Recruitment and Selection Costs, as well as increased

product-reject rates are usually associated with hiring new

workers.  

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 13. Initiative
Initiative means eagerness to initiate actions without being

asked to do so.
Management should provide opportunity to its employees to

suggest ideas, experiences& new method of work.     

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 14. Espirit De Corps
It refers to team spirit i.e. harmony in the work groups and

mutual understanding among the members.

Management should encourage harmony and general good

feelings among employees.

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 Conclusion on the 14 Principles of
Management

The 14 principles of management can be used to manage

organizations and are useful tools for forecasting, planning,
process management, organization management, decision-
making, coordination and control.

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 Categories of Project:
Depending upon Location

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 Depending Upon Size

Schedule A

Schedule B

Schedule C

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 Project Failures:
Owner:
 Decision making problems
 Poor estimating
 Goal and vision
 Lack of integral budget and
planning
 Incomplete and fluid design
 Lack of proactive risk management
 Unrealistic schedule
 Insufficient tool and project
management infrastructure
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Contractor:
Inexperience or unequal
project team
Poor estimating
Unfavorable contract
Lack of senior management
support
Design issue
Overly aggressive schedule
Lack of Risk management
Lack of Project co-ordination.
 Project Life Cycle
A project life cycle is a collection of project phases that

defines:
What work will be performed in each phase

What deliverables will be produced

Who is involved in each phase

How management will control and approve work produced in each

phase

A deliverable is a product or service produced or provided

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as part . of a project
 Five Phases of the Project Life Cycle

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 Project Management Body of
Knowledge:
This book which focus on standard terminology
and guidelines for Project Management.

This book is overseen by PMI (Project

management Institutes).

The Latest Fifth edition was publishing in 2013.

The first PMBOK was published in 1996 by PMI.

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 Contents of PMBOK
Inputs (documents, plans, designs, etc.)

Tools and Techniques (mechanisms applied to inputs)

Outputs (documents, plans, designs, etc.)

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 Purpose of PMBOK
PMI global standards provide
Guidelines
Rules And Characteristics For Project
Program and portfolio management.

 When consistently applied, they help you and your

organization achieve professional excellence

The PMBOK Guide is also used as a support to prepare the

certifications offered by the PMI
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 Phases of the Project Life Cycle as
PMBOK

1. Conception/initiation

2. Definition/planning

3. Production/acquisition

4. Operation

5. Divestment/termination

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 Conception/initiation

First phase includes

o Determine existing needs
o Establish system concepts
o Check technical feasibility
o Examine alternatives

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 Definition/Planning – includes

Firm identification of human and non human

resources. (human resources, such as labor and

management, and nonhuman resources, such as land,
capital goods, financial resources)
Pre of detailed plan

Prevent of cost

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 Production/acquisition
Testing and final standardization of effort so that

operation can begin

Operation
If project is marketable product then this phase

includes life cycle phase of market introduction,

growth, maturity and portion of deterioration.

Divestment/termination
Includes the real location of resources.
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 Knowledge areas of PMBOK.

1. Project INTEGRATION Management

Identification of process and activities, defining activities, combination of
activities to achieve project objectives.
2. Project SCOPE Management
Identification of requirement of Project and only work required.
3. Project COST Management
It involves planning, estimating, budgeting, financing, finding, management
and controlling cost so that project should completed within approved
budget.
4. Project QUALITY management
Determine quiddity policities, qualitative objectives of project, and
responsibilities. So than it’s up to client satisfaction.
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 5. Project HUMAN RESOURCES management
This process involved organizing, managing and lead the project
them.
6. Project COMMUNICATION Management
Project requires a timely and appropriate Planning and information.
7. Project TIME Management
Processes required managing timely completion of project.
8. Project RISK management
This includes process of conducting risk management planning,
identification, analysis, response planning analysis and controlling
risks.
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 9. Project PROCUREMENT management
 This includes to acquire products , services and result needed.

10.Project STAKEHOLDER Management

To identify all people or organization impacted by project, analyzing,
and developing management strategies for effectively engaging
stakeholders.

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 Project Management Institute

The PMI provides services including the

Development Of Standards,
Research,
Education,
Publication,
Networking-opportunities In Local Chapters,
Hosting Conferences
And Training Seminars,
And Providing Accreditation In Project Management.

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 PMI has recruited volunteers to create industry
standards, such as "
A Guide to the Project Management Body of Knowledge
", which has been recognized by the 
American National Standards Institute (ANSI).
In 2012 ISO adapted the project management
processes from the PMBOK Guide 4th edition.

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 Professional
PMP
Most Important industry recognizing certification for
Project Mangers.
Globally recognized and demanded.
PMP shows that you have experience ,education and
competency to lead and direct projects.
Who should apply
Experience project manager looking to solidify.
Your skill stands out to employers and maximize yours earings
potentials.

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 The PMP signifies that you speak and understand the
global language of project management and connects
you to a community of professionals, organizations
and experts worldwide.

Become a PMP and become a project hero

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 Certified Project Management
Professionals (PMP )

You can find PMPs

Leading projects in nearly every country

Geography or domain, the PMP is truly global.

As a PMP, you can work in virtually any industry, with any
methodology and in any location.

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 Examples
The PMP also increases your earning potential. PMP
certification holders earn 20 percent more than their non-
certified peers according to Earning Power: Project
Management Salary Survey, Ninth Edition.

When more than one-third of their project managers are

PMP-certified, organizations complete more of their projects
on time, on budget and meeting original goals. (Pulse of the
Profession® study, PMI, 2015.)

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57
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 Organization
Organization is a group of person working together to

achieve a predefined/establishment goal.

Defining and delegating responsibility and authority
 According to Chester Barnard, “Organizing is a function
by which the concern is able to define the role
positions, the jobs related and the
co-ordination between authority and
responsibility.
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. Business executive
 Importance of Organization

Specialization
Well defined jobs
Clarifies authority
Co-ordination
Effective administration
Growth and diversification
Sense of security
Scope for new changes

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 Importance of Organization
Specialization - 
Organizational structure is a
network of relationships in
which the work is divided
into units and departments.

This division of work is

helping in bringing
specialization in various
60 activities of concern.
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 Well defined jobs
 Organizational structure
helps in putting right men
on right job which can be
done by selecting people for
various departments
according to their
qualifications, skill and
experience.
This is helping in defining
the jobs properly which
clarifies the role of every
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person. .
 Clarifies authority - 
Organizational structure helps in clarifying the role
positions to every manager .
This can be done by clarifying the powers to every
manager and the way he has to exercise those powers
should be clarified so that misuse of powers do not
take place.
Well defined jobs and responsibilities attached helps
in bringing efficiency into managers working.
 This helps in increasing productivity.

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 Co-ordination  

Organization is a means of creating co-ordination

among different departments of the enterprise.
It creates clear cut relationships among positions and
ensure mutual co-operation among individuals.
Harmony of work is brought by higher level managers
exercising their authority over interconnected
activities of lower level manager.

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 Ef fective administration
 The organization structure is helpful
in defining the jobs positions.

The roles to be performed by different

managers are clarified.

Specialization is achieved through

division of work.

This all leads to efficient and effective

64 administration.
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 Growth and diversification
 A company’s growth is totally dependant on how efficiently
and smoothly a concern works.
Efficiency can be brought about by clarifying the role
positions to the managers, co-ordination between authority
and responsibility and concentrating on specialization.
 In addition to this, a company can diversify if its potential
grow.
This is possible only when the organization structure is well-
defined.
This is possible through a set of formal structure.

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 Sense of security
Organizational structure clarifies the job positions.
The roles assigned to every manager is clear.
Therefore, clarity of powers helps automatically in
increasing mental satisfaction and thereby a sense of security
in a concern.
This is very important for job- satisfaction.

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 Scope for new changes
 Where the roles and activities to be performed are clear and
every person gets independence in his working, this provides
enough space to a manager to develop his talents and flourish
his knowledge.

A manager gets ready for taking independent decisions

which can be a road or path to adoption of new techniques of
production.

This scope for bringing new changes into the running of an

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enterprise is possible only through a set of organizational
structure.
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 Importance of Organization

Stimulates independent, creative thinking

Permits optimum use of technical and human resources

Minimize corruption and inefficiencies

Does not generate confusion

Less wastage and expenditure.

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 Principles of Organization
1. Consideration of objectives

2. Relationship of basic components of the organization

3. Responsibility and authority

4. Span of control

5. Dividing and grouping work

6. Effective delegation

7. Communication

8. Line and staff relationship

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9. Balance,
. stability and flexibility
 1. Consideration of objectives
Consider that objectives which increases
productivity and improve quality

2. Relationship of basic components of the

organization
personnel
Objective determine type of work decides selection of
physical facilities

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 3. Responsibility and authority
- Responsibility means accountability
- authority means right or power to act
- Must go together
- When a person is authorized then he is held
responsible for its performance.

4. Span of control
 No of subordinates that reports to executive or no of

subordinates that an executive can supervise directly

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 5. Dividing and grouping work
- Divisionalisation gives a greater sense of
responsibility to personnel
- Grouping is essential for specialization and
coordination

6. Effective delegation
- Passes down tasks to his subordinates

7. Communication
- Transmitting instructions and information's within
organization and to outside
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- Free two way communication
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 8. Line and staff relationship

All activities in two types

primary act or line function are directly contribute to the

objectives
Supporting act or staff function add to line functions.

9. Balance, stability and flexibility

All units should be balanced

Stability refers capacity to withstand the losses

Flexibility specifies to adjust the work assignment

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 Types of organization

1. Line, military or scalar organization

2. Functional organization

3. Line and staff organization

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 Line, military or scalar organisation

Resembled to old military organisation

Simple form of organisation

Based upon authority and responsibility

Followed : Govt. Dpt. And autonomous engineering

college
Application : all type of small firms , industries like
sugar factories, paper mills etc.
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 Line, military or scalar organization

Features:
Have only direct vertical relationships between different levels in the
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firm.
 Advantages
Simple, easy to understand and flexible

Makes clear division of authority

Strong in discipline

Disadvantages
Neglects specialist

Overload few key executives

Small concern
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 2. Functional organization

 F W Taylor suggested this organization

 A functional organization is a common type of organizational

structure in which the organization is divided into smaller 
groups based on specialized functional areas, such as IT,
finance, or marketing.

 Application : not is used in construction industry but

modified forms is used in most modern and advanced
concerns
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 2. Functional organization

Features:
1. Line and staff have direct vertical relationship
between different levels.
2. Staff specialists are responsible for advising
and assisting line managers/officers in specialized
areas.
3. These types of specialized staff are (a)
Advisory, (b) Service, (c) Control
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 Functional organization

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 at FedEx

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 Advantages
1. Since one foreman is responsible for one

function, he can perform his duties in a better

manner

2. Reduces no of accidents, wastage

3. Quality of work improved

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 Disadvantages
1. Difficult to maintain discipline

2. Worker remain confused about authority

3. Difficult to fix up responsibility

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 3. Line and Staff organization
Secretary BOD Legal advisor

Acct Off GM Sales manager

personal man purchase engg
design engg WM industrial engg
stores officer

suptd A suptd B

FM FM FM FM

WORKERS
BOD – Board of Directors GM – General Manager
WM – Works Manager Suptd – Superitendant
FM - Foreman
Feature: Superimposes a horizontal set of divisions and
84 reporting relationships onto a hierarchical functional
. structure
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 1. Line executives marked vertically and staff

executives are placed horizontally

2. For growing industry it is required

Advantages
1. Expert advice from specialist are available

2. Less wastage of material, man hours

3. Quality of product is improved

4. No confusion

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 Disadvantages
Product cost will increase

Frictions and jealousies developed

Applications
Used in medium and larger enterprises.

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 Matrix Organizational Structure:

It is a permanent organization designed to achieve

specific results by using teams of specialists from
different functional areas in the organization.

Use: Industrial like electronics, advertising, banking etc.

Feature:
Superimposes a horizontal set of divisions and reporting
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relationships onto a hierarchical functional structure
.
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 Matrix Organizational Structure:
Advantages:
1. Decentralized decision
making.
2. Strong product/project
co-ordination.
3. Improved environmental
monitoring.
4. Fast response to change.
5. Flexible use of resources.
6. Efficient use of support
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systems.
•.
Disadvantages:
1. High administration
cost.
2. Potential confusion over
authority and
responsibility.
3. High prospects of
conflict.
4. Overemphasis on group
decision making.
5. Excessive focus on
internal relations.
 Modified Matrix Organizational
Structure:

When organisation grown

To avoid the difficulty
Appointed as project director
PD = controls all PM and reports to
GM directly

•91 •.
 Dif ferences between
Authority and Responsibility
Authority
It is the legal right of a
person or a superior to
command his subordinates.
Authority is attached to the
position of a superior in
concern.
Authority can be delegated
by a superior to a
subordinate
It flows from top to bottom.
•92
Responsibility
It is the obligation of
subordinate to perform the
work assigned to him.
Responsibility arises out of
superior-subordinate
relationship in which
subordinate agrees to carry
out duty given to him.
Responsibility cannot be
shifted and is absolute
It flows from bottom to top.
 Delegation of Authority -
A manager alone cannot perform all the tasks assigned to
him. In order to meet the targets, the manager should
delegate authority.
Delegation of Authority means division of authority
and powers downwards to the subordinate.
 Delegation of authority can be defined as
subdivision and sub-allocation of powers to the
subordinates in order to achieve effective results.
Delegation is about entrusting someone else to do parts of
your job.
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 Session Outcomes
Able to understand a basic of project management and its
importance.
Able to classify the categories of project and conceptualizes
the life cycle and phases come in project.
Able to know about project management book of
knowledge, professional certification and its credit.
Able to understand professional learning of project
management by PMI, about PMP.
Able to understand organizational work on the basis of
responsibility and authority.
Able to describe the different types of organization and its

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work according to the same
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 ASSIGNEMENT NO.1
INTRODUCTION TO PROJECT MAMAGEMENT

Que.1 Write a short note on Project Categories.

Que.2. Explain with sketch Matrix Organization, state
advantages and disadvantages.
Que.3 Explain Project Life Cycle.
Que.4 Explain with suitable example Line and Staff
Organization.
Que.5 Explain functional type of organization in detail.
Que.6 Explain functions of management.

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 Que.7 What is PMBOK? Focus on its contents.

Que.8 What is PMI? Which type of certifications carried out

by it? Explain PMP.

Que.9 What is Project Management? State its importance.

Que.10 Explain principles and objectives of Project

Management.
Que.11 Differences between Authority and Responsibility
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97
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 References
http://www.managementstudyguide.com/

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 Elements of Delegation
Authority - in context of a business organization, authority can be defined as the power and right of a person to use and allocate the resources efficiently, to
take decisions and to give orders so as to achieve the organizational objectives. Authority must be well- defined. All people who have the authority should
know what is the scope of their authority is and they shouldn’t misutilize it. Authority is the right to give commands, orders and get the things done. The top
level management has greatest authority.
Authority always flows from top to bottom. It explains how a superior gets work done from his subordinate by clearly explaining what is expected of him and
how he should go about it. Authority should be accompanied with an equal amount of responsibility. Delegating the authority to someone else doesn’t imply
escaping from accountability. Accountability still rest with the person having the utmost authority.
Responsibility - is the duty of the person to complete the task assigned to him. A person who is given the responsibility should ensure that he accomplishes
the tasks assigned to him. If the tasks for which he was held responsible are not completed, then he should not give explanations or excuses. Responsibility
without adequate authority leads to discontent and dissatisfaction among the person. Responsibility flows from bottom to top. The middle level and lower
level management holds more responsibility. The person held responsible for a job is answerable for it. If he performs the tasks assigned as expected, he is
bound for praises. While if he doesn’t accomplish tasks assigned as expected, then also he is answerable for that.
Accountability - means giving explanations for any variance in the actual performance from the expectations set. Accountability can not be delegated. For

•99 •.
 Relationship between Authority
and Responsibility
Authority is the legal right of person or superior to
command his subordinates while accountability is the
obligation of individual to carry out his duties as per
standards of performance Authority flows from the superiors
to subordinates,in which orders and instructions are given to
subordinates to complete the task.

100
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 example, if ’A’ is given a task with sufficient authority, and
’A’ delegates this task to B and asks him to ensure that task is
done well, responsibility rest with ’B’, but accountability still
rest with ’A’. The top level management is most accountable.
Being accountable means being innovative as the person will
think beyond his scope of job. Accountability, in short, means
being answerable for the end result. Accountability can’t be
escaped. It arises from responsibility.
For achieving delegation, a manager has to work in a system
and has to perform following steps : -
Assignment of tasks and duties
101 Granting of authority
.
 Delegation of authority is the base of superior-
subordinate relationship, it involves following steps:-
Assignment of Duties - The delegator first tries to define
the task and duties to the subordinate. He also has to define
the result expected from the subordinates. Clarity of duty as
well as result expected has to be the first step in delegation.
Granting of authority - Subdivision of authority takes
place when a superior divides and shares his authority with
the subordinate. It is for this reason, every subordinate
should be given enough independence to carry the task given
to him by his superiors. The managers at all levels delegate
102 authority and power which is attached to their job positions.
.
 It is only through authority, a manager exercises control. In a
way through exercising the control the superior is
demanding accountability from subordinates. If the
marketing manager directs the sales supervisor for 50 units
of sale to be undertaken in a month. If the above standards
are not accomplished, it is the marketing manager who will
be accountable to the chief executive officer. Therefore, we
can say that authority flows from top to bottom and
responsibility flows from bottom to top. Accountability is a
result of responsibility and responsibility is result of
authority. Therefore, for every authority an equal
103 accountability is attached.
.