Wk-1
After reading chapter-1 and chapter-2 from the attached text book answer the following questions. In addition, write which is the most important concept from these two chapter.
Individually identify what you consider to be the greatest achievements accomplished by mankind in the last five decades. Now share your list with three to five other students in the class, and come up with an expanded list. Review these accomplishments in terms of the definition of a project. What does your review suggest about the importance of project management?
The portfolio of projects is typically represented by compliance, strategic, and operations projects. What impact can this classification have on project selection?
lar38865_fm_i-xxiii.indd i 09/06/19 02:39 PM
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Project
Management
The Managerial Process Eighth Edition
Erik W. Larson
Clifford F. Gray
Oregon State University
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mheducation.com/highered
PROJECT MANAGEMENT: THE MANAGERIAL PROCESS, EIGHTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright 2021 by McGraw-Hill
Education. All rights reserved. Printed in the United States of America. Previous editions 2018, 2014, and
2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a
database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not
limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.
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Library of Congress Cataloging-in-Publication Data
Names: Gray, Clifford F., author. | Larson, Erik W., 1952- author.
Title: Project management : the managerial process / Erik W. Larson,
Clifford F. Gray, Oregon State University.
Description: Eighth edition. | New York, NY : McGraw-Hill Education, [2021]
| Clifford F. Gray appears as the first named author in earlier
editions. | Includes bibliographical references and index. | Summary:
Our motivation in writing this text continues to be to provide a
realistic, socio-technical view of project management. In the past,
textbooks on project management focused almost exclusively on the tools
and processes used to manage projects and not the human dimension
Provided by publisher.
Identifiers: LCCN 2019028390 (print) | LCCN 2019028391 (ebook) |
ISBN 9781260238860 (paperback) | ISBN 1260238865 (paperback) |
ISBN 9781260242379 (ebook)
Subjects: LCSH: Project management. | Time management. | Risk management.
Classification: LCC HD69.P75 G72 2021 (print) | LCC HD69.P75 (ebook) |
DDC 658.4/04dc23
LC record available at https://lccn.loc.gov/2019028390
LC ebook record available at https://lccn.loc.gov/2019028391
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does
not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not
guarantee the accuracy of the information presented at these sites.
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vii
Erik W. Larson
ERIK W. LARSON is professor emeritus of project management at the College of
Business, Oregon State University. He teaches executive, graduate, and undergraduate
courses on project management and leadership. His research and consulting activities
focus on project management. He has published numerous articles on matrix manage-
ment, product development, and project partnering. He has been honored with teach-
ing awards from both the Oregon State University MBA program and the University
of Oregon Executive MBA program. He has been a member of the Project Manage-
ment Institute since 1984. In 1995 he worked as a Fulbright scholar with faculty at
the Krakow Academy of Economics on modernizing Polish business education. He
was a visiting professor at Chulalongkorn University in Bangkok, Thailand, and at
Baden-Wuerttemberg Cooperative State University in Bad Mergentheim, Germany.
He received a B.A. in psychology from Claremont McKenna College and a Ph.D. in
management from State University of New York at Buffalo. He is a certified Project
Management Professional (PMP) and Scrum master.
Clifford F. Gray
CLIFFORD F. GRAY is professor emeritus of management at the College of Business,
Oregon State University. He has personally taught more than 100 executive develop-
ment seminars and workshops. Cliff has been a member of the Project Management
Institute since 1976 and was one of the founders of the Portland, Oregon, chapter. He
was a visiting professor at Kasetsart University in Bangkok, Thailand, in 2005. He was
the president of Project Management International, Inc. (a training and consulting firm
specializing in project management) 19772005. He received his B.A. in economics
and management from Millikin University, M.B.A. from Indiana University, and doc-
torate in operations management from the College of Business, University of Oregon.
He is a certified Scrum master.
About the Authors
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viii
Mans mind, once stretched by a new idea, never regains
its original dimensions.
Oliver Wendell Holmes, Jr.
To my family, who have always encircled me with
love and encouragementmy parents (Samuel and
Charlotte), my wife (Mary), my sons and their wives
(Kevin and Dawn, Robert and Sally), and their children
(Ryan, Carly, Connor and Lauren).
C.F.G.
The reasonable man adapts himself to the world;
the unreasonable one persists in trying to adapt the
world to himself. Therefore all progress depends on the
unreasonable man. Bernard Shaw, Man and Superman
To Ann, whose love and support have brought out the
best in me. To our girls Mary, Rachel, and Tor-Tor for
thejoy and pride they give me. And to our grandkids,
Mr. B, Livvy, Jasper Jones!, Baby Ya Ya, Juniper Berry,
and Callie, whose future depends upon effective project
management. Finally, to my muse, Neilwalk on!
E.W.L
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ix
Our motivation in writing this text continues to be to provide a realistic, socio-technical
view of project management. In the past, textbooks on project management focused
almost exclusively on the tools and processes used to manage projects and not the
human dimension. This baffled us, since people, not tools, complete projects! While we
firmly believe that mastering tools and processes is essential to successful project man-
agement, we also believe that the effectiveness of these tools and methods is shaped and
determined by the prevailing culture of the organization and interpersonal dynamics
of the people involved. Thus, we try to provide a holistic view that focuses on both the
technical and social dimensions and how they interact to determine the fate of projects.
Audience
This text is written for a wide audience. It covers concepts and skills that are used by
managers to propose, plan, secure resources, budget, and lead project teams to success-
ful completions of their projects. The text should prove useful to students and prospec-
tive project managers in helping them understand why organizations have developed a
formal project management process to gain a competitive advantage. Readers will find
the concepts and techniques discussed in enough detail to be immediately useful in
new-project situations. Practicing project managers will find the text to be a valuable
guide and reference when dealing with typical problems that arise in the course of a
project. Managers will also find the text useful in understanding the role of projects
in the missions of their organizations. Analysts will find the text useful in helping to
explain the data needed for project implementation as well as the operations of inher-
ited or purchased software.
Members of the Project Management Institute will find the text is well structured
to meet the needs of those wishing to prepare for PMP (Project Management Profes-
sional) or CAPM (Certified Associate in Project Management) certification exams.
The text has in-depth coverage of the most critical topics found in PMIs Project
Management Body of Knowledge (PMBOK). People at all levels in the organization
assigned to work on projects will find the text useful not only in providing them with a
rationale for the use of project management processes but also because of the insights
they will gain into how to enhance their contributions to project success.
Our emphasis is not only on how the management process works but also, and more
importantly, on why it works. The concepts, principles, and techniques are univer-
sally applicable. That is, the text does not specialize by industry type or project scope.
Instead, the text is written for the individual who will be required to manage a variety
of projects in a variety of organizational settings. In the case of some small projects,
a few of the steps of the techniques can be omitted, but the conceptual framework
applies to all organizations in which projects are important to survival. The approach
can be used in pure project organizations such as construction, research organizations,
and engineering consultancy firms. At the same time, this approach will benefit orga-
nizations that carry out many small projects while the daily effort of delivering prod-
ucts or services continues.
Preface
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x Preface
lar38865_fm_i-xxiii.indd x 09/06/19 02:39 PM
Content
In this and other editions we continue to try to resist the forces that engender scope
creep and focus only on essential tools and concepts that are being used in the real
world. We have been guided by feedback from reviewers, practitioners, teachers, and
students. Some changes are minor and incremental, designed to clarify and reduce con-
fusion. Other changes are significant. They represent new developments in the field
or better ways of teaching project management principles. Below are major changes to
the eighth edition.
All material has been reviewed and revised based on the latest edition of Project
Management Body of Knowledge (PMBOK), Sixth Edition, 2017.
Discussion questions for most Snapshots from Practice are now at the end of each
chapter.
Many of the Snapshots from Practice have been expanded to more fully cover the
examples.
Agile Project Management is introduced in Chapter 1 and discussed when appropri-
ate in subsequent chapters, with Chapter 15 providing a more complete coverage of
the methodology.
A new set of exercises have been developed for Chapter 5.
New student exercises and cases have been added to chapters.
The Snapshot from Practice boxes feature a number of new examples of project
management in action.
The Instructors Manual contains a listing of current YouTube videos that corre-
spond to key concepts and Snapshots from Practice.
Overall the text addresses the major questions and challenges the authors have
encountered over their 60 combined years of teaching project management and con-
sulting with practicing project managers in domestic and foreign environments. These
questions include the following: How should projects be prioritized? What factors con-
tribute to project failure or success? How do project managers orchestrate the complex
network of relationships involving vendors, subcontractors, project team members,
senior management, functional managers, and customers that affect project success?
What project management system can be set up to gain some measure of control? How
are projects managed when the customers are not sure what they want? How do project
managers work with people from foreign cultures?
Project managers must deal with all these concerns to be effective. All of these
issues and problems represent linkages to a socio-technical project management per-
spective. The chapter content of the text has been placed within an overall framework
that integrates these topics in a holistic manner. Cases and snapshots are included from
the experiences of practicing managers. The future for project managers is exciting.
Careers will be built on successfully managing projects.
Student Learning Aids
Student resources include study outlines, online quizzes, PowerPoint slides, videos,
Microsoft Project Video Tutorials, and web links. These can be found in Connect.
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lar38865_fm_i-xxiii.indd xi 09/06/19 02:39 PM
Acknowledgments
We would like to thank Scott Bailey for building the end-of-chapter exercises for Con-
nect; Pinyarat Sirisomboonsuk for revising the PowerPoint slides; Ronny Richardson
for updating the Instructors Manual; Angelo Serra for updating the Test Bank; and
Pinyarat Sirisomboonsuk for providing new Snapshot from Practice questions.
Next, it is important to note that the text includes contributions from numerous
students, colleagues, friends, and managers gleaned from professional conversations.
We want them to know we sincerely appreciate their counsel and suggestions. Almost
every exercise, case, and example in the text is drawn from a real-world project. Spe-
cial thanks to managers who graciously shared their current project as ideas for exer-
cises, subjects for cases, and examples for the text. John A. Drexler, Jim Moran, John
Sloan, Pat Taylor, and John Wold, whose work is printed, are gratefully acknowledged.
Special gratitude is due Robert Breitbarth of Interact Management, who shared invalu-
able insights on prioritizing projects. University students and managers deserve spe-
cial accolades for identifying problems with earlier drafts of the text and exercises.
We are indebted to the reviewers of past editions who shared our commitment to
elevating the instruction of project management. We thank you for your many thought-
ful suggestions and for making our book better. Of course, we accept responsibility for
the final version of the text.
Paul S. Allen, Rice University
Victor Allen, Lawrence Technological University
Kwasi Amoako-Gyampah, University of North
CarolinaGreensboro
Gregory Anderson, Weber State University
Mark Angolia, East Carolina University
Brian M. Ashford, North Carolina State University
Dana Bachman, Colorado Christian University
Robin Bagent, College of Southern Idaho
Scott Bailey, Troy University
Nabil Bedewi, Georgetown University
Anandhi Bharadwaj, Emory University
James Blair, Washington UniversitySt. Louis
Mary Jean Blink, Mount St. Joseph University
S. Narayan Bodapati, Southern Illinois University at
Edwardsville
Warren J. Boe, University of Iowa
Thomas Calderon, University of Akron
Alan Cannon, University of TexasArlington
Susan Cholette, San Francisco State
Denis F. Cioffi, George Washington University
Robert Cope, Southeastern Louisiana University
Kenneth DaRin, Clarkson University
Ron Darnell, Amberton University
Burton Dean, San Jose State University
Joseph D. DeVoss, DeVry University
David Duby, Liberty University
Michael Ensby, Clarkson University
Charles Franz, University of Missouri, Columbia
Larry Frazier, City University of Seattle
Raouf Ghattas, DeVry University
Edward J. Glantz, Pennsylvania State University
Michael Godfrey, University of WisconsinOshkosh
Jay Goldberg, Marquette University
Robert Groff, Westwood College
Raffael Guidone, New York City College of
Technology
Brian Gurney, Montana State UniversityBillings
Owen P. Hall, Pepperdine University
Chaodong Han, Towson University
Bruce C. Hartman, University of Arizona
Mark Huber, University of Georgia
Richard Irving, York University
Marshall Issen, Clarkson University
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xii Preface
lar38865_fm_i-xxiii.indd xii 09/06/19 02:39 PM
In addition, we would like to thank our colleagues in the College of Business at
Oregon State University for their support and help in completing this project. In par-
ticular, we recognize Lacey McNeely, Prem Mathew, and Jeewon Chou for their help-
ful advice and suggestions. We also wish to thank the many students who helped us
at different stages of this project, most notably Neil Young, Saajan Patel, Katherine
Knox, Dat Nguyen, and David Dempsey. Mary Gray deserves special credit for editing
and working under tight deadlines on earlier editions. Special thanks go to Pinyarat
(Minkster) Sirisomboonsuk for her help in preparing the last five editions.
Finally, we want to extend our thanks to all the people at McGraw-Hill Education
for their efforts and support. First, we would like to thank Noelle Bathurst and Sarah
Wood, for providing editorial direction, guidance, and management of the books
development for the eighth edition. And we would also like to thank Sandy Wille,
Sandy Ludovissy, Egzon Shaqiri, Beth Cray, and Angela Norris for managing the final
production, design, supplement, and media phases of the eighth edition.
Erik W. Larson
Clifford F. Gray
Robert T. Jones, DePaul University
Susan Kendall, Arapahoe Community College
George Kenyon, Lamar University
Robert Key, University of Phoenix
Elias Konwufine, Keiser University
Dennis Krumwiede, Idaho State University
Rafael Landaeta, Old Dominion University
Eldon Larsen, Marshall University
Eric T. Larson, Rutgers University
Philip Lee, Lone Star CollegeUniversity Park
Charles Lesko, East Carolina University
Richard L. Luebbe, Miami University of Ohio
Linh Luong, City University of Seattle
Steve Machon, DeVry UniversityTinley Park
Andrew Manikas, University of Louisville
William Matthews, William Patterson University
Lacey McNeely, Oregon State University
Carol Miller, Community College of Denver
William Moylan, Lawrence Technological College
of Business
Ravi Narayanaswamy, University of South
CarolinaAiken
Muhammad Obeidat, Southern Polytechnic
StateUniversity
Edward Pascal, University of Ottawa
James H. Patterson, Indiana University
Steve Peng, California State UniversityEast Bay
Nicholas C. Petruzzi, University of IllinoisUrbana/
Champaign
Abirami Radhakrishnan, Morgan State
University
Emad Rahim, Bellevue University
Tom Robbins, East Carolina University
Art Rogers, City University
Linda Rose, Westwood College
Pauline Schilpzand, Oregon State University
Teresa Shaft, University of Oklahoma
Russell T. Shaver, Kennesaw State University
William R. Sherrard, San Diego State University
Erin Sims, DeVry UniversityPomona
Donald Smith, Texas A&M University
Kenneth Solheim, DeVry UniversityFederal Way
Christy Strbiak, U.S. Air Force Academy
Peter Sutanto, Prairie View A&M University
Jon Tomlinson, University of Northwestern Ohio
Oya Tukel, Cleveland State University
David A. Vaughan, City University
Mahmoud Watad, William Paterson University
Fen Wang, Central Washington University
Cynthia Wessel, Lindenwood University
Larry R. White, Eastern Illinois University
Ronald W. Witzel, Keller Graduate School of
Management
G. Peter Zhang, Georgia State University
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xiii
Established Learning Objectives
Learning objectives are listed both at the beginning of each
chapter and are called out as marginal elements throughout the
narrative in each chapter.
Guided Tour First Pages
28
lar38865_ch02_028-067.indd 28 05/14/19 08:01 PM
Organization Strategy
andProject Selection
OUTLINE
2.1 Why Project Managers Need to Understand
Strategy
2.2 The Strategic Management Process:
An Overview
2.3 The Need for a Project Priority System
2.4 Project Classification
2.5 Phase Gate Model
2.6 Selection Criteria
2.7 Applying a Selection Model
2.8 Managing the Portfolio System
Summary
LEARNING OBJECTIVES
After reading this chapter you should be able to:
2-1 Explain why it is important for project managers to
understand their organizations strategy.
2-2 Identify the significant role projects contribute to
the strategic direction of the organization.
2-3 Understand the need for a project priority system.
2-4 Distinguish among three kinds of projects.
2-5 Describe how the phase gate model applies to
project management.
2-6 Apply financial and nonfinancial criteria to assess
the value of projects.
2-7 Understand how multi-criteria models can be
used to select projects.
2-8 Apply an objective priority system to project
selection.
2-9 Understand the need to manage the project
portfolio.
C H A P T E R T W O
2
First Pages
lar38865_ch02_028-067.indd 30 05/14/19 08:01 PM
30 Chapter 2 Organization Strategy andProject Selection
global competition, and financial uncertainty. These conditions make strategy/project
alignment even more essential for success.
The larger and more diverse an organization, the more difficult it is to create
and maintain a strong link between strategy and projects. How can an organization
ensure this link? The answer requires integration of projects with the strategic plan.
Integration assumes the existence of a strategic plan and a process for prioritizing
projects by their contribution to the plan. A key factor to ensure the success of inte-
grating the plan with projects is an open and transparent selection process for all
participants to review.
This chapter presents an overview of the importance of strategic planning and the
process for developing a strategic plan. Typical problems encountered when strategy
and projects are not linked are noted. A generic methodology that ensures integration
by creating strong linkages of project selection and priority to the strategic plan is
then discussed. The intended outcomes are clear organization focus, best use of scarce
organization resources (people, equipment, capital), and improved communication
across projects and departments.
2.1 Why Project Managers Need to Understand Strategy
Project management historically has been preoccupied solely with the planning and
execution of projects. Strategy was considered to be under the purview of senior
management. This is old-school thinking. New-school thinking recognizes that proj-
ect management is at the apex of strategy and operations. Shenhar speaks to this
issue when he states, It is time to expand the traditional role of the project manager
from an operational to a more strategic perspective. In the modern evolving organi-
zation, project managers will be focused on business aspects, and their role will
expand from getting the job done to achieving the business results and winning in
the marketplace.1
There are two main reasons project managers need to understand their organiza-
tions mission and strategy. The first reason is so they can make appropriate deci-
sions and adjustments. For example, how a project manager would respond to a
suggestion to modify the design of a product to enhance performance will vary
depending upon whether his company strives to be a product leader through inno-
vation or to achieve operational excellence through low-cost solutions. Similarly,
how a project manager would respond to delays may vary depending upon strategic
concerns. A project manager will authorize overtime if her firm places a premium
on getting to the market first. Another project manager will accept the delay if
speed is not essential.
The second reason project managers need to understand their organizations strat-
egy is so they can be effective project advocates. Project managers have to be able
to demonstrate to senior management how their project contributes to their firms
mission in order to garner their continued support. Project managers need to be able
to explain to stakeholders why certain project objectives and priorities are critical in
order to secure buy-in on contentious trade-off decisions. Finally, project managers
need to explain why the project is important to motivate and empower the project team
(Brown, Hyer, & Ettenson, 2013).
Explain why it is impor-
tant for project manag-
ers to understand their
organizations strategy.
2-1LO
1 Shenhar, A., and Dov Dvie, Reinventing Project Management (Boston: Harvard Business School, 2007), p. 5.
End-of-Chapter Content
Both static and algorithmic end-of-chapter content, including Review Questions and Exercises, are assignable
in Connect.
SmartBook
The SmartBook has been updated with new
highlights and probes for optimal student
learning.
Snapshots
The Snapshot from Practice boxes have been
updated to include a number of new exam-
ples of project management in action. New
discussion questions based on the Snapshots
have been added to the end-of-chapter mate-
rial and are assignable in Connect.
New and Updated Cases
Included at the end of each chapter are between one and five cases that demonstrate key ideas from the text
and help students understand how project management comes into play in the real world. Cases have been
reviewed and updated across the eighth edition.
Instructor and Student Resources
Instructors and students can access all of the supplementary resources for the eighth edition within Connect
or directly at www.mhhe.com/larson8e.
First Pages
Chapter 3 Organization: Structure and Culture 87
lar38865_ch03_068-103.indd 87 05/21/19 06:35 PM
On entering the 24-hour Googleplex
located in Mountain View, California,
you feel that you are walking through
a new-age college campus rather than
the corporate office of a billion-dollar
business. The interconnected low-rise buildings with
colorful, glass-encased offices feature upscale trap-
pingsfree gourmet meals three times a day, free use
of an outdoor wave pool, indoor gym and large child
care facility, private shuttle bus
