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  • THE WILEY GUIDE TO MANAGING PROJECTS

    The Wiley Guide to Managing Projects. Edited by Peter W. G. Morris and Jeffrey K. PintoCopyright 2004 John Wiley & Sons, Inc.

  • THE WILEY GUIDE TOMANAGING PROJECTS

    Peter W. G. Morris

    Jeffrey K. Pinto

    JOHN WILEY & SONS, INC.

  • This book is printed on acid-free paper.

    Copyright 2004 by John Wiley & Sons, Inc. All rights reserved.

    Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.

    No part of this publication may be reproduced, stored in a retrieval system, or transmitted in anyform or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise,except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, withouteither the prior written permission of the Publisher, or authorization through payment of theappropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers,MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web at www.copyright.com. Requests tothe Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons,Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, e-mail:permcoordinator@wiley.com.

    Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their bestefforts in preparing this book, they make no representations or warranties with respect to theaccuracy or completeness of the contents of this book and specically disclaim any implied warrantiesof merchantability or tness for a particular purpose. No warranty may be created or extended bysales representatives or written sales materials. The advice and strategies contained herein may not besuitable for your situation. You should consult with a professional where appropriate. Neither thepublisher nor author shall be liable for any loss of prot or any other commercial damages, includingbut not limited to special, incidental, consequential, or other damages.

    For general information on our other products and services or for technical support, please contactour Customer Care Department within the United States at (800) 762-2974, outside the UnitedStates at (317) 572-3993 or fax (317) 572-4002.

    Wiley also publishes its books in a variety of electronic formats. Some content that appears in printmay not be available in electronic books. For more information about Wiley products, visit our website at www.wiley.com.

    Library of Congress Cataloging-in-Publication Data:

    Morris, Peter W. G.The Wiley guide to managing projects / Peter W. G. Morris, Jeffrey K. Pinto.

    p. cm.Includes bibliographical references and index.ISBN 0-471-23302-1 (cloth)1. Project management. I. Title: Guide to managing projects. II. Morris, Peter

    W. G. III. Title.HD69.P75P552 2004658.404dc22

    2003026695

    Printed in the United States of America

    10 9 8 7 6 5 4 3 2 1

  • vCONTENTS

    Preface xi

    Introduction xiii

    SECTION I: KEY ASPECTS OF PROJECT MANAGEMENT

    1 Project Control 5

    Peter Harpum

    2 Qualitative and Quantitative Risk Management 30

    Stephen J. Simister

    3 Project Management Structures 48

    Erik Larson

    4 An Overview of Behavioral Issues in Project Management 67

    Dennis P. Slevin and Jeffrey K. Pinto

  • vi Contents

    SECTION II: THE MANAGEMENT OF PROJECTS

    SECTION II.1 STRATEGY, PORTFOLIO, AND PROGRAM MANAGEMENT

    5 Project Success 99

    Terry Cooke-Davies

    6 Management of the Project-Oriented Company 123

    Roland Gareis

    7 Strategic Business Management through Multiple Projects 144

    Karlos A. Artto and Perttu H. Dietrich

    8 Moving From Corporate Strategy to Project Strategy 177

    Ashley Jamieson and Peter W. G. Morris

    9 Strategic Management: The Project Linkages 206

    David I. Cleland

    10 Models of Project Orientation in Multiproject Organizations 223

    Joseph Lampel and Pushkar P. Jha

    11 Project Portfolio Selection and Management 237

    Norm Archer and Fereidoun Ghasemzadeh

    12 Program Management: A Strategic Decision Management Process 257

    Michel Thiry

    13 Modeling of Large Projects 288

    Ali Jaafari

    14 Managing Project Stakeholders 321

    Graham M. Winch

    15 The Financing of Projects 340

    Rodney Turner

    16 Private Finance Initiative and the Management of Projects 359

    Graham Ive

  • Contents vii

    SECTION II.2: TECHNOLOGY MANAGEMENT

    17 Requirements Management in a Project Management Context 391

    Alan M. Davis, Ann M. Hickey, and Ann S. Zweig

    18 Design Management 422

    Peter Harpum

    19 Concurrent Engineering for Integrated Product Development 450

    Hans J. Thamhain

    20 Process and Product Modeling 471

    Rachel Cooper, Ghassan Aouad, Angela Lee, and Song Wu

    21 Managing Congurations and Data for Effective Project Management 498

    Callum Kidd and Thomas F. Burgess

    22 Safety, Health and Environment 514

    Alistair Gibb

    23 Verication 543

    Hal Mooz

    24 Managing Technology: Innovation, Learning, and Maturity 567

    Rodney Turner and Anne Keegan

    SECTION II.3: SUPPLY CHAIN MANAGEMENT AND PROCUREMENT

    25 Integrated Logistic Support and all that: A Review of Through-Life ProjectManagement 597

    David Kirkpatrick, Steve McInally, and Daniela Pridie-Sale

    26 Project Supply Chain Management: Optimizing Value: The Way We Managethe Total Supply Chain 621

    Ray Venkataraman

    27 Procurement: Process Overview and Emerging Project ManagementTechniques 643

    Mark E. Nissen

    28 Procurement Systems 654

    David Langford and Mike Murray

  • viii Contents

    29 Contract Management 678

    David Lowe

    30 Tender Management 708

    George Steel

    31 Project Changes: Sources, Impacts, Mitigation, Pricing, Litigation, andExcellence 743

    Kenneth G. Cooper and Kimberly Sklar Reichelt

    SECTION II.4: CONTROL

    32 Time and Cost 781

    Asbjrn Rolstadas

    33 Critical Chain Project Management 805

    Lawrence P. Leach

    34 Project Performance Measurement 830

    Daniel M. Brandon, Jr.

    35 Making Risk Management More Effective 852

    Stephen Ward and Chris Chapman

    36 Value Management 876

    Michel Thiry

    37 Improving Quality in Projects and Programs 903

    Martina Huemann

    38 The Project Management Support Ofce 937

    Martin Powell and James Young

    SECTION II.5: COMPETENCE DEVELOPMENT

    39 Contemporary Views on Shaping, Developing, and Managing Teams 983

    Connie L. Delisle

    40 Leadership of Project Teams 1014

    Peg Thoms and John J. Kerwin

  • Contents ix

    41 Power, Inuence and Negotiation in Project Management 1033

    John M. Magenau and Jeffrey K. Pinto

    42 Managing Human Resources in the Project-Oriented Company 1061

    Martina Huemann, Rodney Turner, and Anne Keegan

    43 Competencies: Organizational and Personal 1087

    Andrew Gale

    44 Projects: Learning at the Edge of Organization 1112

    Christophe N. Bredillet

    45 The Validity of Knowledge in Project Management and the Challenge ofLearning and Competency Development 1137

    Peter W. G. Morris

    46 Global Body of Project Management Knowledge and Standards 1150

    Lynn Crawford

    47 Lessons Learned: Project Evaluation 1197

    J. Davidson Frame

    48 Developing Project Management Capability: Benchmarking, Maturity,Modeling, Gap Analyses, and ROI Studies 1214

    C. William Ibbs, Justin M. Reginato, and Young Hoon Kwak

    49 Project Management Maturity Models 1234

    Terry Cooke-Davies

    SECTION III: APPLICATIONS IN PRACTICE

    50 How Projects Differ, And What to Do About It 1265

    Aaron J. Shenhar and Dov Dvir

    51 Managing New Product Development Projects 1287

    Dragan Milosevic

    52 Pharmaceutical Drug Development Project Management 1315

    Janet Foulkes and Peter W. G. Morris

    53 Project Management in the Defense Industry 1329

    John F. Roulston

  • x Contents

    54 Project Management in the Construction Industry 1350

    Peter W. G. Morris

    55 Project Management in the Automotive Industry 1368

    Christophe Midler and Christian Navarre

    56 Professional Associations and Global Initiatives 1389

    Lynn Crawford

    INDEX 1403

  • xi

    PREFACE

    The management of projects represents one of the most signicant undertakings in whichmodern organizations can engage. The economic, social, and technological forces thatshape our world are creating an environment that seems, every day, to be oriented moreand more towards a project-based approach to getting things done. Everywhere there isevidence of an increased interest in managing projects: Thousands of new members areenrolling every year in project management professional organizations; hundreds of privateand public sector enterprises are pushing their operating models toward project-based work-ing; scores of universities and technical agencies are offering courses, certication, and de-grees in project management. It is clear that we are experiencing a revolution in the waywe organize and manage, happily one not threatening disruption and confusion but prof-fering improvement and opportunity.

    When we, as editors, set out to develop this handbook, our clear motivation was tocreate a product that was timely, accessible, and relevant. Timely in that project-basedwork has continued to grow at such an enormous pace, attracting large numbers of newadherents, both as individuals and as organizations. Accessible in that we sought also tocreate a work that spoke the appropriate language to the largest possible audience, appealingto both project management practitioners and academic researchers. But above all rele-vant: Too much of project management writing addresses only the basics of time, cost,and scope management (or people and organizational issues) and fails to address the day-to-day nuances that become so important in practice. The reality is that there is far morethan this to managing projects successfully. For this book to be useful, it needed to reectnot only well-known and widely used basic project management practices but also the new,cutting-edge concepts in the broader theory and practice of managing projects. To this endwe have consciously built on our individual (but in many ways parallel) research to capturethe insights of many of the worlds leading experts, explicitly organized, as we explain inthe Introduction, around a management of projects framework.

  • xii Preface

    In short, our goal was to provide a resource that demonstrated the widest possibleusefulness for readers seeking to develop and deliver successful projects, regardless of theirprofessional background.

    Hence, in The Wiley Guide to Managing Projects, we have endeavored to provide a clearview of the cutting edge in project management best practice. Wherever possible, we dothis within a soundly based conceptual framework, founded in research and practical ex-perience, which we have endeavored to make explicit. In doing so we have been joined bya truly notable range of authorities, all leaders in their eld, drawn from many differentindustry sectors, practice areas, and countries. Together they address the most signicanttopics and problems currently facing project managers and project-based organizationstoday.

    Whether you view this book as a comprehensive resource that should be read cover-to-cover or choose a selective subset of the topics that appeal to you directly, we hope youwill nd the experience rewarding. As a collective whole, we believe the book holds togetherwith clarity and structure; as individual essays, each chapter can provide value to the reader.

    It is with genuine gratitude that we would like to acknowledge the efforts of severalindividuals whose work contributed enormously to this nished product. Bob Argentieri,acquisition editor at Wiley, rst conceived of the idea from which this book eventuallyemerged (the successor to the famous Cleland and King Project Management Handbook, as weexplain at the outset of the Introduction). It was his energy and enthusiasm that led, in largepart, to what you now see. To the contributors of the individual chapters we owe a greatdebt of thanks as well. To have so many busy professionals rst agree to participate in thisproject and then to contribute work of such outstanding quality, and work with us so pa-tiently in crafting the chapters, has been extremely gratifying. We thank them sincerely.Third, we should especially thank Gill Hypher of INDECO, who has patiently and withgood humor shepherded a host of queries and a vast quantum of correspondence in gettingthe details right to allow publication to proceed, and to Naomi Rothwell of Wiley, who hasworked with Gill to embed the emerging document in Wileys production machinery.

    And last, though never least, to our families, we acknowledge a bond that can neverbe broken and a wellspring that continues to lead to greater and better things. Two peoplewere never better blessed than we have been with this support.

    Peter Morris and Jeff Pinto

  • xiii

    INTRODUCTION

    Peter Morris and Jeffrey Pinto

    In 1983 Dave Cleland and William King produced for Van Nostrand Reinhold (nowJohn Wiley & Sons) the Project Management Handbook, a book that rapidly became a classic.Now over 20 years later John Wiley & Sons is bringing that landmark publication up-to-date with this, The Wiley Guide to Managing Projects.

    Why the new titleindeed, why the need to update the original work?Thats a big question, one that goes to the heart of much of the debate in project

    management today and that is central to the architecture and content of this book. First,why the management of projects?

    Project management has moved a long way since 1983. If we take the founding ofproject management to be somewhere between about 1955, when the rst uses of modernproject management terms and techniques began being applied in the management of theU.S. missile programs, and 1969 to 1970, when project management professional associa-tions were established in the United States and Europe (Morris, 1997), then Cleland andKings book was reecting thinking that had been developed in the eld for about the rst20 years of this young disciplines life. Well over another 20 years has since elapsed. Duringthis time there has been an explosive growth in project management. The professionalproject management associations around the world now have thousands of memberstheProject Management Institute (PMI) itself having over 140,000and membership continuesto grow. Every year there are dozens of conferences; books, journals, and electronicpublications abound; companies continue to recognize project management as a core busi-ness discipline and work to improve company performance through it; and increasinglythere is more formal educational work carried out in universities in teaching programs atboth the undergraduate but particularly postgraduate levels and in research.

    Yet in many ways all this activity has lead to some confusion over concepts and appli-cations. The basic American, European, and Japanese professional models of project man-

  • xiv Introduction

    agement, for example, are different. PMIs is, not least because of its size, the mostinuential, with both its Guide to the Project Management Body of Knowledge (PMI, 2000) and itsnewer Organizational Project Management Maturity Model, OPM3 (PMI, 2003). Yet it is also themost limiting, reecting an essentially execution, or delivery, orientation. This tendencyunderemphasizes the front-end, denitional stages of the project, the stages that are socrucial to successful accomplishment. (The Europ...

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