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ANS:
The Project type organization defines the human infrastructure of the project. This task is
designed to define the project organization chart, the roles, and the relationships of the
project team. The organizational structure clearly identifies roles and responsibilities of
each position, augmenting the existing role definitions where necessary to cover all of the
responsibilities in a team.
Teams are put together for a project. Each project is headed by a project leader. Each team
will have employees to suit its demands and complete the project successfully. Only
employees with requisite specialized skills are considered for project teams. These
members of project team will join back their parent company once the project gets finished.
In project-type organisational structure, each project is handled like a small company. All
the essential resources and paraphernalia needed to execute projects are procured for fulltime till the project closes out. Employees having specialised knowledge and exposure to
similar project environment will be appointed on contractual terms to work in a group and
deliver the project expectations.
Advantages of Project type organization
Clear line of authority- The project manager has complete authority over the project.
High level of commitment- The project team has a separate and strong identity, and
all members are committed to the project and to each other strongly.
Swift decision making- Because the authority is only with the project manager, the
capacity to make swift decisions is increased.
Simple and flexible- Project-type organizations are structurally flexible and simple,
which makes them comparatively easy to implement.
Disadvantages of Project type organization
Duplication of effort- Each project team is fully staffed, which can result in a
duplication of effort in every area from clerical staff to technological support.
Cost inefficient - The project organization structure can be cost- inefficient because
of underutilization of resources or stockpiling equipment for future use.
Stretching out work during slow periods - During slack times, team members may
not work at high level of productivity.
Low level of knowledge transfer - There is low level of knowledge transfer between
projects as employees are committed to working only on one project.
Job insecurity - At the completion of a project, the employees may be fired if there is
no similar type of project.
Examples of project-type organisation
Rapid transit projects
Construction projects
IT projects
Question 3: What is project performance evaluation? Explain the various types of project
performance evaluation techniques
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Performance evaluation is an important tool for the assessment of a system or service according to
the measurements specified. We can define it as the systematic process of assessment of
effectiveness against predetermined norms, standards, or expressed goals.
The project performance evaluation is important because
Evaluations of project performance are an independent study which is systematically
conducted from time to time to identify the progress of a project and often these studies are
conducted by including both experts from within and outside the project.
Evaluation inspects the output of a project, program or policy against its objectives. It also
adds the additional value by providing lessons from experience to help future management
or development of a specific project, program or policy.
It establishes accurately what is to be evaluated and how past outturns can be measured.
It chooses the alternative condition of the world and/or alternative management decisions as
counterfactuals.
It evaluates the actual outcome with the target outcome, and with the effects of the chosen
alternative condition of the world and/or management decisions.
It provides the results and recommendations.
Disseminates the results and recommendations.
Types of project performance evaluation and the explanation are
1. Process (or implementation) evaluation
It is also called formative evaluations which are designed to improve the implementation
of a program, policy or strategy as it unfolds.
In this type of evaluation we measure the level to which a program is effective as it was
planned. It usually considers the program activities conformance to statutory and
regulatory requirements, program design, and professional standards or customer
expectations.
2. Outcome evaluation
It is also called summative evaluations which are designed to judge a program, policy or
strategys relevance, success and/or cost-effectiveness which includes its relative
contribution to the intended outcomes.
This type of evaluation measures the level to which a program attains its outcomeoriented objectives. It mainly focuses on outputs and outcomes including unintended
effects to evaluate program effectiveness but may also consider program process to
understand how outcomes are produced.
3. Impact evaluation
This is a type of outcome evaluation that measures the net effect of a program by
evaluating program outcomes with an estimate of what would have happened in the
absence of the program.
This type of evaluation is used when external factors are known to influence the
programs outcomes, in order to isolate the programs contribution to achievement of its
objectives.
4. Cost-benefit and cost-effectiveness analyses
It compares a programs outputs or outcomes with the costs (resources expended) in
order to produce them. When applied to existing programs, they are also regarded as a
variety of program evaluation.
It measures the cost of meeting a single goal or objective, and can be used to identify
the least cost alternative to meet that goal. This analysis aims to recognize all relevant
costs and benefits, generally expressed in dollar terms.
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The final project report is not another evaluation, rather it is the history of the project. It is the
chronicle of the life and times of the project, a compendium of what went right and what did
not, who served the project in what capacity, what was done to create the substance, and
how it was managed.
The suggested contents of a final project report are given below with what it should contain:
Evolution of project
o Narrate the various activities undertaken from project selection, planning, execution,
control, and termination phase; problem faced, what went well, what did not, and why.
Question 5: Explain the various types of risk that can affect a business project.
ANS:
There are various types of risk that can affect business project. While some of these risks can be controlled
through a number of options, some of them simply have to be accepted and planned for any project
environment.
Macro Risks
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A chance of a loss or injury is called risk. It has two components the systematic risk and
unsystematic risk.
Systematic risk:
o A systematic risk cannot be controlled or foreseen in any manner, therefore it is almost
impossible to predict or protect the organization or a project against this type of risk. Such a
risk affects the entire market.
o The changes in the economic, political and the sociological conditions affect the security
market. These are the factors that cannot be controlled by the organization and investor.
The smartest way to tackle this risk is to simply recognize that this type of risk will occur
and plan for your project to be affected by it.
Example: The stock market is in bear hug or in bull grip. This shows that the whole
market is moving in particular direction either downward or upward.
Unsystematic risk:
o Unsystematic risk is sometimes referred to as "specific risk". It is unique and peculiar to a
firm or an industry and can usually be eliminated through a process called diversification.
o Unsystematic risk stems from managerial inefficiency, technological change in the
production process, availability of raw material, changes in the consumer preference, and
labour problems.
Example: The changes in the consumer preference affect the consumer products like
TV, washing machines, refrigerators, etc more than that of consumer product industry
Micro Risks
As compared to Macro risks there are micro risk (small scale ) types of risks that are vital when
talking about a business.
Project risk:
o Project risk relates to the uncertain events or situations that have the potential to adversely
affect a planned project, usually in terms of cost, schedule, and/or product quality.
o Project risk is a function of two components: likelihood and consequence.
Country risk:
o Country risk, also referred to as political risk, is an important risk for investors today. With
more investors investing internationally, both directly and indirectly, the political and
economic stability and viability of a country's economy needs to be considered.
o Factors affecting country risk are
1) Political climate
2) Economic environment
3) Financial conditions
4) Social institution
Market risk:
o The price fluctuations or volatility increases and decreases in the day-to- day market. It is
defined as that portion of total variability of return caused by the alternating forces of bull and
bear market.
o It is also called as bull market, in bull market, the index moves from a low level to the peak.
Bear market is just a reverse to the bull market.
Interest rate risk:
o Interest rate risk is simply the risk to which an institution is exposed because future interest
rates are uncertain. The assets and liabilities of a financial institution have different maturity
and liquidity.
o Financial institutions create assets and at the same time create liabilities. These loans are
invested by the financial institutions at a certain rate of interest and similarly interest cost has
to be paid to the lenders of deposit. The mismatches of interest rates of the assets and
liabilities expose to interest rate risk.
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Activity description
Precedence relationship
Data entry error
Graphics
One of the important features of PM software is its ability to generate a
variety of charts including network diagram, activity-linked Gantt chart, and
Gantt chart quickly. Further, changes in base line plan are quite easy.
Time analysis
If there is unlimited and flexible resource or if resource can be outsourced,
the network may be prepared at the earliest start time of activities. In the
real world, many projects are managed on this basis.
PM packages carry out time analysis which includes calculation of early start,
early finish, late start, and late finish; free slack and total slack with ease.
Manually carrying out time analysis is tedious.
Resources scheduling
Resources scheduling problems are of two types:
o Resource leveling where unlimited and flexible resources are available
o Resource allocation problem where resources are limited
In resource leveling, activities are scheduled to minimize the variation in
level of resource deployment.
Resource allocation problem is concerned with scheduling activities in such a
way so as to find the shortest project schedule.
Output reports
Most PM software packages have extensive report generation capabilities.
They can generate a range of reports in various forms (graphical, tabular, or
textual). The reports are standard or customized.
Project schedule
Network (based on AON systems), linked Gantt chart, Gantt chart : Work-to
list
Cost related report
Budgeted vs. actual cost (daily and cumulative)
Resources utilization report
Progress report
Overall project, milestone chart, critical path
Chart showing responsibility of department/function to carry out particular
activities
Progress summary report
Updating
A change to the project parameter, an unexpected increase or decrease in
the resource available, changed cost rate, or new target dates.
A change in network logic due to change in project scope, design change,
etc.
To have a new schedule that take into account the progress made to date.
Importing/exporting
The process of bringing information into the PM software from other
application such as word processing, spread sheet, etc is called importing.
Similarly, sending information from PM software to other application is called
exporting.
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The exporting and importing obviates typing/data entry effort and eliminates
the possibility of associated error.
Project monitoring and tracking
Tracking the progress about schedule and cost is an important aspect of
project management.
Most PM software packages permit the users to define a baseline plan and
compare the actual progress with respect to those in the baseline plan.
What if analysis
This is a useful feature of PM software. This permits to know the effect of
changes in project variable (people, cost, and change in scope) on project
objective.
This analysis helps the project manager in taking an appropriate decision.
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