Notes for Project Management including the topics: - Managing HR in projects - Managing Risk in projects - Managing NPD projects

MS 969
Advanced Project Management
Group Assignment
14/11/2016
Kimberly Busuttil 201665769
Kristabel Borg 201679385
Jacob Jose 201669488
Nasser Alsubaie 201660851
Syed Farjad Ali Bukhari 201687454
Alexandros Spiliopoulos 201657194
Table of Contents
1. Managing Human Resources in Projects ................................................................................ 1
1.1 Organisational Planning ........................................................................................................ 1
1.2 Acquire the Project Team ..................................................................................................... 4
Case Studies ................................................................................................................................ 5
“Security Technology Firm Relocates Headquarters on Schedule & $3M under Budget”
(pmsolutions, 2015) ................................................................................................................ 5
“Recruitment in an Insurance Company” (MeticulousHRSolutions, 2015) ........................... 6
“How HR Caused Toyota to Crash” (Sullivan, 2010) ............................................................ 7
1.3 Develop the Project Team ..................................................................................................... 8
1.4 Manage the Project Team ................................................................................................... 11
Case Studies .............................................................................................................................. 13
Resolving conflicts in a project............................................................................................. 13
Rewarding Employees .......................................................................................................... 14
Employing Competent Workers ........................................................................................... 15
Summary ................................................................................................................................... 16
Assessment Questions ............................................................................................................... 17
References ................................................................................................................................. 20
2. Project Risk Management ..................................................................................................... 22
2.1 Why Manage Risks? Benefits of Project Risk Management .............................................. 22
2.2 How to Manage Risks? ....................................................................................................... 23
1. Identifying the Risk........................................................................................................... 24
2. Analysing the Risks .......................................................................................................... 25
3. Prioritising the Risk .......................................................................................................... 27
4. Mitigation Plans ................................................................................................................ 27
2.3 Monitoring and Controlling Risks in Projects .................................................................... 27
Case Study ................................................................................................................................ 29
Introduction ........................................................................................................................... 29
The First Panama Canal Project ............................................................................................ 29
A Second Panama Canal Project ........................................................................................... 30
Risks Identification and Prioritization .................................................................................. 30
Risk plans .............................................................................................................................. 30
Adjusting the objective ......................................................................................................... 31
Risk based re planning .......................................................................................................... 31
Completion ............................................................................................................................ 31
Summary ................................................................................................................................... 32
Assessment Questions ............................................................................................................... 32
References ................................................................................................................................. 35
3. Managing New Product Development .................................................................................. 36
3.1 Concept Design ................................................................................................................... 36
3.2 Product Planning ................................................................................................................. 37
3.3 Design Review .................................................................................................................... 38
3.4 Prototype Building .............................................................................................................. 38
3.5 Pilot Production .................................................................................................................. 39
3.6iMass Production ................................................................................................................. 39
3.7 Sustaining Support .............................................................................................................. 40
3.8 Review of Market Performance .......................................................................................... 40
Case Study ................................................................................................................................ 40
Beiersdorf Case Study........................................................................................................... 40
Summary ................................................................................................................................... 44
Assessment Questions ............................................................................................................... 44
References ................................................................................................................................. 47
Managing Human Resources
MS969: Advanced Project Management Group Assignment 1
1. Managing Human Resources in Projects
The success of a project is highly dependent on the people involved within the project itself. This
is because the project can only be as successful as the people are competent and proficient in their
job (Newton, 2015).
The recruitment aspect of human resource management therefore plays a significant part of the
success of a project. Human Resource Management (HRM) is the collection of decisions which
result in the organising, managing and leading of the project team (Shahhasseini & Sebt, 2011).
The strategies and operations of project HRM differ from those normally applied in traditional
HRM, mainly because projects have an end and hence incurs two main considerations:
Since projects have an end, unlike ongoing businesses, this involves release of staff at
different points of the project
The number of persons in a project fluctuates depending on the needs of the project
(R.Duncan, 1996).
The HRM in projects involves four major steps. These are illustrated in Figure 1.
1.1 Organisational Planning
The purpose of this plan is to create a team of people with assigned roles and duties within the
project. The processes involved within this major stage are to first build the HRP, develop it and
fabricate a project team structure (Mishra, 2007).
The number of persons necessary
The skills required for the roles assigned to the workers
The time periods that the persons are needed (must also include availabilities)
The training needed especially for a particular project
The expert knowledge required in certain phases of the project
Costing data (Mishra, 2007)
It is important to point out that, the HRM plan is dependent on the Project Schedule, which
indicates the number man hours of a particular skill needed within a specific period of time. Since
Managing Human
Resources in Projects
Organisational
Planning
Aquiring the
Project Team
Developing the
Project Team
Tracking the
Project Team
Figure 1: Schematic of the 4 Main Stages in Project HRM
Managing Human Resources
MS969: Advanced Project Management Group Assignment 2
the HRM plan sets out the needs of human resources, it also aids in the decisions made when
acquiring staff (Mishra, 2007).
For this plan to be created the project definition, technical environment and Organisation
Breakdown Structure (OBS) must be revised. The latter is built through proper literature and
knowledge of HR Organisational Theory. An example of an organisational breakdown structure,
which is generated in order to illustrate positions and relationships of the team members is shown
in Figure 2. It is always ideal to set a separate OBS for each department as it is commonly utilised
to display who reports to who in specific departments of the project (R.Duncan, 1996).
There are several tools and techniques that can be applied in the development of a human resources
plan. The most common is the Responsibility Assignment Matrix (RAM) which is used to aid in
visualising connections between tasks and workers within the project. The matrix employed for
this tools may also be called Linear Responsibility Chart (LRC), Accountable, Responsible,
Consulted and Informed (ARCI) and also Responsible, Accountable, Consulted and Informed
(RACI), as shown in Figure 3 (Newton, 2015).
Figure 2: Organisational Chart illustrating the Team Members according to
their Position
HRM
Planning
Tools
RAM
RACI
ARCI
LRC
Figure 3: Tool to generate an HRM Plan
Managing Human Resources
MS969: Advanced Project Management Group Assignment 3
An example of this matrix is shown in Table 1. The degree of detail for this matrix may vary from
project to project, however would involve a lot of detail if it involves the responsibility of each
team for each component of the work breakdown structure (Newton, 2015).
Table 1: Example of Generic RAM Adapted from (R.Duncan, 1996)
Person
Phase
Project Manager
Developer
Analyst
Requirements
A + R
-
-
Functional
A + R
C
C
Design
A
I
R
Develop
A
R
C
Testing
A
C
R
Another essential output for the HRM plan is the Staffing Management Plan. This involves a
schematic description of the human resources required during the different phases of the project.
This is usually represented in the form of histograms, as shown in Figure 4 (R.Duncan, 1996).
The HRM plan involves many components and tools but must ultimately include the information
in Table 2.
Table 2: Main Elements of Organisational Planning- Adapted from (R.Duncan, 1996)
Inputs
Tools & Techniques
Outputs
Reporting Relationships
HR Organisational Theory
Organisational Breakdown
Structure
Staff Skills and Qualifications
required
RAM: Responsibility
Assignment Matrix
Assigned Responsibilities
through RAM
Constraints e.g. experiences
effecting present decisions
Charts & Histograms
Staffing Management Plan
Stakeholder Analysis to ensure
that their needs will be met
Roles and Responsibilities
Figure 4: Resource Histogram (R.Duncan, 1996)
Managing Human Resources
MS969: Advanced Project Management Group Assignment 4
1.2 Acquire the Project Team
This involves procedures which are carried out by recognising skilled personnel who are suitable
for the project. It is important that these people fit the requirements set in the HRM plan. Acquiring
the project team entails obtaining the correct persons for the job, with the correct skills, correct
availabilities within the planned budget (Mishra, 2007).
Other than the staffing management plan, the staffing pool descriptions also act as inputs for the
acquisition of project teams. This involves the worker availabilities, experience and personal
characteristics i.e. will the people work well together? Recruitment then follows. These factors are
shown in Figure 5. Different organisations have different strategies and practices, which act as
restraints on hiring staff (R.Duncan, 1996).
Negotiation between the project manager and other managers is an important aspect of the
acquisition of project team. This is usually for situations where other managers are responsible for
the recruitment of team members themselves. Certain politics of organisations may lead to
decisions which may result in complicated outcomes. An example of this is made by R. Duncan,
1996, “a functional manager may be rewarded based on staff utilisation. This creates an incentive
for the manager to assign available staff who may not meet all of the project’s requirements.”
(R.Duncan, 1996)
Project procurement management is usually applied in order to make certain people to work on
activities related to the project. This is employed when there are not enough human resources and
therefore external staff are required for completion of the project. Procurement may be the outcome
of bad decisions such as not to recruit certain people as full time workers. (R.Duncan, 1996)
The outputs that result from the aforementioned inputs and tools are Project Staff Recruited (full-
time or part-time) and Project Team Directory in which all the members and stakeholders of the
project are listed together with their details. The acquisition of the project team involves many
components and tools but must ultimately include the information in Table 3. (R.Duncan, 1996)
Availability
Cost
Experience
Ability
Knowledge
Skills
Attitude
Figure 5: Important Factors to consider when Recruiting
Personal for Project Team (Newton, 2015)
Managing Human Resources
MS969: Advanced Project Management Group Assignment 5
Table 3: Main Elements of Acquisition of Project Team- Adapted from (R.Duncan, 1996)
Inputs
Tools & Techniques
Outputs
Staffing Management Plan
Negotiations
Project Staff Recruited
Staffing Pool description
Procurement
Project Team Directory
Recruitment practices
Case Studies
It is important to be able to apply the theory and apply it to practical and real life situations. By
doing this one can analyse what went wrong and improve what could be done better. A simple
example of failures in terms of human resource management is the following:
The Titanic sank due to the impact that occurred between the iceberg and the hull of the ship,
however, ultimately it was the sequence of incorrect decisions to travel at a higher speed than
dictated under the given weather conditions. It can be concluded from this example that although
the design of the ship’s hull was a factor of the sinking of the Titanic, the actual cause was indeed
human error.
Some examples of case studies are described and discussed in this section.
Security Technology Firm Relocates Headquarters on Schedule & $3M under Budget
(pmsolutions, 2015)
Company
The company in this case study is a global leading security firm. They provide services for the
military and also some resilience applications (pmsolutions, 2015).
Objective
The company aimed to keep costs to a minimum and upgrade R&D as well as customer services.
Challenges
As the title of the case study insinuates, the headquarters needed to be relocated. Relocations of
headquarters have many repercussions;
Headquarters had to stop operating
Resulting in relocations of departments such as R&D labs, accounts departments, etc.
Changing location and handling of hazardous materials
Challenges in keeping important employees
Challenges in keeping services running smoothly
Legal aspects for HR (pmsolutions, 2015)
Managing Human Resources
MS969: Advanced Project Management Group Assignment 6
It is important to mention that external expertise was employed for this relocation, which was
clearly a decent idea. However, the project had already commenced and the company had
announced moves to employees, customers, and public before procurement (pmsolutions, 2015).
Solution
The challenges were analysed by being in collaboration with the client, key personnel, and various
stakeholders and be able to understand the requirements of the different departments. Following
this, a collaborative team was established to hasten the implementation of the relocation. The
procured senior project leader worked with an internal Project Manager and Project Finance
Manager for inside knowledge about key employees and relations and also any legality issues
within the company (pmsolutions, 2015).
The plan was expedited due to the efficient HRM plan which provided all necessary facilities and
requirements for the departments in the new locations. This reflects a good RAM matrix and
staffing management plan, which were used to properly link the personnel with the assigned job
and also with their availabilities.
Results: Success
Not only did the relocation project finish within the planned time limit but it also cost the company
$3 million less than estimated. The main reason for this was that the project was constantly in
correspondence with the crucial agendas at all sites in order to integrate and adapt moves, customer
services, training, and manufacturing. Here, procurement for human resources and services was
essential in carrying out this project especially for it to be on schedule and also within budget
(pmsolutions, 2015).
Recruitment in an Insurance Company (MeticulousHRSolutions, 2015)
Company
The company employs a manual recruitment strategy, which is therefore reliant on these persons
carrying out the task i.e. employment agencies (MeticulousHRSolutions, 2015).
Objective
To reduce service costs which were totalling up to $20M per year (MeticulousHRSolutions, 2015).
Challenges
The company itself became concerned about the challenges within manual recruitment:
Time efficiency
Robustness of process
Incurred costs (MeticulousHRSolutions, 2015)
Managing Human Resources
MS969: Advanced Project Management Group Assignment 7
Solution
Before a solution was developed, reviewing of the following was carried out:
existing processes along with respective data and documentation
existing interviews (MeticulousHRSolutions, 2015)
It was concluded that there was a need for recourse planning as well as an automated recruitment
procedure with possible needs for obtaining staff from external sources. This involved consistency
in the process for recruitment, by setting up an online process with applicant tracking.
Results: Success
This automated procedure resulted in decreased expenses as well as a more organised approach
for the applicant (MeticulousHRSolutions, 2015).
“How HR Caused Toyota to Crash” (Sullivan, 2010)
Company
Toyota Motor Corporation is a worldwide automotive manufacturer (Sullivan, 2010).
Challenges
9M cars worldwide were returned for quality inspections. This may be due to lack of appropriate
training or knowledge of the employees, relating to poor HR management (Sullivan, 2010).
Solution
The HR processes that must at least be considered as suspect include
Rewards policies: rewards are there to increase motivation of employees to work better.
These incentives must encourage the employees to be vocal when they notice any issues
and get managers to act on the issues. In the case of Toyota, it is possible that the rewards
strategy was not correct such that if there was a reward for error-free results, then it could
be that the employees hid the errors so that they could obtain the reward.
Training procedures: employees must be competent at what they are instructed to do. This
is confirmed by providing training. If the training is sufficient enough, then the chances of
employees owing to errored results could have been higher.
Performance management processes: tracking the performance of processes results in
easier identification of issues and problems. This is important as no employees should be
trusted blindly but rather a measurement system must be employed.
Recruitment processes: hiring people who are not right for the job is the primary mistake
in any industry. Recruitment of the wrong people, as seen in this case study may result in
catastrophic and costly errors. If the recruitment strategy is designed properly and
according to the 7 factors mentioned in Figure 5 (Sullivan, 2010).
Managing Human Resources
MS969: Advanced Project Management Group Assignment 8
Results
HR needs to periodically test or audit each of the processes in order to avoid major errors to occur.
Errors that could potentially cost billions (Sullivan, 2010).
1.3 Develop the Project Team
The team members may have different backgrounds and knowledge and thus developing the team
is of utmost importance in order for the members to work as one. During the team development,
members understand their main roles and responsibilities as well as interact with the other team
members (PMI, 2013).
It is recommended that the team development is done before the actual initiation of the project, in
order for this development to be documented in the human resources plan. The HR plan, mentioned
in section 1: Organisational Planning defines a number of techniques that should be applied during
this stage; such as training and team activities (Newton, 2015).
During the planning of training and activities, a resource calendar is used as an input source to
allocate the time available for all the members (Newton, 2015).
Ground rules are usually defined at the beginning of the project, so that the members will be
immediately aware of the regulations they have to obey. These are rules which define the tolerable
behaviour of the members and reduce the possibility of misunderstanding or even conflicts. It is
the members’ responsibility to follow these pre-defined rules; to have an overall improved project
performance. Such ground rules may be to trust and respect other members whilst reducing
animosity (Duncan, 1996).
During the development of the project team, the members are:
1. Taught interpersonal skills, which are also known as soft skills. There may be members
who are already familiar with these skills, especially if they have previously worked in a
group project. Some of the skills covered are communication skills, conflict management,
developing empathy as well as emotional intelligence. These skills will be used by the
members to improve the communication amongst them, regulate how to express their
emotions and control the situation in case of arguments (PMI, 2013).
2. Given training practice; the scope of the project can only be fulfilled if the team members
are competent enough to carry out the requested tasks. Thus, generally members are given
training practices to increase their proficiency in the project’s field (Belout, 1998). The
training helps the team members to develop further their skills in order to deliver high
quality deliverables (PMI, 2013).
3. Given team building activities are activities which aim to enhance team work and improve
the working relationship amongst the members. The main objective of these activities is to
Managing Human Resources
MS969: Advanced Project Management Group Assignment 9
form individual members into one singular, effective and productive team in order to meet
the goals and objectives pre-determined. The managers should continuously study the
relationship amongst the members and their performances (Fabi & Pettersen, 1992). If team
members have a positive relationship, a lower staff turnover rate would result.
After research and studies, Tackman 1977, proposed a model consisting of five different stages
that should be carried out during the team development stage. These stages are illustrated in Figure
6 and explained in Table 4 (Fabi & Pettersen, 1992).
Table 4: Description of the Stages used in the Development of the Project Team (Oxford, 2012)
Figure 6: Tuckman's Team Development Model (Tuckman & Jensen, 1977)
To improve and build a positive relationship amongst the members, they are usually located at the
same location in terms of offices etc. Colocation aids their communication abilities, especially
since the members can interact and meet face to face to discuss their opinions and decisions.
Colocation can be either temporary or for the whole project, depending on the duration and
complexity of the project being carried out (PMI, 2013).
Stages
Description
1. Forming
The members get to know one another and build confidence. Members
understand the goals and objectives of the project.
2. Storming
The members start communicating and working with one another.
Conflicts may arise and thus the management should use any feedback
received from the members to improve the team relationship.
3. Norming
The team members learn the project’s norms and ground rules. By this
stage, members realise that they should work collaboratively and accept
each other’s viewpoints. The management should ensure that conflicts
are minimal.
4. Performing
The members should be comfortable in working with one another.
Effective and well organised work should be produced. The
management should regularly inform the members of the project’s
resources limitations; such as time or money.
5. Adjourning
By this stage, the project is completed and the goals pre-set are reached.
The members are released from the project and the management should
ask the members to give feedback, which can be applied in future related
projects.
1. Forming 2. Storming 3. Norming 4. Performing 5. Adjourning
Managing Human Resources
MS969: Advanced Project Management Group Assignment 10
External feedback is an important input used for team development, since it is used to measure
the performance of the team and compare it with the performance expectations. The performance
of the members increases if they feel the sense of recognition and appreciation (PMI, 2013).
Rewards and recognition are two actions to reward team members for their behaviour, work or
performance. This increases their enthusiasm since they feel that the effort they make is
appreciated and valued in the project. Members can see these rewards as a challenge; to apply their
knowledge and skills, so that in return they have a good reputation and appreciation in the project.
Figure 7 shows a connection between rewards and success, which was presented by Beel 2007.
Rewards can be given either throughout the project or at the end of the project. If the project is of
a large scale and there are more than one group, rewards might be given to a whole group rather
than to an individual (PMI, 2013).
Beel 2007 developed a rewarding model, known as the Reward House. Before rewarding a
member or a team, the human resources management should answer six questions and consider
Motivation Theories, Internal Rewards Factors and External Reward Factors. This model is
shown in Figure 8.
Figure 8: The Reward House (Beel, 2007)
From Figure 8 it can be seen that the reward system is based on the motivation theories. The
management applies these theories to motivate the employees. The management should answer
the questions in this model according to these theories. An example of a motivation theory is
Theory X and Theory Y. This motivation theory states that there are two types of employees; Type
X and Type Y. The former is an employee who attends work since it is a must and the latter attends
Rewards Motivation
Increase in
Performance
Increase in
Success
Figure 7: Influences of Rewards in a Project (Beel, 2007)
Managing Human Resources
MS969: Advanced Project Management Group Assignment 11
work since s/he enjoys it. Thus, this theory implies that the company should only reward Type Y
personnel since they are self-motivated and take responsibilities when required (Beel, 2007).
After answering the questions, the management also consider internal and external factors before
rewarding an employee. Internal factors directly influence the company or the workers, such as
the team size, age and background of other team members as well as the organisational culture.
External factors are factors which are not directly related to the company or to the employees,
such as the world economy and minimum wages (Beel, 2007).
From this stage, developing the team project, it can be concluded that if the tools and techniques
are properly implemented, the member’s performance will improve, resulting in higher
productivity and project efficiency. Thus the human resources should select the most appropriate
training and activities to bring the members to work competently as one team (Fabi & Pettersen,
1992).
Table 5 represents the inputs, tools and outputs used in the development of team project:
Table 5: Main Elements of Developing the Project Team Adapted from (Duncan, 1996)
Inputs
Tools & Techniques
Outputs
HRM Plan
Interpersonal Skills
Team Performance Report
Resource Calendars
Training
Updated HRM plan
External feedback
Team Building Activities
Updated documents
Colocation
Ground Rules
Recognition and Rewards
1.4 Manage the Project Team
At this stage, the team members should be working together without difficulties but it is important
to keep monitoring their performance to ensure that it fulfils the expectations of the project plan
(PMI, 2013). By continuously monitoring the team members, the possibility of team member
disappointment, conflicts or even employees leaving their job should be reduced. If these issues,
amongst others, do occur, the success of the project will be directly influenced, since all jobs and
schedules are interlinked (PMI, 2013).
Conflicts may arise between team members and also between team members and someone from
the management. During serious arguments the human resources department should be
immediately notified either by the project manager or the team members themselves (Victor,
2016).
An Issue Log is a documentation used in this stage and includes the issues that could not be
resolved by the members. This documentation is sent to the HR management to help in resolving
Managing Human Resources
MS969: Advanced Project Management Group Assignment 12
these issues (PMI, 2013). Figure 9 shows the different techniques that can be implemented to
manage conflicts.
Figure 9: Methods of Conflict Management (Blake & Mouton, 1970)
1. Avoidance involves completely ignoring the problem (Victor, 2016).
2. Smoothing is when there is co-operation between the conflict members and the common
opinions are considered. This helps in adopting different ideas and perceptions from
different members. However, this technique is only a short-term solution since the
argument is not resolved but reduced to an acceptable level (Victor, 2016).
3. Compromising is when there is a co-operation between the conflicted members. This
results in a balanced and fair decision. By using this technique, members’ opinions are
taken into consideration (Victor, 2016).
4. Competing is when members ignore each other’s opinions and stubbornly continue with
their way, depending on the power of the member. The man in power makes the final
decision in this method. This method does not solve the problem since the cause of the
problem is not tackled (Victor, 2016).
5. Collaborating is when the people in conflict involve themselves to find the most
appropriate solution of how to resolve the problem. In this method it is members
themselves who come together to solve the problem (Victor, 2016).
6. Problem Solving involves finding the source that is caused the problem. This is the ideal
technique to be used since the root cause of the problem is determined and thus reduces the
chances for this problem to recur (Victor, 2016).
Whilst monitoring the performance of the members and evaluating their work, there may be
requests for replacing staff. This is because of previous recruitment of incompetent staff who
are not suitable for the project (Heldman & Mangano, 2009).
In this stage, Performance Reports are used to evaluate the performance of the project in
comparison with the planned criteria, such as cost and time. HR managers can schedule one to one
meetings with the members to acquire primary feedback about how are they feeling with their
work, how they feel the project is going and if there are any recommendations that they want to
give. Individual meetings are sometimes better than group meetings to obtain genuine insights,
which enable the management to improve the project’s performance (PMI, 2013).
Methods of Conflict
Management
Avoidance Smoothing Compromising Competing Collaborating
Problem
Solving
Managing Human Resources
MS969: Advanced Project Management Group Assignment 13
During the management of team members, Organisational Process Assets are used as an input.
These include useful information related to the project such as process regulations and
procedures. Whilst carrying out the project, new knowledge, findings and techniques may be
developed and these should be included in the organisational process assets to update the current
information and thus can be used in future related projects (Heldman & Mangano, 2009).
Table 6 includes the inputs, tools and outputs used in this stage:
Table 6: Main Elements of Managing the Project Team Adapted from (Duncan, 1996)
Inputs
Tools & Techniques
Outputs
HRM Plan
Observation and Monitoring
Updated HRM Plan
Issue log
Conflict management
Requests for replacing staff
Team performance report
Interpersonal Skills
Updated Organisational Process
Assets
Organisational process assets
Release; After completing the project, the employees will be released from the project since it is
completed. The members either go back to their original company or department or can also be
assigned to a new project (Heldman & Mangano, 2009). Information such as when the staff should
be released and the procedure of how to release staff is included in the Staff Release Plan, which
is a part of the HR plan. It is ideal that before releasing the members, the management asks them
to give feedback about the project. This feedback can be used to improve future related projects
(Watt, 2012).
Case Studies
Resolving conflicts in a project
Company
Anonymous
Objective
To resolve a conflict between team members
Challenges
Lack of communication amongst team members and reluctance of members to make the initial
step to solve the problem (Abudi, 2015).
Solution
Managing Human Resources
MS969: Advanced Project Management Group Assignment 14
The human resource management set a meeting with the members individually and a series of
questions were asked in order to learn more about the problem. During these meetings, the HR
management learned that some of the members are not feeling included in the team and that their
opinion is never good enough to fulfil the project’s requirements. Some stated that certain members
were not completing their tasks as they should and are therefore putting an extra work load on
others (Abudi, 2015).
The problem is that during the initiation stage of developing the team, the human resources did not
include any conflict management courses as the management team considers it irrelevant and a
waste of time and money (Abudi, 2015).
The management therefore hired a facilitator to teach the team members how to resolve issues and
handle conflicts. Team activities were then carried out to improve their relationships and
understand better how they should work as a team to reach the project’s goals. The roles and
responsibilities of each member were reviewed to ensure that everyone knows what must be done
and to ensure that all members are comfortable with their roles. The management decided to
organise more events amongst the team for them to improve their friendship and disconnect from
their working environment (Abudi, 2015).
Result
After the training and activities, the members’ relationships were improved and worked in more
efficiently. This example shows how team activities are important in order to learn more about the
team members and how to handle conflicts appropriately (Abudi, 2015).
Rewarding Employees
Company
FullContact is an IT company which introduced a concept known as Paid, Paid Vacation a few
years ago to their company.
Objective
Employees have to disconnect from work and enjoy themselves by going abroad.
Solution
The company pays $7,500 per person per year to send him/her on vacation, anywhere s/he likes.
The co-founder, Bart Lorang, stated that by doing so, the employee efficiency would increase
(Lorang, 2012).
Results
Managing Human Resources
MS969: Advanced Project Management Group Assignment 15
The company shows the appreciation for their employees, by giving them deserved paid time off.
This reward reduces the pressure on the employees, who will work with higher productivity once
they return back to work. This concept is ideal for long and stressful projects, in which the team
members work hard to meet tight deadlines (Lorang, 2012).
Employing Competent Workers
Company
Volkswagen Group
Challenge
In 2015, VW cheated in emission testing and the company was fined billions of dollars. They also
had to compensate the customers (Ruddick, 2015).
Solution
After this scandal, the company decided to half the size of the senior management due to the
mistake they have done and to reduce the company costs (Ruddick, 2015).
The chief executive stated that the scandal was due to a collection of errors; due to the project
management not organising the work appropriately and the HR employing non competent staff.
The new project management team will increase the company’s efficiency and reliability at
decision making (Ruddick, 2015).
Results
This shows how important it is to primarily employ a good recruitment system and also to properly
develop a team and monitor the work regularly. Regular training is recommended for the members
to keep up to date with new technologies and learn how to minimise errors. Due to lack of planning
and organising, VW lost billions of money, potential customers and trust from its shareholders
(Ruddick, 2015).
Managing Human Resources
MS969: Advanced Project Management Group Assignment 16
Summary
1. Recruitment of employees is an important aspect in a project, since the project can only be
as successful as the people are competent in their job.
2. Managing HR in projects is divided into four major parts;
a. Organisational Planning
b. Acquiring Project Team
c. Developing the Project Team
d. Tracking the Project Team
3. Organisational Planning involves the development of a HR plan, which consists important
information about the project, such as the number of employees required and the training
needed.
4. The most common tool used during the HRM planning is RAM; Responsibility
Assignment Matrix
5. Acquiring the project capital, team capital involves the recognition of the skilled personnel
who are fit for the job, having suitable qualifications, experience and availabilities.
6. Developing the project capital, team capital involves the interaction amongst employees
aiming at forming one united team. If the tools and techniques are properly implemented,
the members performance will improve, resulting in higher productivity and project
efficiency.
7. The Team Development phase involves the following steps:
a. Forming
b. Storming
c. Norming
d. Performing
e. Adjourning
8. The last stage, Managing the Project Team, consists of the monitoring the team members
by observing their performance. This is ideal in order to find whether any team members
are uncomfortable at work and for the HR to resolve any issues which may occur.
9. The methods used to manage conflicts are:
a. Avoidance
b. Smoothing
c. Compromising
d. Competing
e. Collaborating
f. Problem Solving
Managing Human Resources
MS969: Advanced Project Management Group Assignment 17
It is recommended that further reading is carried out. The following two books are very educational
and contain useful information regarding the topic:
- Project Management Institute Standards Committee: A Guide to the Project Management,
Body of Knowledge, 1996
- Heldman K. & Mangano V.: PMP Project Management Professional Exam Review Guide,
2009
Assessment Questions
Please access the quiz through this link after studying the notes: https://goo.gl/K9UWRb
The answer sheet is presented overleaf for easier revisions.
Managing Human Resources
MS969: Advanced Project Management Group Assignment 18
No.
Question
Options for Answer
1.
Which phase is not included in HRM
in projects?
a. Inventory Planning
b. Organisational Planning
c. Acquiring the Project
d. Tracking the project Team
2.
What should the HRM plan include?
a. The number of persons necessary and the
skills required for roles assigned to
workers
b. The time periods that the persons are
needed (must also include availabilities)
c. The training needed for a particular
project
d. All of the above
3.
______ is the appropriate tool to use
when assigning roles and
responsibilities to team members in a
HRM plan.
a. RAM: Responsibility Assignment
Matrix
b. Observation and Monitoring
c. Interpersonal Skills
d. None of the above
4.
The Staffing Management Plan
involves a schematic description of the
human resources required during the
different phases of the project.
a. True
b. False
5.
What is an OBS used for?
a. It is generated in order to illustrate
positions and relationships of the team
members
b. It is used to allocate the time
availabilities of members
c. Both a and b
6.
What are some of the important factors
to consider when hiring people to form
part of the project team?
a. Availability
b. Knowledge & Experience
c. Both a and b
d. Political involvement
7.
Procurement strategy is employed
when there are enough internal staff for
the project to be completed.
a. True
b. False
8.
How many methods are there in
conflict management?
a. Six
b. Five
c. Eight
d. Three
Managing Human Resources
MS969: Advanced Project Management Group Assignment 19
9.
What does the Staff Release Plan
include?
a. Staff release procedure
b. Date of release
c. Both a and b
d. None of the above
10.
Rewards can only be given at the end
of the project.
a. True
b. False
11.
Which of the following is the tool used
for Managing a Project Team?
a. Colocation
b. Conflict management
c. Recognition and rewards
d. Training
12.
Team activities are not always
adequate and can be a waste of time
and money.
a. True
b. False
13.
Which of the following is not a tool
used in Developing the Project Team?
a. Interpersonal Skills
b. Training
c. Issue Log
d. Colocation
14.
Which is the third stage of the Team
Development Model?
a. Performing
b. Norming
c. Storming
d. Adjuring
15.
How can Staff Turnover be reduced?
a. Positive relationship between employees
b. Rewards and recognition
c. Training and team building activities
d. All of the above
Answers:
1a
2d
3a
4a
5a
6c
7b
8a
9c
10b
11b
12b
13c
14b
15d
Managing Human Resources
MS969: Advanced Project Management Group Assignment 20
References
Abudi, G., 2015. Abudi Consulting Group, LLC. [Online]
Available at: http://www.ginaabudi.com/case-study-resolving-serious-conflict-between-team-
members/ [Accessed 6 November 2016].
Beel, J., 2007. Project Team Rewards; Rewarding and Motivating your Project Team. 1 ed. Scotts
Valley: CreateSpace LLC.
Belout, A., 1998. Effects of Human Resource Management on Project Effectiveness and Success.
International Journal of Project Management, 16(1), pp. 21-26.
Blake, R. R. & Mouton, J. S., 1970. The Fifth Achievement. The Journal of Applied Behavioral
Science, 6(4), pp. 413-426.
Duncan, W. R., 1996. A Guide to the Project Management Body of Knowledge. Sylva: PMI
Publishing Division.
Fabi, B. & Pettersen, N., 1992. Human Resources Management Practices in Project Management.
International Journal of Project Management , 10(2), pp. 81-88.
Heldman, K. & Mangano, V., 2009. PMP Project Management Professional Exam Review Guide.
Indiana: Wiley Publishing Inc..
Lorang,B., 2012. FullContact.[Online] Available at:https://www.fullcontact.com/blog/paid-paid-
vacation/ [Accessed 6 November 2016].
MeticulousHRSolutions, 2015. Meticulous HR Solutions. [Online]
Available at: http://www.mhr-solutions.com/consulting-case-studies.asp#casestudy4
[Accessed 22 10 2016].
Mishra, S., 2007. Human Resource Management in a Project. PMWorld Journal, 9(7), pp. 1-18.
Newton, P., 2015. Free Management Ebooks; Managing a Project Team; Project Skills. [Online]
Available at: http://www.free-management-ebooks.com/dldebk-pdf/fme-project-team.pdf
[Accessed 22 October 2016].
Newton, P., 2015. Managing a Project Team: Project Skills. 1 ed. s.l.:s.n.
Oxford, U. o., 2012. Oxford Learning Institute; Stages in Group Development. [Online]
Available at: https://www.learning.ox.ac.uk/media/global/wwwadminoxacuk/localsites/
oxfordlearninginstitute/documents/supportresources/lecturersteachingstaff/developmentprogram
mes/StagesinGroupDevelopment.pdf [Accessed 7 November 2016].
PMI, 2013. A Guide to the Project Management Body of Knowledge. 5 ed. Pennsylvania : Project
Management Institute Inc..
pmsolutions,2015.Client Successes.[Online] Available at: http://www.pmsolutions.com/case-
studies/view/security-technology-firm-relocates-u.s.-headquarters-on-schedule-and-3-mill
[Accessed 22 10 2016].
Managing Human Resources
MS969: Advanced Project Management Group Assignment 21
R.Duncan, W., 1996. Chapter 9: Project Human Resource Management. In: A Guide to the Project
Management Body of Knowledge. 1st ed. Upper Darby: PMI Publications, pp. 93-103.
Ruddick, G., 2015. The Guardian: VW makes Management Changes following Emission
Scandal.[Online] Available at: https://www.theguardian.com/business/2015/dec/17/vv-
management-changes-emissions-scandal-german-carmaker [Accessed 6 November 2016].
Shahhasseini, V. & Sebt, M., 2011. Competency-based Selection and Assignment of Human
Resources to Construction Projects. Scientia Iranica Journal, 18(2), pp. 163-180.
Sullivan, D. J., 2010. ERE MEDIA: A Think Piece- How HR Caused Toyota To Crash. [Online]
Available at: https://www.eremedia.com/ere/a-think-piece-how-hr-caused-toyota-to-crash/
[Accessed 22 10 2016].
Tuckman, B. W. & Jensen, M. A. C., 1977. Stages of Small-Group Development Revisited. Group
& Organization Management, 2(4), pp. 419-427.
Victor, D. A., 2016. Reference for Business: Conflict Management and Negotiation. [Online]
Available at: http://www.referenceforbusiness.com/management/Comp-De/Conflict-
Management-and-Negotiation.html [Accessed 26 October 2016].
Watt, A., 2012. Project Completion. In: Project Management. Vancouver: BC Campus.
Project Risk Management
MS969: Advanced Project Management Group Assignment 22
2. Project Risk Management
“Risk” itself could be defined as an unknown problem that has not even happened yet (Cervone,
2006). Risk management is identified as one of the eight different content areas of the Project
Management Body of Knowledge (PMBOK) by the Project Management Institute, which is the
largest professional organization dedicated to the project management field (Raz & Michael ,
2001).
When considering the management of a project it is inevitable that there will be risks involved in
the process. As a result, in order to successfully complete a project, it is crucial to anticipate the
various risks that could threaten its successful completion. One must have the ability to analyse
those risks, weigh their significance and build a management plan to either avoid them or minimise
the possible losses to protect the final project. Although it is very difficult to foresee all potential
risks that could come up during a project, especially in projects that involve complex and diverse
activities, building a management plan for as many as you can will maximise the chances of
success (Raz & Michael , 2001).
The following report goes through the basic elements of project risk management. Each different
step of a risk management plan will be explained to provide a basis on how to manage risks in
projects. After going through the theory, there will be a case study showcasing how the theory
works in practice, in hope that this will provide a good mixture of understanding for project risk
management.
2.1 Why Manage Risks? Benefits of Project Risk Management
Today we live in a highly competitive business environment where every single decision/action
can have tremendous effects, either positive or negative. As a result, large companies are now
more dependent on their ability to complete projects successfully than ever before, in order to
survive and possibly achieve a competitive advantage in relation to their big rivals in the market.
This means that most people consider project risk management as a very important task that must
be implemented. However, a study from PriceWaterhouseCoopers found that only 2.5 per cent
of companies had 100 per cent of their projects delivered on time, within budget, to scope and
delivering the right business benefits” showing that there is actually little attention to project risk
management (PriceWaterhouseCoopers, n.d.). This therefore arises the question: Why should
companies focus on project risk management and what are the actual benefits and/or costs
associated to it?
- Firstly, by implementing a risk management plan, it is easier to identify potential
problems that may arise during the project.
Projects can be both simple and complex, in both cases there is a set of activities that has to be
completed before the project is finished. How can everything go as originally planned, when many
people doing different tasks collaborate to complete the project? It cannot, simple as that. In
Project Risk Management
MS969: Advanced Project Management Group Assignment 23
contrast, there will be various problems that can affect the delivery of the project which have to be
identified as early as possible so that a solution can be created to avoid, if possible, a potential
threat. Furthermore, by anticipating the hidden problems, one acquires an increased level of
awareness of the project’s risks (Barrow, 2007).
- Secondly, you need to develop a series of contingency plans.
More specifically, one needs to develop an alternative approach (i.e. plan B, plan C etc.), based
on the key risks identified earlier, that will be used when things go wrong. Moreover by creating
this, one will have the ability to determine a specific budget for the contingency plan, which can
be claimed in advance- instead of running out of funds in the middle of the project and suffering
catastrophic delays. Additionally, the increased level of awareness, helps to look for possible signs
which predict that the original plan is not working. This is very crucial as it provides enough time
to activate the “plan B” (Barrow, 2007).
- Finally, another important benefit when developing a risk management plan in a project is
the improved return on investment for the business.
When projects are successfully completed on-time, their investment is paid earlier and the
organisation’s opportunities are fully exploited. Whereas when a project fails to complete or is
delayed, high costs are incurred to the business. These include:
negative impact on sales
negative impact on brand image
loss of competitive advantage
lost opportunities (Barrow, 2007)
2.2 How to Manage Risks?
Risk management is one of the key project management processes. It is a systematic process that
aims to identify risks, evaluate risks and devises strategic ways to resolve and mitigate the risks
concerning a project. It must result in improving control over the projects and raise the chances of
success for the project (Marcelino- Sadaba, et al., 2014).
The occurrence of a risk cannot be predicted with a level of certainty. A project manager should
determine the probability of a risk and how it could affect the project plan (Newton, 2015). A risk
management plan is used to structure the key elements of the risks involved in a project, how they
impact the project and the plans adopted to resolve these risks. There are various steps involved in
the risk management plan. These are listed below and shown in Figure 10 (Marcelino- Sadaba, et
al., 2014).
Project Risk Management
MS969: Advanced Project Management Group Assignment 24
1. Identifying the Risk
The first step involved in managing risks in a project is to identify the risks.
Reviewing project documents helps in comprehending the reality of the project, and also its
strength/weakness. By checking the processes involved, project structure, policies involved and
factors that affect the success of the project, the risk identification could be simplified (Merritt &
Smith, 2004).
Identifying risks aids in determining whether these are preventable or not. Incorrect inclusion of
data/information, negligence of necessary policies and unethical practices involved in a project
could be categorised as preventable risks and they are easy to mitigate and can be corrected without
much complications (Kaplan & Mikes, 2012).
If these risks are hard to resolve, they are classified as non-preventable as they require to be
analysed in order to understand the degree of tension these risks pose for the project. With the
process of identification, a project group is capable of finding the risks at their roots. The identified
risks should be registered in a file for verification in the future (Kaplan & Mikes, 2012).
The most common risk factors, from which a risk can be identified, are relatively consistent across
projects. These include:
lack of top management commitment to the project
failure to gain user commitment
misunderstanding the requirements
lack of adequate user involvement
failure to manage end user expectations (Keil, et al., 1998)
Risk
management
plan
Identifying
the risks
Prioritise
the risks
Mitigating
the risks
Analysing
the risk
Figure 10: The Components of a Risk
Management Plan
Project Risk Management
MS969: Advanced Project Management Group Assignment 25
The most important factor, that project managers have to consider during projects, is commitment.
It is extremely immature to think that providing enough funds and a basic plan will cover the needs
for a project. Project managers have to actively support the project process to ensure its successful
completion (Keil, et al., 1998).
Furthermore, there are certain risk categories that project managers should be aware of before
moving onto the planning process. It is important to think how dependency can be avoided and
this is summarised by the following points identified by McConnell (McConnell, 1996):
inter component dependencies within software
intergroup dependencies that occur when work is split across functions
the availability of people to perform task functions at the needed time
subcontractor relationships and the reliability of delivery according to schedule
(McConnell, 1996).
Nevertheless, in a project there can be both internal and external risks. The latter must also be
identified. A hierarchical risk breakdown structure (HRBS) can be used in order to describe the
potential risks involved in a project. This method separates and distinguished between the risks
related to the internal resources and those related to the external environment of the project.
Internal risks are more controllable and can affect individual tasks whereas external risks are less
controllable such as; bad weather delaying the project, natural disasters (Carr & Tah, 2001).
2. Analysing the Risks
Analysing risks is essential to understand the degree of threat they pose for the project.
The utilisation of risk analysing methodologies helps in assessing the identified risks objectively.
There are various ways to analyse/asses risks in a project, which are based on the method utilised.
Larson and Gray (2010) used one of the most common methods called Scenario Analysis, where
team members analyse the risk in terms of:
Probability of the event this depends on the likelihood of the event to occur in a project
(ranges from 0.1 to 0.9)
Impact of the event this depends on the impact of the event on the project (ranges from
1-10). The ranges and the terms used for the probability/score is denoted based on the
project, by the project manager (Larson and Gray, 2010).
A risk assessment matrix, shown in Figure 11 is used to analyse the severity of the risk by using
the product of the above two factors. This matrix is basically structured around the impact and
probability of the event and it can be divided into zones of severity, which depends upon the team
(Larson & Gray, 2010).
Project Risk Management
MS969: Advanced Project Management Group Assignment 26
Figure 11: Risk Severity Matrix (Larson & Gray, 2010)
There is no perfect or accurate method of analysing a risk. By understanding how a specific risk
affects the management of a project, a project manager could decide which method is most suitable
for assessing the risk (Larson & Gray, 2010).
It is important to note that any type of project has to involve a risk analysis procedure. This is
because, it is a very helpful and important step of the project risk management plan as it allows
professionals to initiate a prioritisation process, for each type of risk, which will be followed by a
mitigation process. Proper risk analysis often includes mathematical and statistical analysis that
provides critical information to the identified risks (Larson & Gray, 2010).
Another matrix-based decision model that helps to analyse and prioritize the risks of a project is
introduced by Lansdowne (1999). Again, each risk is assessed based on its mission and then ranked
based on the criticality to the project. This is done through a five-point scale method for evaluating
and prioritizing each type of risk (Lansdowne, 1999):
1. Critical risk: five points would cause program failure.
2. Serious risk: four points would cause major costs/schedule delays and secondary
requirements may not be achieved.
3. Moderate risk: three points would cause moderate costs/schedule delays; important
requirements may not be achieved.
4. Minor risk: two points would cause only small costs/schedule delays.
5. Negligible risk: one point would have no substantial effect on cost or schedule
(Lansdowne, 1999).
Project Risk Management
MS969: Advanced Project Management Group Assignment 27
3. Prioritising the Risk
Based on the degree of threat these risks pose for the project, priority is provided to those issues
that needs to be quickly resolved.
This is one of the simplest steps in the management of project risks. Having identified and analysed
the risks involved in the project, it is essential to select which risks will be assigned an action.
Time utilised for managing risks is the time lost for managing project tasks. Once this decision is
made, the risks can be arranged according to importance or need to be mitigated (Merritt & Smith,
2004).
4. Mitigation Plans
Having identified and analysed the different risks involved in managing the project, it is necessary
to create mitigation plans to reduce the effect of these risks.
This process involves team effort to develop strategies to reduce the possibility of risks. Among
the various plans devised to mitigate a risk, the most influential types of plans are prevention plans
and contingency plans (Merritt & Smith, 2004).
Prevention plans are usually used to decrease the probability of occurrence of a risk. These plans
are usually designed by the team members depending on the type of the project and can be
modified continuously. The aforementioned contingency plans come into place in order to deal
with risks after its occurrence. The absence of a contingency plan could lead to delays due to the
decisions that must be made with respect to the unplanned risks. These plans are therefore
necessary to strengthen the chances of success of the project (Merritt & Smith, 2004).
2.3 Monitoring and Controlling Risks in Projects
For the effective management of risks in projects as well for its continuous improvement, it is
essential to monitor and control risks.
By revisiting these risks, members could ensure the proper implementation of risk management
plans. It helps in re-evaluation of risks and in determining how new circumstances would create
an impact on the project (Larman, 2004). It can therefore be concluded that the monitoring and
controlling process fix the problem before it turns out to be a serious issue.
There are various tools that may be implemented for monitoring and controlling risks. The most
commonly used methods are described below and shown in Figure 12 (Kendrick, 2015).
Project Risk Management
MS969: Advanced Project Management Group Assignment 28
1. Re-assessment of risks: This process involves the collective assessment of the risks and
the plans adopted by the project members. The priority provided for the risks and methods
adopted to mitigate them could be modified during this period (Kendrink, 2006; Clarizen
Team, 2013).
2. Auditing the risks: This process involves examining & documenting the effectiveness of
the mitigation plans used to deal with identified risks and their root causes. It is a method
of collecting the project status and it is duty of the project manager to conduct these risk
audits (Kendrink, 2006; Clarizen Team, 2013).
3. Managing risk reserves: A project manager could utilise trend and variance analysis to
project the overall cost and performance of the project and its deviation from a set baseline.
Deviation from the baseline could be a sign of potential threat (Kendrink, 2006; Clarizen
Team, 2013).
4. Reverse analysis: Every risk has an impact on the contingency reserves (time and cost).
This process checks if these reserves are optimal compared to the amount of risk remaining
at a given time (Kendrink, 2006; Clarizen Team, 2013).
5. Project tracking system: Continuous tracking of risks helps in documentation and
prioritisation of risks. This provides a structure in effective tracking of the various risks the
project has to face (Kendrink, 2006; Clarizen Team, 2013).
Re-assessment of risks
Auditing the risks
Managing risk reserves
Reverse analysis
Project tracking system
Figure 12: Methods for Controlling and Monitoring Risk
Project Risk Management
MS969: Advanced Project Management Group Assignment 29
Case Study
A Tale of Two Projects: The Panama Canal and the Birth of Project and Risk Management
(Kendrink, 2006).
Introduction
In order to relate the theory presented to a more practical example a case study about The Panama
Canal” is discussed in this section.
It portrays how the different theories, models and stages of risk management can be used in
practice. The case study, introduced by Tom Kendrick, examines the construction project of the
Panama Canal nearly 100 years ago that connected two of the largest oceans on earth, the Pacific
and Atlantic. Until the late twentieth century the Panama Canal was regarded as one of the most
risky, high-tech projectever made. It is a project that is still used as a reference point for the
birth of modern project management (Kendrink, 2006).
The First Panama Canal Project
In total there were two project attempts to complete the Panama Canal construction. The Panama
Canal projects are discussed in order to depict the durability of project risk management principles
and analyse the factors that worked and those that did not work (Kendrink, 2006).
The first effort was made by Ferdinand de Lesseps in the 1880s, however it has been negatively
criticised due to its epic failure. This attempt failed due to a number of factors but mainly because
it lacked a good project organisation and risk management plan. The Congress responsible for the
project ignored the technical input of the engineers who were arguing that the Canal could not
be constructed at the sea-level. Moreover, planning was never seriously taken by De Lesseps, who
thought that innovations would appear in response to needs. Powered by self-confidence he did
not listen to other opinions, an attitude that is not conducive to good risk management
(Kendrink, 2006).
Risk management was ignored since the beginning of the project and improved slightly during the
early stages. Frequent rains with great floods impeded the digging process and made work very
dangerous (Kendrink, 2006).
The project’s initial estimation was $60 million, however in 1885 due to the unforeseen
circumstances, the cost estimates raised to $240 million. In 1887 costs were revised again to reach
the enormous amount of $330 million leading De Lesseps to borrow the additional money as there
were no new investors. As a result, this project was incomplete (Kendrink, 2006).
Project Risk Management
MS969: Advanced Project Management Group Assignment 30
A Second Panama Canal Project
The second attempt was led by John Stevens and George Goethals in the early 1900s. They
managed to successfully complete the project because of the rigorous and disciplined application
of good project practices, especially risk management (Kendrink, 2006).
When John Stevens took on the project, managing the scope was the highest priority. They
tackled issues previously considered insignificant and managed to establish modern project
management principles. The devised plan was finalised and Stevens decided for the project to start
in 1907 and end in 1915 with a total cost of $375 million. One of the great things that Steven
contributed to the project was that he had broken down the work into smaller and easily understood
activities so the project began to seem possible (Kendrink, 2006).
Risks Identification and Prioritisation
They identified the major risks on the basis of cost and probability. The major risks they faced
were the severe diseases, mud slides and technical challenges on constructing the locks. These
risks were a few amongst other challenges that the project faced. They prioritised these risks
depending on the severity that each issue posed for the project (Kendrink, 2006).
Risk plans
In order to deal with these risks, plans were adopted to mitigate the problems in the project and
are listed below:
1. Disease risks: this issue was tackled through diligence, science and sanitation. It also
included widespread use of mosquito controls on a large scale under the guidance of Dr.
William Gorgas. Although the cost and efforts for this process was significant, the results
spoke for it, as it was effective and the risks was managed well (Kendrink, 2006).
2. For frequent and sudden mudslides: A contingency plan was adopted to deal with this
issue. This was basically to dig more, which although was not tidy, was effective. The
completed canal had an average 4:1 slope, which minimized the mudslides and partially
stabilized the flowing clay. This brute-force contingency plan not only resulted in much
more soil to dispose of, it represented about triple the work. Erosion, flowing clay, and
occasional mudslides continue to this day, and the canal requires frequent dredging to
remain operational (Kendrink, 2006).
3. For dealing with the locks: this adopted a similar plan to the one used for the mudslides
brute force and engineering. They used cement to re enforce the locks which made the
locks strong enough to operate for many years (Kendrink, 2006).
Project Risk Management
MS969: Advanced Project Management Group Assignment 31
On his arrival in Panama, John noticed that there was inadequate development and lowered energy
levels in work. With his effective effort in planning and analysis, he made the work look feasible.
A place where most men would give up, he believed in himself and this helped him to succeed. He
created a risk management plan that helped in getting the work done which was credible and
documented (Kendrink, 2006).
Adjusting the objective
In the earlier stages of the Panama Canal Project, back in 1904, Theodore Roosevelt had decided
to build the canal. Yet there was no confirmation on the type of canal would be built. However,
the initial proposal was to build a canal at sea level. With effective study and research, he identified
that building a dam at sea level would lead in flooding of the rain forests. He realised that by
building a lock-and-dam canal he could mitigate this problem and complete the construction of the
canal in less period of time. Even though it took a great effort to get his plan approved, he avoided
a major risk and was able to use to an ideal mitigation plan (Kendrink, 2006).
Risk based re planning
Some useful understanding that can be derived from the re-planning process at the Panama Canal
project is that sometimes some risks can be managed primarily through persistence and
perseverance. This is showcased by the mudslides that were too frequent at the Panama Canal
between the start and the end of the project, when the total estimates for excavation more than
doubled. Therefore to overcome this major issue, they simply continued to dig until there was no
more left (Kendrink, 2006).
Furthermore, it is important to consider any changes that the project might need. When
considering such a long project, it is normal that by the time the project ends there will be new
factors to consider or even new technologies. In the case of Panama, Goethal made two significant
changes to the design of the canal because he realised that there was going to be the need of much
larger ships to pass through than initially estimated. Thus, he ordered to increase the excavation to
accommodate ships wider than 30 meters sailing in each direction (Kendrink, 2006).
Completion
On August 15, 1914, the Panama Canal had its first ship sail across the canal. This was an amazing
accomplishment for mankind especially for its time. Most of the credit of this project went to
George Washington Goethals as he was the main Chief Engineer in Panama dealing with major
problems (Kendrink, 2006).
Project Risk Management
MS969: Advanced Project Management Group Assignment 32
Summary
At the end of this topic, you should be able to show an understanding of:
The importance of project risk management
Risk identification
Risk analysis
Ways to manage risks in projects
Monitoring and controlling risks in project
It is recommended that further reading is carried out. The following two books are very educational
and contain useful information regarding the topic:
1. Kendrick, T, Identifying and Managing Project Risk. 3rd Edition, 2015.
2. Harvey , M; Project Management. 4th Edition, 2010.
Assessment Questions
Please access the quiz through this link after studying the notes: https://goo.gl/zWpF4l
The answer sheet is presented overleaf for easier revisions.
Project Risk Management
MS969: Advanced Project Management Group Assignment 33
No.
Question
Options for Answer
1.
What is the aim of a risk management
process?
a. Identify risks
b. Evaluate risks
c. Mitigate risks
d. All of the above
2.
Who decides the probability of risks in
a project?
a. Project manager
b. Project organizer
c. Project developer
d. None of the above
3.
Which among these is not a common
risk factor in a project?
a. Failure to gain user commitment
b. Lack of inadequate user involvement
c. Failure to manage end user expectations
d. Lack of top management commitment
to the project
4.
Which among these is a way to avoid
dependency while identifying a risk?
a. Intergroup dependencies that occur
when work is not split across functions
b. The unavailability of people to perform
task functions at the needed time
c. Customer relationships and the
reliability of delivery according to
schedule
d. Inter component dependencies within
software
5.
What can be used in order to describe
potential risks in a project?
a. Project plan
b. Hierarchical breakdown structure
c. Project initiation document
d. Chart
6.
What helps in prioritisation of risks in
a project?
a. Risk identification
b. Risk analysis
c. Risk mitigation
d. Risk audit
7.
How is the priority of risk involved in
projects assigned?
a. Based on the time taken
b. Based on the degree of threat it poses
c. Based on prediction
d. Based on risk identification
8.
What type of mitigation plan is used to
deal with risks after its occurrence?
a. Contingency plans
b. Risk avoidance plans
c. Prevention plans
d. None of the above
Project Risk Management
MS969: Advanced Project Management Group Assignment 34
9.
What type of mitigation plan can be
easily modified in Risk management
plan?
a. Risk avoidance plan
b. Risk acceptance plan
c. Contingency plans
d. None of the above
10.
Which among these is not a commonly
used tool for risk monitoring?
a. Reassessment of risks
b. Reverse analysis
c. Trend and variance analysis
d. Scenario analysis
11.
What do we acquire by anticipating
hidden risks in a project?
a. Increased level of awareness of risks
b. Hidden ideas
c. Risk acceptance plan
d. Risk management plan
12.
What is the essential step in creating a
contingency plan?
a. To check whether it is a preventable
plan
b. Allocate a specified fund for the plan
c. Time required for the plan
d. None of the above
13.
Which is the perfect way to analyse
risks in a project?
a. SWOT analysis
b. Scenario analysis
c. Qualitative analysis
d. None of the above
14.
What type of risk monitoring process
helps in documentation of risks?
a. Reverse analysis
b. Project tracking system
c. Mitigation process
d. Reassessment of risks
15.
What type of monitoring process
compares contingency reserves to the
amount of risk at a given point of time?
a. Reverse analysis
b. Project tracking system
c. Risk audits
d. Reassessment of risks
Answers:
1d
2a
3b
4d
5b
6b
7b
8a
9d
10d
11a
12b
13d
14b
15a
Project Risk Management
MS969: Advanced Project Management Group Assignment 35
References
Barrow,B.,2007.The Charterted Institute for IT. [Online] Available
at:http://www.bcs.org/content/conWebDoc/16427 [Accessed 7 November 2016].
Carr, V. & Tah, J., 2001. A Fuzzy Approach to Construction Project Risk Assessment and
Analysis: Construction Project Risks Management system. Advances in Engineering Software,
32(10-11), pp. 847-857.
Cervone, F. H., 2006. project risk management. Emerald Insight, 22(4), pp. 256-262.
Clarizen Team, 2013. Clarizen: Risk Management - Useful Tools and Techniques. [Online]
Available at: https://success.clarizen.com/hc/en-us/community/posts/203996208-Risk-
Management-Useful-Tools-and-Techniques [Accessed 8 November 2016].
Kaplan, S. R. & Mikes, A., 2012. Harvard Business Review. [Online]
Available at: https://hbr.org/2012/06/managing-risks-a-new-framework [Accessed 3 Novemebr
2016].
Keil, M., Cule, P., Lyytinen, K. & Schmidt, R., 1998. A Framework for Identifying Software
Project Risks. Communications of the ACM, 41(11), pp. 76-83.
Kendrick, T., 2015. Identifying and Managing Rroject Risk. 3rd ed. American Management
Kendrink, T., 2006. A Tale of Two Projects: The Panama Canal and the Birth of Project and Risk
Management, San Carlos: s.n.
Lansdowne, Z.F, 1999. Risk Matrix: An Approach for Prioritizing Risks and Tracking Risk
Mitigation Progress. Proceedings of the 30th Annual Project Management Institute, PA, pp.10-16.
Larman, C., 2004. Agile and Iterative Development : A Managers Guise. Boston: Addison Wesley.
Larson, E. W. & Gray, F. C., 2010. Project Management : The Managerial Process. 5th ed. s.l.:tim
Vertovec.
Marcelino- Sadaba, S., Perez-Ezcurdia, A., Lazcano, A. M. & Villanueva, P., 2014. Project Risk
Management Methadology of Small Firms. International Jounal of Project management, Volume
32, pp. 32-340.
McConnell, S., 1996. Rapid Development: Taming Wild Software Schedules. Refmond, WA:
Microsoft Press.
Merritt, M. G. & Smith, G. P., 2004. Techniques for Managing Project Risks. In: D. I. Cleland, ed.
Field guide to Project Management. s.l.:John Wiley and sons.
Newton, P., 2015. Managing project skills, Free Management Ebooks.
PriceWaterhouse Coopers, n.d. Price Waterhouse Coopers. [Online] Available at:
http://www.pwc.co.uk/ [Accessed 7 November 2016].
Raz, T. & Michael , E., 2001. Use and Benefits of Tools for Project Risk Management.
International Journal of Project Management, 19(1), pp. 9-17.
Managing New Product Development
MS969: Advanced Project Management Group Assignment 36
3. Managing New Product Development
New product development is the process of bringing a whole new product into the market.
Engineering and business fields implement new product development, which is described in the
literature, as the transformation of a market opportunity into a product available for sale (Ulrich
& Krishnan , 2001).
It can include intangibles, such as services, or tangibles (something you can touch). A good market
insight and research leads towards success of a new product. Figure 13 shows the eight steps that
are used in new product development process (Ulrich & Krishnan , 2001).
Figure 13: Eight Steps for NPD Process
3.1 Concept Design
This step is also known as Idea Generation and is the basis of NPD processes. In this process
different ideas are generated according to customer needs and demands. Different types of
information are gathered using:
1. SWOT analysis
2. Competitors
3. Market and Consumer Trends
4. Companies Research and
Development Department
5. Sales Personnel
6. Employees
7. Trade Shows
8. Focus groups
9. ETC
Many other sources can also contribute in the idea generation process. Some examples are: Top
Management, Channel members, Employees, Competitor, Scientists and Customers
(Harmancioglu, et al., 2007).
The four basic steps which are considered in making concept design are shown in Figure 14.
Figure 14: Steps involved in Concept Design
Concept
Design
Product
Planning
Design
Review
Prototype
Building
Pilot
Production
Mass
Production
Sustaining
Support
Review of
Market
Performance
Concept
Design
1. Analyze
Need
2. Create
Concept
3. Idea
Screening
4. Set Brand
Image
Managing New Product Development
MS969: Advanced Project Management Group Assignment 37
1. Analyse Need: Analysing customer needs through market surveys etc. (Harmancioglu, et
al., 2007).
2. Create Concept: Based on the needs create concepts regarding product. (Harmancioglu,
et al., 2007)
3. Idea Screening: Idea screening deals with eliminating the bad and focusing on the
best the company can achieve through all the research also it ideas with an idea of size and
growth forecast of the market segment or target market (Harmancioglu, et al., 2007).
4. Set Brand Image: It is the impression of the product by real or potential consumers.
Setting a brand image is not an easy task since the target market and many other elements
must be considered. Some examples of such elements are business goals and brand persona.
To build a strong brand one needs to have better public relations, social media access etc.
(Harmancioglu, et al., 2007)
3.2 Product Planning
Product planning is related to the price, promotion and distribution of products. Ideas about
product are generated and tracked until the product is released into the market. Product planning
also deals with managing the product throughout its life and involves activities such as improving
the design, adding features and changing price (Lee, et al., 2010). Product design has the basic
steps shown in Figure 15.
Figure 15: Steps involved in Product Planning
1. Business Case: It deals with the reasons to start a project. It is a well-structured
document but it can be a verbal argument or presentation (Lee, et al., 2010).
2. Specifications: It is a detailed description of design and material used to make the
product (Lee, et al., 2010).
3. Industrial Design: It is the process of the design implementation on the products which
are manufactured through mass production (Lee, et al., 2010).
4. Sourcing Strategy: It is a procurement process that improves continuously, evaluates
and then re-evaluates the purchasing capacity of a company (Lee, et al., 2010).
Product
Planning
1. Business
Case
2. Specifications
3. Industrial
Design
4. Sourcing
Strategy
Managing New Product Development
MS969: Advanced Project Management Group Assignment 38
3.3 Design Review
A team of experts and specialized people reviews and deals with issues related to the design of the
product or service. These people may not be part of the program. When there is a technical product,
all life cycle issues related to the product as well as schedule, risks and costs, are addressed
(Millson & Wilemon , 2008).
The basic steps of design review are described below and shown in Figure 16.
1. Mockups: Mockup is a scale or full size model of a design or a device. It is similar to
a prototype however has partial functionality of a product and therefore can be used for
testing the design (Millson & Wilemon , 2008).
2. Test (Electrical/Mechanical): Tests are conducted to see if the product is working as
per the standards or not. There are various type of test for each product to check the
durability, reliability and functionality of the product (Millson & Wilemon , 2008).
Figure 16: Steps involved in Design Review
3.4 Prototype Building
After having the design reviewed, a full prototype product is made. This has all the specifications
and functionalities, and once produces, is sent to various commercial stores in order to check its
performance or if the product is good enough to stand in the market (Harmancioglu, et al., 2007).
Prototype building has following important steps, which are shown in Figure 17.
1. Commercial Samples: These are the samples of the prototype product which are
delivered to selected stores (Harmancioglu, et al., 2007).
2. Integrated System Test: It includes overall testing of a complete system which may
include many subsystem elements and components. The system under test can be a
software or a hardware (Harmancioglu, et al., 2007).
Prototype
Building
1. Commercial
Samples
2. Integrated
System Test
Design review 1. Mockups
2. Test (Electrical/
Mechanical)
Figure 17: Steps involved in Prototype Building
Managing New Product Development
MS969: Advanced Project Management Group Assignment 39
Figure 19: Steps involved in Mass Production
3.5 Pilot Production
It is the layout structure of different production and assembly designs to manufacture a product or
a service. It is basically a road map to manufacture products and covers all the issues related to
manufacture a product (Harmancioglu, et al., 2009).
The key steps in Pilot Production are listed below and shown in Figure 18.
1. Production Process Design: It is detailed overall design of how the product is to be
manufactured according to the desired quality, due date and minimum cost
(Harmancioglu, et al., 2009).
2. Pilot Assembly: It is the details of how the assembly lines will work and coordinate
with each other (Harmancioglu, et al., 2009).
3. Production Validation Tests PVT Testing: The goal is to detect as many defects as
possible as it runs a set of tests, using codes (Harmancioglu, et al., 2009).
3.6MMass Production
It involves the production of the product in very large quantities at very low costs per unit, while
maintaining the quality standards of the company. It requires heavy machineries and equipment
and also a large work force to manage all the tasks required for a smooth production (Lu & Yang,
2004).
Following are the key steps related to mass production, also shown in Figure 19.
1. Ramp Up: It is an economical term to describe an increase in production of a firm. It
also describes the period between product development and maximum capacity
utilization (Lu & Yang, 2004).
2. Volume Production: It relates to mass production making products in large quantities
in shorter period of time (Lu & Yang, 2004).
3. Production Testing: Many tests are done to check the quality of the production. It
deals with checking if the machines are working properly (Lu & Yang, 2004).
4. Global Distribution: Distribution of products or services to the distributers, retailers
and target markets (Lu & Yang, 2004).
Pilot
Production
1. Production
Process
Design
2. Pilot
Assembly
3. Production
Validation
Tests PVT
Testing
Figure 18: Steps involved in Pilot Production
Mass
Production
1. Ramp
Up
2. Volume
Production
3. Production
Testing
4. Global
Distribution
Managing New Product Development
MS969: Advanced Project Management Group Assignment 40
3.7 Sustaining Support
These are the after sales services that the company gives to its customer. It is one of the most
important approach to win customer and increase customer satisfaction (Dedrick & Kraemar,
2006).
Following are some key approaches for sustaining support.
1. Component Replacement: If there are any defects in the component of a certain
product, the company replaces the defected one with a new part (Dedrick & Kraemar,
2006).
2. Technical Support: If customer is having problems with using the product, the
company provides technical assistance via call centre or company representatives
(Dedrick & Kraemar, 2006).
3. Warranty Support: It is a guarantee to the purchaser that the manufacturer will
replace or repair the product if there comes any issue with the product in a specified
period of time (Dedrick & Kraemar, 2006).
3.8 Review of Market Performance
It is the overall review of what the company forecasted and what the actual outcome of the whole
project is. It is composed of many reports and findings. It shows what the company has done to
achieve the goals it had. A group of experienced people analyse the reports and makes future
decisions (Durmusoglu & Barczak, 2001).
Following are some tools which help in getting a good market performance view:
1. Forecast Error: It is the difference between actual demand and forecasted demand
(Durmusoglu & Barczak, 2001).
2. Market Survey: It helps to know customer views on product, it also helps to
understand customer satisfaction (Durmusoglu & Barczak, 2001).
Case Study
Beiersdorf Case Study
Introduction
This case study shows how Beiersdorf applied new product development project and practices.
Beiersdorf is an international company, which produces different types of cosmetic products both
for men and women. Nivea is a very popular brand of Beiersdorf, having a good international
market and image (Times100, 2007). Nivea is focusing on developing a new product for women
to increase its market share and overall customer satisfaction (Nivea, 2016).
Managing New Product Development
MS969: Advanced Project Management Group Assignment 41
As mentioned in the theory, a company should focus on developing a product that should better
meet its customer needs and desires. Nivea wanted to introduce a product that no other company
in the market is producing, in order to increase sales performance due to its differentiation
(Times100, 2007).
Key steps of Nivea NPD
In order to be a market leader, Nivea focused on a product that satisfied its customers and
continuously focus on new ideas about the product according to customer needs. Therefore, Nivea
took the following steps to introduce its new deodorant product (Pearl and Beauty). Figure 20
shows the steps that Nivea took to introduce this product to the market.
Figure 20: Steps for introducing product to the marker
Analysing the customer desire
Customer choices differ dramatically in short period of time and so it was very important for Nivea
to understand what the customer expects. In order to analyse the needs of the customers, Nivea did
a research on its target customers to better understand what their needs and desires are by studying
the trends of the market and what the customer desires are by conducting research on is target
market and customers (Times100, 2007).
Nivea also gave an opportunity for customers to give their thoughts and ideas about the product
that they would like to see in the future. While conducting its research they also considered that
customer tastes may differ from different countries and cultures and so in order to produce a single
product that satisfies the need of all its target markets, Nivea took insights from different markets
in different location and countries (Times100, 2007).
It was a great challenge for Nivea to translate all the customer needs from different parts of the
world in to a single product and therefore focused on the needs which were similar among all its
target customers to develop its new product (Times100, 2007).
Research Methods
To find out the customer needs and expectations Nivea applied two different research methods;
secondary and primary researches (Times100, 2007).
Analysing the
customer
service
Research Prototype Testing
Managing New Product Development
MS969: Advanced Project Management Group Assignment 42
Secondary Research
Nivea conducted many secondary researches in its deodorant category in order to access its
consumer needs and views. The research was not specific to only one market but had feedbacks
from different markets and countries. Surveys were also conducted in order to determine the
impact of fragrances on the moods and behaviour of the general consumers in different perfume
houses (Times100, 2007).
Primary Research
After conducting secondary research, there was still not sufficient data to describe the customer
desires. In order to get better insights of the consumer needs, qualitative research was done in
different leading markets [USA, France, Germany and UK]. The basic purpose of the research was
to determine the specific factors that encourage women to buy Pearl and Beauty Nivea product.
The primary research is conducted by carrying out specific interviews for their customers
(Lockrey, 2015).
Research Results
The results of all the surveys showed that there indeed was an opportunity in the market that no
one had discovered before; Nivea found that most of the products in the market only focused on
their fragrances. However, Nivea decided to focus on both fragrance and cosmetic aspects of the
product that no other product in the market was offering (Lockrey, 2015).
New Product Prototype
After conducting a successful market survey and knowing the customer insights about the product,
the next step was to transfer that data into product form. Many prototype products were made with
different features, functions, appearance and design in order to finally make a product that fits best
according to customer needs.
The Monadic method was used to select the one product prototype. This is done by introducing
only one prototype to certain consumer groups in order to eliminate biasness. Nivea measured the
quality of performance, by focusing on different criteria such as the product smells and the
condition of the product (oily/dry to the skin). To finalize the best prototype among all, an analysis
was done on the survey of all prototypes, and therefore the product which the consumers liked the
most was chosen for production (Lockrey, 2015).
Once the product was chosen, decisions regarding different aspects are made for example;
- what should be the name of the product
- how it should be packed
- what colour should the product and packaging be (Lockrey, 2015)
The resultant box and product design involved a pink colour which relates to Nivea’s target
consumer (Times100, 2007).
Managing New Product Development
MS969: Advanced Project Management Group Assignment 43
Testing the New Product
Once the product was finalized, it was tested in various markets on actual consumers for a week
without the brand logo and name on the product. The responses were measured on various factors
such as dryness, perfume, lastingness and reliability. The result that Nivea team had after
conducting this research was very positive and therefore reflected that the target consumer wanted
to have the product in the market (Lockrey, 2015).
How Nivea positioned its New Product within its Product Line
To this point, Nivea had consumer feedback on the design of the product and packaging. The next
step was to determine how Nivea Pearl and Beauty would add value to their current product line
of fragrances and women care products (Times100, 2007).
Advertising the New Product
One of the critical success factors before launching the new product into the market is how to
advertise the product effectively (Piller, et al., 2012). Nivea had collected data from different
customers regarding their thoughts and ideas of different advertising ways, depending on their
interaction. The goal of this stage is to ensure that the product’s advertising motivates the customer
to buy the product. Furthermore, Nivea wanted to guarantee the same specifications that were
stated in the product’s advertising (Piller, et al., 2012).
Analysing Market Performance of the New Product
After launching the new product into the market, Beiersdorf did not stop researching about the
consumer views. They continuously collected data regarding the customers’ perceptions of Pearl
and Beauty Deodorant by asking them whether they are satisfied or not. These methods aided
Beiersdorf to gain high level of customer satisfaction and to help the company improve the product
effectively during the launch phase (Times100, 2007).
Conclusion
A good insight of consumer expectations and needs is the key to success for launching a new
product. Before the launch stage, it is very important to test prototypes on actual customers and
have their views regarding the product. Product design and features should align with customers’
desire in order to gain high level of customer satisfactions. Finally, it is very important to apply
the NPD process in the company that want to launch a new product in order to have better product
feasibility and to eliminate the risk associated with introducing a new product.
Managing New Product Development
MS969: Advanced Project Management Group Assignment 44
Summary
New product development contains eight steps:
1. Concept Design: involves analysing needs, creating concepts, idea screening and setting
brand image.
2. Product Planning: involves business case, specifications, industrial design and sourcing
strategy.
3. Design Review: involves mockups and testing which can be both electrical/mechanical.
4. Prototype Building: involves commercial samples and integrated system test.
5. Pilot Production: involves production process design, pilot assembly and production
validation tests PVT testing.
6. Mass Production: involves ramp up, volume production, production testing and global
distribution.
7. Sustaining Support: involves the key ways to sustain support, which are component
replacement, technical support and warranty support.
8. Review of Market Performance: involves some helpful tools which are used to acquire
better performance of market view. These tools are: forecast error and market survey.
It is recommended that further reading is carried out. The following two books and very
educational and contain useful information regarding the topic.
- Christian, P. Artmann: The Value of Information Updating in New Product Development,
2009
- Christoph, Loch Stylianos Kavadias: Handbook of New Product Development
Management, 2012
Assessment Questions
Please access the quiz through this link after studying the notes: https://goo.gl/zyQ6CP
The answer sheet is presented overleaf for easier revisions.
Managing New Product Development
MS969: Advanced Project Management Group Assignment 45
No.
Question
Options for Answer
1.
_____ is the development of original
products, product improvements,
product modifications, and new brands
through the firm’s own R&D efforts.
a. Idea generation
b. Concept testing
c. Test marketing
d. New product development
2.
New-product development starts with
_____.
a. Idea screening
b. Idea generation
c. Concept development and testing
d. Marketing strategy development
3.
Major sources of new product ideas
include _____.
a. Internal sources, using company R&D
b. Creative approaches, using both
"method and madness" approaches
c. Watching and listening to customers
d. All of the above
4.
The first idea reducing stage is _____,
which helps spot good ideas and drop
poor ones immediately.
a. Idea generation
b. Idea screening
c. Concept development and testing
d. Marketing strategy development
5.
_____ calls for testing new-product
concepts with groups of target
consumers.
a. Concept development
b. Concept testing
c. Idea generation
d. Idea screening
6.
_____ begins when the company finds
and develops a new-product idea.
During product development, sales are
zero and the company's investment
costs increase.
a. Introduction
b. Growth
c. Maturity
d. Product development
7.
Which one is not a stage of Concept
Design?
a. Analyzing the need
b. Idea screening
c. Market research
d. Setting brand image
8.
Which one is not a stage of Product
Planning?
a. Specification
b. Industrial design
c. Sourcing strategy
d. Idea screening
Managing New Product Development
MS969: Advanced Project Management Group Assignment 46
9.
Which of the following steps are
included in mass production?
a. Ramp up
b. Production testing
c. Volume production
d. All of them
10.
Which of the following is not a stage in
NPD?
a. Product Planning
b. Design Review
c. Retailing
d. Pilot Production
11.
Which of the following are added to
sustain support?
a. Component replacement
b. Technical support
c. Warranty support
d. All of them
12.
How was Nivea able to launch a
product that was highly liked by
consumers?
a. R&D
b. Imitation
c. Extensive research on target customers
d. None of above
13.
What method was used to eliminate
biases of consumer views while testing
prototypes on actual customers by
Nivea?
a. Selective
b. Monadic
c. Visuals
d. Other brand products were used
14.
What is the most important thing to
consider while developing a new
product?
a. Market trend
b. Customer needs
c. Cost of production
d. R & D
15.
When BMW made a competitive
entrance in the U.S. in the early 1980s,
it was positioned as the brand as that
offered ________.
a. Luxury
b. Performance
c. Both a and b
d. None of the above
Answers:
1d
2b
3d
4b
5b
6d
7c
8d
9d
10c
11d
12c
13b
14b
15c
Managing New Product Development
MS969: Advanced Project Management Group Assignment 47
References
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the Notebook PC Industry.. IEEE Computer, 39(7), pp. 36-42.
Durmusoglu, S. & Barczak, G., 2001. The Use of Information Technology Tools in New Product
Development Phases: Analysis of Effects on New Product Innovativeness, Quality, and Market
Performance. Industrial Marketing Management, 40(2), pp. 321-330.
Harmancioglu, N., Droge, C. & Calantone, R., 2009. Strategic Fit to Resources Versus NPD
Execution Proficiencies: What Are Their Roles in Determining Success?. Journal of the Academy
of Marketing Science, 37(3), pp. 266-282.
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Development (NPD) is Only As Good As Your Process: An Exploratory Analysis of New NPD
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Using FANP, QFD and Multi-Choice Goal Programming. International Journal of Production
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Lockrey, S., 2015. A Review of Life Cycle based Ecological Marketing Strategy for New Product
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1-15.
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Stages: An Empirical Study of Taiwan's IT Industry. Industrial Marketing Management, 33(7),
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Millson , M. & Wilemon , D., 2008. Impact of New Product Development (NPD) Proficiency and
NPD Entry Strategies on Product Qulity and Risk. R&D Management , 38(5), pp. 491-509.
Nivea, 2016. Nivea Pearl & Beauty Deodorant. [Online]
Available at: https://www.nivea.co.uk [Accessed 7 November 2016].
Piller, F., Vossen, A. & Ihl, C., 2012. From Social Media to Social Product Development: The
Impact of Social Media on Co-creation of Innovation. Die Unternehmung, 65(1), pp. 1-22.
Times100, 2007. Business Case Studies; Nivea Deodorant; How Market Research Supports the
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Available at: http://businesscasestudies.co.uk/beiersdorf/how-market-research-supports-the-new-
product-development-process/#axzz4PNe2Fd7k [Accessed 5 November 2016].
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