Business Environment Flashcards
Quincy and Michael are two executives of Widgets for Life, a company providing the latest cool lifestyle gadgets. They have recently decided to invest further in their organization’s project management capabilities by creating a PMO. After lengthy discussions, they decide to focus on a PMO model that will drive compliance against a set of project management standards. What type of PMO are they implementing?
Agile Directive Controlling Supportive
A controlling PMO is focused on two key areas: providing the organization with support in its application of project management practices and requiring compliance against those practices.
You have just started working for a new company. Your previous project management experience made you stand out from your competitors. Your new business cards are being printed with the title of project coordinator. You discover that the project charter for the project you are working on was never written, so you volunteer to draft one, even though the work of the project has started. The vendor who is assisting with the project is already on board and is working with (and reporting to) the engineering division. You report to the construction division. Which of the following is true?
You are working in a strong matrix organization and are in the Executing phase of the project. You are working in a weak matrix organization and are in the Planning phase of the project. You are working in a strong matrix organization and are in the Initiating phase of the project. You are working in a weak matrix organization and are in the Executing phase of the project.
The title of project coordinator indicates this is a weak matrix organization and that you are working within one of the business units rather than under the PMO (as you would if you were in a strong matrix organization). The question also states that the work of the project has begun, so you are in the Executing phase of the project.
Premature closure of a project phase that is managed using an Adaptive approach is likely to experience greater failure due to sunk costs versus a project managed using a Predictive approach.
This is a true statement. This is a false statement.
This is a false statement.
Which of the following are considered factors that influence the initiation of a project? Select 3
- Compliance, legal requirements, or social requirements
- Stakeholder needs and requests
- Improvement of processes, services, or products
- Enhancement of existing operations
According to the PMBOK® Guide, projects are initiated by business leaders because of the following categories or factors: regulatory compliance, legal requirements, or social requirements; stakeholder needs and requests; changing technology needs of the organization; create or improve processes, services, or products.
All of the following statements about fairness are true except for which one?
- Conflicts of interest might include your associations or affiliations.
- Accepting vendor gifts is sometimes acceptable.
- Fairness encompasses diversity training and preventing culture shock.
- Fairness includes avoiding favoritism and discrimination.
Respect, not fairness, is the value that addresses culture shock and diversity training. Accepting vendor gifts is acceptable when the gift or situation complies with a company’s stated policies.
A program manager working for an infectious disease nonprofit has just been assigned to a program that seeks to solve a deadly issue plaguing a third-world country. The issue involves a deadly bacteria that has entered into a major water source that branches out into multiple regions across the country. The first project will involve a feasibility study. This project came about as a result of what?
Regulatory requirement Social need Environmental considerations Strategic opportunity
This project came about as a result of social need. Social need is one of seven typical reasons that trigger the need for a project, as noted by the PMBOK® Guide.
A project manager is managing a project that contains a high degree of ambiguity. The project team is expected to adapt to changes as the scope of work becomes clearer over time. To better set expectations with the team, what is the project manager likely to communicate regarding the use of an iterative approach to managing the project life cycle?
- The work will experience short feedback loops with reprioritization of the backlog over iterations.
- The team will take work from the backlog bottom up to account for ongoing reprioritization of the work.
- The work will be progressively elaborated, with feedback loops inserted quarterly.
- Features will be prioritized up front, and the decomposition of the work will be progressively elaborated.
The work will experience short feedback loops with reprioritization of the backlog over iterations.
Projects using an iterative and incremental approach to managing the project life cycle tend to experience short feedback loops and reprioritization of the backlog. Frequent delivery and feedback allow the team to adapt and adjust to changes quickly, as well as prioritize appropriately.
You’ve recently begun to suspect your friend, a fellow PMP credential holder, might be accepting gifts from hardware vendors who are bidding on an upcoming multimillion-dollar project that she’s going to manage. She has a new LED flat-screen computer monitor at her desk, she showed off her new electronic tablet at a meeting two days ago, and today she unpacked a new ultra-thin laptop while you were in her office. Which of the following should you do?
- You tell your friend these gifts probably aren’t appropriate and leave it at that.
- You tell your friend you’re concerned about the appearance of impropriety because of all the new things she’s purchased lately, so you ask her directly whether these items were gifts from the vendor or whether she purchased them herself.
- You know this is a conflict-of-interest situation, and it violates the Code of Ethics and Professional Conduct. You report your friend so that an investigation can take place.
- You and your friend have a long conversation about the items she’s received, and she decides to return them and not accept any more items from vendors in the future.
The best answer in this situation is to get the facts before taking any action. A violation based only on suspicion should not be reported. You can get the facts by telling your friend you’re concerned about the appearance of impropriety and ask her whether the vendor gave her these items. It could be that these are the first of several samples that will be coming from all the vendors bidding on the project so the equipment can be evaluated in light of the project objectives. Or she could have accepted them as gifts, which is not appropriate. Never jump to conclusions. Always ask and get the facts straight before reporting a conflict-of-interest situation.
All of the following describe a functional organizational structure except for which one?
A project manager has little or no authority. The role of project manager is part-time. The functional manager manages the project budget. The role of project manager can be full-time.
In a functional organization, the role of project manager typically does not exist. Instead, it may be a part-time role or a similar role such as a project coordinator
You are the project manager for a company that produces mobile phone applications. Currently, the director of the consumer division is evaluating two projects. Funding exists for only one project. Project UV aims to produce a mobile phone application that sends alerts when the UV rays are at dangerous levels, alerting users to stay indoors; Project Fun aims to send alerts when it detects that users have not visited any destinations outside of their usual routine. The director asks you to calculate the payback period and NPV for both projects, and here is what you derive: Project UV: The payback period is 12 months, and the NPV is (100). Project Fun: The payback period is 18 months, and the NPV is 250. Which project would you recommend to the director?
Project Fun, because the NPV is a higher number than Project UV Project UV, because the payback period is shorter than Project Fun Project Fun, because the NPV is a positive number Project UV, because the NPV is a negative number
Projects with NPV greater than 0 should be recommended; the key determining factor in selecting Project Fun is that the NPV is positive. Had both NPVs been positive, then the determining factor would have been the greater NPV number, since the scenario notes that funding exists for only one project. Payback period is considered the least precise selection method and is not typically the sole determining factor.
Yasmin is a senior project manager who has just taken on a project that will produce a new line of medical widgets for a Fortune 100 company. The entire industry is buzzing with excitement over this project, which is estimated to span three years and require an investment of $1.5 billion from the company. What type of project is this?
Portfolio Megaproject Strategic project Program
A megaproject is defined as a large multiyear project that costs more than $1 billion and affects 1 million or more people.
Match the type of PMO with its description.
Supportive PMOs have a low degree of control, controlling PMOs have a moderate degree of control, and directive PMOs have a high degree of control.
Robert is a new executive hired to lead the marketing department of a telecommunications company. He recently met with his project management team to review the project portfolio. Next, he sets his sights on better understanding the governance framework in place. Governance is considered to be which of the following?
Organizational process assets Project management methodology Agile Manifesto Enterprise environmental factors
The organization’s culture, structure, and governance are considered to be part of enterprise environmental factors. Enterprise environmental factors are conditions or capabilities that are not under the direct control of the project team but that influence or constrain the project.
You are a project manager working in an organization that is considered to be a weak matrix organizational type. You are two months into a four-month project when the functional manager for half of your most critical resources announces that she will be reallocating them to another project. You explain to her that this will result in early closure of your project and that resources should not be redirected. What is the likely outcome of this scenario?
Resources will be distributed to another project. You will resign, and the project will end. The functional manager will pull the project budget. Resources will not be distributed to another project.
In a weak matrix organization, the functional manager has greater authority than the project manager. Based only on the information provided within the question, it is likely that resources will be reassigned to another project.
A project manager is in the process of measuring the extent to which the project is compliant with regulatory standards by conducting an audit. What activity are they performing?
Retrospective Quality review Change management Quality assurance
According to the PMBOK® Guide, quality assurance, which occurs through the Manage Quality project management process, is most concerned with using project processes effectively. This includes assuring stakeholders that the end result of the project will meet their needs and expectations and that quality requirements are met.
What considerations should be given when applying organizational change management? Select two
A methodology for project change management Application of change management at the project, program, and portfolio levels A change control process facilitated by the Scrum Master A framework for achieving change
According to Managing Change in Organizations: A Practice Guide, published by PMI, there are three recommendations to consider when applying organizational change management at a comprehensive level: 1) models for describing change dynamics, 2) framework for achieving change, and 3) application of change management practices at the project, program, and portfolio levels.
You are a full-time project manager working within the customer operations organization, reporting to the VP of customer solutions. Your boss manages the project budget. Which organizational structure do you work in?
Hybrid Functional PMO Project-oriented
The question describes a hybrid organizational type, likely a mixture of a weak and a strong matrix. A clue is that your title is project manager, which does not typically exist in a purely functional organization; another is that the functional manager manages the project budget, which is not typical in a project-oriented or PMO organizational type.
What type of organization experiences the least amount of stress during project closeout?
Strong matrix Project-oriented Weak matrix Functional
Weak matrix organizational structures tend to experience the least amount of stress during the project closeout processes.
You are a project manager for the information technology division of a local satellite TV broadcasting company. This spring, the chief information officer for your company gave you the job of converting and upgrading all the PCs in the department to the latest release of a specific desktop application. Prior to this conversion, all manner of desktop software existed on machines throughout the company and had caused increasing problems with sharing files and information across the company. A lot of unproductive hours were spent converting information into several formats. This project came about as a result of which of the following?
Social need Market demand Business need Technological advance
This came about because of a business need. Staff members were spending unproductive hours converting information, causing the company loss. The time the employees spent converting the information could have been spent doing something more productive.
Robert is a new executive hired to lead the marketing department of a telecommunications company. He sits down with his most senior project manager to review a proposal that was created by one of his directors, pitching a new project. The proposal contains a business summary of market demand that justifies the need for the project, the expected outcomes, return on investment, and a comprehensive cost analysis. The proposal can also be described as:
Project charter Feasibility study Benefits management plan Business case
The business case is a feasibility study that lists objectives and reasons for a project. It identifies critical success factors for the project, why the project was undertaken, an analysis of the situation, and recommendations.
What is the present value of $8,000 received three years from the present using a 7 percent interest rate? Assume all options are rounded to the nearest whole dollar.
$6,612 $9,680 $9,800 $6,530
The formula for present value is PV = FV / (1 + i)n. Plugging in the information from the question, the formula becomes $8,000 / (1 + .07)3 = $6,530.
A project manager is performing activities associated with the Plan Procurement Management process. Which tool or technique can the project manager use to gather information on specific seller capabilities?
Source selection analysis Advertising Make-or-buy analysis Market research
Market research can be used to examine industry and seller capabilities. Information can be obtained in places such as conferences, online reviews, and other sources available in the market.
You are a project manager working on contract for an upscale retail toy store. Your project involves implementing a Party Event Planner department in stores in 12 locations across the country as a pilot to determine whether this will be a profitable new service all the stores should offer. You’ve identified two alternative methods of implementing the pilot. Alternative A’s initial investment equals $598,000. The PV of the expected cash inflows is $300,000 in year 1 and $300,000 in year 2. The cost of capital is 12 percent. Alternative B’s initial investment equals $625,000. The PV of Alternative B’s expected cash inflows is $323,000 in year 1 and $300,000 in year 2. The cost of capital is 9 percent. Which of the following is true?
Alternative A will earn a return of at least 12 percent. Alternative B will earn a return of at least 9 percent. The return is not known for either Alternative A or Alternative B. Both alternatives are viable choices.
A positive value for NPV means the project will earn a return at least equal to or greater than the cost of capital. Since NPV for Alternative A is positive, this alternative will earn at least a 12 percent return.
All of the following are examples of constrained optimization methods except for which one?
Economic models Multi-objective programming Dynamic Integer
Economic models are an example of a benefit measurement method, not a constrained optimization method. These are project selection techniques that can be used to measure the advantages or merits of the product of the project.