Ch. 2 Flashcards
List and describe each step in the strategic planning process.
-Strategic Analysis: Analyze both the external and internal environments and determine how they will enhance or limit the organization’s ability to perform (SWOT)
-Guiding Principles: Mission & Vision - Establish guiding principles such as the vision and mission.
-Strategic Objectives: Strategic objectives should be the means of achieving the mission and vision. Many writers have stated that for objectives to be effective, they should be SMART that is, specific, measurable, achievable, results-based, and time specific.
-Flow-down objectives: In this stage they strategic objectives are enforced
-Portfolio Alignment
Name at least four things that a mission statement should include.
The mission statement includes the organization’s
1. core purpose
2. core values
3. beliefs
4. culture
5. primary business
6. primary customers.
What does the strategic analysis acronym SWOT stand for?
Strengths, weaknesses, opportunities, and threats
What is the most widely accepted financial model for selecting projects?
NPV
What are some advantages and disadvantages of using a financial model for selecting projects?
-Payback period models do not consider the amount of profit that may be generated after the costs are paid.
-IRR and BCRs have problems if used for choosing between mutually exclusive projects because they can favor smaller projects that create less total value for the firm but have high percentage returns.
-Sometimes quite difficult to calculate an IRR if a project has nonconventional cash flows
What are some advantages and disadvantages of using a scoring model for selecting projects?
Scoring models allow leadership teams to perform sensitivity analyses—that is, to examine what would happen to the decision if factors affecting it were to change. They are more time-intensive than financial models.
What are some common reasons for project failure?
- Not enough resources
- Not enough time
- Unclear expectations
- Changes to the project
- Disagreement about expectations
Who should be involved in identifying potential projects?
All parts of the organization should help identify potential projects.
If there is a conflict between resource needs for two projects, who decides which one gets the needed resources first?
Generally this is determined by the project sponsor; under especially important circumstances, the decision may require the leadership team.
In a project scoring model, why is each decision criteria given a weight?
The weights are assigned according to each criterion’s relative importance. Therefore, it helps to understand that the more important criteria will have a greater effect on the outcome than criteria deemed less important.
What purpose do sensitivity analyses serve in using scoring models to choose projects?
Allows decision makers to examine what would happen to the decision if factors affecting it were to change.
If several projects have close scores as the result of a scoring model, what can be done to break the virtual tie?
The group can use other criteria or discussion to break a tie.
Why might a contractor company perform a SWOT analysis prior to bidding on a potential project?
A quick SWOT analysis could be used to decide whether to pursue a potential project. Decision makers can also ask how well a potential project will help achieve their objectives. If they determine a project will help achieve their objectives, the next considerations are the cost to pursue the work and the probability of successfully securing the project given the likely competition. A company frequently considers risks both
of pursuing and not pursuing a potential project. Finally, does the company have the capability to perform the work if it is awarded?
Why is it important for a contractor to understand the source selection criteria a client uses to decide to whom they will award a project?
By understanding what a client is looking for, a contractor can demonstrate his company’s capabilities in terms of the specific job proposed, thus increasing his chances of being selected for the work.
Name five things that may be negotiated between a client company and a contractor company.
- Amount of money to be paid
- Contractual terms
- Schedule
- Personnel
- Quality Standards
- Reporting Mechanisms
