Ethics a la PMI Flashcards
PMI’s Code of Ethics and Professional Conduct does not allow project managers to accept gifts. How does this apply to lunch invitations particularly when customary in that culture?
Although the PMI Code of Ethics and Professional Conduct does not allow gift-taking, project managers should respect the norms and customs of others as long as they do not show favoritism based on those norms. A customary invitation to a meal should not be refused if it can be accepted without implying or extending favoritism. The PMI code of conduct applies to both local and international projects. [PMI Code of Ethics and Professional Responsibility] (Domain: Business Environment, Task 1)
Your organization has a standing ethics review committee, and you are a member of this committee. A complaint has been filed against a project manager for allegedly violating a number of company policies. If the allegations are proved, she would be terminated for cause. During the investigation, her boss has been uncooperative. He asked the committee investigators to not to contact his employee directly and has tried to slow down the process of investigation. What should you do?
You should refer the issue to the appropriate management
NOT Check into the nature of relationship between the project manager and her boss.
PMI requires project managers to report known instances of wrong doing to the appropriate management. However, the actions that are taken by the organization investigating the complaint must be in line with that organization’s own policies. Only the management of the organization can interpret or apply those rules. [PMI Ethics] (Domain: Business Environment, Task 1
As you examine a list of job candidates for your project, you find that your cousin is one of the three shortlisted candidates. You know that she was desperately looking for a job. After reviewing the three resumes, you will send them to the electronics engineer for a technical interview. From your review of these resumes, you see that all three shortlisted candidates have similar qualifications and experiences. What should you do?
Forward all three resumes.
NOT Consult your boss before forwarding the resumes for interview.
Send all three candidates’ resumes. Since all the candidates have similar profiles, all three deserve a full chance of evaluation. Because you have not shortlisted the resumes nor will you be the interviewer or make the final decision, there is no question of discrimination, partiality or conflict of interest. [PMI Ethics] (Domain: Business Environment, Task 1)
Your organization is developing a deliverable on a firm fixed-price contract. The project was halfway through execution when a financial recession hits, causing the prices of raw materials to go through the roof. With the current prices, you might not be able to meet your cost targets and that will eat away a significant portion of the profit. You requested additional funds but that was turned down. The contract doesn’t have any EPA clause. What should you do?
Comply with your contractual obligations and continue with the project.
NOT Initiate alternative dispute resolution procedures as defined in your contract
Unfortunately, you have to accept this and continue with the project in line with your contractual obligations. It is your ethical responsibility to deliver what you have committed to deliver. A Fixed Price with Economic Price Adjustment (F.P.E.P.A.) contract is a fixed-price contract, but with a special provision allowing for pre-defined final adjustments to the contract price due to changed conditions, such as inflation changes, or cost increases (or decreases) for specific commodities. [PMI Ethics] (Domain: Business Environment, Task 1)
You were just hired to manage a large project in an underdeveloped country. The project will be on a build-operate-transfer basis and will have a two-year duration. At the close of the project, local authorities will run the program. The World Bank sponsors the project, and a large consortium has received the award. Your company is subcontracted to do this project along with two more contractor companies. After the project scope was finalized, you developed a cost estimate of US$5.5 million. The sponsor reviews your detailed costing sheets and is concerned about the total cost figure. He tells you that the maximum allowable budget he can allocate for this project is US$5 million. What should you do?
Evaluate ways that can result in cost savings and re-estimate the project.
NOT Advise the sponsor that the project cannot be completed within the available budget
You should evaluate approaches that can result in cost savings and re-estimate the project. Requesting a change in budget or scope without fully analyzing the options or simply moving ahead with plans to request additional funds in the future are violations of the PMI Code of Ethics. This code requires project managers to provide accurate, timely, and truthful project information at all times. [PMI Ethics] (Domain: Business Environment, Task 1)
To assist with the selection of a supplier for a large procurement on your project, you have hired a consultant. The consultant has prepared an independent estimate to be used as a benchmark while reviewing bids on the RFP. The independent estimate is confidential and is not shared with any bidders. When the sealed bids are opened, you discover that only one supplier has submitted a quote lower than the independent estimate. All other quotes are 45 percent to 70 percent higher than the benchmark. While discussing this development with members of the project team, you learn a distant relative of the consultant owns the company with the lowest bids. What is the best course of action?
Review the RFP specifications and requirements
NOT Disqualify the lowest bidder
Review the RFP requirements and specifications. Such a wide range of quotes indicates that there may be elements that are not stated clearly or correctly. Because there is no evidence of collusion between the consultant and the lowest bidder, the RFP review is the best choice. [PMI Ethics] (Domain: Business Environment, Task 1)
You are working as a project manager. All staff on the project have signed non-disclosure agreements and are given access to information on a need-to-know basis. During the closeout phase of the project, a government agency contacts your company in regard to a possible tax fraud committed by a finance employee at the company. One of the agency’s representatives contacts you directly and asks you to provide information about your project. What should you do?
Contact the appropriate management at your company for advice how to proceed
NOT Provide all the documentation that the agency requests
Contact the appropriate management to ask them how to proceed. Your organization may wish to conduct its own investigation and provide a coordinated communications channel with the agency. Independently deciding to share or not share information with the agency without involving your company’s management may be a violation of the company’s policies. Further, sharing confidential information without approval of your organization, regardless of the requesting party, is a violation of the PMI Ethics. [PMI Ethics] (Domain: Business Environment, Task 1)
A functional manager in your organization has recently filed a complaint against a junior project manager regarding his project management certification. The functional manager claims that the PMP certification claimed by the junior project manager is invalid and needs to be checked. What should be your response as a senior project manager?
Ask your functional manager to provide evidence for his argument
NOT Ask your project manager to provide evidence for his/her PMP certification
One of the mandatory standards in the PMI Ethics is respect. A project manager must listen to others’ points of view and understand them. However, before asking the junior project manager for evidence of his or her PMP certification, you must ask your functional manager to provide evidence to support his or her allegations. You can suspend the junior project manager or report him or her to PMI if there is sufficient evidence of his or her guilt. [PMI Code of Ethics and Professional Responsibility] (Domain: Business Environment, Task 1)
A project manager in a seller organization discovered that certain deliverables had been delivered to the buyer without undergoing proper testing. Recalling the deliverables will result in a cost overrun on the project. What should the project manager do in such a case?
Recall the deliverables even though there will be a cost overrun.
NOT Approach management to obtain additional funding to handle the potential cost overrun.
It is the project manager’s primary responsibility to ensure that deliverables are tested and have gone through the process outlined in the project management plan. Hence, the project manager should recall the deliverables, even it involves a cost overrun. Approaching management may be the next step. Terminating the project is not called for, and it will be unethical to wait for the procuring organization to do their testing and find out the defects in deliverables. [PMI Ethics] (Domain: Business Environment, Task 1)
You are currently leading a project team. A number of identified project risks did occur during the project but all were successfully managed in accordance to their contingency plans. Your project is now nearing completion, but a previously unidentified risk has arisen, and it could significantly affect one of the project deliverables. What do you do?
Notify the project stakeholders immediately
NOT Include the issue in the project risk log
Notify the project stakeholders immediately about the new risk. Once the stakeholders have been made fully aware of the circumstances and potential impacts, a plan to deal with this risk can be developed. The PMI Ethics requires project managers to provide accurate and timely project information at all times and to follow all project processes and policies. [PMI Ethics] (Domain: Business Environment, Task 1)
Your company is planning to deploy a corporate accounting software project. It will take more than a year to complete, have a budget of more than $5 million, and be implemented at 16 corporate locations around the world. The project sponsor wants to bring in an outside resource to be the project manager. This person, the sponsor’s brother-in-law, has many years of finance experience but no experience or training in project management. You are a PMP; what should you do?
Notify appropriate management that there is a potential conflict of interest
NOT Note this as a project risk
Notify appropriate management that the sponsor has a conflict of interest. Not only is the potential project manager a relative, he is also neither trained nor experienced in project management. PMI requires project managers to have the appropriate qualifications for the projects they are managing, and to report any violations of its code of ethics to the appropriate management. [PMI Ethics] (Domain: Business Environment, Task 1)
Your boss advises you must have your final project schedule and budget ready to present to the executive steering committee at a meeting later this week. A draft schedule is complete based on estimates your team provided. However, they have not yet had a chance to review the schedule to ensure their estimates are appropriate and realistic. Timing constraints make it impossible to complete this review before the meeting. What is the best approach?
Increase the schedule contingency reserve for the project based on analogous estimates.
NOT Present the schedule as is and add the lack of review to the risk register.
The appropriate choice is to increase the contingency reserve based on historical data from prior similar projects. Padding the schedule or using other methods to hide from stakeholders the fact that the schedule has not yet been completed is unprofessional and dishonest. Project managers must provide honest and accurate information at all times; to do otherwise runs counter to the PMI code of ethics. [PMI Code of Ethics and Professional Responsibility, Page 6] (Domain: Process, Task 5)
The manager of a project to design a new device is an electronics engineer but is not an expert in the technology used for this device. The client has requested a specification change in the design. The project manager brings the request to the project’s design leader. After reviewing the request’s details, the design leader states there are no experts in this technology in your organization. As a result, your team cannot assess the full impact of the requested change on the project. What should the project manager do?
Hire an outside consultant to provide the necessary expertise to evaluate the request
NOT Consult the sponsor
The project manager’s best option is to hire an outside consultant to provide the necessary expertise to evaluate the request. Once the project manager has a better understanding of the feasibility of the request, he or she can bring it to the project stakeholders for discussion. PMI requires project managers to work within the realm of their experience and skills. Forming a recommendation to accept or reject the change without consulting an expert would be a violation of the PMI code. [PMI Ethics] (Domain: Business Environment, Task 1)
You are validating the scope of your project. While reviewing some products, you have noticed that the tolerance for one product is 0.01 percent less than what was listed in the requirements documentation. This deviation may not be a problem for the customers, and it may not impair the product’s operation. What is your best immediate action in such a situation?
Notify the stakeholders about the deviation
NOT Discuss with your team about the quality testing
When you find a defective product, you must notify stakeholders immediately even if the deviation may not affect customers. As a project manager, you must maintain honesty and should not hide facts. After notifying the stakeholders, the project manager must discuss the issue with the team and change the project management plan based on the stakeholders’ inputs. [PMI Ethics] (Domain: Business Environment, Task 1)
When reviewing quarterly expenses for your project with the finance department, it becomes clear there is a discrepancy between the projected, budgeted, and actual costs incurred for equipment procured from a specific vendor. This cost variance puts the project over budget by 2 percent, inclusive of reserves. After reviewing and comparing the quotes with the invoices, it is discovered that the quotes were issued in Canadian dollars while the invoices were issued in US dollars. Which of the following is the best option?
Notify the project stakeholders of the situation immediately and take responsibility for the error
NOT Dispute the charges with the vendor
Notify project stakeholders immediately and accept responsibility for the error. PMI’s code of ethics requires project managers to provide accurate and timely project information—including bad news—and to take full responsibility for all errors and omissions. Whenever there is an impact to cost, scope, or schedule, the project manager must notify the project stakeholders; once they have been notified, analysis of options to deal with the impact can be undertaken. [PMI Ethics] (Domain: Business Environment, Task 1)
You’ve been recently hired in an FMCG marketing company, specializing in children’s food products. Before joining the organization, your experience has been in launching industrial and chemical products. The industrial marketing requirements demand close relationship with a small number of industry players, while FMCG marketing is more consumer-oriented. You have not yet been assigned to a project. However, there is a new product development project in the pipeline. It will most likely have several teams involved in product development, commercial market research, distribution management, and sales. Two senior marketing professionals have already been selected to head the market research and sales teams. Your manager asks if you would be interested in managing this project. How do you respond?
You should accept the project.
NOT: Ask your boss for training in the consumer marketing environment
NOR: Reject the project
NOR: Have more meetings with the project experts to gain more insight into the subject
You may accept the project. Although your experience is not an exact match for this project, the organization hired you knowing this. Further, they have allocated resources to your project that can provide the needed industry expertise. These circumstances are in line with the expectations of the PMI Code of Ethics and Professional Conduct. [PMI Ethics] (Domain: Business Environment, Task 1)
You are managing a project with more than 130 procurement contracts. Because of the number of contracts, your project team includes a procurement manager and a procurement assistant. Company policy requires that certain types of procurements be advertised to potential bidders by means of newspaper advertisements. The procurement assistant typically reviews the bids received and shortlists the suppliers for further review by the procurement team. During a meeting to review and select a vendor from the shortlisted suppliers, you discover that one of the suppliers is a company your cousin owns. Which of the following is your best course of action?
Ask the procurement manager to lead the vendor selection process for this contract and excuse yourself from the review
NOT Disclose your relationship with the provider and continue to participate in the selection process
NOR: Remove the supplier from the short list
NOR: Because the procurement assistant prepared the short list, not you, you do not need disclose your relationship with the supplier and may continue to participate in the selection process
The best choice is asking the procurement manager to lead the selection process and excusing yourself from the review. According to the PMI Code of Ethics and Professional Conduct, project managers must disclose any potential conflict of interest situation to the appropriate stakeholders, who will determine if it is appropriate for the project manager to continue participating in the affected processes. Project managers must also act fairly towards others; removing the supplier from the list because of a possible conflict of interest on the part of the project manager is unfair to the vendor. [PMI Ethics] (Domain: Business Environment, Task 1)
