Focus Area Test: Code of Ethics and Professional Conduct

Question 1

1. You are working for a project-based organization. The organization has a procedure to report minor ethical issues, and the ethics committee reviews them at month’s end. Only major violations are escalated for in-depth scrutiny. This month, a project team member reported a minor violation of PMI’s code of ethics. The project manager, who’s a also a member of PMI, has taken on some of the project‘s activities for which he wasn’t qualified. The project manager was offered an opportunity to receive training, which he refused. When the project manager is called for his comments, he says that this rule comes under “aspirational standards” of PMI’s code of ethics and is not covered under “mandatory standards.” Has he violated the code?

Answer 1

He has violated the code.

He has violated the PMI Code. Project managers must adhere to all standards in the Code; none are optional. [PMI Code of Ethics and Professional Conduct]

Question 2

2. Your company took over the management of a project from another company that went out of business. To minimize disruptions related to the transition, your company hired a number of the employees from the other company. One of these employees has delivered a 300-page document a week ahead of schedule. However, while walking past his desk, you notice that his computer is displaying a document with the logo of his former employer. You suspect that some of his work may have been based on documentation that is the property of the other company. What do you do?

Answer 2

Determine if any materials belonging to the other company have been copied.

Determine if any materials belonging to the other company have been copied. The fact that the other company has gone out of business does not necessarily mean that it no longer owns intellectual property. Once you know if materials from the other company have been used, you can develop a plan to move forward. [PMI Code of Ethics and Professional Conduct]

Question 3

3. You have managed a project to write and publish seven books. A team of contributing writers from your client’s organization wrote the books’ content. Six of the seven books are printed and distributed, the seventh was just sent to the printer, and the project closeout work has begun. While walking through the office, you overhear one of the writers mentioning that she made extensive use of an online source of information for the sections she wrote. When you get back to your desk, you do some spot checking of this writer’s work and discover that quite a bit her text was copied word for word from this information source. You are unaware of any existing agreement authorizing the use of this material on your project. What do you do?

Answer 3

Notify your project stakeholders immediately

Notify your project stakeholders immediately. A plan of action can be developed with their input once they have been advised of the situation. Moving forward without notifying the appropriate management that the intellectual property of another party has been used without authorization is a violation of the PMI Code of Ethics and Professional Conduct. [PMI Code of Ethics and Professional Conduct]

Question 4

4. The management of a retail business unit has just assigned Mario to compare multiple projects and select the best project that will produce the most value for the unit. Although Mario has worked as a project manager for a long time, he has only a limited understanding of project selection methods. What should be the first course of action from Mario in this scenario?

Answer 4

Inform the management about lack of knowledge on project selection methods

he management has just assigned Mario to select the best project. One of the mandatory standards for practitioners of project management is honesty. Therefore, Mario should tell the management about his lack of knowledge of project selection methods. Attempting to select the project without expert knowledge could create problems later. Refusing the assignment is not an appropriate action. Management may suggest soliciting expert judgment for selecting the project, but informing the management is the first step to take, and it is up to management to decide what to do next. [PMI Code of Ethics and Professional Responsibility]

Question 5

5. You are managing a project with a large multinational staff. Susan, one of the engineers, was originally asked to deliver her part of the work on October 19. Due to a change in the critical path, her deliverable will be needed two days sooner. However, as the new deadline is still two weeks away and she is ahead of schedule, you are confident her delivery will be on time. During a staff meeting, you learn from John, her functional manager, that Susan celebrates a religious holiday on October 17. However, he also tells you that Susan is not particularly religious; if pushed a bit and offered some incentive, she may

Answer 5

Check whether one of her colleagues can share some of her workload this week

Checking to see if one of her colleagues could share some of her workload this week is the best choice. If another resource can assist with the completion of this task, Susan may celebrate the holiday without affecting the delivery of her work item. PMI’s Code of Ethics and Professional Conduct mandates that project managers must respect the religious beliefs of others and must not use their position or expertise to influence the decisions or actions of others to benefit at their expense. [PMI Code of Ethics and Professional Conduct]

Question 6

6. You have recently started working as a project manager for a health insurance portal development project. The project sponsor tells you that due to the critical nature of the project, the work must start immediately and complete in two weeks. Based on the instructions, you have started documenting significant constraints and assumptions to perform the project feasibility study. What should you do if you can prepare only the high-level feasibility study in the given time frame?

Answer 6

Refer this issue to the sponsor and explain the need for more detailed study

Developing a detailed feasibility study is essential to initiate a project. If efforts are not made initially to determine whether the project is worth the required investment, it could result in project failure. It is also the responsibility of the project manager to provide accurate and complete information about the feasibility of any project. Thus, you must escalate the issue to the sponsor and explain the need for a more detailed study. Since the project initiation depends on the feasibility of the project, the report cannot be prepared in the project planning phase. Conducting stakeholder meeting is an invalid choice because the stakeholders have not yet been selected to conduct a meeting. [PMI Code of Ethics and Professional Responsibility]

Question 7

7. Nancy can bid on two projects. Project A has a 50 percent return on investment while Project B has a 20 percent return on investment. Project A’s scope of work is complex, and Nancy’s organization does not have the necessary skills and experience to do this project. However, Project B’s scope of work falls within the strengths of Nancy’s organization. Which project must Nancy bid on?

Answer 7

Project B since the organization has the required skills

Nancy must not bid on Project A since her organization lacks the required skills and experience. This leaves her with only Project B to bid on. Project managers are mandated by the PMI’s code of ethics and professional conduct to accept only those assignments that are consistent with their background, experience, skills and qualifications. [PMI Code of Ethics & Professional Conduct]

Question 8

8. You are managing an electronic chip design project for a customer. There are a number of engineers and subject matter experts from the customer’s organization that have been assigned as resources to the project plus several additional design engineers that your company has supplied. All the engineers were involved in the development of a prototype chip, an extremely time-consuming and expensive process. Upon the completion of the prototype, you submit it for review to ensure there are no patent infringement issues with the design. However, the review determines there are several issues that could result in an intellectual property dispute with the patent owners should the prototype design be released commercially. Resources from your company developed the affected prototype elements, as well as from your customer’s organization. What should you do?

Answer 8

Notify the project stakeholders immediately

Notifying the project stakeholders immediately is the best choice. Unauthorized use of the intellectual property of others is unethical and is prohibited by the PMI Code of Ethics and Professional Conduct. Once the project stakeholders are notified of the situation, a plan forward can be developed. This plan could involve licensing the previously patented technology from the patent owner or reworking the design. However, this mitigation plan must involve input from the appropriate project stakeholders. [PMI Code of Ethics and Professional Conduct]

Question 9

9. Your organization has a number of projects running simultaneously. The deliverables from some of the projects are developed specifically for use by other projects. A weekly PMO portfolio meeting is held to review the status and progress of each project. The project manager for another project, who is developing a software code that is a critical path item for your project, reported this code was delivered on time. However, the code has not yet been delivered to your project team and is currently two weeks late. What do should you do?

Answer 9

Report the incorrect status to the appropriate management

Notifying the appropriate management of the incorrect status report is the best choice. Project managers are required by the PMI Code of Ethics to report the errors and omissions of others to the appropriate management. The remaining options are actions that would be taken after notifying the appropriate management. [PMI Code of Ethics and Professional Conduct]

Question 10

10. As the project manager of a development project, you are aware that there is a slight defect in the developed product; as a result, it will fail to meet certain regulatory standards. This was due to faulty requirements. You are also aware that the product will continue to function properly even though it fails to meet those standards. Your customer manager asks you to certify that the product meets the necessary regulatory standards, stating that this will not be verified when the report is submitted to the necessary authorities. Your stance is that:

Answer 10

You will not certify that a product meets certain regulations when it does not, even though the product continues to function well.

Your stance will be that you will not certify that a product meets required standards when it does not, even though the product continues to function well. The customer manager might not be pleased with your stance. As a Project Manager, however, you have an obligation to uphold ethical practices, and so you cannot certify a product that fails to meet required standards. [PMI Code of Ethics and Professional Conduct]

Question 11

11. In a software development project, Debby, the project manager, completed development of a charter and identification of stakeholders. Debby has collected proprietary information from vendors during the planning process. What should Debby do when a functional manager from the same organization wants to see this information?

Answer 11

Deny the request to protect the confidentiality of the information

It is the responsibility of the project manager to maintain confidentiality of protected or proprietary information. A project manager should provide such confidential information only to the sponsor and to the vendor evaluation committee or whoever is involved in the evaluation. He or she must not provide this information to any other employees within the organization or within the project. [PMI Code of Ethics and Professional Responsibility]

Question 12

12. Your company has recently been awarded a project to construct an airport in a developing country. This is an opportunity for your company to build an airport from scratch for the first time. Not only this will serve as a five-star project on your company’s profile, the company will also get the opportunity to procure, deploy and integrate a state-of-the-art technological solution to operate the airport. This would give a significant competitive advantage to your company. However, the client is known to be slow in clearing interim payments and as a result you might have negative cash flows on your project. Holding payments and slow processing of invoices is a norm in this country. If you have no control over this, what should you do?

Answer 12

Identify the project funding requirements and consult senior management.

If you do not have any control over this issue and yet the company want to undertake the project due to a number of reasons, you need to determine your funding requirements and check with senior management if they are willing to make up for the cash shortages during the project. [PMBOK® Guide 6th edition, pages 7, 256; PMI Code of Ethics and Professional Conduct]

Question 13

13. A large network hardware upgrade project was scheduled to take place over a weekend. During the course of the implementation, several previously unidentified dependencies on additional materials were discovered. The project manager gave approval for the tech staff doing the implementation to procure with corporate credit cards several hundred dollars’ worth of additional equipment required to complete the implementation. However, these additional expenses caused the project to exceed its budget. How should the project manager handle this?

Answer 13

Notify the project stakeholders immediately of the additional expenses incurred and follow project and company procedures for budget variances.

Notifying project stakeholders and following proper procedures for dealing with budget variances is the best response. Attempting to pass off or hide an unexpected expense in another budget or in expense reports rather than following proper procedures is dishonest and unprofessional. The PMI code of ethics requires project managers to be honest, take responsibility for errors, and follow all organizational rules and policies. [PMI Code of Ethics and Professional Conduct]

Question 14

14. During the planning phase of your project, your team decided to procure a certain brand of hardware because it had the lowest price and came with free shipping and installation. This approach saved $6,000 over the other brands. Since that purchase, however, you discovered the annual maintenance costs for this hardware are $2,500 per year, and $12,500 over the life of the hardware. These costs were not budgeted in the project, nor were they included in the Total Cost of Ownership (TCO) analysis that was part of the project business case. What should you do?

Answer 14

Notify the stakeholders immediately

Notify the project stakeholders of this situation immediately. Once they have been notified of the lifecycle costing, a path forward can be developed. Project managers are responsible for providing accurate and timely information. Even though this cost will not impact the project budget directly, it is still a critical component of the ongoing operation of the project’s product. Failing to communicate this information is a violation of the PMI Code of Ethics and Professional Conduct. [PMI Code of Ethics and Professional Conduct]

Question 15

15. An employee, who works as senior project coordinator and is a member of the PMI, has requested that performance appraisals should be shared with the employees. This is in the best interest of transparency. He also refers to the transparency clause of the PMI code of ethics. What must you do?

Answer 15

Follow the organizational human resource policies for employee reviews.

Follow company human resources policies for employee reviews. The PMI code of Ethics section related to transparency doesn’t apply here. [PMI Code of Ethics & Professional Conduct]

Question 16

16. You have just completed a solid waste management project in an underdeveloped country. The contractor you are working for has a strict policy of abiding by local laws and rules although the local resources working on the project have a much more lax approach to following laws and policies. Now at the end of the project, you are handing over the operational equipment to the local operators and disposing of the leftover inventory and other materials that were used during the project. More than 50 percent of the toxic materials used during the project remains in your inventory. There is no law that would prohibit you from disposing of either the type or quantity of remaining materials in the local sewage system. What should you do?

Answer 16

Do not dispose of the materials improperly

Although there is no law restricting disposal, the material is still toxic and must not be disposed of improperly. Abandoning it or giving it to local recyclers may also result in improper disposal. PMI’s Code of Ethics and Professional Conduct requires project managers to make decisions based on the interests of public safety and the environment. Failing to ensure proper disposal of toxic materials is a violation of this code. [PMI Code of Ethics and Professional Conduct]

Question 17

17. You are the project manager of a construction project to build an Industrial Technology Park in a foreign country. You find that you need to transport large machinery and equipment to the construction site and this may potentially cause some disturbance to traffic in the vicinity. You therefore plan to schedule this for a time which is considered off-peak-hour traffic. Your liaison in the country informs you that you need to pay a fee to the local administration to do this. How would you handle this?

Answer 17

You would first check with your legal team about whether such a fee is a requirement and complies with the local regulations.

A fee is not necessarily a bribe. However, when in doubt on any of the information provided by your local contacts, the project manager should check with the legal team. Depending on the nature of the contract (whether T&M, Fixed price, Cost Reimbursable etc.), you should keep your customer appropriately informed on the fees and any charges. [PMI Code of Ethics and Professional Responsibility]

Question 18

18. You are assisting Benjamin, another project manager, to interview candidates for a resource position on his project. While reviewing your interview notes together, you notice that he sorts the candidate‘s resumes into two piles: One pile for further interviews, the other for candidates that did not meet the requirements for the position. You also notice that he has placed several of the highly qualified candidates in the second pile, stating that those interviewees “did not fit the corporate profile.” Upon further review, you discover that all these candidates are of the same ethnic group. What do you do?

Answer 18

Report this to the appropriate management

Report this to the appropriate management immediately. Discrimination based on nationality is prohibited by the PMI Code of Ethics and may also be illegal, depending on local laws. PMI requires project managers to report discriminatory behavior to the appropriate management; not doing so is a violation of the Code of Ethics. [PMI Code of Ethics and Professional Conduct]

Question 19

19. You are a consulting project manager. An investment bank has a contract with you to run a large information technology project, which you expect to last 15 months. While developing the project charter, you discover that it did not address several regulatory requirements in the business case. Failure to meet these requirements could result in legal action against the company. However, implementing the technology to comply with these regulations could exceed the project’s budget and scope, which could lead to the project’s cancellation. What should you do?

Answer 19

Disclose the discovery to the project sponsor and stakeholders immediately.

Notifying the stakeholders immediately that there has been a significant oversight in the business case is the appropriate response. Project managers are required by PMI’s Code of Ethics to comply with all laws and regulations. Failure to immediately and actively disclose that a regulatory requirement has not been addressed could put the company and the project manager in the position of breaking the law. [PMI Code of Ethics and Professional Responsibility, Pages 2, 3]

Question 20

20. The project you are managing has had many customer-requested requirements changes. Communication and control of the main supplier was a challenge, as well; nearly all this supplier’s deliverables were late, resulting in cost increases of 32 percent and delays of 2.5 months. No deliverables from any other supplier were late. While preparing closeout documentation, you discover that the unreliable supplier is a company owned by the senior director’s brother. What do you do?

Answer 20

Notify the appropriate management immediately of a potential conflict of interest

Notify the appropriate management that there is a potential conflict of interest. It is possible that all proper vendor screening procedures were followed, and there is no conflict of interest. However, it is incumbent upon the project manager to report accurate project information. [PMI Code of Ethics and Professional Conduct]

Question 21

21. You are working for a large project organization with several project managers working on 15 projects. All project managers submit their status reports at month’s end. One of your fellow project managers, Jane, has reported an error in the past two months. From discussions with one of her project’s team members who is also working on one of your projects, you realize Jane is deliberately misreporting the project’s status to inflate her performance for the annual performance appraisal next month. The month-end review meeting is in two days, and you are preparing your own presentation for it. What should you say about her status report?

Answer 21

Investigate and verify the blame before reporting the incorrect status to the appropriate management.

Investigate and verify the blame before reporting the incorrect status to the appropriate management. Project managers are required by PMI’s Code of Ethics to provide truthful and accurate information, and to report errors and omissions of others to the appropriate management. [PMI Code of Ethics and Professional Conduct]

Question 22

22. You are responsible for developing high-level risks, assumptions, and constraints for your project. You meet with experts in your organization and document various risks in the project. However, in reviewing historical data from a previous project, you notice a significant additional risk to your project, one that no one else is aware of. What should you do to continue the project?

Answer 22

Document it and make it a high-level risk

As a project manager, you have a responsibility to disclose accurate information to all project stakeholders honestly. Project managers must not disseminate false or misleading information. Thus, you must document it as a high-level risk. Even though the risk is based on past data, it must be documented because the risks could also be identified from the past data. Documenting it as a low-level risk would be a misleading act, and a project manager must not do that. [PMI Code of Ethics and Professional Responsibility]

Question 23

23. You have recently joined a new company as a project manager. While reviewing the procurement plans for a project you will be taking over, you see that the company is considering using one of the most expensive manufacturers to provide certain equipment required for the project. At your previous employer, you had used a different supplier for the same equipment and had paid significantly less. Without telling your boss, you now call that supplier for a quote. Have you violated the rule of keeping proprietary information confidential?

Answer 23

You have not violated any rule.

No rule has been violated as you have not disclosed any proprietary or confidential information. [PMI Code of Ethics and Professional Conduct]

Question 24

24. You are using the one-on-one interview technique to gather high-level risks, assumptions, and constraints in an infrastructure development project to set up a bank. During the interview process, a key stakeholder tells you that the project might fail due to lack of support from local people. What should you do in this situation?

Answer 24

Investigate the reasons behind the stakeholder’s comments

You must document the comments from the stakeholder. However, you should not continue the project until you also understand his or her rationale. The sponsor might ask you to look into it, so escalating the stakeholder’s comments to the sponsor may not yield anything. Ignoring the stakeholder’s comments is not advisable. Thus, the correct step is to investigate the reasons behind the stakeholder’s comments. [PMI Code of Ethics and Professional Responsibility]

Question 25

25. The project you are managing involves 43 people from different departments and is on schedule and within budget. You conduct project review meetings every week. There are a number of attendees who are quite vocal and can easily send the meeting off track with their questions and comments. You are in a functional organization, where the project manager has little formal authority. Sam, a team member who reports to a senior line manager, sends an email to you and his manager, reporting that two attendees were quite disrespectful in the last meeting and that the general atmosphere of the meetings upsets him. As a result, he will no longer attend weekly review meetings. However, other project members have complained about this person’s shyness and seeming inability to get along with people. What should you do?

Answer 25

Establish meeting ground rules

Establishing meeting ground rules will help all members of the team communicate effectively. It is incumbent upon the project manager to contribute to an atmosphere of mutual cooperation and treat everyone equally and with respect, in accordance with the PMI Code of Ethics. [PMBOK® Guide 6th edition, Page 348 and PMI Code of Ethics and Professional Conduct]

Question 26

26. You recently joined a large multinational pharmaceutical product’s company as a project manager. This is your first experience in a pharmaceutical company; your past jobs have been primarily with auto parts manufacturing companies. The company will launch a new product in a South American country, and you will manage this effort. This product is quite popular in your home market, and pharmaceutical industry reports give it high praise. As you review the project documentation from similar projects, you discover that promotions focus on hospitals, physicians, and other medical practitioners. These targeted groups have been offered incentives such travel, cars, and other luxury items to recommend this company’s products. This is the first time you have seen this type of incentive system in your career. What should you do?

Answer 26

Investigate these practices to determine if they are in compliance with the laws of your country, the country where the product will launch, and your company’s policies. If these practices comply with all regulatory standards, you can accept the project.

If these practices do not violate the polices and laws of your organization or the countries involved in the project, then there is no ethical problem with accepting the project. PMI’s Code of Ethics and Professional Conduct prohibits project managers from using bribery to achieve their personal goals. [PMI Code of Ethics and Professional Conduct]

Question 27

27. The project you are managing has a very slim profit margin. It requires experts from different disciplines, some of whom are not only expensive but are also highly in demand, resulting in frequent job switching. The most expensive senior worker in a specific area of expertise also happens to be the only available resource in that area in your organization, and you were just informed he has resigned. As it happens, he has joined your client’s organization. Hiring a replacement can be extremely expensive due to shortage of expertise and will increase your project cost. The contract specifies the customer will not pay any extra cost. When you bring this issue to your manager, he suggests using a junior level person in another department. The junior resource had worked with the recently departed senior person for over a year. What should you do?

Answer 27

Hire a new expert

The cost of the expensive resource that was lost is already included into the contract. This means that hiring a new expert is possible because the funds are already available. Substituting a less qualified resource in place of a more qualified resource for a project already in execution to reduce costs is a violation of the PMI Code of Ethics and Professional Conduct. [PMI Code of Ethics and Professional Conduct]

Question 28

28. A government agency has awarded your company a massive software project. This project has an early completion incentive, and your company has a policy of paying a bonus to the project manager if such an incentive is awarded. However, this particular government agency has a reputation for being extremely difficult to work with; there is a great deal of bureaucracy within this agency, and stonewalling and hostility toward contractors are common. The project manager will need to have excellent political skills to lead this project successfully. You have been asked to lead the project because of your expertise with this type of project. However, you have never worked within such a highly charged and political environment. What should you do?

Answer 28

Accept the project but disclose your lack of experience in this type of environment.

Accept the position, but disclose your lack of experience with this type of environment. PMI’s Code of Ethics and Professional Conduct requires that project managers accept only those projects for which they have the appropriate qualifications and background. However, if the project stakeholders receive full disclosure and still give their consent, it is permissible to accept a stretch assignment. [PMI Code of Ethics and Professional Conduct]

Question 29

29. You are an electrical engineer with extensive experience in managing transmission projects but limited experience with electronic design projects. However, in a stretch assignment, you were recently transferred to another department in your company that focuses on electronic design. Furthermore, you were asked to lead a highly important project involving both transmission and electronic design. In preparation for a meeting with your manager to discuss this opportunity, you review the initial project design brief. Due to your limited background in electronic design, a number of items in this document seem unclear to you. When you arrive at your meeting, your manager asks if you will be leading the project. How do you respond?

Answer 29

State that you would like to lead the project, but you must disclose that your primary domain of expertise is transmission, and that you may need supplementary training in electronics design.

State that you would like to lead the project, but disclose that your expertise is in transmission, not electronics design. PMI’s Code of Ethics and Professional Conduct mandates that project managers accept only those projects for which they have appropriate qualifications and experience. However, if project stakeholders are fully informed of the areas where you may be lacking skills or knowledge, and they still wish you to lead the project, this is not a violation of the code. [PMI Code of Ethics and Professional Conduct]

Question 30

30. You are a business development manager at a mid-sized automobile manufacturing company. Recently, you were given a project to assess the feasibility of manufacturing light-duty trucks in a Southeast Asian country. To develop a cost estimate, you visit the country with a team of experts to analyze local resources such as power, labor, and real estate. After the visit, you discuss the findings with an automobile manufacturing consultant. The consultant notes that the local laws and government bureaucracy typically make foreign investors spend more than a year obtaining all necessary permits. To avoid these delays, the consultant advises giving a small amount of company stock to the son of the country’s president. In return, the president’s son will personally expedite the issuing of all required permits. What should you do?

Answer 30

Determine the legality of the proposed exchange of stock for permitting assistance.

Determine the legality of the proposed exchange of stock for assistance with permitting. If this arrangement does not violate the laws of your country, the country where you are hoping to start work, corporate regulations, or industry regulations, the cost of the exchange may well offset the opportunity cost of a yearlong permitting delay. Once the legality has been established, a plan forward can be developed. [PMI Code of Ethics and Professional Conduct]