MIS 578 Chapter 2 Flashcards
Strategic analysis
Internal and external analysis using SWOT.
Guiding principles
Vision (preferred future state) and mission (what we stand for and how we will operate) statements, perhaps purpose and values also.
Strategic Objectives
Annual goals to help achieve vision and mission.
Flow-down objectives
In larger organizations an expansion on strategic objectives.
Portfolio
Portfolio is“projects, programs, sub portfolios, and operations managed as a group to achieve strategic business objectives.”
Program
Program is“a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits not available from managing them individually.”
Subproject
Subproject is “a smaller portion of the overall project created when a project is subdivided into more
manageable components or pieces
Methods for project selection
Based upon organizational priorities, including financial and other considerations.
Using a financial model to select projects.
- Comparing expected project costs with benefits often by using net present value analysis.
- NPV, BCR, IRR, PP.
Using a scoring model to select projects
When multiple criteria such as timing, risk, and resource needs are important in selection decisions
Strategic analysis
analyze strengths and weaknesses within the organization and opportunities and
threats external to the organization
Guiding principles
create statements of organizational vision, mission, purpose and/or values to guide decision-making.
Strategic Objectives
often annual planning to establish short and long term results that will support
guiding principles
Flow-down objectives
optional for large or complex organizations to ensure that appropriate goals are established
Portfolio Alignment
selecting a set of projects to support organizations’ goals
Why are multiple criteria project selection models preferred?
Financial criteria is one factor in selecting an appropriate project portfolio, but additional criteria
concerning how well each potential project supports organizational objectives, timing, resource needs, and
risk are also often critical.
What happens to a project proposal that does not meet a “must” objective in a project selection system?
It is evaluated just as all other potential projects to see how well it fits the organization’s selection criteria
What does the strategic analysis acronym SWOT stand for?
Strengths, weaknesses, opportunities, and threats.
Which parts of SWOT are internal? Which parts are external?
Internal – strengths and weaknesses of the organization.
External – opportunities and threats from outside the organization
What are some examples of guiding principles an organization’s leaders might develop after they have
completed strategic analysis?
Vision – a description of the desired future state of the organization.
Mission – the organization’s reason for existing, beliefs, core values of how people will be treated and
decisions will be made, the business the organization is in, and the primary customers of the organization.
Sometimes mission is broken into separate statements such as purpose and values
In what tense should a vision be written?
Future
Name at least four things a mission statement should include.
The mission statement should include the organization’s purpose, beliefs, core values, culture, primary
business, and primary customers.
Why should a mission statement be neither too specific nor not specific enough?
The mission statement should be specific enough to set direction, but not so specific that the organization
precludes imagination.
In addition to short- and long-term results, what should strategic objectives include?
Strategic objectives should include measures to determine if they have been achieved.
What does the acronym SMART mean with regard to goals?
Specific, measurable, achievable, results-based, and time-specific
What is the primary method of implementing organizational objectives?
Projects are the primary means of implementing organizational objectives.
What is the first step in avoiding common reasons for project failure?
The first step in avoiding common reasons for project failure is to carefully align potential projects with the
goals of the parent organization.
Who should be involved in the second part of aligning projects with the firm’s goals, which is identifying
potential projects?
All parts of the organization should help identify potential projects.
How many potential projects should be identified in comparison to how many the organization plans to
actually implement? Why?
One good rule of thumb is to identify about twice as many potential projects as the organization has the
capacity to implement since upon close examination, some projects may not be a good fit and others may
be impractical.
What is the most common financial analysis technique used in project selection? Why?
Net present value (NPV) is the most widely accepted model as all the other models, though offering
additional perspective, have more weaknesses.
Which type of financial model would you normally use in project selection? Why?
Net present value (NPV) is straightforward both in calculation and in interpretation.
