Strategic Application in Project Management – Activity 16

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Project Management

The Managerial Process Eighth
Edition

Erik W.
Larson

Clifford F.
Gray

Oregon
State
University

page vi

PROJECT MANAGEMENT: THE MANAGERIAL PROCESS, EIGHTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2021 by McGraw-Hill Education.
All rights reserved. Printed in the United States of America. Previous editions © 2018, 2014, and 2011. No part of this
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Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

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1 2 3 4 5 6 7 8 9 LWI 24 23 22 21 20 19

ISBN 978-1-260-23886-0 (bound edition)
MHID 1-260-23886-5 (bound edition)
ISBN 978-1-260-73615-1 (loose-leaf edition)
MHID 1-260-73615-6 (loose-leaf edition)

Portfolio Manager: Noelle Bathurst
Product Developer Manager: Michele Janicek
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All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.

Library of Congress Cataloging-in-Publication Data

Names: Gray, Clifford F., author. | Larson, Erik W., 1952- author.
Title: Project management : the managerial process / Erik W. Larson,
 Clifford F. Gray, Oregon State University.
Description: Eighth edition. | New York, NY : McGraw-Hill Education, [2021]
 | Clifford F. Gray appears as the first named author in earlier
 editions. | Includes bibliographical references and index. | Summary:
 “Our motivation in writing this text continues to be to provide a
 realistic, socio-technical view of project management. In the past,
 textbooks on project management focused almost exclusively on the tools
 and processes used to manage projects and not the human dimension”–
 Provided by publisher.

Identifiers: LCCN 2019028390 (print) | LCCN 2019028391 (ebook) |
 ISBN 9781260238860 (paperback) | ISBN 1260238865 (paperback) |
 ISBN 9781260242379 (ebook)
Subjects: LCSH: Project management. | Time management. | Risk management.
Classification: LCC HD69.P75 G72 2021 (print) | LCC HD69.P75 (ebook) |
 DDC 658.4/04–dc23
LC record available at https://lccn.loc.gov/2019028390
LC ebook record available at https://lccn.loc.gov/2019028391

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate
an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of
the information presented at these sites.

mheducation.com/highered

page vii

About the Authors

Erik W. Larson
ERIK W. LARSON is professor emeritus of project management at the College of Business,
Oregon State University. He teaches executive, graduate, and undergraduate courses on
project management and leadership. His research and consulting activities focus on project
management. He has published numerous articles on matrix management, product
development, and project partnering. He has been honored with teaching awards from both
the Oregon State University MBA program and the University of Oregon Executive MBA
program. He has been a member of the Project Management Institute since 1984. In 1995 he
worked as a Fulbright scholar with faculty at the Krakow Academy of Economics on
modernizing Polish business education. He was a visiting professor at Chulalongkorn
University in Bangkok, Thailand, and at Baden-Wuerttemberg Cooperative State University
in Bad Mergentheim, Germany. He received a B.A. in psychology from Claremont McKenna
College and a Ph.D. in management from State University of New York at Buffalo. He is a
certified Project Management Professional (PMP) and Scrum master.

Clifford F. Gray
CLIFFORD F. GRAY is professor emeritus of management at the College of Business,
Oregon State University. He has personally taught more than 100 executive development
seminars and workshops. Cliff has been a member of the Project Management Institute since
1976 and was one of the founders of the Portland, Oregon, chapter. He was a visiting
professor at Kasetsart University in Bangkok, Thailand, in 2005. He was the president of
Project Management International, Inc. (a training and consulting firm specializing in project
management) 1977–2005. He received his B.A. in economics and management from Millikin
University, M.B.A. from Indiana University, and doctorate in operations management from
the College of Business, University of Oregon. He is a certified Scrum master.

page viii

“Man’s mind, once stretched by a new idea, never regains
its original dimensions.”

Oliver Wendell Holmes, Jr.

To my family, who have always encircled me with love and
encouragement—my parents (Samuel and Charlotte), my
wife (Mary), my sons and their wives (Kevin and Dawn,
Robert and Sally), and their children (Ryan, Carly, Connor
and Lauren).

C.F.G.

“The reasonable man adapts himself to the world; the
unreasonable one persists in trying to adapt the world to
himself. Therefore all progress depends on the
unreasonable man.” Bernard Shaw, Man and Superman

To Ann, whose love and support have brought out the best
in me. To our girls Mary, Rachel, and Tor-Tor for the joy and
pride they give me. And to our grandkids, Mr. B, Livvy,
Jasper Jones!, Baby Ya Ya, Juniper Berry, and Callie, whose
future depends upon effective project management. Finally,
to my muse, Neil—walk on!

E.W.L

page ix

Preface

Our motivation in writing this text continues to be to provide a realistic, socio-technical view
of project management. In the past, textbooks on project management focused almost
exclusively on the tools and processes used to manage projects and not the human dimension.
This baffled us, since people, not tools, complete projects! While we firmly believe that
mastering tools and processes is essential to successful project management, we also believe
that the effectiveness of these tools and methods is shaped and determined by the prevailing
culture of the organization and interpersonal dynamics of the people involved. Thus, we try
to provide a holistic view that focuses on both the technical and social dimensions and how
they interact to determine the fate of projects.

Audience

This text is written for a wide audience. It covers concepts and skills that are used by
managers to propose, plan, secure resources, budget, and lead project teams to successful
completions of their projects. The text should prove useful to students and prospective
project managers in helping them understand why organizations have developed a formal
project management process to gain a competitive advantage. Readers will find the concepts
and techniques discussed in enough detail to be immediately useful in new-project situations.
Practicing project managers will find the text to be a valuable guide and reference when
dealing with typical problems that arise in the course of a project. Managers will also find the
text useful in understanding the role of projects in the missions of their organizations.
Analysts will find the text useful in helping to explain the data needed for project
implementation as well as the operations of inherited or purchased software.

Members of the Project Management Institute will find the text is well structured to meet
the needs of those wishing to prepare for PMP (Project Management Professional) or CAPM
(Certified Associate in Project Management) certification exams. The text has in-depth
coverage of the most critical topics found in PMI’s Project Management Body of Knowledge
(PMBOK). People at all levels in the organization assigned to work on projects will find the
text useful not only in providing them with a rationale for the use of project management
processes but also because of the insights they will gain into how to enhance their
contributions to project success.

Our emphasis is not only on how the management process works but also, and more
importantly, on why it works. The concepts, principles, and techniques are universally

page x

applicable. That is, the text does not specialize by industry type or project scope. Instead, the
text is written for the individual who will be required to manage a variety of projects in a
variety of organizational settings. In the case of some small projects, a few of the steps of the
techniques can be omitted, but the conceptual framework applies to all organizations in
which projects are important to survival. The approach can be used in pure project
organizations such as construction, research organizations, and engineering consultancy
firms. At the same time, this approach will benefit organizations that carry out many small
projects while the daily effort of delivering products or services continues.

Content

In this and other editions we continue to try to resist the forces that engender scope creep and
focus only on essential tools and concepts that are being used in the real world. We have been
guided by feedback from reviewers, practitioners, teachers, and students. Some changes are
minor and incremental, designed to clarify and reduce confusion. Other changes are
significant. They represent new developments in the field or better ways of teaching project
management principles. Below are major changes to the eighth edition.

All material has been reviewed and revised based on the latest edition of Project
Management Body of Knowledge (PMBOK), Sixth Edition, 2017.
Discussion questions for most Snapshots from Practice are now at the end of each chapter.
Many of the Snapshots from Practice have been expanded to more fully cover the
examples.
Agile Project Management is introduced in Chapter 1 and discussed when appropriate in
subsequent chapters, with Chapter 15 providing a more complete coverage of the
methodology.
A new set of exercises have been developed for Chapter 5.
New student exercises and cases have been added to chapters.
The Snapshot from Practice boxes feature a number of new examples of project
management in action.
The Instructor’s Manual contains a listing of current YouTube videos that correspond to
key concepts and Snapshots from Practice.

Overall the text addresses the major questions and challenges the authors have
encountered over their 60 combined years of teaching project management and consulting
with practicing project managers in domestic and foreign environments. These questions
include the following: How should projects be prioritized? What factors contribute to project
failure or success? How do project managers orchestrate the complex network of
relationships involving vendors, subcontractors, project team members, senior management,

page xi

functional managers, and customers that affect project success? What project management
system can be set up to gain some measure of control? How are projects managed when the
customers are not sure what they want? How do project managers work with people from
foreign cultures?

Project managers must deal with all these concerns to be effective. All of these issues and
problems represent linkages to a socio-technical project management perspective. The
chapter content of the text has been placed within an overall framework that integrates these
topics in a holistic manner. Cases and snapshots are included from the experiences of
practicing managers. The future for project managers is exciting. Careers will be built on
successfully managing projects.

Student Learning Aids

Student resources include study outlines, online quizzes, PowerPoint slides, videos,
Microsoft Project Video Tutorials, and web links. These can be found in Connect.

Acknowledgments

We would like to thank Scott Bailey for building the end-of-chapter exercises for Connect;
Pinyarat Sirisomboonsuk for revising the PowerPoint slides; Ronny Richardson for updating
the Instructor’s Manual; Angelo Serra for updating the Test Bank; and Pinyarat
Sirisomboonsuk for providing new Snapshot from Practice questions.

Next, it is important to note that the text includes contributions from numerous students,
colleagues, friends, and managers gleaned from professional conversations. We want them to
know we sincerely appreciate their counsel and suggestions. Almost every exercise, case, and
example in the text is drawn from a real-world project. Special thanks to managers who
graciously shared their current project as ideas for exercises, subjects for cases, and examples
for the text. John A. Drexler, Jim Moran, John Sloan, Pat Taylor, and John Wold, whose work
is printed, are gratefully acknowledged. Special gratitude is due Robert Breitbarth of Interact
Management, who shared invaluable insights on prioritizing projects. University students and
managers deserve special accolades for identifying problems with earlier drafts of the text
and exercises.

We are indebted to the reviewers of past editions who shared our commitment to
elevating the instruction of project management. We thank you for your many thoughtful
suggestions and for making our book better. Of course, we accept responsibility for the final
version of the text.
Paul S. Allen, Rice University

Victor Allen, Lawrence Technological University
Kwasi Amoako-Gyampah, University of North Carolina–Greensboro
Gregory Anderson, Weber State University
Mark Angolia, East Carolina University
Brian M. Ashford, North Carolina State University
Dana Bachman, Colorado Christian University
Robin Bagent, College of Southern Idaho
Scott Bailey, Troy University
Nabil Bedewi, Georgetown University
Anandhi Bharadwaj, Emory University
James Blair, Washington University–St. Louis
Mary Jean Blink, Mount St. Joseph University
S. Narayan Bodapati, Southern Illinois University at Edwardsville
Warren J. Boe, University of Iowa
Thomas Calderon, University of Akron
Alan Cannon, University of Texas–Arlington
Susan Cholette, San Francisco State
Denis F. Cioffi, George Washington University
Robert Cope, Southeastern Louisiana University
Kenneth DaRin, Clarkson University
Ron Darnell, Amberton University
Burton Dean, San Jose State University
Joseph D. DeVoss, DeVry University
David Duby, Liberty University
Michael Ensby, Clarkson University
Charles Franz, University of Missouri, Columbia
Larry Frazier, City University of Seattle
Raouf Ghattas, DeVry University
Edward J. Glantz, Pennsylvania State University
Michael Godfrey, University of Wisconsin–Oshkosh
Jay Goldberg, Marquette University
Robert Groff, Westwood College
Raffael Guidone, New York City College of Technology
Brian Gurney, Montana State University–Billings
Owen P. Hall, Pepperdine University
Chaodong Han, Towson University
Bruce C. Hartman, University of Arizona

page xii

Mark Huber, University of Georgia
Richard Irving, York University
Marshall Issen, Clarkson University

Robert T. Jones, DePaul University
Susan Kendall, Arapahoe Community College
George Kenyon, Lamar University
Robert Key, University of Phoenix
Elias Konwufine, Keiser University
Dennis Krumwiede, Idaho State University
Rafael Landaeta, Old Dominion University
Eldon Larsen, Marshall University
Eric T. Larson, Rutgers University
Philip Lee, Lone Star College–University Park
Charles Lesko, East Carolina University
Richard L. Luebbe, Miami University of Ohio
Linh Luong, City University of Seattle
Steve Machon, DeVry University–Tinley Park
Andrew Manikas, University of Louisville
William Matthews, William Patterson University
Lacey McNeely, Oregon State University
Carol Miller, Community College of Denver
William Moylan, Lawrence Technological College of Business
Ravi Narayanaswamy, University of South Carolina–Aiken
Muhammad Obeidat, Southern Polytechnic State University
Edward Pascal, University of Ottawa
James H. Patterson, Indiana University
Steve Peng, California State University–East Bay
Nicholas C. Petruzzi, University of Illinois–Urbana/Champaign
Abirami Radhakrishnan, Morgan State University
Emad Rahim, Bellevue University
Tom Robbins, East Carolina University
Art Rogers, City University
Linda Rose, Westwood College
Pauline Schilpzand, Oregon State University
Teresa Shaft, University of Oklahoma

Russell T. Shaver, Kennesaw State University
William R. Sherrard, San Diego State University
Erin Sims, DeVry University–Pomona
Donald Smith, Texas A&M University
Kenneth Solheim, DeVry University–Federal Way
Christy Strbiak, U.S. Air Force Academy
Peter Sutanto, Prairie View A&M University
Jon Tomlinson, University of Northwestern Ohio
Oya Tukel, Cleveland State University
David A. Vaughan, City University
Mahmoud Watad, William Paterson University
Fen Wang, Central Washington University
Cynthia Wessel, Lindenwood University
Larry R. White, Eastern Illinois University
Ronald W. Witzel, Keller Graduate School of Management
G. Peter Zhang, Georgia State University

In addition, we would like to thank our colleagues in the College of Business at Oregon
State University for their support and help in completing this project. In particular, we
recognize Lacey McNeely, Prem Mathew, and Jeewon Chou for their helpful advice and
suggestions. We also wish to thank the many students who helped us at different stages of
this project, most notably Neil Young, Saajan Patel, Katherine Knox, Dat Nguyen, and David
Dempsey. Mary Gray deserves special credit for editing and working under tight deadlines on
earlier editions. Special thanks go to Pinyarat (“Minkster”) Sirisomboonsuk for her help in
preparing the last five editions.

Finally, we want to extend our thanks to all the people at McGraw-Hill Education for
their efforts and support. First, we would like to thank Noelle Bathurst and Sarah Wood, for
providing editorial direction, guidance, and management of the book’s development for the
eighth edition. And we would also like to thank Sandy Wille, Sandy Ludovissy, Egzon
Shaqiri, Beth Cray, and Angela Norris for managing the final production, design, supplement,
and media phases of the eighth edition.

Erik W. Larson

Clifford F. Gray

page xiii

Guided Tour

Established Learning Objectives
Learning objectives are listed both at the beginning of each chapter and are called out as
marginal elements throughout the narrative in each chapter.

End-of-Chapter Content
Both static and algorithmic end-of-chapter content, including Review Questions and
Exercises, are assignable in Connect.

SmartBook
The SmartBook has been updated with new highlights and probes for optimal student
learning.

Snapshots
The Snapshot from Practice boxes have been updated to include a number of new examples
of project management in action. New discussion questions based on the Snapshots have
been added to the end-of-chapter material and are assignable in Connect.

New and Updated Cases
Included at the end of each chapter are between one and five cases that demonstrate key ideas
from the text and help students understand how project management comes into play in the
real world. Cases have been reviewed and updated across the eighth edition.

Instructor and Student Resources
Instructors and students can access all of the supplementary resources for the eighth edition
within Connect or directly at www.mhhe.com/larson8e.

page xiv

Note to Student

You will find the content of this text highly practical, relevant, and current. The concepts
discussed are relatively simple and intuitive. As you study each chapter we suggest you try to
grasp not only how things work but also why things work. You are encouraged to use the text
as a handbook as you move through the three levels of competency:

I know.

I can do.

I can adapt to new situations.

The field of project management is growing in importance and at an exponential rate. It is
nearly impossible to imagine a future management career that does not include management
of projects. Resumes of managers will soon be primarily a description of their participation
in and contributions to projects.

Good luck on your journey through the text and on your future projects.

Chapter-by-Chapter Revisions for the Eighth Edition

Chapter 1: Modern Project Management

New Snapshot: Project Management in Action 2019.
New Snapshot: London Calling: Seattle Seahawks versus Oakland Raiders.
New case: A Day in the Life—2019.
New section on Agile Project Management.

Chapter 2: Organization Strategy and Project Selection

Chapter text refined and streamlined.
New section describing the phase gate model for selecting projects.

Chapter 3: Organization: Structure and Culture

New section on project management offices (PMOs).
New Snapshot: 2018 PMO of the Year.

Chapter 4: Defining the Project

page xv

Consistent with PMBOK 6th edition, the scope checklist includes product scope
description, justification/business case, and acceptance criteria.
Discussion of scope creep expanded.
New case: Celebration of Color 5K.

Chapter 5: Estimating Project Times and Costs

Snapshot from Practice on reducing estimating errors incorporated in the text.
Snapshot from Practice: London 2012 Olympics expanded.
A new set of six exercises.

Chapter 6: Developing a Project Schedule

Chapter 6 retitled Developing a Project Schedule to better reflect content.
New case: Ventura Baseball Stadium.

Chapter 7: Managing Risk

New Snapshot: Terminal Five—London Heathrow Airport.
Consistent with PMBOK 6e, “escalate” added to risk and opportunity responses and
“budget” reserves replaced by “contingency” reserves.

Chapter 8 Scheduling Resources and Costs

Two new exercises.
New case: Tham Luang Cave Rescue.

Chapter 9: Reducing Project Duration

Snapshot 9.1: Smartphone Wars updated.
New case: Ventura Baseball Stadium (B).

Chapter 10: Being an Effective Project Manager

Effective Communicator has replaced Skillful Politician as one of the 8 traits associated
with being an effective project manager.
Research Highlight 10.1: Give and Take expanded.

Chapter 11: Managing Project Teams

A new review question and exercises added.

Chapter 12: Outsourcing: Managing Interorganizational Relations

page xvi

Snapshot 12.4: U.S. Department of Defense Value Engineering Awards updated.
New exercise added.

Chapter 13 Progress and Performance Measurement and Evaluation

Expanded discussion of the need for earned value management.
New case: Ventura Stadium Status Report.

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