Project Management

Question 1

ORGANIZATIONAL AMBIDEXTERITY

Answer 1

Organizational ambidexterity is a
company’s ability to exploit current
capabilities while simultaneously
exploring new competencies.

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Question 2

OPERATIONS VS. PROJECTS

Answer 2

OPERATIONS
These activities make up the core and legacy of the organization.
Operations drive short-term commercial goals and keep the organization alive by focusing on efficiency and productivity.
In academic terms, this dimension is exploitation.

PROJECTS
Projects focus on strategic initiatives that change the organization and create future value.
Projects drive long-term goals, transforming the organization, though they are often highly risky and uncertain.
In academic terms, this dimension is exploration.

Operations reflect an organization’s day-to-day activities, which generally follow similar patterns and objectives every year (with some marginal improvements).

Projects are one-off investments designed to achieve a specific objective.

Operations are repetitive and easily automated. They operate according to a yearly budget and are staffed with dedicated team members.

Projects are restricted in terms of time and budget and are staffed with temporary team members.

Both project managers and operations managers require
specialized skills, especially in people management,
diplomacy, and negotiation. However, project managers
need to work across the organization to bring different views
together from people who often do not report to them. They
must be good at managing uncertainty, because large
strategic projects are partly unpredictable.

Question 3

KEY CHARACTERISTICS OF PROJECTS

Answer 3

1. INVESTMENT IN RESOURCES
   Projects require investments in the form of capital (money, funds) and human resources (effort, time, expertise)
2. DIVERSE EXPERTISE
   Projects often bring together people from
   different backgrounds and areas of expertise,
   many of whom may not have worked together before.
3. LIMITED IN TIME
   Projects have a clear start and end date
4. UNIQUENESS
   Some elements of a project are unique; a project is something that has not been done before
5. SERIES OF ACTIVITIES
   Projects are made up of a series of activities
   included in a plan, which is determined and designed to deliver an output or a solution that will ultimately create value.

Question 4

Project DEFINITION

Answer 4

A project is a temporary endeavor undertaken to
create a unique product, service or result.
More specifically, a project is a series of structured
tasks, activities and deliverables that are carefully
executed to achieve a desired outcome.

Question 5

PROJECT TYPOLOGIES

Answer 5

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Question 6

EFFICIENCY PROJECTS

Answer 6

Purpose: Keep the organization running efficiently.
Uncertainty: Low uncertainty; clear outcomes.
Complexity: Low to medium complexity, especially for
projects impacting large parts of the organization.
Success Rate: Should be nearly 100% successful.
Impact of Failure: Higher costs, more bureaucracy, or
lower quality can hurt organizational performance.

Question 7

Project life cycle

Answer 7

The project life cycle is a structured approach that guides the delivery of a project
from start to finish. Traditionally, project management has focused on delivering
the defined outcomes within scope, time and budget. However, limiting the
focus to the project life cycle often overlooks the broader strategic value, such as
innovation, long-term impact, and post-completion management. Expanding
project management to include these areas allows for greater alignment with
overall business goals and enhances the benefits delivered by the project

INITIATION
PLANNING
IMPLEMENTATION (MONITORING, REPORTING, TESTING)
CLOSING (HANDOVER)
BENEFITS

Question 8

THE PROJECT MANAGEMENT CANVAS

Answer 8

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1. FOUNDATION
   - PURPOSE: Why are we doing the project?
   - INVESTMENT How much will the project cost?
   - BENEFITS What benefits and impact will the project generate, and how will we know the project is successful?
2. PEOPLE
   - SPONSORSHIP: Who is accountable for the project?
   - RESOURCES: Who will manage the project, and which skills are needed to deliver the project?
   - STAKEHOLDERS Who will benefit from and be affected by the project?
3. CREATION
   - DELIVERABLES What will the project produce, built, or deliver?
   - PLAN How and when will the project be carried out?
   - CHANGE How are we going to engage stakeholders and manage the risks?

Question 9

WHY USE THE CANVAS?

Answer 9

1. IT IS A STARTING POINT, NOT AN ENDPOINT.

The Project Canvas serves as a
gateway to deeper data and
documentation. It should clarify the
reasoning, assumptions, and
evidence behind the project while
providing stakeholders with a clear
overview. Additional project details
can be accessed through the
canvas, enabling stakeholders to
dive deeper when needed.

2. IT EXPRESSES THE ESSENTIAL
   PRINCIPLES THAT GUIDE YOUR
   PROJECT.

The Project Canvas combines
explicit knowledge (documented
and written details) with tacit
knowledge (experience, judgment,
and behavior). This balance allows
stakeholders to evaluate the
project’s credibility, quality, and
risks while creating a shared
understanding of the project.

3. IT COMMUNICATES WITH CLARITY TO ALL YOUR STAKEHOLDERS.

The canvas avoids misinterpretation
by promoting clear and inclusive
communication. To ensure effective
communication:
* Involve stakeholders in cocreating the canvas to add value
beyond the final product.
* Describe outcomes that can be
objectively agreed upon.
* Use concrete, specific language
instead of vague aspirations.
* Avoid jargon to make the canvas
accessible to all decisionmakers and specialists.

Question 10

FOUNDATION DOMAIN

Answer 10

Strategic Level Focus:
Defines the project’s essence and strategic alignment.
Key Elements:
* Clarity around Purpose (the “Why”)
* Buy-in and Resources from the organization
* Commitment from Leadership
* Engagement from the Project Team
Components:
Purpose, Investment, Benefits

Question 11

PURPOSE
WHY ARE WE DOING THIS PROJECT?

Answer 11

Clarifies the problem to solve or the opportunity to capture

The purpose should not be fancy or
embellished - it has to be genuine, and it has to feel
meaningful. These questions can help you determine your
project’s purpose:
What makes the project great and unique?
Does the project have an emotional element?
What will be remembered about the project ten years
from now?
What aspects would make people volunteer to
participate and to contribute to the project?
What problem will we solve with this project?
What opportunity will we capture?

Question 12

Purpose tool1

Answer 12

The PESTEL analysis connects to the purpose of
a project by providing a broader context for
defining why the project exists and ensuring that it aligns with external environmental conditions.

1. Political: How government actions and policies influence the market and your organisation. I.e. election results, legislation changes, trade agreements.
2. Economic: Broader economy’s health and its impact on your organisation. Includes infliation rates, economic growth, exchange rates.
3. Social: Cultural and demographic aspects of the external environment. This looks at population growth, age distribution, cultural trends, and lifestyle changes.
4. Technological: Incorporates innovation and tech changes that could affect your market position or operations. I.e. Advancements in digital technology.
5. Legal: Involves the regulatory environment in which you operate. Compliance with laws and regulations at local, national, and international levels.
6. Environmental: Ecological and environmental aspects that could impact your operations or market. This includes climate change and sustainable practices.

Question 13

Purpose tool2

Answer 13

Projects should have at least one SMART objective that reflects the purpose. This
objective should be clear and easy to remember.

Specific: Provide the “Who” and “What” of
the project.
Measurable: Focus on “How Much” the
project will produce.
Action-Oriented: Trigger practical actions to
achieve the project objective.
Relevant: Accurately address the purpose of
the project.
Time-Based: Have a timeframe indicating
When the objective will be met.

Question 14

INVESTMENT HOW MUCH WILL THE PROJECT COST?

Answer 14

In project management, understanding and controlling the project’s budget
is crucial for success. Here are the key points to consider regarding project
investment:
Project costs include labor, materials, software, and other
resources, all part of the project budget
Accurate cost estimates depend on a stable and well-defined
project scope, but stability is often rare in today’s dynamic world.
“Cut your coat according to your cloth”: Deliver what your
budget can afford and expand only if the project succeeds
Some projects may have the luxury of an unlimited budget (e.g.,
Burj Khalifa), but financial freedom does not guarantee success
Accurate budget estimation is crucial for project success. Combining topdown (broad, high-level estimates) and bottom-up (detailed, activitybased) methods ensures realistic planning. Comparing both approaches,
adding contingencies (5–10%), and maintaining flexibility can help avoid
overoptimism and cost overruns, ensuring a feasible and reliable financial
plan.

Question 15

Triple Constraint of Investment

Answer 15

Scope: The work required to complete the project, including
deliverables and specific tasks.
Key Elements of the Triple Constraint:
Time: The schedule or deadlines within which the project
needs to be completed.
Cost: The budget or financial resources allocated for the
project.

All three of these constraints impact Quality. If one is adjusted without
changing the others, the quality may suffer. For instance, delivering a project
quickly (shortened time) with the same scope may increase costs or reduce
quality.

Question 16

THE RELEVANCE OF BENEFITS

Answer 16

Project benefits are often considered only in financial terms, but true success
comes from the impact a project has beyond monetary gains

Focus beyond financial gains: Success is not just about delivering a
project on time and within budget, but about what people do with the asset
once it is delivered.
Post-project benefits: The majority of benefits often materialize after the
project is completed, whether they are social, environmental, or financial.
Non-financial benefits matter: Some benefits, like mental and physical
well-being, cannot easily be quantified in monetary terms but are crucial for
evaluating a project’s success.
Positive impact: Stakeholders should be able to point to clear
improvements resulting from the project, whether large or small,
measurable in financial terms or not.

Question 17

PEOPLE DOMAIN

Answer 17

Sponsorship: the conduit between the organization
funding the project and the project team delivering it; the
executive sponsor is also accountable for delivery of the
benefits
Resources: the human resources—the people delivering
the project, from the project manager to the project team
to consultants—and the particular capabilities they
require to make it all happen
Stakeholders: all those involved in, affected by, or
benefiting from the project

Question 18

SPONSORSHIP

Answer 18

Importance of Clear Accountability:
* Many projects suffer from unclear accountability, with
multiple executives feeling “responsible” but no one truly
accountable.
* Shared or symbolic sponsorship often leads to lack of
commitment and higher risk of failure.

Critical Role of the Executive Sponsor:
* The executive sponsor plays a crucial role, especially in
strategic or complex projects.
* A hands-on sponsor provides guidance, allocates
resources, and supports the project team

Project Managers’ Role in Engaging Sponsors:
* Project managers should actively involve the sponsor,
clarifying their role and expectations.

Responsibilities of the executive sponsor
* Ensure the project’s strategic significance.
* Establish approval and funding for the project.
* Secure support from key stakeholders.
* Resolve conflicts and make decisions.
* Be accessible and approachable—on-call
support for the project manager.
* Participate in periodic reviews.
* Chair the steering committee.
* Encourage recognition.
* Support closure review.
* Be ultimately accountable for the project.

Strong project governance will address three organizational challenges:
1. Resources have other responsibilities on top of the project.
2. Resources have different reporting lines outside the project.
3. Departmental objectives differ from project objectives.

Question 19

WHO WILL MANAGE THE PROJECT?

Answer 19

Ensuring that the organization has the requisite
resources—with the right skills, expertise, and
experience to implement the project—is an
essential responsibility of senior management.

Understanding the strategic and business aspects of the project
* Influencing and persuading stakeholders at all levels
* Leading in a matrix organization
* Creating a high-performing team from a group of individuals
* Motivating and providing feedback to the project team
* Monitoring the progress of the project work

Question 20

WHICH SKILLS ARE NEEDED TO DELIVER THE
PROJECT?

Answer 20

RESOURCES AND PROJECT STAFFING
Ensures the project team has sufficient personnel with the
right skills, experience, and availability.
* Roles and responsibilities must align with capacity and
capabilities; neglecting this leads to delays and project risks.

Beyond just availability, team commitment is crucial for
project success.
* Employees often juggle multiple responsibilities; their
willingness to contribute depends on their belief in the
project’s value

BUILDING HIGH-PERFORMING TEAMS

Characteristics of High-Performing Teams
* Purpose: Clear and meaningful purpose that resonates with
every team member.
* Contribution: Roles that allow each member to contribute
their best.
* Psychological Safety: Environment where members feel
safe to take risks and speak openly.
* Camaraderie: Trust that everyone will deliver quality work
on time.
* Recognition: Regular acknowledgment of contributions

Creating Effective Teams
* Project managers and sponsors must establish a foundation
of trust, respect, and shared purpose.
* High performance stems from early team-building efforts:
setting goals, fostering accountability, and building mutual
trust.
* Leaders should engage members who are motivated and
create a contagious enthusiasm for project success.

Question 21

Resources tool1

Answer 21

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Question 22

Resources tool2

Answer 22

RESPONSIBILITY ASSIGNMENT MATRIX

A responsibility assignment matrix is a simple tool used to
cross-match key activities with the various roles in a project. It
assigns the following levels of responsibility:
* Responsible: person responsible for carrying out the
activity
* Accountable: the ultimate owner of the activity
* Consulted: individuals or groups that need to be consulted
and provide input
* Informed: individuals or groups that ought to be informed
The matrix has several uses. It helps ensure that things are
done because tasks and activities are assigned to particular
individuals. It underlines the difference and the significance
between the person who does each task (is responsible) and
the person who makes sure that the activity (or the project as a
whole) meets the required standard. Finally, the matrix helps
keep communication and decision-making lean by keeping the
right people involved in the right ways.

Question 23

WHO WILL BENEFIT FROM AND BE AFFECTED BY
THE PROJECT?

Answer 23

Stakeholders are those who have a stake or an interest in the project. Or they will be affected in some way by the project and
so usually have an interest in influencing it.

MANAGE STAKEHOLDER INFLUENCE AND
RESISTANCE
Stakeholder Pressure:
* Can increase project complexity, jeopardize costs, and
cause uncertainty.
* Larger projects with more stakeholders require extensive
communication and change management.
Importance of Engagement:
* Project managers and executive sponsors must identify,
engage, and communicate with stakeholders of varying
influence and interest levels.
* Stakeholder influence generally increases as the project
progresses, especially during the implementation phase.
Role of Executive Sponsor and Project Manager:
* Executive sponsors address resistance by influencing senior
leaders and external stakeholders.
* Project managers manage day-to-day stakeholder
engagement and involve sponsors when necessary.

Question 24

INTERNAL VS. EXTERNAL STAKEHOLDERS

ROLE-BASED VS. AGENDA-BASED STAKEHOLDERS

Answer 24

Internal Stakeholders: Internal stakeholders are individuals
within the organization directly affected by the project’s
outcomes. They include employees, senior leaders of
departments or business units, and other members of the
organization. Managing internal stakeholders can be
challenging as their needs and expectations often vary,
especially in projects impacting working relationships or
involving restructuring.

External Stakeholders: External stakeholders are individuals or
organizations outside the organization who have an interest in
the project. While they may not be involved in day-to-day
project activities, their actions or influence can significantly
affect the project outcome. They participate indirectly but have
the potential to impact the project’s success.

Role-based Stakeholders:
* Defined by function, such as sponsors, team members, or
organizations (e.g., clients, contractors).
* Management focuses on clear responsibility lines, contracts, and
processes for change management.
* Involves effective communication and dispute resolution to ensure
project alignment.
Agenda-based Stakeholders:
* Often external entities, including elected officials, competitors, end
users.
* Their behavior and perspectives heavily influence project direction and
outcomes.
* Increases complexity, requiring the project to adapt to external
demands and unexpected changes.
Project Implications:
* Projects with numerous role-based stakeholders are more manageable
with detailed planning and attention to detail.
* Projects dominated by agenda-based stakeholders require adaptability
and a recognition that success may partly depend on external factors
beyond control

Question 25

STAKEHOLDERS tool1

Answer 25

См. слайд 41 MENDELOW STAKEHOLDER MATRIX: STAKEHOLDER MATRIX The Stakeholder Analysis Matrix categorizes stakeholders based on their power, interest, and stance towards the project. It enables the project manager and sponsor to manage stakeholder relationships effectively by understanding each stakeholder’s potential impact and required engagement. Core (High Power, High Interest): Crucial supporters or potential threats if opposed. Regularly update and involve them; leverage their influence as project ambassadors. Dormant (High Power, Low Interest): Potential supporters or opposers. Monitor and engage to prevent sudden negative impact; keep informed about project benefits. Vocal (Low Power, High Interest): Strong allies if favorable, or minor risks if not. Keep informed and ask for advice; engage as project advocates. Trivial (Low Power, Low Interest): Minimal impact on the project. Inform but limit engagement to save resources. Benefits of the Matrix: Helps project teams focus on key influencers. Ensures efficient use of communication resources. Aids in anticipating and managing stakeholder resistance.

Question 26

CREATION DOMAINE

Answer 26

Deliverables: what the project will produce, build or deliver; the deliverables are defined by the key stakeholders and project team and will generate the benefits of the project Plan: how the deliverables of the project will be developed; the plan determines when the work will be carried out and who will do it Change: how the project will engage stakeholders to support the project and how the risk of the project will be managed THE CREATION INCLUDES BOTH the hard aspects of project management: * Definitions * Scope * Design * Schedule * Plans * Milestones * Costs * Risks the soft aspects of project management: * Motivation * Empathy * Training * Coaching * Communication * Change management

Question 27

UNDERSTANDING DELIVERABLES AND SCOPE

Answer 27

DELIVERABLES * What the project will produce, build, or deliver. * Examples: Design and features of a company website (deliverable), which generates benefits like capturing new business. * Importance: Deliverables define tangible outputs that fulfill the project's purpose and drive success. SCOPE * Defines project boundaries: what is included and excluded. * Key components: Solution, specifications, design, stakeholder expectations, etc. * Example: A university project’s scope includes dimensions, materials, and technology. The benefit? Improved learning experience or higher student enrollment. WHY SCOPE MATTERS Focuses project activities on what aligns with the deliverables. Helps manage stakeholder expectations to avoid misalignment.

Question 28

MANAGING SCOPE AND UNCERTAINTY

Answer 28

SCOPE CHALLENGES * Clear scope: For projects with low uncertainty (e.g., construction), scope can be defined early and precisely. * Adaptive scope: For projects with high uncertainty (e.g., digital transformation), scope evolves as the project progresses. APPROACHES TO MANAGING SCOPE Limiting Scope: * Fixed budget and deliverables. * Example: Delivering as much functionality as possible within a set budget. Emergent Scope: * Budgets and deliverables are revisited periodically (e.g., every 12 months). * Adaptive to changing project needs and progress.

Question 29

DELIVERABLES tool1

Answer 29

WORK BREAKDOWN STRUCTURE (WBS) What is a WBS? * A structured, hierarchical breakdown of project components. * Organizes the total scope into smaller, manageable pieces. * Looks like a “family tree” of project tasks. Purpose of a WBS * Clarifies task ownership and measures progress. * Excludes out-of-scope elements, avoiding wasted effort. * Provides input for estimating time and costs. Key Features of a WBS * Each level details a smaller project component. * Lowest levels define tasks assigned to individuals. * Ensures all scope elements are captured. M UTUALLY E XCLUSIVE C OLLECTIVELY E XHAUSTIVE

Question 30

DIFFERENT TYPES OF WBS

Answer 30

DELIVERABLE-BASED WBS This type of WBS organizes the project based on its outcomes or deliverables. Each level in the WBS represents a major thing that needs to be done, and then it breaks those down into smaller parts. A deliverable-based WBS works well when the project deliverables are clear and easy to identify, like building a website or creating a marketing campaign. PHASE-BASED WBS With this type, the structure is organized around the different stages or phases of the project. Each level represents a project phase, breaking it into smaller tasks. It’s handy for projects that need to be done in specific steps or stages.

Question 31

WHAT IS SCOPE CREEP?

Answer 31

DEFINITION: Gradual, uncontrolled expansion of a project’s scope without corresponding changes in schedule or budget. NEGATIVE IMPACTS * Undermines budgets and schedules. * Forces reductions in other planned aspects of the project. * Can lead to an imbalanced outcome inconsistent with the original business case. STRATEGIES TO RESIST SCOPE CREEP * Lock down the scope early. * Require corresponding adjustments to schedules or budgets for any additions. * Engage stakeholders in clear discussions on scope changes. WHEN TO ALLOW SCOPE CHANGES * If they add substantial benefits. * When additional costs are justified by the improved outcomes. * If refusal may harm political or organizational relationships.

Question 32

PROJECT PLANNING AS THE FOUNDATION FOR SUCCESS

Answer 32

PURPOSE OF PLANNING * Defines the how and when of project tasks, leading to deliverables and benefits. * Relies on a well-defined what from the previous stage for accuracy. KEY PLANNING DUTIES * Identifying necessary tasks to meet scope and WBS. * Selecting and assigning required resources. * Estimating effort and costs for task completion. * Scheduling dependencies and ensuring correct task sequencing. * Balancing deadlines with resource availability. * Using critical-path analysis to identify key tasks for project success. PLANNING GOALS * Establish timeframes, budgets, resources, and task sequences. * Align activities with project constraints and targets.

Question 33

Plan tool1

Answer 33

TRANSITIONING FROM WBS TO GANTT CHART WHAT IS A GANTT CHART? * A project schedule tool created by Henry Gantt in the 1910s. * Visualizes the schedule derived from the WBS. * Shows what work is scheduled and when it will occur. KEY ELEMENTS IN A GANTT CHART * Start and end dates of the project. * Tasks, durations, and assigned personnel. * Interdependencies between tasks. * Milestones and deliverables. MODERN USAGE * Created in tools like Excel or project management software. * Widely used for planning projects of any size.

Question 34

Plan tool2

Answer 34

CRITICAL PATH METHOD (CPM) WHAT IS CPM? The Critical Path Method (CPM), also called Critical Path Analysis (CPA), is a project management technique used to identify tasks essential for project completion, determine scheduling flexibility, and calculate task durations. The critical path is the longest sequence of dependent tasks that must be completed on time for the project to finish on schedule. Delays in critical tasks will delay the entire project. CPM was developed in the 1950s to address inefficient scheduling and has since become a widely used method for breaking down complex projects, prioritizing tasks, and understanding project flexibility. WHY USE CPM? * Improves Future Planning: Compares expectations with actual progress, helping refine future project plans. * Enhances Resource Management: Assists in task prioritization to avoid resource constraints. * Prevents Bottlenecks: Identifies task dependencies to manage parallel activities and avoid delays.

Question 35

Plan tool3

Answer 35

PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT) WHAT IS PERT? The Program Evaluation and Review Technique (PERT) is a project management tool designed to handle uncertainty in task durations. It estimates project timelines using three time estimates: Optimistic (O), Most Likely (M), and Pessimistic (P). These estimates are used to calculate an expected duration for each task. PERT helps project managers assess risks, calculate the likelihood of meeting deadlines, and develop realistic project schedules. WHY USE PERT? * Manages Uncertainty: Models variability in task durations to plan realistic schedules. * Supports Risk Management: Calculates the probability of meeting deadlines and managing potential delays. * Improves Planning Accuracy: Uses time estimates to refine project expectations and develop contingency plans.

Question 36

Plan tool4

Answer 36

PRECEDENCE DIAGRAMMING METHOD (PDM) WHAT IS PDM? The Precedence Diagramming Method (PDM) is a scheduling technique used to visually sequence project tasks and their dependencies. Each task is represented as a node, and arrows indicate the relationships between tasks. WHY USE PDM? * Clarifies Dependencies: Helps visualize task relationships, ensuring proper sequencing. * Improves Planning: Identifies bottlenecks, overlaps, and potential delays. * Supports Flexibility: Incorporates lead and lag times to adjust task timing.

Question 37

HOW TO MANAGE CHANGE IN PROJECTS

Answer 37

Definition: Change management ensures that a project adapts efficiently to unexpected shifts while staying aligned with its goals and delivering value. Types of Changes in Projects * Scope Changes: Adjustments to deliverables (e.g., adding or removing features). * Schedule Changes: Modifications to timelines or milestones. * Resource Changes: Changes to budgets, personnel, or tools. * External Changes: Market conditions, regulatory updates, or competitor actions. What is Change Management in Projects? * Change management involves preparing, supporting, and guiding teams and stakeholders to adapt to changes within a project. * Changes can arise from shifting goals, external factors, or unexpected challenges.

Question 38

MANAGING CHANGE INTRODUCED BY THE PROJECT

Answer 38

Definition: Preparing stakeholders and organizations to embrace the changes brought about by project deliverables. STAKEHOLDER ENGAGEMENT * Conduct a stakeholder analysis to understand who will be affected and how. * Develop a communication plan to deliver tailored messages to stakeholder groups. CHANGE MANAGEMENT PLAN * Define what information will be communicated, when, how, and to whom. * Collaborate with communication and change experts to execute the plan.

Question 39

Change tool1

Answer 39

The Change Adoption Curve or Diffusion of Innovation Curve was developed by Everett M. Rogers, a sociologist and communication theorist. He introduced it in his 1962 book, "Diffusion of Innovations.” Rogers' model became a foundational framework in multiple fields, including marketing, change management, and sociology, for understanding how new ideas or products are adopted within a population.

Question 40

WHAT IS RISK MANAGEMENT IN PROJECTS?

Answer 40

Effective risk management ensures project success by balancing opportunities and uncertainties. Early identification, strong governance, and a strategic mindset are critical for avoiding costly mistakes and delivering value Definition: Risk management involves identifying, assessing, and mitigating uncertainties to ensure project success. Key Purpose: Prevent failures such as: Ø Delivering outputs that fail to meet value expectations. Ø Overspending on budget or time. Governance vs. Failure: Redirecting or cancelling a project is good governance, not failure, if: Ø Benefits no longer justify the project. Ø A better alternative arises. Example: Canceling a low-value project to invest in a higher-return alternative. TYPES OF RISK * Strategic risk: Strategic risks involve performance or decision errors, such as choosing the wrong vendor or software for a project. * Operational risk: Operational risks are process errors or procedural mistakes, like poor planning or a lack of communication among teams. * Financial risk: Financial risk can involve various events that cause a loss of company profit, including market changes, lawsuits, or competitors. * Technical risk: Technical risk may include anything related to company technology, such as a security breach, power outage, loss of internet, or damage to property. * External risk: External risks are out of your control, like floods, fires, natural disasters, or pandemics.

Question 41

TIME’S RELATIONSHIP TO RISK

Answer 41

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Question 42

WHY RISK MANAGEMENT MATTERS

Answer 42

Proactive vs. Reactive Risk: Ø Risks identified early can be avoided, mitigated, or transferred. Ø Late risk identification increases cost and effort. Real-World Example: SNCF (French Railway) ordered trains too large for stations, costing €50M in retrofitting - a result of poor risk identification. Trade-offs in Risk: Effective risk management involves balancing opportunities with uncertainties and ensuring transparent decision-making. SUBJECTIVITY OF RISK * Risk perception depends on stakeholders’ values and priorities. * Risk appetite varies: Some organizations are innovation-focused (higher risk tolerance), others prioritize safety. RISK AWARENESS Ask critical questions: Ø What could go wrong? Ø What is the worst that could happen? Encourage "what-if" scenario planning with teams.

Question 43

Change tool2 (risk)

Answer 43

WHAT IS IT? This matrix categorizes project risks based on: * Probability: How likely the risk is to occur (e.g., Rare to Almost Certain). * Impact: The severity of the effect if the risk occurs (e.g., Insignificant to Severe). WHY USE IT? * Prioritization: Quickly identify which risks require immediate attention. * Resource Allocation: Focus efforts on highprobability and high-impact risks. * Clarity: Provides a visual framework for discussing risks with the team.