Chapter 2 – Project Selection and Prioritization
TRUE/FALSE
1. Strategic analysis is an important first step in setting strategic direction.
2. Strategic analysis is often called SWOT – Strengths, Weaknesses, Opportunities and Threats (SWOT).
3. Strategic analysis is often called SWOT – Start With Objectives Template (SWOT).
4. The internal part of strategic analysis considers opportunities and threats posed by competitors,
suppliers and regulatory agencies among others.
5. The organization’s leadership should establish guiding principles such as the vision and mission for an
organization before developing strategic objectives.
6. The organization’s leadership should establish the strategic objectives to set the stage for the strategic
analysis.
7. The vision should present a positive, inspiring and vivid description of the organization as it currently
exists.
8. Strategic objectives should focus decisions regarding which projects to select and how to prioritize
them.
9. Strategic objectives describe both long and short term results that are desired, along with measures to
determine their achievement.
10. Projects tend to be the primary method for implementing many objectives.
11. A portfolio is a collection of projects, programs, subportfolios, and operations managed as a group to
achieve strategic business objectives.
12. A project portfolio is a useful storage medium that enables the project manager to consolidate all
project information in a single, convenient location.
13. Portfolio management aligns with organizational strategies by selecting the right projects, prioritizing
work, and providing needed resources.
14. If an organization does not have the right capabilities, a project may be too difficult to complete
successfully.
15. The degree of formality used in selecting projects varies widely across organizations.
16. While there is a wide variety of projects across organizations, the degree of formality used in selecting
them is largely uniform.
17. The prioritization of projects in a portfolio should consider whether the demands of performing each
project are clearly understood.
18. Payback period models do not consider the amount of profit that may be realized after the costs are
paid.
19. None of the financial project selection models ensure alignment of the project with an organization’s
strategic goals.
20. Scoring models are most useful when there are multiple projects and several criteria to consider.
21. Traditional financial models are most useful when there are multiple projects and several criteria to
consider.
22. There are times that certain projects must be selected regardless of any considerations such as strategic
fit, profitability or probability of success.
23. In addition to considering financial factors, project selection should often consider how well each
project fits with the organization’s strategic planning.
24. Scoring models are very useful in providing input regarding the starting order of projects.
25. Project selection scoring models are very useful in providing performance data that can be used to
terminate a project.
26. When a firm prepares to submit a proposal, it is really conducting a small project with the primary
deliverable of the project being a compelling and complete proposal.
27. When a client company decides to engage an external contractor to perform project work, it must be
prepared to submit a proposal and prepare a bid.
MULTIPLE CHOICE
1. Which of the following statements concerning strategic analysis is true?
a.
Strategic analysis focuses exclusively upon external analysis.
b.
External analysis focuses on the strengths and weaknesses of the organization.
c.
Internal analysis focuses on the threats and opportunities facing the organization.
d.
External analysis focuses on the threats and opportunities facing the organization.
2. All of the following factors influence the opportunities and threats an organization must consider when
performing a strategic analysis EXCEPT:
a.
competitors
b.
suppliers
c.
regulatory agencies
d.
employees
3. A clear and compelling vision will have all the following characteristics EXCEPT:
a.
often requires extra effort to achieve.
b.
often requires several years to achieve.
c.
provides detailed roadmap for managing a project
d.
helps stakeholders to understand the direction of the firm.
4. Which of the following responses most accurately depicts the correct sequence of activities in the
strategic planning process?
a.
strategic objectives – strategic analysis – guiding principles – flow-down objectives
b.
guiding principles – strategic analysis – strategic objectives – flow-down objectives
c.
strategic analysis – guiding principles – strategic objectives – flow-down objectives
d.
guiding principles – strategic objectives – flow-down objectives – strategic analysis
5. Many writers have stated that effective objectives should be:
a.
broad – to cover many dimensions of the business
b.
measurable – to track progress
c.
unachievable – to inspire maximum performance
d.
resource based – to focus on the inputs
6. All of the following statements concerning project portfolios are true EXCEPT:
a.
The projects in a portfolio are grouped to be managed collectively.
b.
Portfolios cannot include operations and programs.
c.
Portfolios usually include a mix of high-risk and low-risk projects.
d.
All projects in a portfolio contribute to the organization’s goals.
7. Portfolios deal with all of an organization’s projects, while programs deal with:
a.
ongoing operations
b.
a specific group of related projects
c.
resource availability
d.
tradeoffs between schedule, scope and quality
8. Portfolio management helps an organization achieve its strategic goals in all of the following ways
EXCEPT:
a.
managing ongoing projects
b.
providing needed resources
c.
selecting the right projects
d.
prioritizing work to be done
9. The document that describes why the project is needed, and may include estimated costs and benefits,
is called a:
a.
program management plan
b.
business case
c.
SWOT analysis
d.
guiding principle
10. All of the following factors should be assessed to determine an organization’s ability to perform
projects EXCEPT:
a.
Does the organization have free and open communication, creativity, and empowered
decision making?
b.
Does the organization have a clearly defined project management process?
c.
Do teams and individuals follow instructions well?
d.
Does the organization monitor and understand it’s external environment?
11. All of the following represent appropriate sources to identify new potential projects EXCEPT:
a.
existing and potential customers
b.
the operations staff within the organization
c.
industry and trade journals
d.
lessons learned from previous projects
12. Which of the following statements best describes the contemporary use of financial models and
scoring models for project selection?
a.
These methods are often used together to ensure financial and non-financial factors are
both considered.
b.
Financial methods are preferred because they ensure alignment with the organization’s
strategic goals.
c.
Scoring models are unreliable because they fail to consider financial factors.
d.
One of these techniques is typically used to the exclusion of the other, due to time
demands.
13. Which of the following statements correctly describes a weakness associated with the financial project
selection model?
a.
The benefit-to–cost models favor projects which generate the smallest absolute return over
a specified period.
b.
Payback period models do not consider the profit to be realized after the costs are paid.
c.
The Net Present Value (NPV) method does not consider the time value of money.
d.
The Internal Rate of Return (IRR) method is difficult to use when a project has
conventional cash flows.
14. All of the following criteria serve as a valid basis for identifying potential projects in most
organizations EXCEPT:
a.
social need
b.
environmental considerations
c.
technological advances
d.
internal politics
Criteria:
Weight:
Project
Strategic
Fit
10
Risk
6
Market
Potential
7
Probability
of Success
5
Weighted
Total
Score
Project A
5 50
3 18
3 21
3 15
104
3
4
5
4
Project B
30
24
35
20
109
Project C
3 30
4 24
3 21
2 10
85
Project D
2 20
2 12
5 35
3 15
82
Figure 2-1 Project Selection and Prioritization Matrix
15. Based on the information provided in Figure 2-1, which criterion is most important to the leadership
team?
a.
strategic fit
b.
risk
c.
market potential
d.
probability of success
16. Based on the information provided in Figure 2-1, which project has the highest probability of success?
a.
Project A
b.
Project B
c.
Project C
d.
Project D
17. Consider the information provided in Figure 2-1. Based on the results in the project selection and
prioritization matrix, which project would you select if you were limited to selecting only one project?
a.
Project A
b.
Project B
c.
Project C
d.
Project D
18. Based on the information provided in Figure 2-1, which project is least attractive based on the strategic
fit?
a.
Project A
b.
Project B
c.
Project C
d.
Project D
19. Once selected projects have been prioritized, it is time to assign resources to projects based on their
order of priority. Resources could include all of the following EXCEPT:
a.
c.
quality metrics
b.
d.
money
20. Which of the following is NOT a typical source selection criterion that an organization would use to
evaluate potential contractors?
a.
life cycle cost
b.
references
c.
personalities
d.
technical approach
21. All of the following organizations can effectively use a scoring model to select and prioritize
competing projects EXCEPT:
a.
the leadership team
b.
client companies
c.
contractor companies
d.
program management office
22. All of the following may be negotiated between a client company and a contractor EXCEPT:
a.
the amount of money to be paid.
b.
quality standards
c.
selection criteria for scoring models
d.
personnel assignments
ESSAY
1. Describe the relationship between the strategic planning process and portfolio management in an
organization.
2. Describe the advantages and limitations of financial models in project selection.
3. Describe the advantages and limitations of scoring models in project selection.