Project Management 8th Edition Larson Test Bank

 

Chapter 02 Organization Strategy and Project Selection Answer Key 

Multiple Choice Questions

  

  

1. Which of the following is NOT true about an organization's strategy? 

  

  

 

A.  Strategy determines how an organization will compete. 

B.  Strategy is implemented through projects. 

C.  Only top management must understand strategy. 

D.  Project selection should be clearly aligned with strategy. 

E.  Project management plays a key role in supporting strategy. 

Strategy was considered to be under the purview of senior management, but this is old school thinking.

Projects and project management play a key role in supporting strategic goals. It is vital for project

managers to think and act strategically.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

2. A project selection process that is strongly linked to strategy results in 

  

  

 

A.  The most profit. 

B.  Better utilization of the organization's resources. 

C.  More projects. 

D.  A larger and more diverse organization. 

E.  Stronger core competencies.  

Without integration of projects with the strategic plan, resources are poorly utilized. Conversely,

organizations that have a link of projects to strategy have more cooperation across the organization,

perform better on projects and tend to have fewer projects.  

 

Blooms: Understand

Difficulty: 2 Medium 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

Blooms: Understand

Difficulty: 2 Medium 

  

  

3. Which of the following is NOT true about organizational politics? 

  

  

 

A.  Project managers should not engage in organizational politics. 

B.  Politics can have a significant influence on which projects receive funding. 

C.  Politics exist in every organization. 

D.  Politics can influence project selection. 

E.  Politics can play a role in the aspirations behind projects. 

Many would argue that project management and politics should not mix. A more proactive response

would be that projects and politics invariably mix. Effective project managers recognize that any

significant project has political ramifications.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Understand

Difficulty: 3 Hard 

Learning Objective: 02-03 Understand the need for a project priority system.

Topic: The Need for a Project Priority System 

4. Which of the following terms is often used to denote a project that a powerful, high-ranking official is

advocating? 

  

  

 

A.  Sacred cow 

B.  Pet project 

C.  Political necessity 

D.  Special undertaking 

E.  Strategic ploy  

The term 'sacred cow' is often used to denote a project that a powerful, high-ranking official is

advocating.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Remember

Difficulty: 1 Easy 

Learning Objective: 02-03 Understand the need for a project priority system.

Topic: The Need for a Project Priority System 

  

  

5. Why do project managers need to understand their organization's mission and strategy? 

  

  

 

A.  To reduce project duration and increase the number of projects implemented 

B.  So they can make appropriate decisions and adjustments and be effective project advocates 

C.  It is only important for senior management to understand the organization's mission and strategy.  

D.  To get their job done and increase opportunities for promotion 

E.  So that they can make sure the customer is satisfied  

There are two main reasons why project managers need to understand their organization's mission and

strategy. The first reason is so they can make appropriate decisions and adjustments. For example, how

a project manager would respond to a suggestion to modify the design of a product to enhance

performance will vary depending upon whether his company strives to be a product leader through

innovation or to achieve operational excellence through low cost solutions. The second reason project

managers need to understand their organization's strategy is so that they can be effective project

advocates. Project managers have to be able to demonstrate to senior management how their project

contributes to their firm's mission.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

6. Project managers who understand the role that their project plays in accomplishing the organization's

strategy will be inclined to do all of the following EXCEPT 

  

  

 

A.  Demonstrate to senior management how their project contributes to the firm's mission. 

B.  Explain to team members why certain project objectives and priorities are critical. 

C.  Explain to stakeholders why certain project objectives and priorities are critical. 

D.  Be able to respond appropriately to delays and/or questions about product design. 

E.  Be able to focus on problems or solutions if the project is a low priority strategically.  

Project managers who understand the role that their project plays in accomplishing the organization's

strategy will not be inclined to waste time focusing on problems that are a low priority in regard to

achieving the organization's strategy.  

 

Blooms: Understand

Difficulty: 1 Easy 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

Blooms: Understand

Difficulty: 2 Medium 

  

  

7. All of the following are symptoms of organizations struggling with strategy disconnect and unclear

priorities EXCEPT 

  

  

 

A.  Frequent conflicts between managers. 

B.  Inadequate resources. 

C.  Confused employees regarding which projects are more important. 

D.  Not enough projects within the portfolio to make a profit. 

E.  People are working on multiple projects and feel inefficient.  

Frequent conflicts between managers, inadequate resources, confused employees and multitasking are

all symptoms of organizations struggling with strategy disconnect and unclear priorities. Typically these

organizations are also completing projects with low priority which results in a portfolio that consists of

too many projects that do not align with organizational strategy.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Understand

Difficulty: 1 Easy 

Learning Objective: 02-03 Understand the need for a project priority system.

Topic: The Need for a Project Priority System 

8. Which of the following problems refers to lack of understanding and consensus of organization strategy

among top and middle-level managers? This also can result when top management formulates strategy

and leaves implementation to functional managers. 

  

  

 

A.  Multitasking 

B.  Organization politics 

C.  Implementation gap 

D.  Resource conflicts 

E.  Employee turnover  

The implementation gap refers to the lack of understanding and consensus of organization strategy

among top and middle-level management.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Understand

Difficulty: 2 Medium 

Learning Objective: 02-03 Understand the need for a project priority system.

Topic: The Need for a Project Priority System 

  

  

9. Which of the following is NOT true for strategic management? 

  

  

 

A.  It should be done once every few years just before developing the operating plan. 

B.  It supports consistency of action at every level of the organization. 

C.  It develops an integrated and coordinated long-term plan of action. 

D.  It positions the firm to meet the needs of its customers. 

E.  It involves responding to changes in the external market and allocating scarce resources to improve

a competitive position. 

Two major dimensions of strategic management are responding to changes in the external environment

and allocating scarce resources of the firm to improve its competitive position. Constant scanning of the

external environment for changes is a major requirement for survival in a dynamic competitive

environment.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

10. Which of the following is the correct order for the strategic management process? 

  

  

 

A.  Strategies, mission, objectives, projects 

B.  Objectives, projects, mission, strategies 

C.  Mission, strategies, objectives, projects 

D.  Objectives, mission, strategies, projects 

E.  Projects, mission, strategies, objectives  

Once the mission statement has been written, strategies are formulated. After this, objectives are

developed to achieve the strategy and finally strategies are implemented through projects.  

 

Blooms: Understand

Difficulty: 3 Hard 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

11. Which of the following questions does the organization's mission statement answer? 

  

  

 

A.  What are our long-term strategies? 

B.  What are our long-term goals and objectives? 

C.  How do we operate in the existing environment? 

D.  What do we want to become? 

E.  All of these are answered by the mission statement. 

The mission identifies 'what we want to become,' or the raison d'être. Mission statements identify the

scope of the organization in terms of its product or service. They communicate and identify the purpose

of the organization to stakeholders.  

 

Blooms: Remember

Difficulty: 2 Medium 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Understand 

  

  

Difficulty: 2 Medium

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization. 

Topic: The Strategic Management Process: An Overview

  

12. Which of the following is NOT one of the traditional components found in mission statements? 

  

  

 

A.  Major products and services 

B.  Profitability 

C.  Target customers and markets 

D.  Geographic domain 

E.  Contribution to society  

Traditional components found in mission statements are major products and services, target customers

and markets, and geographical domain. In addition, statements frequently include organizational

philosophy, key technologies, public image, and contribution to society.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

13. Which of the following is NOT one of the characteristics of effective objectives? 

  

  

 

A.  Realistic 

B.  Assignable 

C.  Flexible 

D.  Specific 

E.  Measurable  

Characteristics of effective objectives are that they are specific, measurable, assignable, realistic and

related to time.  

 

Blooms: Understand

Difficulty: 3 Hard 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

14. In order to formulate strategies that align with the mission some of the activities the organization will

need to perform are 

  

  

 

A.  Assess internal strengths and weaknesses. 

B.  Analyze competitors. 

C.  Examine the external environment. 

D.  Know their core competencies. 

E.  All of these should be considered when formulating strategies.  

Strategy formulation includes assessment of the internal and external environments. 

 

Blooms: Understand

Difficulty: 1 Easy 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Understand 

  

  

Difficulty: 1 Easy

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization. 

Topic: The Strategic Management Process: An Overview

  

15. The assessment of the external and internal environments is called _______ analysis. 

  

  

 

A.  SWOT 

B.  Competitive 

C.  Industry 

D.  Market 

E.  Strategic  

The keys are to attempt to forecast fundamental industry changes and stay in a proactive mode rather

than a reactive one. This assessment of the external and internal environments is known as the SWOT

analysis (strengths, weaknesses, opportunities, and threats).  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

16. Which of the following would be classified as an organizational external threat? 

  

  

 

A.  Slowing of the economy 

B.  Excellent employees 

C.  Poor product quality 

D.  Declining facilities 

E.  High labor costs  

Examples of perceived external threats could be a slowing of the economy, a maturing life cycle,

exchange rates, or government regulation.  

 

Blooms: Remember

Difficulty: 1 Easy 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

Blooms: Understand

Difficulty: 2 Medium 

  

  

17. Which of the following would be classified as an organizational opportunity? 

  

  

 

A.  Low debt 

B.  Excellent employees 

C.  Increasing product demand 

D.  Talented management 

E.  Government regulation  

Typical opportunities are increasing demand, emerging markets, and demographics. Managers or

individual firms have limited opportunities to influence such external environmental factors; however,

in recent years notable exceptions have been new technologies such as Apple using the iPod to create a

market to sell music.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

18. Which of the following is NOT one of the requirements for successful implementation of strategies

through projects? 

  

  

 

A.  Allocation of resources 

B.  Prioritizing of projects 

C.  Motivation of project contributors 

D.  Adequate planning and control systems 

E.  Quality management  

First, completing tasks requires allocation of resources. Resources typically represent funds, people,

management talents, technological skills, and equipment. Frequently, implementation of projects is

treated as an 'addendum' rather than an integral part of the strategic management process. However,

multiple objectives place conflicting demands on organizational resources. Second, implementation

requires a formal and informal organization that complements and supports strategy and projects.

Authority, responsibility, and performance all depend on organization structure and culture. Third,

planning and control systems must be in place to be certain project activities necessary to ensure

strategies are effectively performed. Fourth, motivating project contributors will be a major factor for

achieving project success. Finally, areas receiving more attention in recent years are portfolio

management and prioritizing projects.  

 

Blooms: Understand

Difficulty: 2 Medium 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Learning Objective: 02-02 Identify the significant role projects contribute to the strategic direction of the organization.

Topic: The Strategic Management Process: An Overview 

Blooms: Understand

Difficulty: 3 Hard 

  

  

19. Which of the following is NOT a problem associated with the absence of a project portfolio system? 

  

  

 

A.  Organizational politics 

B.  Lack of funding 

C.  Resource conflicts 

D.  Multitasking 

E.  Implementation gap  

A project portfolio system can go a long way to reduce the impact the implementation gap, organization

politics, resource conflicts and multitasking.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Remember

Difficulty: 2 Medium 

Learning Objective: 02-03 Understand the need for a project priority system.

Topic: The Need for a Project Priority System 

20. Susie's department is implementing many projects. She finds herself starting and stopping work on one

task to go and work on another task, and then return to the work on the original task. Susie is

experiencing 

  

  

 

A.  Poor scheduling. 

B.  Excess work burden. 

C.  Flexible tasking. 

D.  Multitasking. 

E.  Burnout.  

Resource sharing also leads to multitasking. Multitasking involves starting and stopping work on one

task to go and work on another project, and then returning to the work on the original task. People

working on several tasks concurrently are far less efficient, especially where conceptual or physical

shutdown and startup are significant.  

 

21. Project selection criteria are typically classified as 

  

  

 

A.  Financial and nonfinancial. 

B.  Short-term and long-term. 

C.  Strategic and tactical. 

D.  Required and optional. 

E.  Cost and schedule.  

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Apply

Difficulty: 2 Medium 

Learning Objective: 02-03 Understand the need for a project priority system.

Topic: The Need for a Project Priority System 

Although there are many criteria for selecting projects, selection criteria are typically identified as

financial and nonfinancial.  

 

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation 

Blooms: Understand