Unit I: Concepts of Project and Project Management (8)

1.1 Concepts of the project

1.2 Features of a project

1.3 Project life cycle

1.4 Project Environment

1.5 Project Classification

1.6 concept of Project management

1.7 Tools and techniques for project management

1.8 Benefits and limitations of project management

1.9 The project manager - roles and responsibilities of the project manager.
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 Cont..

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 Concepts of the Project
A project is a unique group of activities designed to achieve a specific objective with the
constraints of time, cost, and quality using resources (physical, financial, human, natural, and
informational).

Put differently, a project is a temporary endeavor, having a defined beginning and end usually
constrained by date, cost, and quality, undertaken to meet particular goals and objectives, usually to
bring about beneficial change or added value.

It is only a one-time activity designed to achieve specific objectives. It has fixed beginning and
ending dates and forms a life cycle. It is a temporary endeavor, integrating human and non-human
resources to create a unique product or service within the constraints.

A project is any series of activities and tasks that have specific objectives to be completed within
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certain specifications, have defined start and end dates, have funding limits, and consume
A project is a collection of linked activities, carried out in an organized manner with a clearly defined
start point and finish point, to achieve some specific results that satisfy the needs of an organization as
derived from the current business plans.

A project is a sequence of tasks with a beginning and an end that are bounded by time, resources, and
desired results. This means that a project has a specific, desired outcome; a deadline or target date
when the project must be done, and a budget that limits the number of people, supplies, and money
that can be used to complete the project.

According to Dennis Lock (2013): “A project is a single, non-repetitive enterprise, planned, executed,
and controlled to achieve a set of objectives within a given timeframe, cost, and quality parameters.”

Turner, J.R. (2008): “A project is a temporary organization to which resources are assigned to
undertake a unique, novel, and transient endeavor delivering a specific outcome under time, cost, and
quality constraints.”
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Projects are unique, and they are also uncertain, and temporary tasks to be accomplished. They are
related to the introduction of new initiatives or organizational changes.

A project can take the form of anything, an undertaking, a job, a task, a mission, an assignment, a
choice, or a promise to deliver something that is specified in the form of a product or service.

From the analysis of the above definitions and discussion, we can conclude that a project is a unique,
one-time job that has specified starting and ending dates, clearly specified objectives and goals, scope
of work to be performed, predefined budget, and usually a temporary organization in a dynamic
environment.

 It is mission-driven activities when the mission is accomplished, the project is finished. Common
examples of projects are the construction of a building, the introduction of a new product, the
installation of a new piece of machinery in a manufacturing plant, the creation of a new software tool,
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design and launch of a new advertising campaign. The project differs from ordinary work
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and
 Features of a Project
a. Cear Objectives and Goals: Projects are initiated to achieve specific objectives, such as creating
a product, providing a service, or achieving a particular result. These objectives guide the
planning and execution.

b. Temporary Nature: Projects have a defined beginning and end date. Unlike routine operations,
which are continuous, projects are finite, with a specific timeline for completion.

c. Uniqueness: Each project is unique in some way. It may involve a new process, product, or
approach, which is distinct from routine tasks or previously completed projects.

d. Defined Scope: Projects have a well-defined scope, which specifies the work required, the
boundaries of the project, and what is and isn’t included in its deliverables.

e. Resource Constraints: Projects operate within certain limitations, such as budget, time,
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manpower, and materials. These constraints must be managed effectively to deliver results.
e. Cross-Functional Teams: Projects often require a team of people from different departments,
with various skills and expertise, to work together toward the project’s objectives.

f. Risk and Uncertainty: Projects often involve a degree of risk and uncertainty due to their
unique and sometimes innovative nature. Identifying and managing risks is an important part
of project planning.

g. Complexities: A project involves complexities of different kinds. These may be in terms of

technology, materials, equipment, work culture, people, and complex human behaviour. All
these resources need to be coordinated to achieve the project goals.

h. Tailor-made: A project is always tailor-made or customized to the specifications made by the

customer. The project must be completed according to the customer specifications and within
the restrictions imposed by them.
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 Project Life Cycle
 A project typically follows a life cycle. A project life cycle contains a series of major steps in the process of
conceptualizing, designing, developing, and putting into operation the project's technical performance
"deliverables". The project life cycle refers to the logical sequence of activities required to accomplish a
project's goals or objectives. The project life cycle is made up of five project stages: project initiation, project
planning, project execution, monitoring & control, and project closing. Each of these phases is necessary for
the effective delivery of the project.

a. Initiation/Formation or Conception Phase:

 This is the conception phase of the project. The conception takes place through creative ideas gathered from
situation surveys, external sources (from the external environment), and internal sources (from the internal
environment). Ideas are carefully screened in terms of objectives, constraints, and resource capabilities.
Following this, a detailed project formulation is carried out by developing the project scope, goals, and
outputs.
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 Preliminary estimates of schedules, costs, and resources required. Similarly, the statement of work is
developed. Lastly, a detailed project proposal is developed to move the project ahead. The project proposal
outlines the scope, objectives, activities, structure, budget implementation schedule, risks, constraints, and
assumptions of the project. A series of managerial activities and actions is carried out in the initiation phase.

b. Project Planning and Design

 This is the critical phase of the project life cycle. This phase includes the planning of all the elements/
parameters of the project so as to be ready for implementation. This phase of the life cycle plans resource
utilization, prepares detailed plans, and estimates for time, cost, and quality. In this phase, feasibility study,
appraisal, and detailed design are performed.

 Based on technical, financial, management, marketing, economic, and environmental analysis. A detailed
feasibility study is carried out, and lastly, a detailed project is designed, including the development of
operating plans and performance standards, allocation of roles and responsibilities, determination of activities
and resources,
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Typically, in this stage, the following plans are prepared:

i. Activities schedule (definition of activities and task sequence, time scheduling).

ii. Risk plan (highlighting of possible risks and actions to mitigate them).

iii. Resource plan (determination of the labor, equipment, the materials needed in each task/stage).

iv. Cost plan (identification of the internal and external costs and their occurrence in time).

v. Quality plan (setting quality targets for the project deliverables and definition processes for
quality assurance and control).

vi. Issue management plan (definition of the process for identifying, assessing, and resolving
issues related to the project).

vii. Communication plan (definition of information to be distributed to the stakeholders and the
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c. Project Implementation or Execution Phase

During this phase, each activity is implemented according to the various plans. This phase makes things
happen, and people see something happening in the field. A series of management procedures is
undertaken to monitor and control the deliverables of the project.

It begins with the preparation of specifications for equipment and machinery, ordering equipment,
shortlisting contractors, drawing of construction, civil construction works, construction of foundations
for machinery and equipment, erection of machinery and equipment, connections for public utilities
services, trial run, and commissioning of the plants.

This phase involves about 80% of the total project work or activities; therefore, project authorities wish
to complete this phase as early as possible. This phase requires a high degree of coordination and
control. In order to coordinate and control effectively, major activities are subdivided into smaller sub-
phases and making fast tracking possible.
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d. Project Monitoring and Controlling Phase
During the implementation of the activities and tasks, a series of management processes are
undertaken to monitor and control time, resources, cost, risks, quality, issues, changes, deliverables,
acceptance procedure, communication, etc. It involves monitoring and evaluation, and control of
project performance to provide feedback.
Appropriate control measures- pre-control, concurrent control, and pest control are used in this
connection. Major activities in this phase are setting performance standards, measuring actual
performance against performance standards, finding performance deviations, and taking corrective
actions to rectify mistakes and deviations during the project implementation phase.
The project monitoring and controlling phase consists of setting up controls and key performance
metrics to measure the effectiveness of the project execution. The monitoring and controlling project
phase is very important to make sure the execution goes as planned in terms of schedule, scope, and
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e. Project Closure
The last phase of the project life cycle is the termination phase. The project is
completed and handed over to the customer during this phase. It also includes the
evaluation of the processes used in the project and of the outcomes achieved.
The basic managerial tasks in this phase are to transfer materials, transfer
responsibility, release resources, and reassign project team members.
Differently, tasks such as assisting in the transfer of the project's product, transfer
of human and non-human resources to other organizations, transfer or complete
commitment, terminate the project, and reward personnel.
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 Project Environment
A project operates in a specific environment. The project manager must consider the elements and forces of
their environment. All influencing forces surrounding the project are collectively referred to as the project
environment.

Putting it differently, the project environment is individuals, groups of people, organizations, or firms that
affect or are affected directly or indirectly, positively or negatively by the process and the outcomes of the
project. It consists of forces that influence the project's ability to achieve its goals and objectives.

The environment is rapidly changing and dynamic. Environmental influences on projects occur through
complexity, uncertainty, and competition for various resources, flexibility, and technological change.
Project managers need to identify and interact with key institutions and individuals in the project's systems
environment. The project environment can be categorized into:

a. Internal Environment
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A. Internal Environment: The forces located within the project are called the internal environment. It is
the conditions and forces within an organization. It is controllable by the project authority. The
internal environment provides the strengths and weaknesses of the project. The elements of the
internal environment consist of:

1. Project Goals and Objectives: Every project is designed and developed to attain desired outcomes or
results. Project activities must be conducted within the project goals and objectives. It tends to exist
when the objectives are realized. The goals and objectives must be specific, measurable, agreed upon,
time-bound, and realistic. Conflicting. Inconsistent and non-integrated objectives create weaknesses
within the project.

2. Project Resources: The Project uses and mobilizes resources like human, financial, physical, natural,
and informational resources. The project is designed and developed to attain desired outcomes or
results. Resource availability sets a limit on overall project activities. The quality of human and non-
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human resources brings a multifaceted limit on achieving project goals and objectives.
3. Project Structure: A project is a temporary organization designed to implement project lines. The project has its
management with a project team headed by a project manager. The project’s structure generally cuts across
organizational and departmental managers. The project manager has the sole responsibility for overall project
management

4. Constraints: A project operates within the constraints of time, cost, and quality performance. They shape and
reshape the scope and boundaries of the project.

5. Project Owner or Shareholders: Owners or shareholders are part of the project. In a big management of the
project. The influence and attitudes of shareholders or owners set limits on the projects.

B. External Environment: The external environment consists of the forces and elements outside the project.
Everything outside an organization (project) that might affect it is considered an environment. It is outside
institutions or forces that potentially affect an organization's performance. It is beyond the direct control of the
project authority. It brings opportunities and threats to the project. The external environment can be:

i. Task Environment
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i. Task Environment: Task environments are also known as directly interactive forces or organizational stakeholders.
The task environment of the project relates to the tasks immediately surrounding the project.

 The task environment is made up of stakeholders who affect the project activities. Stakeholders are any community
that is affected by an organization's decision and policies and that can influence the project. It consists of specific
organizations or a group that affects the organization.

 Task environment is a specific force that is part of the environment that is directly relevant to the achievement of an
organization's goals. Project authority cannot directly control the forces but can influence them. The project manager
has to develop an appropriate strategy to manage the project through:

 Identifying who the project's stakeholders are.

 Specifying the nature of stakeholders’ interest or concerns might affect product quality. Financial issues, the safety of
working conditions, environmental protection, employment, and so forth,

 Measuring how critical the stakeholders’ interest in the project's decisions and actions, Predicting what each
stakeholder’s future behavior will be to satisfy his/her stake,
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 Evaluating the impact of stakeholder behavior on the project team's freedom in managing the project.
 The forces of the task environment are:

1. Customers: The ultimate users are customers of the project. A customer is someone who pays money to acquire

an organization's product or services. In some cases, the other party may have paid for the products or services

on behalf of customers. The project satisfies the needs of the client. The client greatly influences the activities of

the project. Therefore, the project should focus on the needs and requirements of the client or customers. Thus,

the project is custom made and the project manager obviously should understand that the customer determines

the terms of reference of the project. It is imperative to collect information about the demands and preferences

of customers through research, surveys, and reports.

2. Suppliers: Suppliers are parties and institutions that supply materials, machines, and other resources to the

project. They carry on a regular, steady supply of quality goods and services to facilitate the timely completion

of the project. They affect the efficiency, quality, and schedule of the project delivery timings. Harmonious end

supportive relations with suppliers help the effective implementation of the project, and vice versa.
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3. Consultants: Consultants are a more influential force in the project due to their expert advice. The project

consists of an array of consultants, such as procurement, technical. environment, financial management from

project formulation to termination. They exert a major influence on different phases of the project life cycle,

providing professional skills.

4. Contractors: By nature, projects involve contracting and subcontracting. The capacity, performance, and

attitudes of the contractors heavily influence the time, cost, and quality performance of the project.

5. Competitors: Competition is a basic characteristic in the present open economic situation. Competitors are rivals

that compete with the organization or any organization that competes with other organizations for resources.

Competitors affect project activities.

6. Agencies: Government agencies function as a regulator that affects the project activities. The regulator has the

potential to control, legislate, or otherwise influence the project's policies and practices. Many of these agencies

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significant roles in protecting people’s rights and
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Dinesh Pant 21
7. Pressure Groups: A Pressure group is formed by its members to attempt to influence the project. They can exert
considerable influence by using media and other channels to call attention to their position. Organizations like
Mothers’ Group, Environment Protection Society, and Local Concern Society are examples of pressure groups.

8. Financial Institutions: Financial institutions like banks, finance companies, and cooperatives may affect project
activities. Most of the project’s financial activities are based on financial institutions. Financial transactions, deposits,
credit, remittance, fund transfer, and so forth activities are largely dependent on financial institutions.

9. Media: Paper and electronic media play a significant role in project activities. They informed both the good and bad
aspects of the project. They can create a popular impression on stakeholders and vice versa. The project manager must
manage relationships with media stakeholders.

10. Financiers: Project financiers can be owners, shareholders, donors, or among them. They greatly affect the project life
cycle, including fund mobilization and utilization.

11. Labor Unions: Union activities are growing day by day in developing countries. Labor relations between employers
and employees, employees and project, project and project, project and organization, organization and organization,
organization
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Assistant beDinesh
effectively
Pant managed by project managers. Industrial
22 relation
 among and between the project, organization, employees, and government should be maintained; otherwise, it

can adversely affect project activities.

ii. General Environment: General environment is known as an indirectly interactive force. Every project operates

on broad external conditions that may affect the project activities. General conditions and forces that are located

outside the project are known as the general environment.

 It is the set of broad dimensions and forces in an organization’s surroundings that create its overall context. It

provides opportunities, threats, and constraints of the project. It is composed of the set of elements that are outside

the project’s operating system. External environmental forces are beyond the control of the project authority.

 This environment has a secondary and more distant impact upon the project. The general environment may have

more impact on one organization than another organization simply because of the nature of a particular business.

The general environmental forces are Political-Legal forces, Economic forces, Socio-Cultural forces, and

Technological
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1. Political and Legal Environment: It is concerned with public affairs. It is related to policies, constitutions,

rules and regulations, trade policies, and international relationships maintained by the government. Political-

legal dimension is the government regulation of business and the general relationship between business and

government.

a. Political Environment: Political forces are associated with power. Legitimate power, expert power, referent

power, and coercive power are associated with the political environment. The important forces that influence the

project are given below:

i. Political System: The Political system includes ideological forces, political parties, election procedures, and

power centers. Political parties create or influence regulatory parameters within which the project manager

must abide by these laws.

ii. Political Institutions: Three basic political institutions create an environment for the project-legislative,

judiciary,
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 The legislature enacts laws that guide organizational activities.

 The executive or government implements the decisions of the legislature and lays down policies, regulations, and
procedures that influence the project.

 The judiciary acts as a watchdog, and their ruling influences the project activities. It settles disputes and legal issues
associated with the project.

iii. Political Philosophy: Political philosophy influences a lot of project activities. The democratic, autocratic, and
totalitarian systems are entirely different in thought, and it impedes project activities a lot positively or negatively.

b. Legal Environment: The legal forces that affect project activities are the legal environment. It consists of an array of
acts, rules, regulations, precedents, legal institutions, and legal processes. Major forces of the legal environment
consist of:

i. Constitution: The Constitution is the supreme law of the country. It provides direction to the nation.

ii. Law: Legislation affecting organizational activities is growing day by day. The purpose of the legislature is to
protect the organization, to protect consumers, and
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to protect the interests of society.
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iii. Courts of Law: Courts are established to resolve legal disputes between and among the parties. It is perceived that
courts of law protect the people and the organization as per legislation enacted by the legislature of the country.

iv. Law Administrator: Law enforcement agencies, such as government agencies, lawyers, police, and jail administration,
are major forces in a legal environment. They implement laws and the judgments of the courts of law.

2. Economic Environment: Economic environment refers to the forces that influence project activities, like interest rates,
inflation or deflation in the market, and changes in disposable income, stock market fluctuations, and the stage of trade
or business cycle that affect the project activities in general. It indicates the overall health of the economic system in
which the organization operates. Furthermore, it includes the economic status of the consumers. Their expensive habits,
the economic policy of the government, etc. to set economic objectives or goals. Important components of the
economic environment are:

a. Economic Systems: Economic systems shape and reshape the scope of public, private, and third sector participation and
market forces. There are commonly three models of the economic system:

i. Free Market Economy: Private sectors are major actors in the economy, where mechanisms, freedom of choice
individual
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initiative are the major characteristics. Profit serves as the driver of the economic engine. The government
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ii. Planned Economy: This type of economy is based on public ownership of factors of production, characterized
by a centrally planned, controlled, and regulated economy by the government. There is no consumer
sovereignty. Public enterprise plays a vital role in economic activities.

iii. Mixed Economy: It is characterized by both the free market economy and the planned economy. The public
sector has ownership and control over basic industries, including utilities, whereas the private sector serves as a
vehicle for development in other sectors where public sector presence does not exist or exists at a minimum
level.

b. Public Policies: Public policies such as trade and transit policy, industrial policy, and privatization policy affect
the project activities.

c. Economic Policies: Economic policies, such as fiscal policies, monetary policies, shape and reshape the
economic environment.

d. Economic Conditions: Economic conditions indicate the health of the economy in which the projects operate.
The influencing factors of economic factors are:
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i. Income Distribution: Income distributions vary among and within countries. The industrial structure is a major
determinant of the income of the people. Four types of industrial structures can be identified and distinguished
Substance economy, the Raw material exporting economy, the Industrializing economy, and the Industrial
economy.

ii. Saving, Debt, Credit Availability: Consumer saving, credit, and credit availability affect the project activities.
Changes in income, cost of living, interest rates, and savings and borrowing patterns have a high impact on
projects.

iii. Business Cycles: Different stages of business cycles, prosperity, recession, and recovery affect the health of
projects.

iv. Inflation: The rate of inflation influences costs, quality, and price, and profits of the projects.

v. Stage of Economic Development: The stage of economic development also influenced the project activities. An
economy can be developed, developing, or least developed.

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3. Regional Economic Groups: Regional economic groups such as the South Asian Association for Regional
Cooperation (SAARC), Association of South East Asian Nations (ASEAN), European Union (EU), and the
Organization of Petroleum Exporting Countries (OPEC) promote cooperation among members for projects. It
provides opportunities to member countries and threats to non-member countries. The economic environment plays
a significant role. The planner or organizer must consider these factors to make consistent planning and strategy at
different levels.

4. Socio-Cultural Environment: Socio-cultural environment refers to the customs, values, mores, and demographic
characteristics of the society in which the organization functions. It includes the attitudes of the people and
establishes a system in society. The goal shouldn't hamper those norms and values established in society.

a. Demographics: Demographics are major forces composed of the population. The project manager is keenly
interested in the size and growth rate of population in different countries/ cities; age distribution and ethnic mix,
educational levels, household patterns, and regional characteristics and movements.

b. Social Institutions: Social institutions such as reference groups and class upper, middle, and lower classes
influenced
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c. Social Change: Existing relationships and behavior patterns of society are changing day by day. Lifestyle,
social values have undergone a change in recent years, which affects the project activities at large.

d. Pressure Groups: Various types of interest groups pressurize and lobby for their own or social concerns. It may
impact projects positively or negatively toward projects. It provides room for change in laws, policies, and
practices.

e. Cultural Environment: Cultural environment refers to the set of surroundings that influences projects. It is a set
of basic beliefs, values, and norms. It is a way of life of people from the past to the present and for the future
created by society. It includes all walks of our life, modes of behavior, philosophies, ethics, morals, manners,
customs, traditions, religions, as well as political, economic, and other types of activities. It is the learned,
cumulative creation of man. Culture is social, shared, trans-massive, continuous and cumulative, consistent and
integrated, dynamic and adaptive; gratifying varies from society. Man-made objects like tools, technology,
houses, dress, and so on are considered as material culture, whereas internal and intrinsically valuable aspects
like languages, beliefs, values, rituals, customs, attitudes and outlook, feelings, and thinking are considered as
non-material
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5. Technological Environment: Technology refers to the ideas, methods, machines, tools, techniques, procedures,
and processes that combine two or more of them to convert inputs into outputs. It is the total of the knowledge
we have of ways to do things. It may be simple or complex. The technological environment refers to the level
and pace of technological changes in the national and international context. Every new technology is a force for
"creative destruction". Every technological growth and innovation has an impact positive or negative impact on
projects. Level and pace of technological change, innovation opportunities, research and development budget,
and regulation of technological change are some critical aspects of the technological environment.

a. Level of Technology: The level of technology can be simple to complex. It can be labor-based or capital-based.
It influences the project activities. Appropriate technology should be used to transform inputs into outputs.

b. Labor-based Technology: Labor is used to transform inputs into outputs.

c. Capital-based Technology: Machinery, which requires huge capital investment, is used to convert inputs into
outputs.

d. The Pace of Technological Change: Technology is a dynamic force and changing at high speed. Projects should
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e. Research and Development Budget: The Research and development budget plays an important role in projects. R&D
budget is the essence of innovation. Project stakeholders expect projects of superior quality, which are safe, comfortable,
and environmentally friendly.

f. Innovative Opportunities: Innovational opportunities refer to the augmentation of value. Mobilization of resources and
creating appropriateness of the technology. It is a dynamic network of agents interacting in a specific economic industrial
area under a particular institutional infrastructure and involved in the generation, diffusion, and utilization of technology.
Entrepreneurial activities, knowledge development. Knowledge diffusion/ exchange, guidance for the search, market
formation, resource mobilization, and support from an advocacy coalition are crucial pillars for technological innovation.

g. Regulation of Technological Change: Technology transfer is the prime concern for project development. It implies
technology imported from technologically advanced countries through globalization, projects, foreign trade, technical
assistance, training, and publications. Sources of technology transfer can be within the project, within the country, or
foreign countries/ organizations. As the goods and/ or services become more complex, the stakeholders need to be assured
of their safety. As a result, government agencies all over the world have expanded their power to investigate and ban
potentially unsafe goods/ or services. The authors used the globalization model and the new institutional economic order
model to describe technology transfer regulation inAssistant
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Prof. Dineshcountries.
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 Project Classification
A project is a unique set of activities designed to attain specific objectives within the
constraints of time, cost, and quality performance. It uses a variety of resources in a dynamic
environment. Projects can be of many types. Various ways of classifying a project are:

a. Labor-Intensive Project

b. Capital-intensive project

c. Indigenous Project

d. Joint Venture Project

e. Bilateral Project

f. Multilateral Project
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a. Labor-Intensive Project: The labor-based project is considered labor-intensive. The project
implementation is based on a skilled, semi-skilled, and unskilled labor force. Labor-based
technology, as described by David & Veen (1998), is "a technology that applies a labor/
equipment mix that gives priority to labor, supplementing it with appropriate equipment where
necessary for reasons of quality or cost". The labor-based project indicates that a flexible and
optimal use is made of labor as a predominant resource, while cost effectiveness and quality
aspects are ensured. Indigenous and local simple technology is used to handle the jobs of the
project. Employment generation is a major objective of labor-intensive projects. Labor-intensive
projects in Nepal are:

i. Food for Work program in the midwestern region as employment employment-intensive project

ii. Road construction practice applied by Chinese contractors in Nepal

iii. Garment
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factories in Nepal Assistant Prof. Dinesh Pant 34
 Advantages of Labor-Intensive Project
1. Employment Generation: Labor-intensive projects generate employment opportunities for a vast pool of unemployed people in the

developing world. It is most beneficial in order to provide more employment to people where unemployment is massive in most

developing countries. Labor-intensive projects are considered beneficial for saving capital investment and the use of the labor force.

Labor-intensive projects promote people's participation at the local level.

2. Social Justice: Labor-intensive projects create employment opportunities on one hand, and on the other hand, they promote social

justice by distributing income to the bottom level. The projects use goods/ services as inputs available at the local level, which

directly and indirectly promote social justice.

3. Low Capital Requirement: Labor-intensive projects use a low level of technology in the projects. It uses labor-based technology that

applies a labor/ equipment mix that gives priority to labor, reducing the investment in technology. The projects are useful where

resources for technological investment are low.

4. Utilization of Local Resources: Labor-intensive projects are useful to mobilize local and indigenous resources with indigenous

technology effectively and efficiently. Similarly, developing countries are facing capital and other resource gaps at large. They want

to make investment decisions by economizing the investment and saving capital, which provides maximum benefits to the nation.
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 Disadvantages of Labor-Intensive Project
1. Low Level of Capital Formation: Labor-intensive projects hold back the growth and development of
technology in the country. The competitive capacity in terms of innovation, quality, and market leadership is
adversely affected in the projects.

2. Lack of Technological Development: Labor-intensive projects turn out to be costly in the long run. In most
cases, capital-intensive projects encourage greater effort by public officials than labor-intensive projects.

3. Time-consuming: Labor-intensive projects are time-consuming and have a lengthier project life cycle. The
projects are unable to achieve project outcomes and outputs on time.

4. Low Capital Formation: Labor-intensive projects result from the low level of capital formation. In most cases,
operating expenses are higher than capital-intensive projects.

5. Inability to Handle Complexity: It is difficult to handle a complex task by using labor-based technology.
Modern projects are complex and need capital-intensive technology. Thus, labor-based projects are not suitable
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for handling complex tasks.
b. Capital-Intensive Project: A capital-intensive project is considered capital-intensive. The project
implementation is based on technology. Highly skilled technical and professional manpower is used in
the process of project implementation. It requires a huge capital investment in technology. A capital
investment decision is required while making project-related decisions. The basic characteristics of a
capital-intensive project are that it typically involves a current outlay (or current and future outlays) of
funds into the expectation of a stream of benefits extending far into the future. Capital-intensive
projects in Nepal are:

i. Trauma Center of Bir Hospital

ii. MRI & CT Scan

iii. Bridge over the Mahakali River

iv. ICT Center

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 Advantages of Capital Capital-Intensive Project
1. Optimize Resource Utilization: Projects use human and non-human resources. Capital-intensive projects use
resources at an optimal level. Developed countries are facing high labor costs due to labor shortage and tend to
use capital-intensive technology. Capital-intensive projects induce greater effort by public officials than labor-
intensive projects.

2. Quality Products Services: Capital-intensive projects produce better quality goods and services compared to
labor-intensive projects. High-tech provides a competitive advantage. Time is saved, and the level of
productivity is also enhanced.

3. Complexity Management: Capital-intensive projects are best suited to handle the complexity of tasks.

4. Cost Reduction: Capital-intensive projects are designed for a large scale of production, which leads to cost
reduction.

5. High Capital Formation: Capital-intensive projects add value to the capital. It results in a high level of capital
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formation.
 Disadvantages of Capital Capital-Intensive Project
1. Ignorance of Human Aspects: Capital-intensive projects ignore human aspects. Capital-based
technology is highlighted, and technically competent, high-level professionals are accorded to, while
other people are pushed to the back seat.

2. Cut-down Employment Opportunity: Capital-intensive projects negatively affect the employment

opportunities of semi-skilled and unskilled workers. It widens economic and social inequalities and
adversely affects social justice.

3. Costly Technology: High-tech capital-intensive projects are costly. Timely repair and maintenance costs
are also high. Most of the developing countries are facing the maintenance of technology for smooth
operation. Heavy import of technology and accessories adversely affects the balance of payments.

4. Unequal Distribution of Income: Capital-based projects promote centralization of project benefit in the
hands of a few people, which is against the principle of equal distribution of income/ revenue. It is not
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socially justifiable.
c. Indigenous Project: The project, which is funded from local sources and implemented based on local
and indigenous materials and technology to fulfill local needs, is known as an indigenous project. It is
based on indigenous styles, systems, traditions, and cultures. It is small in size and appropriate for
local technology. Local skilled people and technology are used in the process of project
implementation. The Indigenous Projects in Nepal are:

i. Palpa Durbar Renovation Project.

ii. Thanka and Mithila Art Painting.

iii. Pagoda Style Temples in Lalitpur.

iv. Pratappur Chitya Renovation Project of Swoyambhu.

Advantages of the Indigenous Project

1. Growth of Local Economy: Indigenous projects use local resources and technology. These practices
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2. Preservation of Traditional Cultures, Values, and Norms: Indigenous projects protect local
traditions, values, and customs. Such preservation is possible only through indigenous projects and
also promotes creativity.

3. Labor Intensive: Indigenous projects are labor-intensive. It generates employment opportunities.

Disadvantages of the Indigenous Project

4. Technical Retardation: Very indigenous and local technologies are used in indigenous projects. The
quality and quantity of outputs are not high enough to meet market demand. Technical development is
restricted by indigenous projects.

5. Rigidity: Indigenous projects are rigid and stick with traditions, customs only.

6. Limited Application: Indigenous projects have a limited scope of application. Indigenous technology
is not suitable for handling complex tasks.
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d. Joint Venture Project: A Joint venture project is ownership sharing by a foreign company with a host
local company to implement a project. Under the joint venture agreement, the foreign company
supplies raw materials, human resources, technology, and managerial competencies (knowledge,
skills, and experiences) to the host company. It can involve the form of equity participation,
technology transfer, management contract, production and marketing arrangements. Due to
globalization, economic liberalization, and the advancement of information technology, joint venture
projects are becoming very popular throughout the world. Multi-ownership status, economic
development objective, profit-oriented, an equal chance of risk and return, and help to industrial
growth are some attributes of the joint venture project. The Joint Venture Projects in Nepal are:

i. Everest Bank Limited

ii. The Oriental Insurance Company Limited

iii. Khimit I Hydropower Project

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 Advantages of Joint Venture Project
1. Low Labor Costs: Labor costs in developing economies are very high. Joint venture projects
take advantage of lower labor costs in the developing host country.

2. Capital and Technology Transfer: Joint venture project facilitates the transfer of capital,
technology, and management know-how from an advanced economy to a developing economy.

3. Employment Opportunities: Joint venture projects create additional employment opportunities

for host countries.

4. Risk Spreading: Risk is inseparable in every project. Joint venture projects spread risks
between joint venture partners via the host company and the foreign company.

5. Market Entry: Entry into foreign markets is difficult for companies. So, joint venture projects
make it easier to enter into foreign markets
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only due to the goodwill of foreign companies.
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 Disadvantages of Joint Venture Project
1. Competition: Joint venture projects create a tough environment for competition in host
countries as well as foreign countries. The impact of competition is high on local
contractors and local markets.

2. Dependence: Joint venture project culture increases dependence on foreign countries

for capital, technology, and managerial competencies. Local competitiveness is
demolished with imported capital, technology, and managerial knowledge.

3. The Disagreement between Host Company and Foreign Company: There are
grounds for disagreement between the host company and a foreign company on
benefit distribution as well as other issues.
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e. Bilateral Project: The project, which comes into existence as a result of an agreement between two friendly
countries, is called a bilateral project. They are based on foreign assistance, especially foreign aid grants or loans in
the form of cash, kind, and technical assistance. The following are key donor agency funding bilateral projects in
Nepal:

i. Japan International Cooperation Agency (JICA).

ii. United States Agency (USAID).

iii. Department of Foreign Investment Directorate (DFID).

iv. Swedish Development Cooperation (SDC)

v. German Technical Cooperation Agency (GTZ).

 The Bilateral Projects in Nepal are:

i. Trishuli Hydropower Project (India)

ii. BP Koirala Highway Project (Japan)

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 Advantages of Bilateral Project
1. Increased Resource Base: Most of the bilateral projects are the result of friendly relations
between the two governments. Recipient countries are able to expand their resource base for
developmental works in the country. Bilateral project funding is mostly assistance-based.
Assistance can be in the form of a grant-cash, kind, or technical assistance; or loan assistance-
cash, kind, or technical assistance. This type of assistance increases the resource base of the
recipient country.

2. Economic Development: Bilateral projects accelerate economic growth in the country.

Infrastructure development and social development are possible through bilateral projects in
countries like Nepal.

3. Enhanced Friendly Relations: Bilateral projects help to enhance friendly relations between
countries.
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This type of project helps to memorize mutual relations for the long term46 at the
Assistant Prof. Dinesh Pant
 Disadvantages of Bilateral Project
1. Dependency: Bilateral projects make the recipient countries dependent on foreign
countries. The internal competitiveness of recipient countries gradually weakens and
moves towards being dependent on donor countries. For instance, Nepal is dependent on
about 40 % of its budget on foreign assistance.

2. Increased Corruption: Corruption and irregularities in bilateral projects are high where
transparency, governance are weak. In bilateral projects, resources tend to be misused.
Transparency in public procurement is in question due to intimidation and collusion/cartel.

3. Uncertainty of Assistance: As we know that friendly countries provide assistance based on

prevailing relations. The relation has different dimensions. As a result, the volume and
frequency of assistance become uncertain.
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f. Multilateral Project: A multilateral project is the result of an agreement between the recipient
country and a multilateral agency. They are based on foreign assistance, especially foreign aid- loans
in the form of cash, kind, and technical assistance and sometimes grants. They are generally
concession loan financing, which needs to be paid back along with commitment fees, service charges,
and interest at nominal rates. The following are key multilateral agency funding projects in Nepal:

i. World Bank (Through IDA and IFC).

ii. Asian Development Bank (ADB).

iii. United Nations Development Program (UNDP).

iv. United Nations (UN).

v. Food and Agriculture Organization (FAO).

vi. International Labor Organization (ILO).

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vii. European Union (EU).
 The Multilateral Projects in Nepal are:

i. Higher Education Reforms Project (World Bank).

ii. Road Connectivity Sector Project (ADB).

iii. Poverty Alleviation Fund (World Bank)

iv. Food for Education (FAO)

Advantages of Multilateral Project

1. Low Cost of Funds: Multilateral projects are based on grant or concessional loans. Their interest rates and
commitment charges are very low compared to commercial loans. Developing nations are getting funds in the
form of multilateral projects to develop infrastructure.

2. Economic Development: Multilateral projects accelerate economic growth in the country by developing
infrastructure and social development.

3. Enhanced
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Assistant Prof. to Pant
Dinesh enhance friendly relations among countries. 49This type
 Disadvantages of Multilateral Project
1. Debt Servicing Burden: A multilateral project involves the debt servicing capacity of the country. Once the
borrower country borrows the assistance, it has to repay the principal amount with commitment charge and
interest amount. Debt servicing adversely affects the economy of developing countries.

2. Cumbersome: The implementation procedures of multilateral projects tend to be cumbersome. Multilateral

agencies have developed their own rules and procedures for managing the different life cycles of the projects,
which are not similar to the borrower countries. The terms and conditions laid down by these agencies adversely
affect the projects.

3. Dependency: Multilateral projects make the recipient countries dependent on multilateral donor agencies. The
internal competitiveness of recipient countries gradually weakens and moves towards being dependent on donor
countries.

4. Uncertainty of Assistance: Multilateral assistance is not certain. It is dependent on the decisions of multilateral
donor agencies. Political, cultural, and other factors affect the funding of these agencies.
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g. Construction Project: Construction is a process of building or assembling infrastructure. The

construction project is related to the construction of infrastructure within budget, time, and quality.

Effective planning, design, and execution of a project are essential to construction projects.

Residential Housing Construction. Institutional and Commercial Building Construction, Specialized

Industrial Constructions. Infrastructure and Heavy Construction are the major types in the

construction project. Components of Construction Projects are listed below:

i. Physical Space

ii. Materials

iii. Machinery, Equipment, and Tools

iv. Human Resources

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v. Finance Technology
 The Construction Projects in Nepal are:

i. Sun City Housing Project

ii. Dry Port Construction Project

iii. Gopi Krishna Cinema Hall Construction Project

Advantages of a Construction Project

1. Infrastructure Development: Construction is inevitable in the development of the country. Construction-oriented
projects help in the infrastructure development of the country. Without basic infrastructure, the countries cannot move
forward for the well-being of the people.

2. Engine for National and World Economy: Research evidence shows that infrastructure development directly
contributes to the reduction of poverty and enhances the national and world economy. Thus, it is considered an engine
for growth and development.

3. New Technologies: Construction projects help to develop, transfer, and use new technologies in an array of
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4. The Basis for Development: Construction projects serve as the basis for development. Without
construction, other developmental activities are in the shadows.

5. Industrialization: Construction projects help towards industrialization.

Disadvantages of a Construction Project

6. Heavy Capital Investment: Construction requires huge capital investment in technology. So, it is not
desirable for those whose financial ability is not sound to finance such constructions.

7. Environmental Degradation: Construction hampers the natural environment setting. The adverse
effects of construction pose threats to species and natural habitats on the Earth.

8. International Competition: Competition is a global phenomenon. Local companies are not in a position
to compete with international business companies in terms of technology, capital, methodologies, and
management know how and so forth. It adversely threatens the internal capacity of developing
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 Concept of Project Management
 Project management is the planning, organizing, directing, and controlling of company resources for a relatively short-term
objective that has been established to complete specific goals and objectives.
 Project management deals with planning, scheduling, controlling, and monitoring the complex non-routine activities that
must be completed to reach the predetermined objectives of the project.
 Project Management is the application of skills, tools, techniques, and processes to plan, coordinate, implement, monitor,
and control a project successfully.
 Project management includes developing a project plan, which includes defining and confirming the project goals and
objectives, identifying tasks and how goals will be achieved, quantifying the resources needed, and determining budgets
and timelines for completion.
 It also includes managing the implementation of the project plan, along with operating regular 'controls' to ensure that there
is accurate and objective information on 'performance' relative to the plan and the mechanisms to implement recovery
actions where necessary.
 According to Ruin (2003) “Project management is the application of knowledge, skills, tools, and techniques to project activities
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 Project management involves the following steps:

a. Grouping of Activities: All related activities in a project are grouped as a work package. These activities
contribute to the same goal and are bound by definite periods, costs, and performance schedules and targets.

b. Fixing Responsibilities: The responsibilities of the project activities are entrusted to a single authority called
the Project Manager. The Project Manager coordinates, directs, and exercises control over project activities
and personnel.

c. Servicing the Project: This means that the project has to be supported internally by establishing a matrix
organization. It must be supported externally through contracting, subcontracting, and vendors or suppliers.

d. Negotiations: It refers to building commitments through negotiations, coordination, and direction to achieve
the overall project objectives. During the negotiation process, time schedules, budgets, and contracts must be
agreed upon by the parties involved.

e. Eecution of Tasks: The tasks have to be completed within time schedules, budgets, and predetermined
specifications
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and quality for the accomplishment of objectives. This requires continuous monitoring
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and
 Tools and Techniques for Project Management
 Project management involves a set of techniques and is a scientific part of management. We shall discuss these
techniques briefly here. The different techniques used in project management are broadly grouped as follows:

1. Project Selection Techniques: These techniques are used to select the projects. These include cost-benefit and
risk and sensitivity analysis.

i. Cost-Benefit Analysis: It is used to evaluate the overall economic impact of the project. Private sector
projects examine the profitability of the project. Public sector projects use social cost-benefit analysis to
evaluate social benefits in terms of contribution to the national economy. A project with the highest cost-
benefit ratio is selected.

ii. Risk and Sensitivity Analysis: It considers the fact that the price of inputs fluctuates, and the Project Manager
needs to fix the contract price. Varying prices are used to analyze the sensitivity of price fluctuations.
2. Project Planning and Execution Techniques: Project planning and execution techniques include the
following:
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i. Work Breakdown Structure (WBS): This means breaking down large activities into manageable units. It
facilitates financial controls, fixing of responsibility, and monitoring the progress.

ii. Project Execution Plan: This shows an activity chart showing the beginning and ending of different
activities. It includes network diagrams

iii. Project Responsibility Matrix: It refers to the interface between different functional and staff personnel
involved in the project. It also includes the responsibilities of all the stakeholders.

iv. Project Management Manual: It defines the procedures and steps for various activities in the project.

3. Project Scheduling and Coordinating Techniques: It refers to the timing and the volume of work to be
done. The Project Manager has to coordinate all the resources and efforts with reference to the volume of
work to be accomplished. It involves the following tasks:

i. Bar Charts: They show the work breakdown and its logical relationship.

ii. Life Cycle Curves: This reflects the standard progress used for a technological project. The curve
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iii. Line of Balance (LOB): This shows the variations between the committed performance and the actual
performance. The variation will indicate the areas that require closer attention for the progress of the
project.

iv. Networking (PERT & CPM): They constitute the heart of the planning, scheduling, and monitoring system
and show the inter-relationship and interdependence between various work systems.

4. Project Monitoring and Progress Techniques: This is a technique that evaluates the project progress and
evaluation in terms of work accomplishments. These are part of the project control system. It includes the
following:

i. Progress Measurement Techniques (PROMPT): This refers to a method of measuring the actual progress
of project activities.

ii. Performance Monitoring Technique (PERMIT): This refers to the exercise carried out to remove
bottlenecks
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and measure achievements against targets. This is done by breaking down the total project
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into
iii. Updating, Reviewing, and Reporting Technique (URT): This refers to periodic reviews and
updating, and reporting to senior management. This can be done through narrative reports and
graphs or curves.

5. Project Cost and Productivity Control Techniques: This refers to cost estimates and
budgeting for project activities and their productivity. It includes productivity budgeting
techniques, value engineering, and cost and work structure breakdown.

6. Project Communication and Cleanup Techniques: This refers to the communication

between the Project Manager and the entire stakeholders and interest groups. It also includes the
clean-up of project activities while the project nears completion and termination.

7. Computer-based Project Management Systems: This refers to the computerized project

management system generally found in capital-intensive projects. It begins with computer-aided
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planning, design, implementation, and monitoring and evaluation of all project activities.59
 Benefits of Project Management

a. Improved Efficiency: Project management helps streamline processes, allocate resources effectively, and
minimize waste, leading to increased efficiency and productivity.

b. Enhanced Communication: It fosters clear and open communication among team members, stakeholders, and
clients, reducing misunderstandings and ensuring everyone is aligned.

c. Reduced Risk: By identifying potential risks early on, project managers can implement proactive measures to
mitigate them, reducing the likelihood of project failure.

d. Better Decision-Making: Project management provides a structured framework for making informed decisions
based on data and analysis.

e. Increased Project Success: By following proven methodologies and best practices, project managers can
increase the chances of delivering projects on time, within budget, and to the desired quality standards.

f. Improved Customer Satisfaction: Effective project management leads to satisfied clients by delivering
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projects that meet their needs and expectations.
 Limitations of Project Management
a. Overhead Costs: Implementing project management practices can incur additional costs, such as training, software,

and administrative overhead.

b. Resistance to Change: Introducing new project management methodologies can face resistance from team

members who are accustomed to traditional ways of working.

c. Difficulty in Forecasting: Accurately predicting future events and uncertainties can be challenging, making it

difficult to create precise project plans.

d. Time-Consuming: Developing detailed project plans and tracking progress can be time-consuming, especially for

complex projects.

e. Limited Applicability: Not all projects benefit equally from formal project management. Smaller, simpler projects

may not require the same level of rigor.

f. Dependency on Skilled Professionals: Effective project management relies on skilled project managers and team
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 The Project Manager - Roles and Responsibilities of the Project Manager
A project manager is a professional person having knowledge, skills, attitudes, and behaviors in the
field of project management. S/he can have the responsibility of managing the project life cycle, i.e,
project initiation, planning, execution, monitoring, control, and termination of any project.

It may be related to the projects of the construction industry, architecture, aerospace and defense,
computer programming, production, design, and service industries.

The project manager serves as a single responsibility center in the project. It is his/her responsibility
to achieve project deliverables within the constraints of time, cost, and technical quality
performance.

The project manager is concerned with controlling project resources-physical, financial, human, and
informational. The project manager performs the tasks of planning, organizing, directing, and
controlling
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an organization's resources. Assistant Prof. Dinesh Pant 62
 Roles of the Project Manager
 A role is defined as the expected behavior for a certain position. Put differently, roles are an organized set of

behaviors related to an individual position. The concept of role, in this sense, is similar to the role an actor plays in

a theatrical production.

 A person does certain things, meets certain needs of the project, and has certain responsibilities. The functions of a

project manager make clear what s/he do, whereas roles indicate how they do it. Not only a project manager, a

team leader, but s/he is also a planner, organizer, cheerleader, coach and problem solver and decision maker, and so

on. This indicates that the project manager wears many hats (plays various roles).

 A well-known management expert, Henry Mintzberg (1973), has described ten different roles of a manager in a

highly interrelated fashion with each other.

1. Interpersonal Roles: Interpersonal roles deal with coordination and interaction with project team members. The

project manager provides direction and supervision

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Pant team with the help of interpersonal roles.
63
 The project manager provides direction and supervision to the project team with the help of interpersonal roles.
The project manager develops contacts and builds relationships with people inside and outside the project. They
communicate with peers, supervisors, subordinates, suppliers, customers, bankers, both formally and informally.
Interpersonal roles involve three activities:

i. Figurehead Role: This role deals with ceremonial work such as greeting and receiving visitors, chairing
board meetings, attending parties, and entertaining visitors. Thus, this role is social, and the manager serves
as the official representative of the organization.

ii. Leadership Role: It involves directing, coordinating, motivating, staffing, and controlling activities. The
project manager guides and motivates cross-functional team members from different functional units and
acts as a positive influence in the workplace. As a leader, s/he directs team efforts towards project objectives
through team building, conflict resolution, and creating team loyalty and identity.

iii. Liaison Role: It involves maintaining relations internally with different units and externally with society for
building the image, gathering resources, etc. The manager interacts with peers and with people outside the
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organization to gain information.
2. Informational Roles: Informational roles are closely related to the tasks necessary to obtain and transmit
information. The sources of such information are different. The role of the project manager is to develop a
network of contacts and relations within and outside the project for the collection, processing, and
dissemination of such information. Informational roles involve three activities:

i. Monitor Role: The Monitor role relates to the assessment and watching over the activities taking place in
and around the organization. As a mentor, the project manager talks to the project team and gathers the
information that is useful in running the project.

ii. Disseminator Role: The manager distributes information within the project team and outside the project
through downward, upward, and lateral channels. This role provides information to team members and
keeps them informed of what is going on around the project. The transmission of information in the
workplace can be written or oral and formal or informal. Project communication can be through
correspondence, email, audio-visual presentations, report meetings, training, and workshops.
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iii. Spokesperson Role: This role involves representing the unit of work to explain to organizational
members and outsiders about the related issues of their interest. As a spokesperson, the manager
provides information to people outside the project, either to inform the public about project activity or
to satisfy influential people who control the project.

3. Decisional Roles: Decisional roles are the ones through which the manager makes things happen.
Mainly, a decision is taken to solve the problem. Managers develop strategies to negotiate with
conflicting interests, uncertainties. Decisional roles are closely related to the method that project
managers use to plan and utilize human and nonhuman resources. Such roles arise from to day
activities of the project. They are:

i. Entrepreneur Role: It is concerned with planning that involves risk-taking and experimentation. In
this role, the manager looks for new ways to increase the department's effectiveness. Managers
identify
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Assistant Prof. Dinesh Pant 66
ii. Disturbance Handling Role: It is related to maintaining a good working environment and
organizational stability. Managers need to resolve problems like strikes, disagreements, and conflicts
before they become serious.

iii. Resource Allocator Role: This involves allocating available resources where they are most needed to
meet the project’s needs. It is a managerial function of allocating resources such as money, people,
physical, informational, and time etc. In the role of resource allocation, the manager also designs the
unit's organizational structure. For example, who will do what and who will report to whom?

iv. Negotiator Role: The manager decides to negotiate major contracts with other organizations or
individuals. It involves resolving the disputes both inside and outside the organization. Negotiating is
a major part of the manager's job because only the manager has the authority to make the required
decisions and to commit organizational resources. The negotiations may be over work, performance,
objectives, or anything influencing the project. Negotiation among stakeholders is essential to settle
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the disputes.
 Responsibilities of the Project Manager
 Responsibility is the obligation to perform duties and carry out tasks resulting from the authority. The authority

can be delegated, whereas responsibility cannot be delegated. The project manager has total responsibility for
managing the project’s life cycle from initiation to completion. The responsibilities of the project manager
consist of:

1. Define the Project: The project manager is responsible for defining the goals and objectives for all project
participants and stakeholders. Differently, it is about defining where we are at present and where we want to
reach in the future. Thus, it is the project manager who sets objectives and project constraints by maintaining
the project's integrity.

2. Select the Project Team: The project manager, as a leader, is responsible for the selection of the project team
from various functional departments. S/he is responsible for training and developing team members to make
them competent on project tasks. S/he leads the team, motivates them, and manages their performance toward
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goal attainment within constraints of time, cost, and technical quality performance.
3. Managing Stakeholders: Stakeholders are people who have a personal, entrepreneurial interest in the
results of a project. The project manager identifies and manages the stakeholders in the different life cycles
of the project. Common stakeholders include customers, managers, corporate executives, and
representatives from government agencies. In this process, their tasks are to make sure that stakeholders
are participating in the project and satisfied with their needs. In the same, s/he gets top management
commitment to the project

4. Project Planning: Project Planning is a rational determination of how to initiate, sustain, and terminate a
project. It is the project manager who thinks through and makes explicit the project's objectives, goals, and
strategies necessary to bring the project through its life cycle to a successful termination when the project's
product takes the right direction. In this regard, the project manager performs:

i. Defining work requirements, Definition of the quality of work

ii. Scheduling of the project,

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iii. Definition of the project,
5. Designing Project Organization: Designing the organization structure is the major responsibility of the

project manager. S/he develops organizational structure by:

i. Dividing the work of the project into jobs & Grouping tasks and people into project divisions.

ii. Establishing an authority and responsibility relationship by allocating authority to the project team.

iii. Managing interfaces with functional units of the parent organization.

iv. Establishing a coordination mechanism between and among people, tasks, methods, and procedures.

6. Implement the Project: Project implementation is the prime responsibility of the project manager. At this

stage, the activities consist of:

i. Inviting proposals from contractors and consultants, & Awarding and managing contracts.

ii. Mobilizing resources & Procurement of goods, works, and services.

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iii. Leading a project team & Building PMIS for effective project life cycle management
7. Control the Project Progress: Control is the process of establishing performance standards,
measuring actual progress, comparing actual project progress with performance standards, finding
and analyzing deviations with reasons, and taking corrective measures to address deviations. The
project manager is responsible for managing the control cycle, including the tasks or activities, and
informing stakeholders about the project progress from time to time.

8. Financial Management: Financial management is the key area of project management where the
project manager is responsible for the efficient and effective use of financial resources. Budget and
cost control techniques are used while implementing projects. Internal and external control
mechanisms are used along with auditing.

9. Change Management: Most of the projects are designed and implemented to bring positive
change in organizational processes. The project manager is responsible for managing change.
Change bears the risks. Therefore, change management is another important responsibility of the
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 Skills Requirements for a Project Manager
Skills are specific abilities that result from knowledge, information, practice, and aptitude (talent). It is

an individual's ability to translate knowledge into action. A project manager's skill is the learned capacity
to carry out pre-determined project results often with the minimum outlay of time, energy, or both.

It is about applying learned knowledge to specific tasks or results. t is the project manager who

integrates personnel from many disciplines into an effective work team. To get desired results, s/he must
relate to the people to be managed, the task to be done, the tools available, the organizational structure,
the organizational environment, and the project beneficiaries.

To design project goals and objectives and realize those goals and objectives by mobilizing human and

nonhuman resources, s/he must possess the necessary skills in this regard.

Robert Katz (1969) has identified three different kinds of managerial skills: technical, human, and
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conceptual. Skills required for a project manager are discussed below:
1. Technical Skills: Technical skills are the knowledge, abilities, and proficiencies to perform a specialized task using
technology. Technical skill is the ability to perform a specialized task that involves a certain method or process.
Technical skills involve the use of tools, techniques, and procedures that are required to perform a project role.

This skill is particularly important to the project manager, who needs to know how the project work is done. These
abilities tend to be related to knowledge of the industry and a general understanding of the project's work process
and products.

Project managers need to have a clear understanding of the technology involved, engineering tools and techniques
employed, specific markets, their customers and requirements, product applications, technological trends and
innovations, the relationship between supporting technologies, and people who are part of the technical community.

2. Human Skill: Human skill is the ability to understand, communicate, motivate, coordinate, lead, and control the
behavior of project team members, including project stakeholders. An understanding of human relations and
organizational behavior is most important to the project manager. The ability to persuade, negotiate with, and
coordinate the activities of others is the key to their success.

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Hence, the project manager needs human skills in fields such as communication. motivation, conflict
management, group dynamics, etc. They are needed to get along with people and to get work done through
people.

The project manager with these behavioral skills can successfully lead and manage the teams and groups and
coordinate their activities for effectiveness. These skills can be developed through education, training, and work
experiences.

It is vital to realize the importance of 'people skills' in getting a job, keeping it, and performing well in it. As one
expert commented. "In many projects, the reason a project manager fails is not that she doesn't have the technical
skills. It's because he doesn’t have the people skills.

While there are still plenty of traditional managers around, concentrating on being the boss, giving orders, and
carefully monitoring employees, the project manager of today and the future must focus more on interpersonal
skills such as being a team player, sharing information with others, and teaching and helping people learn.

Many high-potential managers have derailed (ruined, spoiled) many developments and changed projects due to
problems in interpersonal relations.
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3. Conceptual Skill: Conceptual skill involves the ability of the project manager to visualize holistically the
project in its environment. Conceptual skills include the project manager's ability to identify and resolve
problems for the realization of project deliberations within the constraints of cost, time, and technical quality
performance by addressing everyone's concerns.

It is the most important project where long-range forecasting and planning are the principal activities. The
project manager also needs to look for opportunities in the environment and develop strategic plans to
capitalize on these opportunities.

Managers use these skills when they consider the role of the business in its external environment. As you
acquire greater responsibility, you must exercise your conceptual and decision skills with increasing
frequency (recurring trend). Formal education and training are very important in helping managers develop
conceptual skills.

Finally, it is the skills of a manager’s ability to recognize complex and dynamic issues, examine the numerous
and conflicting factors where such issues arise, and resolve the problems for the benefit of the organization
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and its members.
4. Team Building: Team building is one of the prime responsibilities of the project manager. Team building

involves a whole structure of management skills required to identify, commit, and integrate the various

cross-functional task groups into a single project team. The project manager must create and nurture a

climate with the following characteristics to make an effective team:

i. Committed Team members.

ii. Good interpersonal relations and team spirit.

iii. Complementary expertise and resources.

iv. Clearly defined goals and objectives.

v. Good project leadership.

vi. Open communication and mutual trust.

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5. Leadership Skill: Leadership skill is the manager's ability to lead the team within an unstructured
environment. It is directing and influencing the project team to realize project goals willingly and
enthusiastically. The project manager with the underlined characteristics is considered an effective leader:

i. Clear project leadership and direction.

ii. Assistance in problem-solving.

iii. Ability to handle interpersonal conflict.

iv. Facilitating group decision making.

v. The capacity to plan.

vi. Ability to communicate clearly.

Similarly, personal traits such as project management experience, flexibility and change orientation,
innovative thinking, initiative and enthusiasm, charisma and persuasiveness, organization and discipline
help08/31/2025
the project manager to make himself orAssistant
herself [Link] effective
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6. Conflict Resolution Skill: Conflict resolution skill is the project manager's ability to understand
interpersonal and inter-group dynamics, understand the causes of conflicts, have knowledge about
functional and dysfunctional conflicts, and their impact on overall project performance, including
conflict handling capabilities. The project manager must understand the level of conflicts in
different phases of the project life cycle and manage them accordingly.

7. Entrepreneurial Skill: Entrepreneurial skill is creating and implementing ideas in a novel,

creative manner. The project manager should undertake innovations, finance, and business
expertise in an effort to transform innovations into economic goods. S/he can start new
businesses, including social and political forms of activities.

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 Short Answer Questions (2 marks each)

a. Define a project and mention any two of its features.

b. What is meant by the project life cycle?

c. List any two tools used in project management.

d. Mention two key roles of a project manager.

e. Write any two limitations of project management.

Long / Analytical Answer Questions (6 marks each)

f. Explain the different phases of a project life cycle with examples.

g. Discuss the classification of projects based on different criteria.

h. Critically analyze the benefits and limitations of project management in modern organizations.

i. Describe the roles and responsibilities of a project manager and explain why these are important for project success.
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j. Explain the essential skills required for a project manager to effectively lead a project, with relevant examples.
Case- 1
SkyBuild Pvt. Ltd., a well-known construction company in Nepal, recently secured a prestigious contract to
design and construct a modern corporate office complex for a multinational IT firm entering the Nepalese
market. The project had a strict completion deadline of 18 months, with high expectations for quality,
sustainability, and modern architectural design.

The company appointed Ms. Anisha Sharma, an experienced and certified project manager, to lead the
initiative. From the very beginning, Ms. Sharma took a structured approach to ensure efficiency. During the
initial planning phase, she broke the project into clearly defined phases—design approval, site preparation,
structural work, interior finishing, and final handover. She set realistic but challenging milestones for each
phase and implemented advanced project management software to track timelines, budgets, and resources.

Ms. Sharma assembled a skilled multidisciplinary team, assigning roles according to each member’s expertise
in architecture, engineering, procurement, and quality control. She also maintained regular communication
with the client to ensure expectations were aligned.
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 However, six months into the project, unforeseen challenges emerged. Global supply chain disruptions delayed the
delivery of essential construction materials, and sudden changes in the client’s design requirements forced a revision of
several completed plans. Additionally, environmental issues arose, including complaints from nearby residents about
excessive construction noise and dust.

To address these problems, Ms. Sharma revisited the project schedule, adjusting timelines while negotiating new
delivery commitments with suppliers. She also organized community engagement meetings to address residents’
concerns and implemented noise-control measures. Her leadership skills, adaptability, problem-solving ability, and
clear communication played a crucial role in keeping the project moving forward despite the difficulties.

Questions (3 marks each)

a. Identify the classification of the project in this case and explain two of its key features.

b. Describe the stages of the project life cycle reflected in this case study.

c. Suggest two project management tools or techniques that could help Ms. Sharma manage progress and challenges
effectively.
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Case-2
Sunrise Builders Pvt. Ltd., a reputed construction company in Nepal, has been entrusted with the task of building a
modern, eco-friendly resort in the scenic city of Pokhara. The project has a planned duration of 20 months, with a
strong emphasis on environmental sustainability, quality, and timely completion. The project manager, Mr. Ramesh
Shrestha, adopted a systematic and professional approach from the very beginning. He began by clearly defining
the project’s objectives—to construct a state-of-the-art resort that not only meets the client’s expectations but also
promotes green building practices. The project scope was carefully outlined to avoid misunderstandings and scope
creep during execution.

To ensure smooth execution, Mr. Shrestha divided the entire project into five well-defined phases: design,
foundation, construction, finishing, and handover. Each phase had its own set of milestones and deliverables,
allowing the team to monitor progress and maintain accountability. Before initiating work, Mr. Shrestha carried out
a comprehensive assessment of the internal and external project environment. External factors included Pokhara’s
seasonal weather patterns, which could affect construction timelines, government laws and environmental
regulations that had to be complied with, and the availability of skilled labor in the local market. Internally, he
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Based on his findings, Mr. Shrestha implemented modern project management tools such as Gantt
charts for scheduling and visual progress tracking, along with advanced project scheduling software
to manage timelines, allocate resources efficiently, and foresee potential delays. The project team
consisted of highly qualified engineers, creative architects, reliable suppliers, and skilled workers,
each assigned tasks according to their specific expertise. Mr. Shrestha ensured open and transparent
communication with stakeholders, including the client, suppliers, and contractors, through regular
progress meetings. He also played a vital role in resolving conflicts quickly, addressing unexpected
challenges, and ensuring that all safety and quality standards were strictly maintained.

His leadership combined technical competence with interpersonal skills, ensuring that the project
stayed within the allocated budget and was delivered within the planned time frame. The vision was
to create a resort that would not only serve as a luxurious destination for tourists but also stand as a
model of eco-friendly construction in Nepal, contributing positively to Pokhara’s reputation as a
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major tourism hub.
Questions (3 marks each)

a. List any three external factors that influenced the planning of the eco-friendly resort project.

b. Mention the five phases into which Mr. Shrestha divided the project.

c. Identify any two project management tools used by Mr. Shrestha and explain their purpose.

d. State any three ways in which Mr. Shrestha ensured the quality and timely completion of the
project.

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