Projects and project management operate in an environment broader than that of the project itself. The project management team must understand this broader context—managing the day-to-day activities of the project is necessary for success but not sufficient. This chapter describes key aspects of the project management context not covered elsewhere in this document. The topics included here are:

2.1 Project Phases And The Project Life Cycle

Because projects are unique undertakings, they involve a degree of uncertainty. Orga-nizations performing projects will usually divide each project into several project phases to provide better management control and appropriate links to the ongoing operations of the performing organization. Collectively, the project phases are known as the project life cycle.

  • Characteristics of Project Phases
  • Characteristics of the Project Life Cycle
  • Representative Project Life Cycles


2.2 Project Stakeholders

Project stakeholders are individuals and organizations who are actively involved inthe project, or whose interests may be positively or negatively affected as a result ofproject execution or successful project completion. The project management teammust identify the stakeholders, determine what their needs and expectations are,and then manage and influence those expectations to ensure a successful project.Stakeholder identification is often especially difficult. For example, is an assemblyline worker whose future employment depends on the outcome of a new productdesign project a stakeholder?

Key stakeholders on every project include:

  • Project manager—the individual responsible for managing the project.
  • Customer—the individual or organization who will use the project product. There may be multiple layers of customers. For example, the customers for a new pharmaceutical product may include the doctors who prescribe it, the patients who take it, and the insurers who pay for it.
  • Performing organization—the enterprise whose employees are most directly
    involved in doing the work of the project.
  • Sponsor—the individual or group within the performing organization who
    provides the financial resources, in cash or in kind, for the project.

In addition to these there are many different names and categories of project stakeholders—internal and external, owners and funders, suppliers and contractors, team members and their families, government agencies and media outlets, individual citizens, temporary or permanent lobbying organizations, and society at large. The naming or grouping of stakeholders is primarily an aid to identifying which individuals and organizations view themselves as stakeholders. Stakeholder roles and responsibilities may overlap, as when an engineering firm provides financing for a           plant it is designing.   

2.3 Organizational Influences

            Projects are typically part of an organization larger than the project—corporations, government agencies, health care institutions, international bodies, professional associations, and others. Even when the project is the organization (joint ventures,partnering), the project will still be influenced by the organization or organizations that set it up. The following sections describe key aspects of these larger organizational structures that are likely to influence the project.  

  • Organizational Systems                                                                                             
  • Organizational Cultures and Style
  • Organizational Structure


2.4 Key General Management Skills

General management is a broad subject dealing with every aspect of managing an ongoing enterprise. Among other topics, it includes:

Finance and accounting, sales and marketing, research and development, manufacturing and distribution.

  • Strategic planning, tactical planning, and operational planning.
  • Organizational structures, organizational behavior, personnel administration, compensation, benefits, and career paths.
  • Managing work relationships through motivation, delegation, supervision, team building, conflict management, and other techniques.
  • Managing oneself through personal time management, stress management, and other techniques.


General management skills provide much of the foundation for building project management skills. They are often essential for the project manager. On any given project, skill in any number of general management areas may be required. This section describes key general management skills that are highly likely to affect most projects and that are not covered elsewhere. These skills are well documented in the general management literature and their application is fundamentally the same on a project.

There are also many general management skills that are relevant only on certain projects or in certain application areas. For example, team member safety is critical on virtually all construction projects and of little concern on most software development projects.

  • Leading
  • Communicating
  • Negotiating
  • Problem Solving
  • Influencing the Organization


2.5 Socioeconomic Influences

Like general management, socioeconomic influences include a wide range of topics and issues. The project management team must understand that current conditions and trends in this area may have a major effect on their project: a small change here can translate, usually with a time lag, into cataclysmic upheavals in the project itself. Of the many potential socioeconomic influences, several major categories that fre-quently affect projects are described briefly below.

  • Standards and Regulations
  • Internationalization
  • Cultural Influences