After reading case study-1 from the attached text book(page-43 in pdf) answer the following questions. 

  1. How effectively do you think Rachel spent her day?
  2. What does the case tell you about what it is like to be a project manager?

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The McGraw-Hill Series Operations and Decision Sciences

SUPPLY CHAIN MANAGEMENT Benton Purchasing and Supply Chain Management Third Edition

Bowersox, Closs, Cooper, and Bowersox Supply Chain Logistics Management Fifth Edition

Burt, Petcavage, and Pinkerton Supply Management Eighth Edition

Johnson Purchasing and Supply Management Sixteenth Edition

Simchi-Levi, Kaminsky, and Simchi-Levi Designing and Managing the Supply Chain: Concepts, Strategies, Case Studies Third Edition

Stock and Manrodt Fundamentals of Supply Chain Management

PROJECT MANAGEMENT Brown and Hyer Managing Projects: A Team-Based Approach Larson Project Management: The Managerial Process Eighth Edition

SERVICE OPERATIONS MANAGEMENT Bordoloi, Fitzsimmons, and Fitzsimmons Service Management: Operations, Strategy, Information Technology Ninth Edition

MANAGEMENT SCIENCE Hillier and Hillier Introduction to Management Science: A Modeling and Case Studies Approach with Spreadsheets Sixth Edition

BUSINESS RESEARCH METHODS Schindler Business Research Methods Thirteenth Edition

BUSINESS FORECASTING Keating and Wilson Forecasting and Predictive Analytics Seventh Edition

LINEAR STATISTICS AND REGRESSION Kutner, Nachtsheim, and Neter Applied Linear Regression Models Fourth Edition

BUSINESS SYSTEMS DYNAMICS Sterman Business Dynamics: Systems Thinking and Modeling for a Complex World

OPERATIONS MANAGEMENT Cachon and Terwiesch Operations Management Second Edition

Cachon and Terwiesch Matching Supply with Demand: An Introduction to Operations Management Fourth Edition

Jacobs and Chase Operations and Supply Chain Management Sixteenth Edition

Jacobs and Chase Operations and Supply Chain Management: The Core Fifth Edition

Schroeder and Goldstein Operations Management in the Supply Chain: Decisions and Cases Eighth Edition

Stevenson Operations Management Fourteenth Edition

Swink, Melnyk, and Hartley Managing Operations Across the Supply Chain Fourth Edition

BUSINESS MATH Slater and Wittry Practical Business Math Procedures Thirteenth Edition

Slater and Wittry Math for Business and Finance: An Algebraic Approach Second Edition

BUSINESS STATISTICS Bowerman, Drougas, Duckworth, Froelich, Hummel, Moninger, and Schur Business Statistics in Practice Ninth Edition

Doane and Seward Applied Statistics in Business and Economics Sixth Edition

Doane and Seward Essential Statistics in Business and Economics Third Edition

Lind, Marchal, and Wathen Basic Statistics for Business and Economics Ninth Edition

Lind, Marchal, and Wathen Statistical Techniques in Business and Economics Eighteenth Edition

Jaggia and Kelly Business Statistics: Communicating with Numbers Third Edition

Jaggia and Kelly Essentials of Business Statistics: Communicating with Numbers Second Edition

McGuckian Connect Master: Business Statistics

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Project Management

The Managerial Process Eighth Edition

Erik W. Larson

Clifford F. Gray Oregon State University

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Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2021 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2018, 2014, and 2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 LWI 24 23 22 21 20 19

ISBN 978-1-260-23886-0 (bound edition) MHID 1-260-23886-5 (bound edition) ISBN 978-1-260-73615-1 (loose-leaf edition) MHID 1-260-73615-6 (loose-leaf edition)

Portfolio Manager: Noelle Bathurst Product Developer Manager: Michele Janicek Executive Marketing Manager: Harper Christopher Lead Content Project Manager: Sandy Wille Senior Content Project Manager: Angela Norris Senior Buyer: Sandy Ludovissy Design: Egzon Shaqiri Content Licensing Specialist: Beth Cray Cover Image: Gina Pricope/Getty Images Compositor: SPi Global

All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.

Library of Congress Cataloging-in-Publication Data

Names: Gray, Clifford F., author. | Larson, Erik W., 1952- author. Title: Project management : the managerial process / Erik W. Larson, Clifford F. Gray, Oregon State University. Description: Eighth edition. | New York, NY : McGraw-Hill Education, [2021] | Clifford F. Gray appears as the first named author in earlier editions. | Includes bibliographical references and index. | Summary: “Our motivation in writing this text continues to be to provide a realistic, socio-technical view of project management. In the past, textbooks on project management focused almost exclusively on the tools and processes used to manage projects and not the human dimension”– Provided by publisher. Identifiers: LCCN 2019028390 (print) | LCCN 2019028391 (ebook) | ISBN 9781260238860 (paperback) | ISBN 1260238865 (paperback) | ISBN 9781260242379 (ebook) Subjects: LCSH: Project management. | Time management. | Risk management. Classification: LCC HD69.P75 G72 2021 (print) | LCC HD69.P75 (ebook) | DDC 658.4/04–dc23 LC record available at LC ebook record available at

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

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Erik W. Larson ERIK W. LARSON is professor emeritus of project management at the College of Business, Oregon State University. He teaches executive, graduate, and undergraduate courses on project management and leadership. His research and consulting activities focus on project management. He has published numerous articles on matrix manage- ment, product development, and project partnering. He has been honored with teach- ing awards from both the Oregon State University MBA program and the University of Oregon Executive MBA program. He has been a member of the Project Manage- ment Institute since 1984. In 1995 he worked as a Fulbright scholar with faculty at the Krakow Academy of Economics on modernizing Polish business education. He was a visiting professor at Chulalongkorn University in Bangkok, Thailand, and at Baden-Wuerttemberg Cooperative State University in Bad Mergentheim, Germany. He received a B.A. in psychology from Claremont McKenna College and a Ph.D. in management from State University of New York at Buffalo. He is a certified Project Management Professional (PMP) and Scrum master.

Clifford F. Gray CLIFFORD F. GRAY is professor emeritus of management at the College of Business, Oregon State University. He has personally taught more than 100 executive develop- ment seminars and workshops. Cliff has been a member of the Project Management Institute since 1976 and was one of the founders of the Portland, Oregon, chapter. He was a visiting professor at Kasetsart University in Bangkok, Thailand, in 2005. He was the president of Project Management International, Inc. (a training and consulting firm specializing in project management) 1977–2005. He received his B.A. in economics and management from Millikin University, M.B.A. from Indiana University, and doc- torate in operations management from the College of Business, University of Oregon. He is a certified Scrum master.

About the Authors

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“Man’s mind, once stretched by a new idea, never regains its original dimensions.”

Oliver Wendell Holmes, Jr.

To my family, who have always encircled me with love and encouragement—my parents (Samuel and Charlotte), my wife (Mary), my sons and their wives (Kevin and Dawn, Robert and Sally), and their children (Ryan, Carly, Connor and Lauren).


“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” Bernard Shaw, Man and Superman

To Ann, whose love and support have brought out the best in me. To our girls Mary, Rachel, and Tor-Tor for the joy and pride they give me. And to our grandkids, Mr. B, Livvy, Jasper Jones!, Baby Ya Ya, Juniper Berry, and Callie, whose future depends upon effective project management. Finally, to my muse, Neil—walk on!


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Our motivation in writing this text continues to be to provide a realistic, socio-technical view of project management. In the past, textbooks on project management focused almost exclusively on the tools and processes used to manage projects and not the human dimension. This baffled us, since people, not tools, complete projects! While we firmly believe that mastering tools and processes is essential to successful project man- agement, we also believe that the effectiveness of these tools and methods is shaped and determined by the prevailing culture of the organization and interpersonal dynamics of the people involved. Thus, we try to provide a holistic view that focuses on both the technical and social dimensions and how they interact to determine the fate of projects.


This text is written for a wide audience. It covers concepts and skills that are used by managers to propose, plan, secure resources, budget, and lead project teams to success- ful completions of their projects. The text should prove useful to students and prospec- tive project managers in helping them understand why organizations have developed a formal project management process to gain a competitive advantage. Readers will find the concepts and techniques discussed in enough detail to be immediately useful in new-project situations. Practicing project managers will find the text to be a valuable guide and reference when dealing with typical problems that arise in the course of a project. Managers will also find the text useful in understanding the role of projects in the missions of their organizations. Analysts will find the text useful in helping to explain the data needed for project implementation as well as the operations of inher- ited or purchased software.

Members of the Project Management Institute will find the text is well structured to meet the needs of those wishing to prepare for PMP (Project Management Profes- sional) or CAPM (Certified Associate in Project Management) certification exams. The text has in-depth coverage of the most critical topics found in PMI’s Project Management Body of Knowledge (PMBOK). People at all levels in the organization assigned to work on projects will find the text useful not only in providing them with a rationale for the use of project management processes but also because of the insights they will gain into how to enhance their contributions to project success.

Our emphasis is not only on how the management process works but also, and more importantly, on why it works. The concepts, principles, and techniques are univer- sally applicable. That is, the text does not specialize by industry type or project scope. Instead, the text is written for the individual who will be required to manage a variety of projects in a variety of organizational settings. In the case of some small projects, a few of the steps of the techniques can be omitted, but the conceptual framework applies to all organizations in which projects are important to survival. The approach can be used in pure project organizations such as construction, research organizations, and engineering consultancy firms. At the same time, this approach will benefit orga- nizations that carry out many small projects while the daily effort of delivering prod- ucts or services continues.


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x Preface

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In this and other editions we continue to try to resist the forces that engender scope creep and focus only on essential tools and concepts that are being used in the real world. We have been guided by feedback from reviewers, practitioners, teachers, and students. Some changes are minor and incremental, designed to clarify and reduce con- fusion. Other changes are significant. They represent new developments in the field or better ways of teaching project management principles. Below are major changes to the eighth edition.

∙ All material has been reviewed and revised based on the latest edition of Project Management Body of Knowledge (PMBOK), Sixth Edition, 2017.

∙ Discussion questions for most Snapshots from Practice are now at the end of each chapter.

∙ Many of the Snapshots from Practice have been expanded to more fully cover the examples.

∙ Agile Project Management is introduced in Chapter 1 and discussed when appropri- ate in subsequent chapters, with Chapter 15 providing a more complete coverage of the methodology.

∙ A new set of exercises have been developed for Chapter 5. ∙ New student exercises and cases have been added to chapters. ∙ The Snapshot from Practice boxes feature a number of new examples of project

management in action. ∙ The Instructor’s Manual contains a listing of current YouTube videos that corre-

spond to key concepts and Snapshots from Practice.

Overall the text addresses the major questions and challenges the authors have encountered over their 60 combined years of teaching project management and con- sulting with practicing project managers in domestic and foreign environments. These questions include the following: How should projects be prioritized? What factors con- tribute to project failure or success? How do project managers orchestrate the complex network of relationships involving vendors, subcontractors, project team members, senior management, functional managers, and customers that affect project success? What project management system can be set up to gain some measure of control? How are projects managed when the customers are not sure what they want? How do project managers work with people from foreign cultures?

Project managers must deal with all these concerns to be effective. All of these issues and problems represent linkages to a socio-technical project management per- spective. The chapter content of the text has been placed within an overall framework that integrates these topics in a holistic manner. Cases and snapshots are included from the experiences of practicing managers. The future for project managers is exciting. Careers will be built on successfully managing projects.

Student Learning Aids

Student resources include study outlines, online quizzes, PowerPoint slides, videos, Microsoft Project Video Tutorials, and web links. These can be found in Connect.

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We would like to thank Scott Bailey for building the end-of-chapter exercises for Con- nect; Pinyarat Sirisomboonsuk for revising the PowerPoint slides; Ronny Richardson for updating the Instructor’s Manual; Angelo Serra for updating the Test Bank; and Pinyarat Sirisomboonsuk for providing new Snapshot from Practice questions.

Next, it is important to note that the text includes contributions from numerous students, colleagues, friends, and managers gleaned from professional conversations. We want them to know we sincerely appreciate their counsel and suggestions. Almost every exercise, case, and example in the text is drawn from a real-world project. Spe- cial thanks to managers who graciously shared their current project as ideas for exer- cises, subjects for cases, and examples for the text. John A. Drexler, Jim Moran, John Sloan, Pat Taylor, and John Wold, whose work is printed, are gratefully acknowledged. Special gratitude is due Robert Breitbarth of Interact Management, who shared invalu- able insights on prioritizing projects. University students and managers deserve spe- cial accolades for identifying problems with earlier drafts of the text and exercises.

We are indebted to the reviewers of past editions who shared our commitment to elevating the instruction of project management. We thank you for your many thought- ful suggestions and for making our book better. Of course, we accept responsibility for the final version of the text.

Paul S. Allen, Rice University Victor Allen, Lawrence Technological University Kwasi Amoako-Gyampah, University of North Carolina–Greensboro Gregory Anderson, Weber State University Mark Angolia, East Carolina University Brian M. Ashford, North Carolina State University Dana Bachman, Colorado Christian University Robin Bagent, College of Southern Idaho Scott Bailey, Troy University Nabil Bedewi, Georgetown University Anandhi Bharadwaj, Emory University James Blair, Washington University–St. Louis Mary Jean Blink, Mount St. Joseph University S. Narayan Bodapati, Southern Illinois University at Edwardsville Warren J. Boe, University of Iowa Thomas Calderon, University of Akron Alan Cannon, University of Texas–Arlington Susan Cholette, San Francisco State Denis F. Cioffi, George Washington University Robert Cope, Southeastern Louisiana University

Kenneth DaRin, Clarkson University Ron Darnell, Amberton University Burton Dean, San Jose State University Joseph D. DeVoss, DeVry University David Duby, Liberty University Michael Ensby, Clarkson University Charles Franz, University of Missouri, Columbia Larry Frazier, City University of Seattle Raouf Ghattas, DeVry University Edward J. Glantz, Pennsylvania State University Michael Godfrey, University of Wisconsin–Oshkosh Jay Goldberg, Marquette University Robert Groff, Westwood College Raffael Guidone, New York City College of Technology Brian Gurney, Montana State University–Billings Owen P. Hall, Pepperdine University Chaodong Han, Towson University Bruce C. Hartman, University of Arizona Mark Huber, University of Georgia Richard Irving, York University Marshall Issen, Clarkson University

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xii Preface

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In addition, we would like to thank our colleagues in the College of Business at Oregon State University for their support and help in completing this project. In par- ticular, we recognize Lacey McNeely, Prem Mathew, and Jeewon Chou for their help- ful advice and suggestions. We also wish to thank the many students who helped us at different stages of this project, most notably Neil Young, Saajan Patel, Katherine Knox, Dat Nguyen, and David Dempsey. Mary Gray deserves special credit for editing and working under tight deadlines on earlier editions. Special thanks go to Pinyarat (“Minkster”) Sirisomboonsuk for her help in preparing the last five editions.

Finally, we want to extend our thanks to all the people at McGraw-Hill Education for their efforts and support. First, we would like to thank Noelle Bathurst and Sarah Wood, for providing editorial direction, guidance, and management of the book’s development for the eighth edition. And we would also like to thank Sandy Wille, Sandy Ludovissy, Egzon Shaqiri, Beth Cray, and Angela Norris for managing the final production, design, supplement, and media phases of the eighth edition.

Erik W. Larson

Clifford F. Gray

Robert T. Jones, DePaul University Susan Kendall, Arapahoe Community College George Kenyon, Lamar University Robert Key, University of Phoenix Elias Konwufine, Keiser University Dennis Krumwiede, Idaho State University Rafael Landaeta, Old Dominion University Eldon Larsen, Marshall University Eric T. Larson, Rutgers University Philip Lee, Lone Star College–University Park Charles Lesko, East Carolina University Richard L. Luebbe, Miami University of Ohio Linh Luong, City University of Seattle Steve Machon, DeVry University–Tinley Park Andrew Manikas, University of Louisville William Matthews, William Patterson University Lacey McNeely, Oregon State University Carol Miller, Community College of Denver William Moylan, Lawrence Technological College of Business Ravi Narayanaswamy, University of South Carolina–Aiken Muhammad Obeidat, Southern Polytechnic State University Edward Pascal, University of Ottawa James H. Patterson, Indiana University Steve Peng, California State University–East Bay

Nicholas C. Petruzzi, University of Illinois–Urbana/ Champaign Abirami Radhakrishnan, Morgan State University Emad Rahim, Bellevue University Tom Robbins, East Carolina University Art Rogers, City University Linda Rose, Westwood College Pauline Schilpzand, Oregon State University Teresa Shaft, University of Oklahoma Russell T. Shaver, Kennesaw State University William R. Sherrard, San Diego State University Erin Sims, DeVry University–Pomona Donald Smith, Texas A&M University Kenneth Solheim, DeVry University–Federal Way Christy Strbiak, U.S. Air Force Academy Peter Sutanto, Prairie View A&M University Jon Tomlinson, University of Northwestern Ohio Oya Tukel, Cleveland State University David A. Vaughan, City University Mahmoud Watad, William Paterson University Fen Wang, Central Washington University Cynthia Wessel, Lindenwood University Larry R. White, Eastern Illinois University Ronald W. Witzel, Keller Graduate School of Management G. Peter Zhang, Georgia State University

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Established Learning Objectives Learning objectives are listed both at the beginning of each chapter and are called out as marginal elements throughout the narrative in each chapter.

Guided Tour First Pages


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Organization Strategy and Project Selection


2.1 Why Project Managers Need to Understand Strategy

2.2 The Strategic Management Process: An Overview

2.3 The Need for a Project Priority System

2.4 Project Classification

2.5 Phase Gate Model

2.6 Selection Criteria

2.7 Applying a Selection Model

2.8 Managing the Portfolio System



After reading this chapter you should be able to:

2-1 Explain why it is important for project managers to understand their organization’s strategy.

2-2 Identify the significant role projects contribute to the strategic direction of the organization.

2-3 Understand the need for a project priority system.

2-4 Distinguish among three kinds of projects.

2-5 Describe how the phase gate model applies to project management.

2-6 Apply financial and nonfinancial criteria to assess the value of projects.

2-7 Understand how multi-criteria models can be used to select projects.

2-8 Apply an objective priority system to project selection.

2-9 Understand the need to manage the project portfolio.



First Pages

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30 Chapter 2 Organization Strategy and Project Selection

global competition, a