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chaPter 1
introduction
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) is a recognized standard for the
project management profession. A standard is a formal document that describes established norms, methods,
processes, and practices. As with other professions such as law, medicine, and accounting, the knowledge
contained in this standard evolved from the recognized good practices of project management practitioners
who contributed to the development of this standard.

The first two chapters of the PMBOK® Guide provide an introduction to key concepts in the project management
field. Chapter 3 is the standard for project management. As such, it summarizes the processes, inputs, and outputs
that are considered good practices on most projects most of the time. Chapters 4 through 12 are the guide to the
project management body of knowledge. They expand on the information in the standard by describing the inputs
and outputs as well as tools and techniques used in managing projects.

The PMBOK® Guide provides guidelines for managing individual projects. It defines project management
and related concepts and describes the project management life cycle and the related processes.

This chapter defines several key terms and identifies external environmental and internal organizational factors
that surround or influence a project’s success. An overview of the PMBOK® Guide is in the following sections:

1.1 Purpose of the PMBOK® Guide

1.2 What is a Project?
1.3 What is Project Management?
1.4 Relationships Among Project Management, Program Management,
and Portfolio Management
1.5 Project Management and Operations Management
1.6 Role of a Project Manager
1.7 Project Management Body of Knowledge
1.8 Enterprise Environmental Factors

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 1 CHAPTER 1 − INTRODUCTION

1.1 Purpose of the PMBOK® Guide

The increasing acceptance of project management indicates that the application of appropriate knowledge,
processes, skills, tools, and techniques can have a significant impact on project success. The PMBOK® Guide
identifies that subset of the project management body of knowledge generally recognized as good practice.
“Generally recognized” means the knowledge and practices described are applicable to most projects most
of the time, and there is consensus about their value and usefulness. “Good practice” means there is general
agreement that the application of these skills, tools, and techniques can enhance the chances of success over
a wide range of projects. Good practice does not mean the knowledge described should always be applied
uniformly to all projects; the organization and/or project management team is responsible for determining what
is appropriate for any given project.

The PMBOK® Guide also provides and promotes a common vocabulary within the project management
profession for discussing, writing, and applying project management concepts. Such a standard vocabulary is
an essential element of a professional discipline.

The Project Management Institute (PMI) views this standard as a foundational project management reference
for its professional development programs and certifications.

As a foundational reference, this standard is neither complete nor all-inclusive. This standard is a guide
rather than a methodology. One can use different methodologies and tools to implement the framework.
Appendix D discusses application area extensions, and Appendix E lists sources of further information on
project management.

In addition to the standards that establish guidelines for project management processes, tools, and
techniques, the Project Management Institute Code of Ethics and Professional Conduct guides practitioners
of the profession of project management and describes the expectations practitioners have of themselves
and others. The Project Management Institute Code of Ethics and Professional Conduct is specific about the
basic obligation of responsibility, respect, fairness, and honesty. It requires that practitioners demonstrate a
commitment to ethical and professional conduct. It carries the obligation to comply with laws, regulations, and
organizational and professional policies. Since practitioners come from diverse backgrounds and cultures, the
Code of Ethics and Professional Conduct applies globally. When dealing with any stakeholder, practitioners
should be committed to honest and fair practices and respectful dealings. The Project Management Institute
Code of Ethics and Professional Conduct is posted on the PMI website (http://www.pmi.org). Acceptance of the
code is a requirement for the PMP® certification by PMI.

This copy is a PMI member benefit, not for distribution, sale or reproduction.
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
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 CHAPTER 1 − INTRODUCTION 1

1.2 What is a Project?

A project is a temporary endeavor undertaken to create a unique product, service, or result. The temporary
nature of projects indicates a definite beginning and end. The end is reached when the project’s objectives
have been achieved or when the project is terminated because its objectives will not or cannot be met, or when
the need for the project no longer exists. Temporary does not necessarily mean short in duration. Temporary
does not generally apply to the product, service, or result created by the project; most projects are undertaken
to create a lasting outcome. For example, a project to build a national monument will create a result expected
to last centuries. Projects can also have social, economic, and environmental impacts that far outlast the
projects themselves.

Every project creates a unique product, service, or result. Although repetitive elements may be present in
some project deliverables, this repetition does not change the fundamental uniqueness of the project work. For
example, office buildings are constructed with the same or similar materials or by the same team, but each
location is unique—with a different design, different circumstances, different contractors, and so on.

An ongoing work effort is generally a repetitive process because it follows an organization’s existing
procedures. In contrast, because of the unique nature of projects, there may be uncertainties about the products,
services, or results that the project creates. Project tasks can be new to a project team, which necessitates
more dedicated planning than other routine work. In addition, projects are undertaken at all organizational
levels. A project can involve a single person, a single organizational unit, or multiple organizational units.

A project can create:

• A product that can be either a component of another item or an end item in itself,
• A capability to perform a service (e.g., a business function that supports production or distribution), or
• A result such as an outcome or document (e.g., a research project that develops knowledge that can
be used to determine whether a trend is present or a new process will benefit society).

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 1 CHAPTER 1 − INTRODUCTION

Examples of projects include, but are not limited to:

• Developing a new product or service,

• Effecting a change in the structure, staffing, or style of an organization,
• Developing or acquiring a new or modified information system,
• Constructing a building or infrastructure, or
• Implementing a new business process or procedure.

1.3 What is Project Management?

Project management is the application of knowledge, skills, tools, and techniques to project activities to
meet the project requirements. Project management is accomplished through the appropriate application and
integration of the 42 logically grouped project management processes comprising the 5 Process Groups. These
5 Process Groups are:

• Initiating,
• Planning,
• Executing,
• Monitoring and Controlling, and
• Closing.

Managing a project typically includes:

• Identifying requirements,
• Addressing the various needs, concerns, and expectations of the stakeholders as the project is
planned and carried out,
• Balancing the competing project constraints including, but not limited to:
○ Scope,
○ Quality,
○ Schedule,
○ Budget,
○ Resources, and
○ Risk.

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A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
©2008 Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073-3299 USA

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 CHAPTER 1 − INTRODUCTION 1

The specific project will influence the constraints on which the project manager needs to focus.

The relationship among these factors is such that if any one factor changes, at least one other factor is
likely to be affected. For example, if the schedule is shortened, often the budget needs to be increased to add
additional resources to complete the same amount of work in less time. If a budget increase is not possible,
the scope or quality may be reduced to deliver a product in less time for the same budget. Project stakeholders
may have differing ideas as to which factors are the most important, creating an even greater challenge.
Changing the project requirements may create additional risks. The project team must be able to assess the
situation and balance the demands in order to deliver a successful project.

Because of the potential for change, the project management plan is iterative and goes through progressive
elaboration throughout the project’s life cycle. Progressive elaboration involves continuously improving and
detailing a plan as more-detailed and specific information and more accurate estimates become available.
Progressive elaboration allows a project management team to manage to a greater level of detail as the
project evolves.

1.4 Relationships Among Project Management, Program Management,

and Portfolio Management
In mature project management organizations, project management exists in a broader context governed
by program management and portfolio management. As Figure 1-1 illustrates, organizational strategies and
priorities are linked and have relationships between portfolios and programs, and between programs and
individual projects. Organizational planning impacts the projects by means of project prioritization based on
risk, funding, and the organization’s strategic plan. Organizational planning can direct the funding and support
for the component projects on the basis of risk categories, specific lines of business, or general types of
projects, such as infrastructure and internal process improvement.

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A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
©2008 Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073-3299 USA

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 1 CHAPTER 1 − INTRODUCTION

Highest
Level
• Strategies & priorities Portfolio • Strategies & priorities
• Progressive elaboration • Progressive elaboration
• Governance • Governance
• Disposition on requested changes • Disposition on requested changes
• Impacts from changes in other • Impacts from changes in other
portfolios, programs or projects portfolios, programs or projects
Lower Level
• Performance reports Projects
Portfolios • Performance reports
• Change requests with • Change requests with
impact on other portfolios, impact on other portfolios,
programs or projects programs or projects

• Strategies & priorities

• Progressive elaboration
Higher Level • Governance
Programs • Disposition on requested changes
• Impacts from changes in other
portfolios, programs or projects Higher Level
Programs
• Performance reports
• Change requests with
impact on other portfolios,
Lower Level programs or projects
Programs
Projects
Lower Level
Programs
Projects

Projects

Projects

Figure 1-1. Portfolio, Program, and Project Management Interactions

Projects, programs, and portfolios have different approaches. Table 1-1 shows the comparison of project,
program, and portfolio views across several domains including change, leadership, management, and others.

1.4.1 Portfolio Management

A portfolio refers to a collection of projects or programs and other work that are grouped together to
facilitate effective management of that work to meet strategic business objectives. The projects or programs
of the portfolio may not necessarily be interdependent or directly related. For example, an infrastructure firm
that has the strategic objective of “maximizing the return on its investments” may put together a portfolio that
includes a mix of projects in oil and gas, power, water, roads, rail, and airports. From this mix, the firm may
choose to manage related projects as one program. All of the power projects may be grouped together as a
power program. Similarly, all of the water projects may be grouped together as a water program.

This copy is a PMI member benefit, not for distribution, sale or reproduction.
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
©2008 Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073-3299 USA

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 CHAPTER 1 − INTRODUCTION 1

Portfolio management refers to the centralized management of one or more portfolios, which includes
identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work, to
achieve specific strategic business objectives. Portfolio management focuses on ensuring that projects and
programs are reviewed to prioritize resource allocation, and that the management of the portfolio is consistent
with and aligned to organizational strategies.

Table 1-1. Comparative Overview of Project, Program, and Portfolio Management

PROJECTS PROGRAMS PORTFOLIOS

Scope Projects have defined Programs have a larger scope Portfolios have a business
objectives. Scope is progres- and provide more significant scope that changes with the
sively elaborated throughout benefits. strategic goals of the organiza-
the project life cycle. tion.

Change Project managers expect The program manager must Portfolio managers continually
change and implement expect change from both inside monitor changes in the broad
processes to keep change and outside the program and be environment.
managed and controlled. prepared to manage it.

Planning Project managers progressively Program managers develop the Portfolio managers create and
elaborate high-level information overall program plan and create maintain necessary processes
into detailed plans throughout high-level plans to guide and communication relative to
the project life cycle. detailed planning at the the aggregate portfolio.
component level.

Management Project managers manage the Program managers manage the Portfolio managers may
project team to meet the program staff and the project manage or coordinate portfolio
project objectives. managers; they provide vision management staff.
and overall leadership.

Success Success is measured by Success is measured by the Success is measured in terms

product and project quality, degree to which the program of aggregate performance of
timeliness, budget compliance, satisfies the needs and benefits portfolio components.
and degree of customer for which it was undertaken.
satisfaction.

Monitoring Project managers monitor and Program managers monitor the Portfolio managers monitor
control the work of producing progress of program compo- aggregate performance and
the products, services or results nents to ensure the overall value indicators.
that the project was undertaken goals, schedules, budget, and
to produce. benefits of the program will be
met.

1.4.2 Program Management

A program is defined as a group of related projects managed in a coordinated way to obtain benefits and
control not available from managing them individually. Programs may include elements of related work outside
the scope of the discrete projects in the program. A project may or may not be part of a program but a program
will always have projects.

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A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
©2008 Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073-3299 USA

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 1 CHAPTER 1 − INTRODUCTION

Program management is defined as the centralized coordinated management of a program to achieve

the program’s strategic objectives and benefits. Projects within a program are related through the common
outcome or collective capability. If the relationship between projects is only that of a shared client, seller,
technology, or resource, the effort should be managed as a portfolio of projects rather than as a program.

Program management focuses on the project interdependencies and helps to determine the optimal
approach for managing them. Actions related to these interdependencies may include:

• Resolving resource constraints and/or conflicts that affect multiple projects within the program;
• Aligning organizational/strategic direction that affects project and program goals and objectives; and
• Resolving issues and change management within a shared governance structure.

An example of a program would be a new communications satellite system with projects for design
of the satellite and of the ground stations, construction of each, integration of the system, and launch of
the satellite.

1.4.3 Projects and Strategic Planning

Projects are often utilized as a means of achieving an organization’s strategic plan. Projects are typically
authorized as a result of one or more of the following strategic considerations:

• Market demand (e.g., a car company authorizing a project to build more fuel-efficient cars in response
to gasoline shortages),
• Strategic opportunity/business need (e.g., a training company authorizing a project to create a new
course to increase its revenues),
• Customer request (e.g., an electric utility authorizing a project to build a new substation to serve a
new industrial park),
• Technological advance (e.g., an electronics firm authorizing a new project to develop a faster, cheaper,
and smaller laptop after advances in computer memory and electronics technology), and
• Legal requirements (e.g., a chemical manufacturer authorizes a project to establish guidelines for the
handling of a new toxic material).

Projects, within programs or portfolios, are a means of achieving organizational goals and objectives, often
in the context of a strategic plan. Although a group of projects within a program can have discrete benefits,
they can also contribute to the benefits of the program, to the objectives of the portfolio, and to the strategic
plan of the organization.

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A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
©2008 Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073-3299 USA

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 CHAPTER 1 − INTRODUCTION 1

Organizations manage portfolios based on their strategic plan, which may dictate a hierarchy to the portfolio,
program, or projects involved. One goal of portfolio management is to maximize the value of the portfolio
by the careful examination of its components—the constituent programs, projects, and other related work.
Those components contributing the least to the portfolio’s strategic objectives may be excluded. In this way,
an organization’s strategic plan becomes the primary factor guiding investments in projects. At the same time,
projects provide feedback to programs and portfolios by means of status reports and change requests that may
impact other projects, programs, or portfolios. The needs of the projects, including the resource needs, are rolled
up and communicated back to the portfolio level, which in turn sets the direction for organizational planning.

1.4.4 Project Management Office

A project management office (PMO) is an organizational body or entity assigned various responsibilities
related to the centralized and coordinated management of those projects under its domain. The responsibilities
of a PMO can range from providing project management support functions to actually being responsible for
the direct management of a project.

The projects supported or administered by the PMO may not be related, other than by being managed
together. The specific form, function, and structure of a PMO is dependent upon the needs of the organization
that it supports.

A PMO may be delegated the authority to act as an integral stakeholder and a key decision maker during the
beginning of each project, to make recommendations, or to terminate projects or take other actions as required
to keep business objectives consistent. In addition, the PMO may be involved in the selection, management,
and deployment of shared or dedicated project resources.

A primary function of a PMO is to support project managers in a variety of ways which may include, but are
not limited to:

• Managing shared resources across all projects administered by the PMO;

• Identifying and developing project management methodology, best practices, and standards;
• Coaching, mentoring, training, and oversight;
• Monitoring compliance with project management standards, policies, procedures, and templates via
project audits;
• Developing and managing project policies, procedures, templates, and other shared documentation
(organizational process assets); and
• Coordinating communication across projects.

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A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
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 1 CHAPTER 1 − INTRODUCTION

Project managers and PMOs pursue different objectives and, as such, are driven by different requirements.
All of these efforts, however, are aligned with the strategic needs of the organization. Differences between the
role of project managers and a PMO may include the following:

• The project manager focuses on the specified project objectives, while the PMO manages major
program scope changes which may be seen as potential opportunities to better achieve business
objectives.
• The project manager controls the assigned project resources to best meet project objectives while
the PMO optimizes the use of shared organizational resources across all projects.
• The project manager manages the constraints (scope, schedule, cost, and quality, etc.) of the
individual projects while the PMO manages the methodologies, standards, overall risk/opportunity,
and interdependencies among projects at the enterprise level.

1.5 Project Management and Operations Management

Operations are an organizational function performing the ongoing execution of activities that produce
the same product or provide a repetitive service. Examples include: production operations, manufacturing
operations, and accounting operations. Though temporary in nature, projects can help achieve the organizational
goals when they are aligned with the organization’s strategy. Organizations sometimes change their operations,
products, or systems by creating strategic business initiatives. Projects require project management while
operations require business process management or operations management. Projects can intersect with
operations at various points during the product life cycle, such as:

• At each closeout phase;

• When developing a new product, upgrading a product, or expanding outputs;
• Improvement of operations or the product development process; or
• Until the divestment of the operations at the end of the product life cycle.

At each point, deliverables and knowledge are transferred between the project and operations for
implementation of the delivered work. This occurs through a transfer of project resources to operations toward
the end of the project, or through a transfer of operational resources to the project at the start.

Operations are permanent endeavors that produce repetitive outputs, with resources assigned to do basically
the same set of tasks according to the standards institutionalized in a product life cycle. Unlike the ongoing
nature of operations, projects are temporary endeavors.

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 CHAPTER 1 − INTRODUCTION 1

1.6 Role of a Project Manager

The project manager is the person assigned by the performing organization to achieve the project objectives.
The role of a project manager is distinct from a functional manager or operations manager. Typically the
functional manager is focused on providing management oversight for an administrative area, and operations
managers are responsible for a facet of the core business.

Depending on the organizational structure, a project manager may report to a functional manager. In other
cases, a project manager may be one of several project managers who report to a portfolio or program manager
that is ultimately responsible for enterprise-wide projects. In this type of structure, the project manager works
closely with the portfolio or program manager to achieve the project objectives and to ensure the project plan
aligns with the overarching program plan.

Many of the tools and techniques for managing projects are specific to project management. However,
understanding and applying the knowledge, tools, and techniques that are recognized as good practice is not
sufficient for effective project management. In addition to any area-specific skills and general management
proficiencies required for the project, effective project management requires that the project manager possess
the following characteristics:

.1 Knowledge. This refers to what the project manager knows about project management.
.2 Performance. This refers to what the project manager is able to do or accomplish while applying
their project management knowledge.
.3 Personal. This refers to how the project manager behaves when performing the project or related
activity. Personal effectiveness encompasses attitudes, core personality characteristics and
leadership—the ability to guide the project team while achieving project objectives and balancing
the project constraints.

1.7 Project Management Body of Knowledge

The PMBOK® Guide is the standard for managing most projects most of the time across many types of
industries. This standard describes the project management processes, tools, and techniques used to manage
a project toward a successful outcome.

This standard is unique to the project management field and has interrelationships to other project
management disciplines such as program management and portfolio management.

This copy is a PMI member benefit, not for distribution, sale or reproduction.
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
©2008 Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073-3299 USA

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 1 CHAPTER 1 − INTRODUCTION

Project management standards do not address all details of every topic. This standard is limited to single
projects and the project management processes that are generally recognized as good practice. Other standards
may be consulted for additional information on the broader context in which projects are accomplished.
Management of programs is addressed in The Standard for Program Management, and management of portfolios
is addressed in The Standard for Portfolio Management. Examination of an enterprise’s project management
process capabilities is addressed in Organizational Project Management Maturity Model (OPM3®).

1.8 Enterprise Environmental Factors

Enterprise environmental factors refer to both internal and external environmental factors that surround or
influence a project’s success. These factors may come from any or all of the enterprises involved in the project.
Enterprise environmental factors may enhance or constrain project management options and may have a
positive or negative influence on the outcome. They are considered as inputs to most planning processes.

Enterprise environmental factors include, but are not limited to:

• Organizational culture, structure, and processes;

• Government or industry standards (e.g., regulatory agency regulations, codes of conduct, product
standards, quality standards, and workmanship standards);
• Infrastructure (e.g., existing facilities and capital equipment);
• Existing human resources (e.g., skills, disciplines, and knowledge, such as design, development, law,
contracting, and purchasing);
• Personnel administration (e.g., staffing and retention guidelines, employee performance reviews and
training records, overtime policy, and time tracking);
• Company work authorization systems;
• Marketplace conditions;
• Stakeholder risk tolerances;
• Political climate;
• Organization’s established communications channels;
• Commercial databases (e.g., standardized cost estimating data, industry risk study information, and
risk databases); and
• Project management information systems (e.g., an automated tool, such as a scheduling software
tool, a configuration management system, an information collection and distribution system, or web
interfaces to other online automated systems).

This copy is a PMI member benefit, not for distribution, sale or reproduction.
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
©2008 Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073-3299 USA

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