ASSIGNMENT

NAME- MAHEK GARG

SUBJECT- PROJECT MANAGEMENT
DEPARTMENT- BBA 6TH SEM
DATE OF SUBMISSION- 20TH JUNE 2021
SUBMITTED TO- Mrs. AMARJEET KAUR
ROLL NO.- 180805250026

QUES 1) Distinguish clearly between BMRED projects.

ANS) Type # 1. Balancing Projects:

There are situations when the production process in a plant passes through different stages

and/or through different machineries. The maximum production at a particular stage (or by

a particular machine) is the ultimate optimum production of the plant as a whole. This

particular stage may be called the ‘Key Factor’ with respect to the volume of production.

It may also be noted that installation of additional capacity and/or additional machineries at

that particular stage—within the entire chain of production process—would increase the

plant’s total volume of production.

A project for augmenting/strengthening the capacity of a particular area or areas within the

chain of entire production plant—so that the production capacity of all the production

centres within the plant is harmonised—is called “Balancing Project”.

These projects are undertaken to remove the underutilization of capacity of certain

production centres as the volume of ‘input’ to such centre is not to the level of its capacity.

Balancing Project with Backward Integration:

An organisation procures materials and components to be consumed in the process of

manufacturing a finished product.

The organisation finds that:

i. The supply of some components is irregular in nature and not to the level (volume- wise)

of its plant’s capacity. At the same time, it is uneconomic to increase the volume of

procurement from different sources. This situation is hampering the regular manufacture of

the ultimate finished product in its plant and/or

ii. The long lead time for supply of certain costly basic components requires some

components in the store at a very high inventory level. Which means large inventory
carrying cost, and/or

iii. The supplier of such components commands undue large profit and thus erodes the

profitability of the organisation itself.

Under this situation, the organisation looks for installation of capacity in its own plant for

the production of such components primarily for its own captive consumption and, thus,

brings in a harmony of the plant capacity utilisation. No doubt this increases the efficiency in

production and profitability of the organisation.

A project for installation of capacity to manufacture components etc., as mentioned above,

for its own captive consumption is called Balancing Project with Backward Integration.

The project shows the necessary investments for the installation of the capacity within its

chain of production process, to produce such components, including the required

machineries, space cost etc. as against the monetary benefits derived from manufacturing

the components in its own plant instead of procurements from external suppliers.

A project of this category is in the process of implementation by a company which is

importing “Seamless Tubes”, also called “Green Pipes”. These pipes are passed through
special processing in the company’s plant. The finished products, after the processing, are

sold by the company as “casing pipes”, achieving a sales turnover of Rs. 90 crores in 1995.

The import of seamless tubes needing longer lead time and, with the weakening of rupee

against hard currency was becoming costlier. Considering the high inventory cost and

gradual increase in the material cost, the company finalised a balancing project with

backward integration for installation of in-house pipe manufacturing.

The company also was manufacturing these pipes in its own plant but with a low volume

and the company’s ‘processing plant’ had a larger capacity and, hence, such imports were

necessary.

Balancing project with forward integration:

There may be a situation where a company would like to install additional capacity for

further processing of its currently produced finished products. The new capacity to install

should be in balance with the volume of the finished products as output of the present

plant.

In such case, the company with the aim of further value additions and growth (in sales

turnover) as well as in profitability is to prepare a balancing project with forward integra-

tion. Of course, the project can be implemented with a thorough market research, satisfying

the possibility of selling the proposed ultimate product.

A company producing acrylic fibre started facing problems with Government of India’s

liberalisation of imports—bringing in more and more of acrylic fibres with lesser import

duty. The profitability of the company was further pressurised as the international price of

the Acrylic Nitrite, the required raw material for the production of acrylic fibre, had gone up

from $ 700 to $ 1,500 per tonne.

In order to fight the situation the company identified a project to produce “yarn” from its

current finished product of acrylic fibre and, further, process the yarn in production of

blankets.

The report on market study-revealed that, by further processing of the acrylic fibre from the

present plant, the company will have no problem in selling the volume of ‘yarn’ produced as

such, part of which also will be consumed by the company in manufacture of blankets.

The company made a balancing project with forward integration. The project analysis

showed the financial viability of investing for such additional production facility.

In spite of the fact that the installation of the production facilities for ‘yarn’ and ‘blanket’ are

new projects, we still call it balancing, because the projected new facilities are to balance

with the volume of the output from the existing plant

The projects described above are often called ‘Integration Projects’ instead of Balancing

Projects.

Type # 2. Modernisation Project:

We find a situation when an organisation is carrying out its activities with its plant setup
long back. As a result, while the company was running efficiently and profitably in the past,

it started facing problems in its plant leading to erosion of its profitability.

This is mainly because:

i. The old age of the plant causing very high maintenance cost and increasing breakdown;

ii. The modernisation elsewhere in the plants for the same industry (and obsolescence of its

own plant) is creating difficulties in competition.

This scenario was faced by the steel manufacturing industry in USA when steel industry was

referred to as “sunset industry”. In recent years, new, cost effective steel manufacturing
units in the United States have again become globally competitive. This situation was
apprehended years back by Tata Iron and Steel Company in India (TISCO) and the company

undertook a massive modernisation project divided into 4 phases.

Phases I, II and III have already been completed and the company undertook the Phase IV

modernisation programme in 1996 which should double the capacity of hot rolled coils and

triple the output of bars and rods, thus raising the overall capacity of the plant to 3.2 million

tonnes of saleable steel per annum.

No doubt, with the lowest ore costs and own captive mines, together with the

modernisation, the company’s output should be extremely competitive.

The modernisation projects are aimed at the improvement of the plants and process (by

new machineries, new techniques and process) and are not meant for changes in the line of

activities / products.

The National Textile Corporation (NTC) has been suffering losses due to various reasons

including obsolescence of machineries. The government has approved, in July 1996, a

modernisation project of Rs. 2,006 crores to modernise 79 mills and restructuring of 36

unviable units.

Type # 3. Replacement Project:

An organisation carrying out its manufacturing activities in its plant may face some problems

with some machinery installed in the plant. The situation arises due to ageing, wear and tear

leading to break-down, and lower output. Mounting up of such problems even lead to a

situation where the maintenance costs become too high and uneconomic and, at the same

time, a reduction in the volume of output.

In such a situation, the organisation must consider replacing the particular

machine/machines causing such problem.

By ‘replacement’ in such a situation we mean that the assets currently in use is replaced by
a new one with almost the same capacity (as the old one being replaced) and does not
include new machine with much larger capacity as, otherwise, it would be a type of

‘expansion project’ and not a ‘replacement project’.

The management implements the replacement project, as such, with the expectation to

reduce the cost of maintenance of the old machine, get rid of the hindrances to smooth

flow of production and, thus, maintain the scheduled delivery to customers.

This type of project is generally cost based and does not have enough scope to estimate

additional revenues from the projected investment. The appraisal of the project is made

with the expected benefits from such investment mainly in the area of saving the

maintenance cost and achieving the sales target by timely deliveries.

The managerial decision to go ahead with the project will depend upon:

i. The cost of replacement; comparative costs when there are options to select a new

machine;

ii. The availability of resources for the new machines;

iii. The magnitude of the saving of maintenance costs and the losses on account of

breakdowns;

iv. The possibility of achieving the sales target;

v. Additional incidental facilities by replacement and

vi. The scrap value of the old machine which is being replaced.

Type # 4. Expansion Project:

An organisation carrying out certain volume of activities may like to increase its volume of

activities with the same products or services and grow. When such an organisation intends

to install extra capacities by adding, inter alia, new set of machineries etc. for larger
volumes, the project for such investments is called Expansion Project.
The expansion project is undertaken primarily for the growth of the organisation with

confidence that the organisation is likely to maintain its market share in the estimated

increase in the market size, or, that the organisation is driving for an increase in the market

share.

The expansion plan, as such, can be achieved by one or more of the following steps:

i. By establishing additional capacity in its plant and thus increase its volume of output;

ii. By acquisition of another organisation relating to the same industry and

iii. By modernisation of its plant, which may also include installation of capacity within the

plant to boost the volume of production.

Examples of such expansion:

(a) A leading industry for batteries with Rs. 360 crore turnovers is in the process of its

expansion projects:

(i) For batteries in the two-wheeler segment with an expansion project of Rs. 35 crore to

raise the capacity from 8, 00,000 batteries a year to 20, 00,000 at the end of 1996; and

(ii) In the automotive segment, with a project cost of Rs. 65 crore to expand the capacity

from 2.2 million to 3.8 million in 1997-98 and then to 5 million by 1998- 99.

(b) A leading company in Tea with sales turnover of Rs. 519 crore is in the process of

investment for its expansion projects by:

(i) Acquiring two plantation estates in Assam and one in Dooars; and

(ii) Acquiring a group of 20 estates in Sri Lanka in partnership with a Sri Lankan organisation.

(c) A large paper and boards manufacturing company, with a sales turnover of Rs. 156 crore

in 1995-96 has embarked upon a major Expansion/Modernisation Project to double its

production capacity from 60,000 tonnes per annum to 1,20,000 tonnes per annum.
The project is bifurcated into two parts—one relating to direct paper manufacturing activity

and the other relating to generation and distribution of steam and power (with up to Rs. 40

crore for investment) which will modernise the plant.

Sometime such modernisation may include a change in the input and process as well.

This may be seen from the following illustrations:

The company presently running ”tapioca” based plant with capacity of 50,000 tonnes p.a. to

manufacture Starch Powder, Liquid Glucose, Dextrose etc. embarked in 1995 upon an

expansion-cum-modernisation project with the programme.

(i) To increase the total-capacity from existing 50,000 T.P.A. to 1,00,000 T.P.A.;

(ii) Modernise the plant with the latest technology using Maize in addition to Tapioca.

This involved modification of the existing plant to use maize as an alternative input, setting

an additional capacity of 150 MT per day with a project cost of Rs. 50 crore in addition to

the technical know-how cost. Considering the overall analysis of the project and the

profitability against such investment, the company duly launched on the project.

Type # 5. Diversification Project:

The project initiated by an organisation with the idea of carrying out new activity, a new

business dealing with new products/services in addition to its existing activities, is known as

Diversification Project.

It must be ensured that the new products/services are fully marketable by the organisation.

Such diversification project can be illustrated by the following illustration:

A large company in the business of fertilizers and chemicals with a sales turnover of Rs. 850

crores in 1994-95 made plans to diversify into core sector projects of power and steel.
The new activity planned, as such, is so diversified from the company’s existing product that

the company had to obtain its shareholder’s approval to change the ‘object clause’ of its

Memorandum of Association, to enable it to carry on the business in the planned area of

diversification and, subsequently, also had the approval from the relevant statutory authori-

ties.

The diversification project was with an estimated project cost of Rs. 7,700 crore with the

projected production of 2.2. million tonnes of steel plant and a 1,000 MW Power Plant. The

feasibility study contained in the relevant project report helped the management to decide

in favour of such large investment.

It may be noted that the diversification project is almost a ‘new project’ of the organisation

except that, in case of a diversification project, the organisation derives some cost benefit

from the already existing infrastructure of the organisation dealing with certain current

products.

We repeat here that there may be overlapping of the projected activities, so that one

project may be complex in nature to include activities belonging to different types of

projects narrated earlier.

Again, an illustration of a project undertaken by a company in Alkali and chemical industry

revealed such complex activities as the project included:

i. Modernisation of existing mercury cell plant of 200 T.P.D. to membrane cell plant;

ii. Installation of two D.G. Sets of 18 MW each;

iii. Balancing of Membrane Cell Plant capacity from 60 T.P.D. to 100 T.P.D.

Type # 6. Rehabilitation/Reconstruction Project:

There may be a situation when a large organisation has for some years incurred loss and the

accumulated loss have exceeded the company’s Shareholders’ Fund, which leads to a
negative Net Tangible Asset (NTA). The company, in such case, is declared sick.
Detailed scrutiny of the company’s operation may show that the company has well-

equipped plant, a good product and there is also a good market for such a product but the

company is suffering losses due to continuous increased borrowings leading to abnormally

high finance cost. In such cases, the company also faces acute cash crunch.

Under this situation, the company may find a project by completely changing the existing

financial structure. The company or the project owner draws a project—Rehabilitation-cum-

Reconstruction project—which is discussed with the Board of Industrial and Financial

Reconstruction (BIFR).

When the BIFR agrees with the feasibility of such project it requests the financial institution
the Industrial Reconstruction Bank of India (IRBI), now named as Industrial Investment Bank

of India (IIBI) to provide the necessary fund for the financial restructure.

Normally, there are ‘special concessions’, whereby liability for interest are reduced, penal

charges are waived, old liability to Financial Institutions, are to a certain extent converted to

the company’s equity, thereby further reducing the interest burden.

Such restructuring is agreed upon when the BIFR and also the IRBI agree about the possibili-

ties of the company turning the corner by implementing the project. In such case, along

with infusion of fund by IRBI, they also insist on the project owner to bring in further

amount of fund as interest-free loan or equity.

QUES 2) Write the qualities and traits of an entrepreneur.

ANS) ENTREPRRENEUR- An entrepreneur is an individual who creates a new business,

bearing most of the risks and enjoying most of the rewards. The process of setting up a
business is known as entrepreneurship. The entrepreneur is commonly seen as an
innovator, a source of new ideas, goods, services, and business/or procedures.

Entrepreneurs play a key role in any economy, using the skills and initiative necessary to
anticipate needs and bringing good new ideas to market. Entrepreneurship that proves to
be successful in taking on the risks of creating a startup is rewarded with profits, fame, and
continued growth opportunities. Entrepreneurship that fails results in losses and less
prevalence in the markets for those involved.
Qualities and traits of an entrepreneur are mentioned below:

1) Creativity:

Creativity gives birth to something new. For without creativity, there is no innovation
possible. Entrepreneurs usually have the knack to pin down a lot of ideas and act on them.
Not necessarily every idea might be a hit. But the experience obtained is gold.

Creativity helps in coming up with new solutions for the problems at hand and allows one to
think of solutions that are out of the box. It also gives an entrepreneur the ability to devise
new products for similar markets to the ones he’s currently playing in.

2) Professionalism:
Professionalism is a quality which all good entrepreneurs must possess. An entrepreneurs
mannerisms and behavior with their employees and clientele goes a long way in developing
the culture of the organization.

Along with professionalism comes reliability and discipline. Self-discipline enables an

entrepreneur to achieve their targets, be organized and set an example for everyone.

Reliability results in trust and for most ventures, trust in the entrepreneur is what keeps the
people in the organization motivated and willing to put in their best. Professionalism is one
of the most important characteristics of an entrepreneur.

3) Risk-taking:

A risk-taking ability is essential for an entrepreneur. Without the will to explore the
unknown, one cannot discover something unique. And this uniqueness might make all the
difference. Risk-taking involves a lot of things. Using unorthodox methods is also a risk.
Investing in ideas, nobody else believes in but you is a risk too.

Entrepreneurs have a differentiated approach towards risks. Good entrepreneurs are always
ready to invest their time and money. But, they always have a backup for every risk they
take.

For exploring in the unknown, one must be bestowed with a trump card; a good
entrepreneur has one, always. Also, evaluation of the risk to be undertaken is also essential.
Without knowing the consequences, a good entrepreneur wouldn’t risk it all.

4) Passion:
Your work should be your passion. So when you work, you enjoy what you’re doing and stay
highly motivated. Passion acts as a driving force, with which, you are motivated to strive for
better.

It also allows you the ability to put in those extra hours in the office which can or may make
a difference. At the beginning of every entrepreneurial venture or any venture, there are
hurdles but your passion ensures that you are able to overcome these roadblocks and forge
ahead towards your goal.

5) Planning:

Perhaps, this is the most important of all steps required to run a show. Without planning,
everything would be a loose string as they say, “If you fail to plan, you plan to fail.”

Planning is strategizing the whole game ahead of time. It basically sums up all the resources
at hand and enables you to come up with a structure and a thought process for how to
reach your goal.

The next step involves how to make optimum use of these resources, to weave the cloth of
success. Facing a situation or a crisis with a plan is always better. It provides guidelines with
minimum to no damage incurred to a business. Planning is one of the most
important characteristics of an entrepreneur.

6) Knowledge:

Knowledge is the key to success. An entrepreneur should possess complete knowledge of

his niche or industry. For only with knowledge can a difficulty be solved or a crisis is tackled.

It enables him to keep track of the developments and the constantly changing requirements
of the market that he is in. May it is a new trend in the market or an advancement in
technology or even a new advertiser’s entry, an entrepreneur should keep himself abreast
of it. Knowledge is the guiding force when it comes leaving the competition behind. New
bits and pieces of information may just prove as useful as a newly devised strategy.

He should know what his strengths & weaknesses are so that they can be worked on and
can result in a healthier organization.

A good entrepreneur will always try to increase his knowledge, which is why he is always a
learner. The better an entrepreneur knows his playground, the easier he can play in it.
7) Social Skills:

A skillset is an arsenal with which an entrepreneur makes his business work. Social Skills are
also needed to be a good entrepreneur. Overall, these make up the qualities required for an
entrepreneur to function.

Social Skills involve the following:

• Relationship Building
• Hiring and Talent Sourcing
• Team Strategy Formulation

And many more.

8) Open-mindedness towards learning, people, and even failure:

An entrepreneur must be accepting. The true realization of which scenario or event can be a
useful opportunity is necessary. To recognize such openings, an open-minded attitude is
required.

An entrepreneur should be determined. He should face his losses with a positive attitude
and his wins, humbly. Any good businessman will know not to frown on a defeat. Try till you
succeed is the right mentality. Failure is a step or a way which didn’t work according to the
plan. A good entrepreneur takes the experience of this setback and works even hard with
the next goal in line.

This experience is inculcated through the process of accepted learning. Good entrepreneurs
know they can learn from every situation and person around them. Information obtained
can be used for the process of planning.

Learning with an open mind lets you look at your faults humbly. New information always
makes an entrepreneur question his current resolve. It also provides a new perspective
towards a particular aspect. Open-mindedness also enables you to know and learn from
your competition.

9) Empathy:

Perhaps the least discussed value in the world today is empathy or having high emotional
intelligence. Empathy is the understanding of what goes on in someone’s mind. This a skill
that is worth a mention. A good entrepreneur should know the strengths and weaknesses of
every employee who works under him.You must understand that it is the people who make
the business tick! You’ve got to deploy empathy towards your people.
Unhappy employees are not determined and as an entrepreneur, it is up to you to create a
working environment where people are happy to come. To look after their well-being, an
entrepreneur should try to understand the situation of employees. What can be a
motivational factor? How can I make my employees want to give their best? All this is
understood through empathy.

Keeping a workplace light and happy is essential. For without empathy, an entrepreneur
cannot reach the hearts of employees nor the success he desires. Empathy is one of the
most important characteristics of an entrepreneur.

10) And lastly, the customer is everything:

A good entrepreneur will always know this; a business is all about the customer. How you
grab a customer’s attention is the first step. This can be done through various mediums such
as marketing and advertising.

It is also important that you know the needs of your customers. The product or service
which is being created by your organization needs to cater to the needs of your consumers.
Personalising a business for consumers will also boost the sales.

The ability to sell yourself in front of a potential investment when it comes in the form of a
customer is also required. Being ready with the knowledge to please a customer, is a way to
have a successful business.

QUES 3) What is capital budgeting? What are its different techniques?

ANS) CAPITAL BUDGETING- Capital budgeting is a process of evaluating investments and
huge expenses in order to obtain the best returns on investment. An organization is often
faced with the challenges of selecting between two projects/investments or the
buy vs replace decision. Ideally, an organization would like to invest in all profitable projects
but due to the limitation on the availability of capital an organization has to choose between
different projects/investments. Capital budgeting as a concept affects our daily lives.

Capital Budgeting Techniques:

To assist the organization in selecting the best investment there are various techniques
available based on the comparison of cash inflows and outflows. These techniques are:

1. Payback period method

In this technique, the entity calculates the time period required to earn the initial
investment of the project or investment. The project or investment with the shortest
duration is opted for.
2. Net Present value
The net present value is calculated by taking the difference between the present value of
cash inflows and the present value of cash outflows over a period of time. The investment
with a positive NPV will be considered. In case there are multiple projects, the project with a
higher NPV is more likely to be selected.

3. Accounting Rate of Return

In this technique, the total net income of the investment is divided by the initial or average
investment to derive at the most profitable investment.

4. Internal Rate of Return (IRR)

For NPV computation a discount rate is used. IRR is the rate at which the NPV becomes
zero. The project with higher IRR is usually selected.

5. Profitability Index
Profitability Index is the ratio of the present value of future cash flows of the project to the
initial investment required for the project. Each technique comes with inherent advantages
and disadvantages. An organization needs to use the best-suited technique to assist it in
budgeting. It can also select different techniques and compare the results to derive at the
best profitable projects.

QUES 5) Explain the phases of project life cycle.

ANS) The project manager and project team have one shared goal: to carry out the work of
the project for the purpose of meeting the project’s objectives. Every project has a
beginning, a middle period during which activities move the project toward completion, and
an ending (either successful or unsuccessful). A standard project typically has the following
four major phases (each with its own agenda of tasks and issues): initiation, planning,
implementation, and closure. Taken together, these phases represent the path a project
takes from the beginning to its end and are generally referred to as the project “life cycle.”
Initiating
This process helps in the visualisation of what is to be accomplished. This is where the
project is formally approved by the sponsor/client, initial scope defined, and stakeholders
identified. This process is performed so that projects and programmes are not only
approved by a sponsoring body, but also so that projects are aligned with the strategic
objectives of the organisation. Where this is not performed, projects may be started and
carried out haphazardly, with no real stated goal or objective.
Planning
This is a crucial process in project management. The planning process is at the heart of the
project activity cycle, and gives guidance to stakeholders on where and how to undertake
the project. The planning stage is where the project plans are documented, the project
deliverables and requirements are defined, and the project schedule is created. It involves
creating a set of plans to help guide your team through the implementation and closure
phases of the project. The plans created during this phase will help the project team
manage time, cost, quality, changes, risk and related issues.
Executing
This process is also known as the implementation phase, in which the plan designed in the
previous phase of the project activity cycle is put into action. The intent of the execution
phase of the project activity cycle is to bring about the project’s expected results. Normally,
this is the longest phase of the project management life cycle, where most resources are
applied. During the project execution, the execution team utilises all the schedules,
procedures and templates that were prepared and anticipated during prior phases.
Unexpected events and situations will inevitably be encountered, and the project manager
and project team will have to deal with them as they arise.
Monitoring and control
This process oversees all the tasks and metrics needed to guarantee that the agreed and
approved project that is undertaken is within scope, on time and within budget so that the
project proceeds with minimum risk. This process involves comparing actual performance
with planned performance and taking corrective action to yield the desired outcome when
significant differences exist.
Closing
This is considered to be the last process of the project activity cycle. In this stage, the project
is formally closed and then a report is produced to the project sponsor/client on the overall
level of success of the completed project. The closing process involves handing over the
deliverables to the sponsor/client, handing over documentation to the owners, cancelling
supplier contracts, releasing staff and equipment, and informing stakeholders of the closure
of the project.

QUES 6) What is venture capital? What are the forms of venture capital?

ANS) Venture capital (VC) is a form of private equity and a type of financing that investors
provide to startup companies and small businesses that are believed to have long-term
growth potential. Venture capital generally comes from well-off investors, investment
banks, and any other financial institutions. However, it does not always take a monetary
form; it can also be provided in the form of technical or managerial expertise. Venture
capital is typically allocated to small companies with exceptional growth potential, or to
companies that have grown quickly and appear poised to continue to expand.

Types of venture capital:

Seed Capital. If you’re just starting out and have no product or organized company yet, you
would be seeking seed capital. Few VCs fund at this stage and the amount invested would
probably be small. Investment capital may be used to create a sample product, fund market
research, or cover administrative set-up costs.
Startup Capital. At this stage, your company would have a sample product available with at
least one principal working full-time. Funding at this stage is also rare. It tends to cover
recruitment of other key management, additional market research, and finalizing of the
product or service for introduction to the marketplace.

Early Stage Capital. Two to three years into your venture, you’ve gotten your company off
the ground, a management team is in place, and sales are increasing. At this stage, VC
funding could help you increase sales to the break-even point, improve your productivity, or
increase your company’s efficiency.

Expansion Capital. Your company is well established, and now you are looking to a VC to
help take your business to the next level of growth. Funding at this stage may help you
enter new markets or increase your marketing efforts. You should seek out VCs that
specialize in later stage investing.

Late Stage Capital. At this stage, your company has achieved impressive sales and revenue
and you have a second level of management in place. You may be looking for funds to
increase capacity, ramp up marketing, or increase working capital.

Bridge Financing: You may also be looking for a partner to help you find a merger or
acquisition opportunity, or attract public financing through a stock offering. There are VCs
that focus on this end of the business spectrum, specializing in initial public offerings (IPOs),
buyouts, or recapitalizations. If you are planning an IPO, a VC may also assist with
mezzanine or bridge financing – short-term financing that allows you to pay for the costs
associated with going public.

QUES 8) What is the role of communication in project environment?

ANS) Role and importance of communication in project environment is mentioned below:

Relaying information.
As a project manager, you need to ensure that the team members and the stakeholders are
informed of what you expect of them – their roles and responsibilities and other time
constraints that prevent them from accomplishing the task on time. As the project manager,
it is also your task to keep them informed of project details and progress.

Receiving information.
In order to relay information, it is a must that project managers regularly access the
information for a given project. At any time, there may be stakeholders who need
information about the project such as the objectives, plan, risks, customer needs, and time
constraints. Adherence to a system of regular and focused communication can prevent
misunderstandings and delays that can cause failure in any project.
Change in situation.
All projects are fluid and the project manager needs to prepare for the challenges that he
will face from the start until the project completion or end. To ensure effective
communication throughout the whole project and team, a communication plan needs to be
developed at start – planning stage. The communication plan will contain the type of
communication required during specific meetings, who needs to be communicated with, the
frequency of communication needed, and the needs to be communicated.

Discussing problems.

In terms of project problems, the fish bone diagram is essential in solving the causes for
every problem. The importance of communication in project management cannot be
debated upon. However, communication comes in various forms. Aside from a fish bone
diagram, one can also discuss other topics through infographics, linear/bar graphs, pie chart,
comics, etc. There have been various forms of communicating one’s message and the more
that we need to develop effective communication skills.

Bridging the language gap.

The language gap in project management lies in the distance that hinders understanding
business benefits. The challenges of using language to deliver information that is often
unclear and filled with project management jargon raises the importance of project
communication.

Communication may mean being able to talk, speak and be listened to. It can also be called
interaction. However, in project management, there is also a need for the team to
understand the long-term goal of the business so that they know how they have contributed
to it and learn how they can make an impact.

Project success depends on effective communication and this is the importance of

communication in any project. Improving communication maximizes success and minimizes
risk. In addition, if a project manager can develop effective communication with its
stakeholder, this may mean more projects for him and the team. communication skills.