International Project Management

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Introduction Project managers must take into account the unique financial aspects of their projects. Failure to understand the financial ramifications of a project, or of any method of executing a project, can lead to significant adverse outcomes not only for the project as well. Project managers must always bear in mind their role as stewards of the company and agents of the shareholders. In this agency role, project managers must ensure that the project is structured in such a way that it adds value to the company by delivering a positive return to the shareholders (Mahaney & Lederer, 2003). This paper will outline some of the most important financial considerations that project managers should be aware of, and apply this knowledge real work project management practice. Budgeting The budgeting process is one of the most important for any project. The budget is critical to the project's internal controls and therefore to the practical application of agency theory (Carcello et al, 2005). In addition to serving as a key control mechanism, budgets also help the company to manage the project's cash flows more effectively, and to use that knowledge of cash flows and earned value management to make better decisions with respect to what projects are accepted and what are rejected. There are a number of different approaches to the budgeting process. For projects that are similar to existing projects within the company, internal benchmarking is a sound budgeting technique.

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