CASE-1- :-

When Texas Instruments, Inc. wanted an imaging system designed for their Accounts Receivable department that would interface with their mainframe accounts receivable system, they turned to ViewStar Corporation to design it. Several leading edge technologies were desired so ViewStar compiled the work breakdown structure from which to plan the budget and track actual spending. However, the planned budget exceeded the contract funds available. In order to match the overall budget to the contract funds, the budget for selected early-on tasks was arbitrarily reduced because top management wanted to win this contract.

As the contract progressed, the under budgeted items showed up quickly in the earned value chart, as illustrated below. Although funds were being expended at the planned rate, progress wasnt keeping up with the plan. However, with special attention to meeting only key requirements for later project tasks, earned value began to climb back toward plan. Near the very end of the project, the client asked for additional technology, which Viewstar easily provided in trade for Texas Instruments completing some of the high- earned-value production tasks themselves, thereby bringing the project in only one percent over budget.

Question 1: Isnt arbitrarily reducing the available budget for tasks dangerous? What was ViewStars probable strategic thinking here?

Question 2: What would be the motivation of a project team that immediately falls behind schedule?

Question 3: How did the trade late in the project between ViewStar and Texas Instruments probably

operate?