3.4: PfMP style questions

Sample Questions

1. An organization is designing its portfolio governance structure and must decide which body approves new component funding versus which body monitors ongoing component health. What principle should guide this design?
   1. A single governance body should handle every decision to avoid confusion.
   2. Different decision bodies should be assigned distinct roles based on the type and level of decision required.
   3. Decision bodies are unnecessary if the portfolio manager is experienced.
   4. Funding and monitoring should always be handled by the same executive.
2. A portfolio steering committee and a component-level change control board both claim authority to approve a $2 million scope change. What does this indicate?
   1. Both bodies should approve the change independently for extra assurance.
   2. Decision rights have not been clearly defined, creating overlapping and ambiguous authority.
   3. The larger governance body should always defer to the smaller one.
   4. The change should be escalated outside the organization for resolution.
3. A portfolio manager reports to two different executives who give conflicting direction about which components should be prioritized this quarter. What governance failure does this scenario illustrate?
   1. Unclear authority models and decision rights, leaving the portfolio manager without a single source of prioritization guidance.
   2. The portfolio manager is not qualified for the role.
   3. Both executives should be removed from governance entirely.
   4. This is a normal and unavoidable feature of portfolio management.
4. A newly formed portfolio management office wants to avoid building every process from scratch. What should it do first?
   1. Build entirely new governance processes independent of existing organizational practices.
   2. Review and tailor existing organizational process assets to fit the portfolio's specific needs.
   3. Copy another company's governance framework without modification.
   4. Avoid documenting any processes so the portfolio can remain flexible.
5. A portfolio charter is being drafted for a new enterprise-wide initiative. What is the primary purpose of this document?
   1. To provide a detailed schedule for every component in the portfolio.
   2. To formally authorize the portfolio and establish its purpose, scope, and governance structure.
   3. To list the specific tasks each team member will perform.
   4. To replace the need for a portfolio management plan.
6. A portfolio management plan includes defined stage gates where components must meet specific criteria before advancing. A component fails to meet the criteria at a gate, but the sponsor wants to proceed anyway. What should happen?
   1. Allow the component to proceed automatically, since the sponsor requested it.
   2. Apply the stage gate criteria and governance process, requiring an explicit governance decision to override or address the gap before proceeding.
   3. Remove stage gates from the plan since they created a conflict.
   4. Escalate the issue publicly to embarrass the sponsor.
7. A manufacturing company designing a governance framework for its factory automation portfolio must decide who has authority to approve reallocating funds between two components. What organizational asset would most directly help clarify this?
   1. A documented decision rights or authority matrix.
   2. A marketing communications plan.
   3. A customer satisfaction survey.
   4. An employee training calendar.
8. Two departments both believe they have final authority over the same portfolio component, leading to conflicting direction for the project team ("the two masters" problem). What is the most effective long-term solution?
   1. Let the project team decide which department to listen to on a case-by-case basis.
   2. Formally clarify and document decision rights so only one governance path has final authority over the component.
   3. Assign the component to whichever department escalates most loudly.
   4. Dissolve the component to avoid the conflict.
9. A portfolio management plan needs to be tailored for a highly regulated industry versus a fast-moving startup environment. What does this illustrate about governance frameworks?
   1. Governance frameworks should be identical across all organizations for consistency.
   2. Governance approaches should be tailored to organizational context, culture, and risk environment.
   3. Regulated industries do not need portfolio governance.
   4. Tailoring governance is only relevant for very large organizations.
10. A portfolio charter was approved a year ago, but the organization's structure and strategic priorities have since changed significantly. What should the portfolio manager do?
    1. Ignore the charter since it was only needed for initial approval.
    2. Review and, if necessary, update the charter and governance structure to reflect the current strategic context.
    3. Create an entirely new portfolio without referencing the original charter.
    4. Wait until the next multi-year planning cycle to make any changes.

Answer Key

1. B. Effective governance design assigns distinct decision bodies clear roles based on the type and level of decision required.
2. B. Overlapping approval authority signals that decision rights have not been clearly defined across governance bodies.
3. A. Conflicting direction from two executives points to unclear authority models rather than a normal or acceptable arrangement.
4. B. Tailoring existing organizational process assets is more efficient than building every governance process from scratch.
5. B. A portfolio charter formally authorizes the portfolio and establishes its purpose, scope, and governance structure.
6. B. Stage gate criteria should be applied consistently, with any override requiring an explicit governance decision rather than sponsor preference alone.
7. A. A documented decision rights or authority matrix directly clarifies who can approve fund reallocation between components.
8. B. The two-masters problem is resolved by formally documenting decision rights so only one governance path holds final authority.
9. B. Tailoring governance to context, culture, and risk environment is a core principle rather than a one-size-fits-all approach.
10. B. Charters and governance structures should be reviewed and updated as organizational strategy and structure evolve.