Analyze the potential impacts of risk, commercial issues, and internal operational procedures on each of the eight organizations based on the information provided in the sampler, discuss risk, commercial issues, and other operational factors that either were or should be considered by each of the organizations.

• A brief summary of the selection and screening methods for each of the eight companies mentioned in the project profile.
• At least two specific examples of impacts for each company that either should be or actually were considered in developing their screening and selection process.
• Reference-based conclusions relative to how every decision model needs to include both objective (factual) and subjective (open to interpretation) contextual considerations.

Below are the project profiles that are used as the reference for the questions above.

• The art and science of selecting projects is one that organizations take extremely seriously. Firms in a variety of industries have developed highly sophisticated methods for project screening and selection to ensure that the projects they choose to fund offer the best promise of success. As part of this screening process, organizations often evolve their own particular methods based on technical concerns, available data, and corporate culture and preferences. The following list gives you a sense of the lengths to which some organizations go with project selection:
• Hoechst AG, a pharmaceutical firm, uses a scoring portfolio model with 19 questions in five major categories when rating project opportunities. The five categories include probability of technical success, probability of commercial success, reward to the company, business strategy fit, and strategic leverage (that is, the ability of the project to employ and elevate company resources and skills). Within each of these factors are several specific questions, which are scored on a 1 to 10 scale by management.
• At German industrial giant Siemens, every business unit in each of the 190 countries in which the company operates uses a system entitled "PM@Siemens" for categorizing projects that employs a two-digit code. Each project is awarded a letter from A to F, indicating its significance to the company, and a number from 0 to 3, indicating its overall risk level. Larger or riskier projects (e.g., an "A0") require approval from Siemens' main board in Germany, but many of the lesser projects (e.g., an "F3") can be approved by local business units. Too many A0s in the portfolio can indicate mounting risks while too many F3 projects may signal a lack of economic value overall.
• The Royal Bank of Canada has developed a scoring model to rate its project opportunities. The criteria for the portfolio scoring include project importance (strategic importance, magnitude of impact, and economic benefits) and ease of doing (cost of development, project complexity, and resource availability). Expected annual expenditure and total project spending are then added to this rank-ordered list to prioritize the project options. Decision rules are used, e.g., projects of low importance that are difficult to execute get a "no-go" rating.
• The Weyerhaeuser corporate research and development (R&D) program has put processes in place to align and prioritize R&D projects. The program has three types of activities: technology assessment (changes in external environmentand impact to the company), research (building knowledge bases and competencies in core technical areas), and development (development of specific commercial opportunities). Four key inputs are considered when establishing priorities: significant changes in the external environment, long-term future needs of lead customers, business strategies, priorities, and technology needs, and corporate strategic direction.
• Mobil Chemical uses six categories of projects to determine the right balance of projects that will enter its portfolio: (1) cost reductions and process improvements, (2) product improvements, product modifications, and customer satisfaction, (3) new products, (4) new platform projects and fundamental/breakthrough research projects, (5) plant support, and (6) technical support for customers. Senior management reviews all project proposals and determines the division of capital funding across these six project types. One of the key decision variables involves a comparison of "what is" with "what should be."
• The Texas Department of Transportation identifies several criteria in its project selection process. Infrastructure and building projects are selected by the Texas Transportation Commission based on the following criteria: safety, maintenance and preservation of the existing system, congestion relief, access and mobility, economic vitality, efficient system management and operations, and any additional transportation goals identified in the statewide long-range transportation plans. These projects must adhere to all department design standards as well as applicable state and federal regulations.
• At 3M's Traffic Safety Systems Division during project screening and selection, management uses a project viability chart to score project alternatives. As part of the profile and scoring exercise, personnel must address how the project accomplishes strategic project objectives and critical business issues affecting a specific group within the target market. Projected return on investment is always counterbalanced with riskiness of the project option.
• Exxon Chemical's management begins evaluating all new project proposals in light of the business unit's strategy and strategic priorities. Target spending is decided according to the overall project mix portfolio. As the year progresses, all projects are reprioritized using a scoring model. As significant differences between projected and actual spending are uncovered, the top management group adjusts for the next year's portfolio.