PMP Practice Question: Business Environment: strategy and project benefits
You are the project manager for a portfolio of projects. One project is consistently underperforming and missing milestones. The steering committee asks you to recommend whether to continue or cancel the project. What should you do first?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Conduct a benefits review and assess if the project still aligns with organizational strategy
The correct first step is to conduct a benefits review and assess alignment with organizational strategy (Option C). This ensures the decision is based on an evaluation of whether the project still delivers value and fits strategic goals, rather than reacting prematurely. Option A (cancelling) is premature without analysis; Option B (escalation to sponsor) bypasses due diligence; Option D (recovery plan) is a subsequent step if the review indicates continuation.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Recommend cancelling the project to free up resources for other projects
Why it's wrong here
Recommending immediate cancellation based solely on performance issues is premature and lacks the necessary strategic analysis expected of a project manager. While resource optimization is important, a project's termination should be a data-driven decision, considering its current and future benefits realization, alignment with organizational strategy, and potential for recovery. This action bypasses a critical evaluation of the project's overall value proposition before making such a drastic recommendation.
- ✗
Escalate to the sponsor for decision
Why it's wrong here
Escalating directly to the sponsor for a decision without first conducting a thorough analysis and formulating a recommendation is an abdication of the project manager's responsibility. The steering committee specifically requested a recommendation, implying the PM should perform due diligence, evaluate the project's status against strategic objectives, and present a data-backed course of action. Simply passing the problem up the chain without analysis undermines the PM's role in strategic portfolio management.
- ✓
Conduct a benefits review and assess if the project still aligns with organizational strategy
Why this is correct
When a project experiences performance issues, the most appropriate first step for a project manager overseeing a portfolio is to conduct a benefits review and reassess its alignment with organizational strategy. This critical analysis determines if the project still delivers expected value and contributes to strategic objectives, even with current challenges. This data-driven approach provides the foundation for a sound recommendation to the steering committee regarding continuation, modification, or potential termination, ensuring portfolio optimization.
- ✗
Ask the project team to create a recovery plan
Why it's wrong here
Asking the project team to create a recovery plan, while addressing performance, is a premature action without first validating the project's continued strategic relevance and value. A recovery plan assumes the project *should* continue, but if the project no longer aligns with organizational strategy or its expected benefits are no longer achievable, investing further resources in recovery would be inefficient. The PM must first confirm the project's viability from a strategic perspective before committing to operational recovery efforts.
Go deeper
Related to this question
About these practice questions
Courseiva writes every PMP question from scratch — 800 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PMP practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PMP exam.