Chapter 3 of 3 · PMI PMP
Business Environment
Governance, compliance, change control, issues, risk, improvement, and organizational and external change.
- 8topics
- 35 minfast track
- 3diagrams and exhibits
- 26%of the exam
Topics in this chapter
Take them in order, or jump to the one you need.
- 1Project GovernanceUnderstand governance frameworks, organizational structures, the PMO, decision rights, stage gates and escalation in predictive…4 min
- 2Project ComplianceIdentify legal, regulatory, security, privacy and contractual obligations, plan how to meet them, and prove compliance through…4 min
- 3Managing and Controlling ChangesFollow the integrated change control process, understand change requests, the change control board and configuration management…Diagram4 min
- 4Issues and ImpedimentsTell issues from risks, run an issue log, remove team impediments as a servant leader, and escalate problems when they exceed…Diagram5 min
- 5Risk Identification and AnalysisPlan risk management, identify risks, score them by probability and impact, and apply quantitative tools such as EMV, decision…5 min
- 6Risk Responses and MonitoringChoose responses for threats and opportunities, use contingency plans, fallback plans and reserves, separate residual and…Diagram4 min
- 7Continuous ImprovementImprove processes with PDCA, kaizen, lean, root cause analysis, retrospectives and lessons learned using small, measured steps in…4 min
- 8Organizational Change and EnvironmentSupport organizational change with readiness, communication, training and reinforcement, and track external shifts in markets…5 min
About this chapter
What this chapter covers
The Business Environment domain connects the project to the organization around it. It asks how projects are governed, how they stay within the rules, how change and risk are controlled and how the project supports the value that the business expects.
The chapter covers governance and compliance, change control, issues and impediments, and risk planning, analysis and response. It also covers continuous improvement, support for organizational change and watching the external environment. Each topic is explained for predictive, agile and hybrid ways of working.
How the topics fit together
The pages move from the rules that surround a project to the forces that act on it.
- Governance defines decision rights, review points and escalation.
- Compliance makes sure legal, contract and policy obligations are met.
- Change control protects baselines while allowing sensible change, and agile work uses the backlog.
- Issues and risk deal with problems now and uncertainty later.
- Improvement and change keep the way of working healthy and make sure the business adopts the result.
When an answer choice involves acting outside your authority or tolerance, check the governance route first, because escalation to the right body is usually correct.
How to use these pages
Each topic page has the same shape, so you can skim for what you need.
- What it is: the idea in plain words.
- How it works: the mechanism, with diagrams and examples.
- What to remember for the exam: the facts to memorize.
- Common mistakes: the classic traps.
- Check yourself: three questions to test your understanding.
Learn the lists that questions love to test, such as the threat and opportunity strategies, the change request types and the contrast between issues and risks. Then practice the numeric items, such as expected monetary value, so you can calculate them without hesitation.
Ready for more practice?
The full PMI PMP question bank has 1,463 questions, with timed practice exams and an explanation for every answer.
This study guide is independent and is not affiliated with, endorsed by, or sponsored by PMI. Vendor names, certification names and exam codes are trademarks of their respective owners and are used for identification only.