ACCA Strategic Business Leader (SBL) Practice Exam

What is the main purpose of a project initiation document?

1. To document employee performance

2. To define the project and its objectives

3. To create marketing strategies

4. To set the company's budget

The correct answer is: To define the project and its objectives

The main purpose of a project initiation document (PID) is to define the project and its objectives. A PID serves as a crucial reference for stakeholders and team members, providing clarity on the project's scope, goals, deliverables, and the rationale behind it. It establishes a foundation for the project by articulating what needs to be achieved, ensuring that everyone involved has a shared understanding of the intended outcomes and the path to reach them. This clarity helps in aligning the project with the organization's strategic objectives and aids in managing expectations throughout the project lifecycle. It is important to distinguish this from other options: documenting employee performance focuses on individual assessments rather than project objectives, creating marketing strategies is unrelated to project initiation specifics, and setting the company's budget, while vital for financial management, does not define the project itself but rather supports its funding. Thus, the role of a PID is specifically about project definition and goal setting.