PRINCE2 – Foundation Exam Exam

What is established to define limits of delegated authority in a PRINCE2 project?

1. Milestones

2. Key objectives

3. Budget constraints

4. Tolerances for each project objective

The correct answer is: Tolerances for each project objective

In a PRINCE2 project, tolerances for each project objective are crucial for defining the limits of delegated authority. Tolerances essentially outline the permissible variations for time, cost, quality, scope, risk, and benefits. By setting these tolerances, project managers establish clear boundaries within which they can operate without needing further approval. This structure enables them to make decisions and manage the project effectively, ensuring they remain accountable for the overall project while also empowering team members to act within their delegated authority. When tolerances are exceeded, it necessitates escalation to higher levels of authority, ensuring that critical decisions are made with the appropriate oversight. The other options mentioned do play important roles in a project but do not specifically define limits of delegated authority. Milestones are significant checkpoints within a project timeline, key objectives refer to the primary goals to be achieved, and budget constraints lay out financial limits—but none of these directly set the operational boundaries for decision-making within the project structure like tolerances do.