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ACCA Strategic Professional · Strategic Business Leader · Leading and managing projects

Corvane Energy is at the start of a large project. The sponsor proposes proceeding straight to detailed design, since senior managers are enthusiastic. The PMO director insists on a stage-gate review at the end of initiation. Which is the strongest reason, in project governance terms, for the stage-gate?

A stage-gate gives decision-makers a formal checkpoint to confirm the business case still holds and to stop, redirect or approve further funding before more resources are committed. It improves control and limits escalating commitment, but it does not guarantee budget outcomes or replace sponsor or risk activities.

  1. AIt gives decision-makers a formal point to confirm the business case remains valid and to stop or redirect the project before more resources are committedCorrect
  2. BIt guarantees the project will finish within the original budget
  3. CIt replaces the need for a project sponsor during later stages
  4. DIt allows the project team to skip risk assessment during planning

Explanation

Stage gates are formal go/no-go checkpoints at which viability, the business case and risks are reassessed so that failing projects can be halted early and resources escalate only with justification. They do not guarantee budget outcomes, remove the sponsor's role or replace risk assessment.

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