1 - agree precise specification (terms of reference) for the project
Often called the project 'terms of reference', the project specification should be an accurate description of what the project aims to achieve, and the criteria and flexibilities involved, its parameters, scope, range, outputs, sources, participants, budgets and timescales (beware - see note below about planning timescales).
Typically and prior to the project's formal establishment the project 'terms of reference' are produced or at least drafted at a fundamental level by a 'project sponsor', or 'executive in charge' (of the project). Often such an initial top-level general project description (a 'business case' basically) is required for the project to be justified, approved, and funded at a corporate level, prior to the commencement of detailed project planning. The project manager, typically appointed by the 'project sponsor' or the 'executive in charge', may be involved to varying degrees in the drafting of the initial corporate project description or business case. It is not unusual for a project manager to first be unofficially appointed to the project management role, pending corporate approval of the project itself and the formal appointment of the project manager. The project sponsor is usually a more senior manager or executive than the project manager, although not necessarily the 'boss' or senior up-line manager to which the project manager normally reports. All substantial projects generally require a formal and senior 'project sponsor' or 'executive in charge', although minor projects forming part of a manager's conventional duties, and not requiring specific board or corporate approval, may not require a 'project sponsor' as such, in which case executive accountability for the project and the project manager belongs to the normal up-line reporting manager/executive.
Usually the