According to the PMBOK® Guide and the Standard for Portfolio Management by PMI, portfolio management is a high-level governance structure that aligns collections of work with an organization ' s strategic goals.

Definition of a Portfolio: A portfolio is defined as projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives. The components of a portfolio may not necessarily be interdependent or directly related (unlike a Program), but they are linked by the organization ' s strategic plan.

Focus on Strategic Alignment: The primary goal of portfolio management is to ensure that the organization is doing the right work. It involves identifying, prioritizing, authorizing, managing, and controlling projects and programs to meet specific business objectives.

Resource Allocation: It serves as a mechanism for the organization to evaluate which initiatives provide the most value and to allocate limited resources (funding, people, and equipment) accordingly.

Portfolio vs. Program vs. Project:

Project: Focuses on doing the work right (tactical).

Program: Focuses on harmonizing related projects to achieve specific benefits.

Portfolio: Focuses on strategic value and " big picture " investment.

Comparison with other options:

A. a project by dividing the project into more manageable sub-projects: This describes the Work Breakdown Structure (WBS) or the decomposition of a single project, not portfolio management.

B. a project by utilizing a portfolio of general management skills...: This describes the application of General Management skills to a single project. The term " portfolio " here is used as a figure of speech for a " collection of skills, " which is not the PMI technical definition.

C. all projects undertaken by a company: While a portfolio can contain all projects, it is not the definition. Many large organizations have multiple separate portfolios (e.g., an IT Portfolio and a Research and Development Portfolio) that are distinct from one another.