In general portfolio management is doing the correct jobs and project management is doing the jobs correctly.
Both definitions are valid.
To extend the definitions portfolio management has two dimensions. First of all to achieve to objectives of the company and compatible with strategies, things that should be done to focusing on the jobs and considered budget constrains.
There is no portfolio management without strategic approaches and choices. When creating a project portfolio and determining priorities, this is the first thing to be done. Which direction does my firms want? What structure do I want to be in? What is the objective endorsement, profit rate and budgets? Strategies are built to find solutions to questions such as in which are and who am I going to sell my products, how will I get improved, where will I put my organization and much more. Project is selected according to these strategies. The projects that do not support the strategies are not prior.
My strategy is build according to certain managements rather than doing everything. This situation has been observed many times. But in parallel with all the observation, my strategy is everything means I don't have any strategy. It means I will act according to the situation. This is achievable but two things should have solid grounds.
Otherwise problems will arise.
In other words strategy is to know what the firm wants. Linked with this jobs and projects you will be doing or certain objectives and demands are selected and efficiency is provided, or on the contrary everything is left to chance. Leaving everything to chance is not acceptable in professional environment and in this sense processes and structures to support portfolio management and project management should be build.
Second dimension in portfolio management is mostly valid for organization the create multiple projects which is managing the project inventory with different point of view and different expectations. Huge organization do many project simultaneously. The main parts of these projects are technology use, resource overlap, need for skills, need for integration of products, deciding which strategies should be followed and intersection points. Every work group or intersection point can be monitored by different interest groups. Generally this is what happens. Expectation and objectives of a department or a person and objectives and expectations of other departments sometimes overlap and sometimes contradict. All of these coordination should be built to serve the objectives of the company, correct communication between each parties and persuasion are processes that are hard and should be monitored.
To achieve the most with less cost, taking correct steps forward, disciplined monitoring of project portfolio and projects are mandatory.