Project Governance (in relation to project management)

Abstract

Project governance is a rather new concept. Many of the authors cited in this literature review offer definitions of the concept. While these definitions differ from each other, they all include organizational strategy and alignment of goals among the stakeholders of a project These authors also discuss the benefits, purpose and approaches to project governance.

Introduction

Project governance is a rather new concept in project management. It can be described as a context that gives structure, tools, processes and decisiveness to a project. The decisions made using project governance are based on knowledge and experience of prior projects rather than snap decisions aimed at soothing the project sponsor, placating project team members, or keeping the project progressing regardless of cost overruns. Project governance gives each project a logical framework based on the organizational goals of the company tasked with completing the project. That structured approach may sound simple enough to describe or define, but it is more complex than it seems as this literature review reveals.

Definition of Project Governance

Many of the authors of the articles used in this literature review felt it necessary to offer a definition of governance, and the definitions offered differed from each other to some extent, although some of them cited another source for their definition. For instance, Joslin and Müller (2015) of the International Journal of Project Management cite the definition provided by Müller, et al. (2013): “‘Corporate governance encompasses all work done in an organization, and thus governs the work in traditional line organizations, plus the work done in temporary organizations, such as projects’” (Joslin & Müller, 2015, p. 1378). These authors also cite the Organization for Economic Cooperation and Development (OECD) (2004) for a definition. That definition is: “Involving a set of relationships between a company's management, its board, its shareholders and other stakeholders […] and should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring” (Joslin & Müller, 2015, p. 1378). One may assume that governance then includes incentivizing and monitoring. Yet other authors provide other definitions: Badewi (2015) and Ahola, Ruusaka, Artto, and Kujala (2014) both authors writing in the International Journal of Project Management, say, “Project governance deals with the internal control of individual projects, such as the level of flexibility in applying [project management] PM tools, techniques and roles, the governance of projects is a way of selecting, coordinating and controlling projects such as programme/portfolio management” (Badewi, 2015, p. 4; Ahola, Ruuska, Artto, & Kujala, 2014); Sirisomboonuk, Gu, Cao, and Burns (2018) of the International Journal of Project Management define project governance as “the framework, functions, and processes that guide project management activities in order to create a unique product, service, or result and meet organizational strategic and operational goals’” (Sirisomboonsuk, Gu, Cao, & Burns, 2018, p. 288). These definitions add selecting, coordinating, controlling and guiding to the activities of project governance.

Derakhshan, Turner, and Mancini (2019) of the International Journal of Project Management use a description from Williamson (1979) that says governance is “the engagement of two actors in an economic transaction that requires them to monitor and control the transaction, protect the interests of each party, and reach the most efficient share of values. They cite the definition that Müller et al., (2016) offer, “that project governance describes the interactions between project participants and the mechanisms adopted [that] can heavily influence the engagement of the stakeholders and their trust in the project” (Derakhshan, Turner, & Mancini, 2019, p. 98). These two definitions focus on the interactions rather than the activities of project governance. From these varying definitions and descriptions, it is clear that project governance is a more complex and richer concept than what its name implies—the dominance of a project. Yet all the definitions share the view that governance is about organizational strategy and alignment of goals among the stakeholders of a project.

Part of what makes the definition of project governance important is the concept that goes along with the word. Khan, et al. (2019) of Administrative Sciences explains that the word “governance” comes from the Greek wordk “Kubernao” or “to ste