Differentiate governance from management
Karin Grasenick | 29 September 2021
The term governance is used for different types of organisations and refers to sustaining coordination and coherence among a variety of stakeholders by setting a framework for interactions, engagement and decision making. Project management is concerned with the operative implementation needed to plan, implement, monitor, and report on achievements. Management too, thereby needs to take decisions, however within the predefined framework.
The following table lists elements of project governance in contrast to elements of project management to support differentiation of governance from management:
Project Governance
VS
Project Management
Coordination of a variety of stakeholders (incl. representation of diverse groups, etc.)
≠
Coordination of project activities and objectives
Setting a framework for interactions, engagement and decision making (incl. legal arrangements and contracts)
≠
Planning, implementing, monitoring and reporting on achievements (Gantt charts, budget planning, etc.)
Structure and processes of decision making (e.g. formal/informal networks)
≠
Decision making within a predefined framework (thus limited)
The term governance is used for different types of organisations such as states, infrastructures or corporations or projects (temporary organisations). Such organisations comprise different units and actors, so called stakeholders, with their own goals and interests, which are usually not all aligned and can even be conflicting.
Thus, governance refers to sustaining coordination and coherence among a variety of stakeholders by setting a framework for interactions, engagement and decision making (Turner and Müller, 2017; Biesenthal and Wilden, 2014; Abednego and Ogunlana, 2006).
In the corporate governance literature derived from agency theory, an agent (head of unit, or leader of an organisation or project) acts on behalf of the principle or owner (private or public funding institutions or organisations) (Derakhshan et al. 2019, Jensen and Meckling, 1976). Governance thus involves legal arrangements and contracts between principle and agent, between central offices and suppliers, organisation and staff etc. (Winch, 2006).
Additionally, organisational arrangements refer to the structure and processes clarifying
- how decisions are made and by whom,
- where and how information is shared, collaboration and trust building enhanced,
- what behaviour is considered as adequate
- and how deviations from goals and contracts will be handled (Ahola et al., 2014).
An appropriate governance framework ensures that goals of organisations or projects can be reached. It might be committed to equality, diversity and inclusion and thereby critically reflect which stakeholders are involved, who represents specific groups, how decisions are taken. Special attention will thus be paid to whose voices get heard, to power relations and informal networks which might counteract transparency and fairness.
Given the challenges deriving from conflicting objectives and interests within a system of asymmetric power relationships, hence unequal access to information, governance must answer the following questions:
- Who involves whom? How will stakeholders be enabled to contribute?
- Where does governance take place (formal vs. informal networks?)
- How will the asymmetric power relations be considered in the design of transparent and fair processes and practices?
Project management is concerned with the operative implementation needed to plan, implement, monitor, and report on achievements. Management too, thereby needs to take decisions, however within the predefined framework.
Classical tools of project management are for example Gantt charts, budget planning, or performance indicators.
However, it has been realised that organisations and their projects are embedded in dynamic environments (Bosch-Rekveldt, 2011) and characterised by specific levels of complexity (see “Complexity in projects”). Rather than trying to follow and control a linear plan, organisations and projects need to “prepare and commit” to unavoidable changes (Priemus, Bosch-Rekveldt & Giezen, 2013, Koppenjan et al., 2011).
Agile planning has emerged from experiences in software industry as an approach to stay flexible under complex and uncertain conditions. As the Agile Manifesto states since 2001:
“We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
That is, while there is value in the items on the right, we value the items on the left more.”
(Agile Manifesto, 2001)
References
Abednego, Martinus P./Ogunlana, Stephen O. (2006): Good project governance for proper risk allocation in public-private partnerships in Indonesia. In: International Journal of Project Management. Vol. 24(7), p. 622-634. DOI: https://doi.org/10.1016/j.ijproman.2006.07.010
Ahola, Tuomas/Ruuska, Inkeri/Artto, Karlos/Kujala, Jaakko (2014): What is project governance and what are its origins? In: International Journal of Project Management. Vol. 32(8), p. 1321-1332. DOI: https://doi.org/10.1016/j.ijproman.2013.09.005
Beck, Kent et al. (2001): Manifesto for Agile Software Development. URL: https://agilemanifesto.org/ [17.08.2021]
Biesenthal, Christopher/Wilden, Ralf (2014): Multi-level project governance: Trends and opportunities. In: International Journal of Project Management. Vol. 32(8), p. 1291-1308. DOI: https://doi.org/10.1016/j.ijproman.2014.06.005
Bosch-Rekveldt, Marian (2011): Managing project complexity: A study into adapting early project phases to improve project performance in large engineering projects. URL: http://resolver.tudelft.nl/uuid:a783e581-bc7a-4efa-adcb-7e9201840367
Derakhshan, Roya et al. (2019): Project governance and stakeholders: a literature review. In: International Journal of Project Management. Vol. 37(1), p. 98-116. DOI: https://doi.org/10.1016/j.ijproman.2018.10.007
Jensen, Michael C./Meckling, William H. (1976): Theory of the firm: Managerial behavior, agency costs and ownership structure. In: Journal of Financial Economics. Vol 3(4), p. 305-360. DOI: https://doi.org/10.1016/0304-405X(76)90026-X
Koppenjan et al. (2011): Competing management approaches in large engineering projects: The Dutch RandstadRail project. In: International Journal of Project Management. Vol. 29(6), p. 740-750. DOI: https://doi.org/10.1016/j.ijproman.2010.07.003
Priemus, Hugo/Bosch-Rekveldt, Marian/Giezen, Mendel (2013): Dealing with the complexity, uncertainties and risk of megaprojects: redundancy, resilience and adaptivity. In: Priemus, Hugo/van Wee, Bert (eds.): International Handbook on Mega-Projects. Cheltenham: Edward Elgar Publishing Limited. DOI: https://doi.org/10.4337/9781781002308
Turner, JR/Müller, R. (2017): The governance of organizational project management. In: Sankaran, S/Müller, R/Drouin, N (eds.): Organizational Project Management. Cambridge: Cambridge University Press.
Winch, G. M. (2006): The governance of project coalitions: towards a research agenda. In: Lowe, D. (ed.): The Commercial Management of Complex Projects: Defining the Discipline, p. 324–343. Oxford: Blackwell.