Project governance: Balancing control and trust in dealing with risk

Abstract

Organizational performance can be enhanced by effective project benefit generation. Although it identifies the project owner as the single point of accountability for the realization of project benefits, the literature does not comprehensively discuss this role in the project governance model, nor the management approaches that can support this role. Based on principal-agent theory and a control-trust-risk approach, we have conducted an empirical study across various managerial contexts. Results suggest that trust of the project owner in the project manager is more effective in a turbulent environment, whereas more control by the project owner of the project management process is a superior management approach in a more stable project setting. Finally, a project governance model is introduced and the management role of the project owner is discussed.

The impact of project management (PM) and benefits management (BM) practices on project success: Towards developing a project benefits governance framework

“…Because Zwikael and Smyrk (2015) apply the principal-agent theory to the relationship between project manager, benefit owner and the funder of the project, the principal (i.e. the funder, sometimes called the Senior Responsible Owner (SRO) (Zwikael and Smyrk, 2015)) assigns responsibility and accountability for delivering efficient output to the project manager (agent) and should assign the responsibility and accountability for realising the expected benefits from this output to the benefit owner (agent).…”

“…As with the Input-Transformation-Output model, the responsibility for capturing benefits should be assigned to a specific person (Zwikael and Smyrk, 2012); the project manager should be responsible for implementing the project as planned, but s/he is not necessarily accountable for obtaining the expected benefits from it. Thus, from the governance perspective, assigning a role of accountability for realising benefits from intended projects is perceived as critical for capturing these benefits (OGC, 2011;Zwikael and Smyrk, 2015).…”

“…The hand-off point (sometimes called the "output closeout") should be left to the benefit owner (also called the project owner) (Zwikael and Smyrk, 2011), the one responsible for capturing the benefits from the project business case. The benefit owner is perceived to be critical for buy-in behaviour and in this capacity has been found to affect project performance (Zwikael and Smyrk, 2015). Finally, a benefits audit should be conducted regularly in order to guarantee that the benefits were obtained after implementation (Ashurst et al, 2008).…”

Understanding Collaboration in Integrated Forms of Project Delivery by Taking a Risk-Uncertainty Based Perspective

“…These KSAEs are likely to be dispersed across multi-disciplinary teams; not available from any one individual or narrow team of people. The richer the depth of understanding of uncertain situations, the more comprehensive will be the response options; (3) A further necessary condition is that those with the above capacity that are capable to collaborate to manage uncertain situations need institutional enablers and foundational facilities that support and sustain motivation to collaborate.…”

“…Much of the traditional project management (PM) literature has its focus on coping with risk and uncertainty in order to successfully deliver a project to plan (see, for example, [1][2][3][4]). Parties engaged in risk and uncertainty management (the project owner and/or representative, the design team and the project delivery entity) have usually done so separately and in isolation.…”