Organizational Systems and Project Governance

Definition

Organizational systems and project governance refer to the structures and processes within an organization that govern project management practices. These systems provide a framework for decision-making, resource allocation, and overall project management. They ensure that projects align with the organization's goals, policies, and procedures. Here are the key aspects of this topic:

Methods of Organizational Governance Systems:

Hierarchical Organizational Structure:

This is a traditional organizational structure where authority flows from top to bottom. Project managers have limited decision-making power, and project governance is often centralized.

Matrix Organizational Structure:

In this structure, project managers have more authority and can make decisions within their project. Project governance is shared between functional managers and project managers.

Project-Based Organizational Structure:

This structure is designed specifically for project-based organizations. Project managers have significant decision-making power, and project governance is decentralized.

Types of Governance:

Functional Governance:

The project is governed by functional managers who oversee project activities within their respective departments. They provide resources and monitor progress.

Project Governance:

Project governance is delegated to a specific project management office (PMO) or project board. They provide strategic direction, approve project plans, and ensure compliance with organizational policies.

Hybrid Governance:

1. This approach combines elements of functional and project governance. It allows flexibility and tailoring based on the project's specific needs.

Advantages of Organizational Systems and Project Governance:

• Clear project roles and responsibilities.
• Effective communication channels and decision-making processes.
• Consistency in project management practices.
• Improved alignment with organizational goals and strategies.
• Enhanced accountability and control over projects.

Disadvantages:

• Lack of flexibility in hierarchical structures.
• Potential for conflicts between functional and project managers.
• Slow decision-making processes in centralized governance models.
• Increased bureaucracy in complex governance structures.

Applications Organizational Systems and Project Governance:

Organizational systems and project governance are applicable in various industries and sectors, including construction, information technology, healthcare, and engineering. They are essential for managing complex projects and ensuring efficient resource utilization.

Example:

Consider a large construction company that adopts a matrix organizational structure. The company establishes a project governance framework that includes a PMO responsible for overseeing project activities. Functional managers provide resources and technical expertise, while project managers have the authority to make decisions within their projects. This governance structure ensures coordination, aligns projects with organizational goals, and facilitates effective communication among stakeholders.

References:

• Kerzner, H. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. Wiley.
• Pinto, J. K., & Slevin, D. P. (2019). Project management: achieving competitive advantage. Pearson Education.