Link to thesis. - Concept - NTNU

Practical implications of governance frameworks for public projectsTerry Williams, Professor of Management Science, Southampton University, UKOle Jonny Klakegg, Research Director, Concept Program, Norwegian Univ. of Science & TechnologyOle Morten Magnussen, Researcher, Concept Program, Norwegian Univ. of Science and TechnologyHelene Glasspool, Management School, Southampton University, UKIntroductionThere are various governance frameworks set up by different authorities and governments for public projects,but the effects of these on the development of project plans and estimates is not clear. Such frameworks are setup as self-evidently appropriate, but we know that apparently self-evident correctness sometimes do not apply tocomplex projects (Malgrati and Damiani 2002). The effect of bias in the estimates, such as optimism bias andstrategic under-estimation is known (Flyvbjerg et al 2003); however, it is not clear how the various governanceframeworks exacerbate or ameliorate these effects, and this is crucial to understanding how to tackle thisproblem, rather than the “sledgehammer” of simply adding factors onto estimates.Supported by PMI, the Concept Programme (Norway) and Southampton University are currently undertaking astudy analysing the frameworks for front-end appraisal and governance of public investment projects. The aimof this work is to look at how the governance regimes for major investment projects in different countries affectsproject performance, as well as comparing this with the frameworks’ intended effect. It is focussing on cost andtime management (and considering how and why underestimation occurs, rather than simplistically comparingestimates with out-turns, which would not distinguish under-estimation in the early governance phase fromexecution-phase effects). The study is also looking into four case-studies, to see how the implementedgovernance frameworks actually affect Project Management and how consistent they are with the stated aims.There is only room to report a small part of this study, so this paper will concentrate on how the frameworkswork out in practice, and how consistent the frameworks and good project management are.This was a small study undertaken to find initial results. A very small number of case studies are being studied,in just two countries. Norway and the UK were chosen as having a fairly new public-sector project governanceframework and a well-established one respectively. It was found however as part of the UK study that defenceprojects (the largest public projects) were governed under a different framework from other UK public projects,so it was decided to study a defence project and a civil project in each country. Similarity between the projectsin each country was sought but, as in most case-study research, access was difficult and to a certain extent wehad to accept the projects that were available. The study was organised as follows. Firstly, the literature gave usa theoretical underpinning for governance in general. This enabled us to specify and structure the characteristicsof a public project governance framework, and this was used in semi-structured interviews with experts in theseframeworks. Analysis of framework differences then gave the foundations for the case-studies.Governance is a term with many meanings and usages. Corporate governance has various models in differentcountries, which can be categorised as shareholder-value systems (USA, UK, Canada); where only shareholdersare legitimate stakeholders, and communitarian systems, which hold other constituencies such as employees,banks and the community as legitimate stakeholders (including “family-based” systems eg Asia Pacific) (see egDetomasi 2006). For us, public governance “refers to the formal and informal arrangements that determine howpublic decisions are made and how public actions are carried out, from the perspective of maintaining acountry’s constitutional values in the face of changing problems, actors and environments.” OECD (2005). Asfar as projects are concerned, Governance of Projects concerns those areas of governance (public- or corporate)that are specifically related to project activities; good project governance ensures relevant, sustainablealternatives are chosen and delivered efficiently (based on APM (2002)). There seem to be three main goals:choosing the right projects; delivering the chosen projects efficiently; and ensuring projects are sustainable. Thesecond of these goals - delivering the projects efficiently - is important to avoid wasting (public) resources andinvolves the framework established around the project execution. This is governance of projects. Choosing theright projects (to ensure the right objectives are achieved) and ensuring the projects (actually the goals andeffects of the project) are sustainable, is governance through projects – the context in which the criticaldecisions are made. This is the true Governance of Projects on a public or corporate level.