Week 6 – Project Governance

6.1. Introduction
The focus of this week’s topic is on project governance. Project Managers should ensure
effective governance to successfully manage projects. In this context, the most effective
leadership styles and the successful team dynamics will be introduced. Project governance
requires, amongst others, the formation and development of a team as well as managing conflict
and change successfully.

6.2. Learning Outcomes

Upon the completion of this week of study you will able to:
1. Understand the characteristics of effective project governance.
2. Form and develop governance methodologies.
3. Manage team dynamics and performance.
4. Manage project change effectively.

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6.3. Leadership
The success of a project is determined by its leadership. Building a team, engaging others,
inspiring them, handling conflict, navigating change, and overseeing team performance are all
aspects of project leadership.

Numerous leadership philosophies that can be categorized as traditional and modern are
identified in current literature.

6.3.1. Traditional approaches to leadership

The characteristic approach, the behavioral approach, and the situational approach are all
recognized in traditional approaches to leadership.
The trait approach is the oldest leadership approach and determines a set of traits
(characteristics) that leaders must have. This approach represents that leaders are born; not made
and perceives leadership as personality laden. Characteristics that made a leader refer to as a set
of characteristics reflecting effort; high need for achievement; ambition; energy; tenacity;
ability to motivate; integrity; self-confidence; and knowledge of the business.
The behavioral approach supports certain behaviors ensuring leadership effectiveness
and identifying what leaders do. Studies of behavioral leadership consider the extent to which
leaders are effective by performing either task performance, group performance, or engage
employees in decision making. Task performance behaviors reflect a leader’s efforts towards the
accomplishment of specific goals. This dimension supports directive leadership styles as well as
the closeness of supervision and initiating structure. Group performance behaviors reflect the
actions undertaken by leaders to ensure group satisfaction, social stability, team harmony,
and cohesiveness. This dimension supports supportive leadership styles.
One of the most important leadership styles reflected by behavioral leadership is the
leadership-member exchange (LMX). The theory of LMX recognizes maintenance behaviors
such as trust, open communication, mutual respect, mutual obligation, and loyalty and focuses on
leaders’ behaviors, which are considered as group maintenance. At the same time, however, the
theory highlights the importance of leadership towards individuals on a personal basis.
Leadership

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behaviors encouraging employee engagement and participation in decision-making are often
reflected in autocratic leadership and democratic leadership styles.
The situational approach was first introduced in 1958 by Tannenbaum and Schmidt and
focuses on a leader’s ability to analyze a situation prior to deciding on a course of action. The
three factors considered by leaders before deciding on how to lead are managers, i.e., their
personal values, feelings of security, and confidence in subordinates (1): subordinates, i.e., their
knowledge and experience, readiness to assume responsibility for decision making, interest in the
task or problem, and understanding and acceptance of the organizational goals (2): situation, i.e.,
the type of leadership style, the organizational values, the degree to which the group works
effectively as a unit, the problem itself and the type of information needed to solve, the amount
of time the leader has to make the decision (3).

6.3.2. Contemporary approaches to leadership

Contemporary approaches to leadership recognize charismatic, transformational, and authentic
leadership. Charismatic leadership refers to charisma that describes an emotional ability, which
extends beyond ordinary esteem, affection, and admiration. It has been shown to improve
corporate financial performance, particularly under conditions of uncertainty.
Charismatic leaders are exceptionally self-confident, dominant, and moral with a
compelling vision. They also arouse excitement and inspire in their followers’ trust,
confidence, acceptance, emotional involvement admiration, and high performance.
Transformational leaders generate excitement and revitalize organizations. They inspire people
to excel in their personal interests aiming at the social good. They can achieve this in many
ways, which amongst others include individualized attention and intellectual stimulation to those
who lead (House et al., 1992)
Transactional leaders, often approach management as a series of transactions in which
they use their legitimate, rewards and coercive power to give authority to their followers
(Crosby, 1996). The difference between transformational and transactional leadership is that
the later does excite transform, empower, or inspire people to focus on the interests of the
group or organization. Rather, they are more effective for individuals than for collectivists.
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 Authentic leadership, from the ancient Greek “To thine own self be true”, supports
authenticity in the form of honesty, genuineness, reliability, integrity, and trustworthiness.
Authentic transformational leaders focus on public interests (community, organizational, or
group) and they are ethically mature.
For further information, see Camilleri, E., (2011, pp. 247-257 ).
Current literature distinguishes many differences between leadership and management.
These are summarized in the Table bellow:

Source: Richman (2002, p. 212).

6.4. Team building and development

Manage project team – “the process of tracking team Member performance, providing
feedback, resolving issues, and coordinating changes to optimize project performance.”
PMBOK® Guide

Teams are, often, formed of a small number of people with complementary knowledge, skills
and abilities who are committed to common purposes and goals. Team members, often, trust one
another and are found to be committed to the teams; goals. Teams differ from groups as group

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is, often, defined as a collection of people who work together towards the accomplishment of a
specific task without, however, performing as a unit.

6.4.1. Types of teams

There are different types of teams: project and development teams; parallel teams; management
teams; transnational teams and self-managing teams.
Project and development teams work for a long period of time for the development of
specific projects, which might include research on new product development requiring
contribution of subject matter experts. However, the reams disband upon the completion of the
project and then new teams are assigned to new projects.
Parallel teams work on temporary basis as they work separately from the work structure.
Their members, often, provide solutions to specific tasks; while, they do not act/operate under a
certain authority.
Management teams, often, coordinate and give direction to units and subunits under
their jurisdiction.
Transnational teams are often composed of multinational members whose activities
span multiple countries and they tend to be virtual teams, communicating online with the use of
new technologies.
Self-managing teams, have the responsibility for an entire product or an entire part for a
production process.
The members of the teams have certain responsibilities: to successfully complete the
tasks which are assigned to them on time and on budget (1); to close collaborate with others to
complete the team work on time and on budget (2); to improve work methods (3).
Team leaders must ensure team cohesiveness, i.e., the extent to which team members
found the team attractive; remain with the team; as well as influence one another. Team
cohesiveness is associated to member satisfaction as well as to increased performance outcomes.
However, extremely high levels of cohesiveness might be linked to groupthink, i.e., the
members of a team are cooperative to a great extent that agreeing with one another’s opinions
and refraining from criticizing others’ ideas become norms.

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6.5. Project team acquisition
Based on the PMBOK project team acquisition is “the process of confirming human resource
availability and obtaining the team necessary to complete project assignments”.

This process has three stages: pre-assignment of team members; negotiation for project team
members and on-boarding team members.
6.5.1. Project team development
The current literature recognizes many processes/models for team development. The most well-
recognized is the one in which the following five stages are distinguished: forming (1); storming
(2); norming (3); performing (4). Some models add a last stage that is called adjourning (5).
PMBOK defines team development as “the process of improving the competencies, team
interaction, and overall team environment to enhance project performance”.

• Forming, this is the initial stage in which the team members are directed by the team
leader about their roles and what they should.
• Storming, the second stage requires from team to reconsider their goals and evaluate
leadership effectiveness.
• Norming, the third stage requires from team members to resolve conflicts and
misunderstandings as well develop norms and respect each other.
• Performing, this is the stage in which leader’s success is reflected. As the team members
work effectively together and achieve performance outcomes.
For further information, please, see Heagney (2011, p. 126-127).
Activity
Analyze the project environment in your organization. Make a list of ten important project
leadership characteristics that help ensure success. From that list, identify the three most
important characteristics. Then contrast the list with your own abilities. Which characteristics are
your strongest? Which areas may need improvement?
Source: Heagney, J. (2011, p. 138)

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6.5.2. Motivation
Project leaders should motivate teams to effectively perform the tasks which are assigned to
them, and, therefore, successfully complete the project. Motivation, often, refers to drives
energizing, directing and sustaining one’s effort. Those who are highly motivated work harder
and better, are found to be loyal and committed to the team as well as achieve a thorough
understanding of the job and its requirements. Highly motivated team members are found to be
more productive.
There are five general categories of motivation, i.e., join the organization; remain on the
organization; come to work regularly; perform effectively and exhibit citizenship behavior.
Current literature recognizes many theories of motivation, which project leaders can
apply to motivate project team. These include but are not limited to the Maslow’s need
hierarchy, the Alderfer ERG theory, the David McClelland theory of needs (Mishra, 2005, pp.
73-75).

6.6. Managing conflict

Conflict is a process in which one party perceives that its interests are being opposed or
negatively affected by another party (Moore, 1998). It may occur between individuals on the
same team or among different teams. Project leaders, often, cope with conflicts. Effective
conflict management includes, amongst others, the identification of the potential sources of
conflicts; the knowledge and understanding of conflict resolution tools, methods, and
techniques as well as successful negotiation.
Sources of conflict (general) Sources of task conflict
Roles and responsibilities Stakeholder expectations
Lack of commitment Unique project demands
Communications failure Money and other resources
Different personalities Technical approach
Stakeholder relationships Priorities
Personal motives of participants Differing goals of stakeholders
Energy and motivation Task interdependencies

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 Next project assignment Schedule
Individual rewards Risks
Source: Heagney, J. (2011)

6.6.1. Conflict management techniques

Project managers must be knowledgeable about the available techniques to manage conflict
appropriately. These techniques are summarized as follows:
• Avoidance, i.e., managers do not take any action to satisfy either themselves or others.
• Accommodation, i.e., managers cooperate on behalf of both parts without being
assertive about one’s own interests.
• Compromise, i.e., involves moderate attention to both parties’ concerns. In this case
managers are neither highly cooperative nor highly assertive.
• Competing, i.e., managers focus strictly on their own wishes and are unwilling to
recognize the concerns of others who disagree.
• Collaboration, i.e., managers emphasize on both cooperation and assertiveness of the
two parts.
Source: Heagney (2011, p. 135).
When project managers fail to manage conflict appropriately, they should refer the case
to mediators. Mediators investigate the situation by interviewing the disputants and others
aiming to gather information about the case. Then, they decide how to resolve the dispute, often
in alignment with the project leader. Based on the decisions made they take certain actions by
explaining their decisions and the rationale behind them as well as advise or train the disputants
to avoid future incidents. Last, they follow up by ensuring that both parts understands the
solution, documenting the conflict and the resolution, and monitoring the results by checking
back with the disputants and their bosses.

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Telestar International
On November 15, 1998, the Department of Energy Resources awarded Telestar a $475,000
contract for the developing and testing of two waste treatment plants. Telestar had spent the
better part of the last two years developing waste treatment technology under its own R&D
activities. This new contract would give Telestar the opportunity to “break into a new field”—
that of waste treatment. The contract was negotiated at a firm-fixed price. Any cost overruns
would have to be incurred by Telestar. The original bid was priced out at $847,000.Telestar’s
management, however, wanted to win this one. The decision was made that Telestar would “buy
in” at $475,000 so that they could at least get their foot into the new market place.The original
estimate of $847,000 was very “rough” because Telestar did not have any good man-hour
standards, in the area of waste treatment, on which to base their man-hour projections. Corporate
management was willing to spend upto $400,000 of their own funds in order to compensate the
bid of $475,000.By February 15, 1999, costs were increasing to such a point where over run
would be occurring well ahead of schedule. Anticipated costs to completion were now$943,000.
The project manager decided to stop all activities in certain functional departments, one of which
was structural analysis. The manager of the structural analysis department strongly opposed the
closing out of the work order prior to the testing of the first plant’s high-pressure pneumatic and
electrical systems.

Structures manager: “You’re running a risk if you close out this work order. How will you know
if the hardware can withstand the stresses that will be imposed during the test? After all, the test
is scheduled for next month and I can probably finish the analysis by then.” Project manager: “I
understand your concern, but I cannot risk a cost overrun. My boss expects me to do the work
within cost. The plant design is similar to one that we have tested before, without any structural
problems being detected. On this basis I consider your analysis unnecessary. ”Structures
manager:“ Just because two plants are similar does not mean that they will be identical in
performance. There can be major structural deficiencies. ”Project manager: “I guess the risk is
mine. ”Structures manager: “Yes, but I get concerned when a failure can reflect on the integrity
of my department. You know, we’re performing on schedule and within the time and money
budgeted. You’re setting a bad example by cutting off our budget without any real justification.

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”Project manager: “I understand your concern, but we must pull out all the
stops when overrun costs are inevitable. ”Structures manager: “There’s no question in my mind
that this analysis should be completed. However, I’m not going to complete it on my overhead
budget. I’ll reassign my people tomorrow. Incidentally, you had better be careful; my people are
not very happy to work for a project that can be canceled immediately. I may have trouble
getting volunteers next time. ”Project manager: “Well, I’m sure you’ll be able to adequately
handle any future work. I’ll report to my boss that I have issued a work stoppage order to your
department. ”During the next month’s test, the plant exploded. Post analysis indicated that the
failure was due to a structural deficiency.
Questions:
Who is at fault?
Should the structures manager have been dedicated enough to continue the work on his own? Can
a functional manager, who considers his organization as strictly support, still be dedicated to
total project success?
Source: Kerzner and Kerzner (2013, pp. 530-53)
6.7. Managing change
Project managers should be capable of managing change. For project managers their ability to
manage change is related to the team’s performance. There are three main factors ensuring
successful change management. These are: shared leadership; supportive environment and
motivate employees to effectively respond to project changes as new business challenges.
People, however, often resist change. The current literature recognizes the following
reasons for employee resistance to change:
• Inertia, i.e., people do not will to change the status quo.
• Timing, i.e., people feel pressure of time and resist because poor timing.
• Surprise, i.e., change happens suddenly and it is unexpected, or extreme. People
resist change initially as a reflexive reaction.
• Peer pressure, i.e., people resist change as an outcome of peer pressure.

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 Project managers must lead change effectively by establishing a sense of urgency. They
must examine current the pressures in the project and identify crises and opportunities, and be
frank and honest about them. Urgency is a reality-based sense of determination, not just fear
based power.
Project managers must also determine the idealized expected state of affairs after the
change implementation. Misunderstandings are common during change and the final goals must
be as clear as possible as well as communicated effectively to everyone. Communication about it
should include how the transition will occur, why the change is being implemented, and how
people will be affected.

6.7.1. Managing performance

Project managers must mange team performance on an ongoing basis. Performance Management
requires constant monitoring of the performance that should be followed by feedback.
A commonly accepted performance management system includes the following steps:
• Establishing clear goals and objectives (see, also SMART goals above).
• Defining actions and activities.
• Effective feedback.
• Effective planning (which is based on the given feedback).
• Managing teams without obstacles and with the new performance standards.
(Richman, 2002)

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References
Camilleri, E. (2011). Project Success: Critical Factors and Behaviours, Taylor & Francis.

Crosby, P. B. (1996). The absolutes of leadership. San Francisco: Jossey-Bass Publishers.

Heagney, J. (2011). Fundamentals of Project Management. AMACOM.

House, R. J., & Howell, J. M. (1992). Personality and charismatic leadership. The Leadership

Quarterly, 3(2), 81-108.

Kerzner, H. and Kerzner. H.R. (2013). Project Management: Case Studies, John Wiley &

Sons, Incorporated.

Mishra, R.C. (2005). Modern Project Management, New Age International Ltd.

Moore, K. R. (1998). Trust and relationship commitment in logistics alliances: A buyer's

perspective. International Journal of Purchasing and Materials, 34, 24- 37. Richman, L.

(2002). Project Management: Step-by-Step. AMACOM, 2002.

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