The versatile project-based organization: governance and operational control

Throughout the latter half of the 20th century, there has been a shift in the management paradigm, from the functional, bureaucratic approach, almost universally adopted in the first half of the century, to project and process-based approaches. This shift has been in response to the changing nature of work from mass production, with essentially stable customer requirements and slowly changing technology, to the current situation where every product supplied may be against a bespoke design, and technology changes continuously and rapidly. Whereas the functional, bureaucratic approaches to management are underpinned by a strong theoretical basis, the classical theory of management developed during the late 19th and early 20th centuries, the process and project-based approaches do not have a strong theoretical basis. Furthermore, in adopting project- and process-based approaches to overcome the weaknesses of the functional approach, managers have also lost its strengths; they have not replaced some of the essential roles it fulfils. With the eventual aim of developing a theoretical basis for the project and process-based approach, which recovers the strengths of classical management, we at Erasmus University Rotterdam are conducting a research project to determine how project-based organizations are managed. In this paper we present initial findings, especially as they relate to the management of the process of product delivery, that is in the areas of operational control and governance. We also briefly review the issues identified in the management of human resources.