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3.5
Governance - Coggle Diagram
3.5
Governance
Governance Theories
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Transaction Cost Theory
The organisations adapt their governance structure to achieve the lowest possible transaction costs
Biesenthal and Wilden (2014)
Shareholder Theory
Shareholders are primarily concerned with maximising the profits, particularly the return on equity
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Müller’s four paradigms
Müller (2009, p. 11-23) outlines there are a number of objectives of governance in projects:
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identifying projects in trouble, and rescue, suspension or termination of these projects as appropriate.
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In a major project, for example, construction site management is a complex activity to measure. If the site manager’s performance is measured in relation to the success of the project, then the site manager might believe that how they perform does not really depend on their own contribution, but on the overall outcome of the project. This might influence their motivation and commitment to the project. In such a case it would probably be easier to evaluate their performance in relation to their specific behaviour: evaluating their actions and responsibilities
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What is governance?
to all processes of governing, whether undertaken by a government, market, or network
governance provides the instruments, principles, and techniques to steer an organisation
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Governance vs management
Governance focusses on the framework supporting and underlying decision making whereas management refers to the exercise of decision making powers
governance focusses on the rules of the game, either implicitly or explicitly, while management is about playing the game.