The significance of Luhmann's theory on organisations for project governance

Abstract

The aim of this paper is to lay out a novel analytical perspective for project governance. Applying two elementary concepts of Luhmann's organisation theory, distinction and autopoiesis, as well as Luhmann's decision-making model offers a deeper comprehension of the project, which renders a novel classification of projects. These project classes are associated with a certain influence relation between organisation and project, which determines the modality of how organisations steer their projects. These are labelled as governance mode and management mode. Fleshing out the decision-making approach of Luhmann, a detailed operational framework for the steering modality governance mode is advanced, as in this case the organisation faces elevated steering challenges and limitations. It is reasoned when and why governance can be effective and positively impact on the project. These contributions offer an enhanced understanding of project governance and new perspectives for developing its practice.