Ethics, Trust, and Governance

PAPERS

in Temporary Organizations
Ralf Müller, Department of Leadership and Organizational Behaviour, BI Norwegian Business
School, Oslo, Norway
Rodney Turner, Universite Lille Nord de France, LSMRC, Skema Business School, Euralille,
France; Faculty of Design Architecture and Building, University of Technology Sydney, Australia;
Kingston Business School, Kingston University, Kingston-Hill, Kingston-upon-Thames, Surrey,
United Kingdom
Erling S. Andersen, Department of Leadership and Organizational Behaviour, BI Norwegian
Business School, Oslo, Norway
Jingting Shao, Institute of Industrial Economics, Chinese Academy of Social Sciences
Øyvind Kvalnes, Department of Leadership and Organizational Behaviour, BI Norwegian
Business School,Oslo, Norway

ABSTRACT ■ INTRODUCTION ■

We investigate the influence of governance
structures of temporary organizations on
the ethical issues faced by its managers,
how they respond to these issues, and how
that influences trust among stakeholders. A
global, web-based survey confirmed earlier
research that project managers encounter
transparency, optimization, and relationship
issues, and identified four additional ethical
issue types. Managers’ behavior in respond-
ing to ethical issues varies by governance
structure, their willingness to resolve ethical
issues themselves, and the trust between
stakeholders. Higher levels of trust are found
in stakeholder-oriented governance, which
can reduce transaction costs. Implications for
practitioners and academics are discussed.
KEYWORDS: project governance;
governance of projects; trust; ethics; ethical
issues
Project Management Journal, Vol. 45, No. 4, 39–54
© 2014 by the Project Management Institute
Published online in Wiley Online Library
(wileyonlinelibrary.com). DOI: 10.1002/pmj.21432
I
n this paper we investigate the types of ethical issues and trust implica-
tions that can be expected within four different approaches to the gover-
nance of projects; for this, we categorize the types of ethical issues and
trust implications by governance paradigm. The study takes the work by
Schaubroeck et al. (2012) (which is built on the model by Schein, 1985, 2010)
as its point of departure. Their work shows that ethical leadership by upper
management impacts both directly by influencing the managers at the next
level within the organizational hierarchy, and indirectly, by influencing the
overall organizational culture, which pervades all layers in the hierarchy. This
study extends these findings into the realm of temporary organizations by
assessing the impact of governance structures on the types of ethical issues
managers of temporary organizations face and the behaviors they adopt to
respond to them. Furthermore, we identify those governance structures,
which support the building of trust between these managers, their teams, and
other stakeholders.
This paper reports the results of the second stage of a multi-stage study.
In the first stage (Müller et al., 2013), we conducted a qualitative analysis
based on nine case studies and found that managers of temporary organiza-
tions, such as projects, face different types of ethical issues, and showed that
the way they respond to them can be influenced by the governance structure
of the parent organization. Moreover, we proposed that the trust that builds
between the manager and the governance structure can influence the trust
the project team and other stakeholders have in those two actors. In this, the
second stage, we conducted a quantitative analysis of results obtained from
a web-based survey to validate and extend the propositions from the prior
study. We also collected data on ethical issues and the role of trust in differ-
ent governance structures, so the results reported here are both confirmatory
and exploratory.
Ethics has developed into an important topic for organizations and their
governance. Irrespective of the many influences on ethics in organizations,
such as culture and leadership we focus on its role in the governance of
projects. Within the present study we view ethics in the sense of Buchholz

August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj 39

 Ethics, Trust, and Governance in Temporary Organizations
PAPERS
and Rosenthal (1996) as a person’s sit-
uation-dependent application of moral
standards, which stem from the tra-
ditions or beliefs that have grown in
societies concerning right and wrong
conduct.
In the first stage of our first study
(Müller et al., 2013) we identified three
generic types of ethical issues encoun-
tered by project management practitio-
ners: transparency issues, relationship
issues, and optimization issues. We do
not claim that this list is exhaustive;
other categories, including politics or
illegal actions, can be posited. In this
stage of the study, we quantitatively
test the conclusions from the qualitative
study and further investigate whether
additional ethical issues faced by proj-
ect managers can be identified. This
leads to our first research question:
RQ1: What are the ethical issues that
managers of temporary organizations
are experiencing in their work?
Governance is executed through the
governance structure, which includes
the organization’s value system, formal
procedures, processes, policies, roles,
responsibilities, and authorities, which
regulate governance mechanisms such
as trust and control. It is the material-
ized or “lived” form of governance and
exists at every level of a hierarchy, or
the nodes in a network, by setting the
goals, providing the means to achieving
these goals, and controlling progress
for the next lower level in the hierar-
chy or an adjacent node in a network
(Müller, 2009; Turner, 2009). Corpo-
rate governance encompasses all work
in an organization, including work in
line and temporary organizations, and
interfaces, overlaps with, and sets the
boundaries for lower level governance,
such as projects, programs, and port-
folios (Association of Project Manage-
ment, 2004; Müller, 2009). From the
work of Schaubroeck et al. (2012) it
can be assumed the way projects are
governed by their respective institu-
tions, such as steering committees,
program and portfolio management,
40 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
project management offices (PMOs)
and so forth impacts ethical decision
making in projects. Decisions on ethical
issues should therefore be understood
within the context of the governance of
projects, and are influenced in turn by
corporate governance (Müller, 2009). So
governance sets the context, and trust is
one mechanism to execute governance
in temporary organizations; within this
context ethical decisions are taken by
project managers.
Thus different governance struc-
tures try to control the ways project
managers respond to ethical issues in
different ways, resulting in different
profiles of trust between the project
manager and governance structure. We
wish to further expand on this model
and obtain quantitative support for it,
which leads to our second research
question:
RQ2: In what way do different gov-
ernance structures influence the
behavior of project managers when
responding to ethical issues?
Schaubroeck et al. (2012) showed
that higher management levels influ-
ence the ethical behavior of lower level
managers as well as the overall ethi-
cal culture in an organization. Building
on that, we assume the way the proj-
ect manager and governance structure
behave toward each other will influence
the perception of the project team and
other stakeholders. Thus the influence
the governance structure has on the
behavior of the project manager, and
the trust between those two actors, may
have an impact on the trust that the
project team and other stakeholders
have in the project manager. This leads
to our third research question:
RQ3: To what extent do governance
structures influence the level of
trust within the project team and
between the project team and other
stakeholders?
The unit of analysis for RQ1 and RQ2
are the project manager and for RQ3,
the community of project stakeholders.
The topic is of interest for several
reasons. First, an understanding of the
nature of the ethical issues faced by
project managers allows them to be
addressed more effectively. Second, an
understanding of the impact of gov-
ernance on project managers’ ethical
decisions and the trust it engenders,
enables organizations to adjust gover-
nance structures to potential ethical
issues and to prepare for possible issues
in given governance structures.
Literature Review
The literature for this study falls natu-
rally into these three categories: eth-
ics, governance, and trust. An in-depth
literature review on these items can be
found in our previous paper (Müller
et al., 2013). Due to space limitations
we provide here only the definitions and
additional literature, which are relevant
for the present study over and above
what was reviewed before.
Ethics in Projects
Our qualitative study on the nature of
ethical issues and the related ethical
dilemmas for project managers revealed
the three categories of transparency,
optimization, and relationship issues,
as presented in the introduction. That
study was based on nine case stud-
ies and 28 interviews; thus, the results
are only generalizable to a theory, not
to a population (Yin, 2009). However,
they are supported by research find-
ings in general management. Examples
include transparency as one of the clas-
sic and most important ethical issues
in governance (Child, 2002). Trans-
parency is needed to stimulate ethical
awareness through information sharing,
which ultimately ensures accountability
for the performance of individuals and
their organizations (Kim, Halligan, Cho,
Oh, & Eikenberry, 2005). Optimization
issues are at the core of Kohlberg’s
popular six-stage model of increasingly
higher levels of moral sophistication
(Kohlberg, 1969), where self-interest
(as ethical optimization) constitutes
the lowest level and justice, rights, and
social responsibility the highest level.
Relationship issues arising from the
dilemma of either sacrificing personal
relationships for the sake of the organi-
zation or vice versa are yet another clas-
sic theme in business ethics, as shown
by Barnett and Karson (1989).
In the present study we wish to
expand on our findings in two ways.
First, we aim to confirm them quantita-
tively and so make them generalizable
to the project manager population. We
therefore propose:
P1: The three categories of ethical
issues (transparency, optimization,
and relationship issues) are experi-
enced by the wider population of proj-
ect managers.
Second, we are aware of the limita-
tions of our qualitative study and expect
other ethical issues to be found, such as
some of those identified in general man-
agement research (such as in Cooper
et al., 2000), or some of those that are
conceptualized as particular for proj-
ect settings, as indicated by Helgadóttir
(2008) or Godbold (2007). However, we
do not expect that all types of ethical
issues identified in general manage-
ment and conceptualized for project
management to be empirically found in
the management of projects.
P2: Project managers experience addi-
tional ethical issues.
These two propositions address
research question RQ1.
Project Governance
The term governance is applied in many
different areas, including politics, soci-
ology, medicine, philosophy, informa-
tion technology, management, and
project management. Although there
are differences between these perspec-
tives, there are also commonalities,
which include Stoker’s (1998, p. 155)
finding that “governance is ultimately
concerned with creating the conditions
for ordered rule and collective action,”
which is accomplished through a
“framework for ethical decision making
and managerial actions based on trans-
parency, accountability, and defined
roles.” The way this is accomplished dif-
fers widely among organizations.
Following Morris (1997), we dif-
ferentiate between the governance of
projects and project governance. Proj-
ect governance is the governance of an
individual project and applies from the
issue of the charter to project close-out,
whereas the governance of projects is
the governance of a portfolio of proj-
ects—whether in a program, portfolio,
project-oriented organization, or a
network of projects—and applies from
initial concept to early operation of
the project’s deliverable (Morris, 1997;
Turner, 2009; Turner, Huemann, Anbari,
& Bredillet, 2010; Gareis, Huemann, &
Martinuzzi, 2013). The Association for
Project Management (2004) uses the
term “governance of project manage-
ment” to refer specifically to the interest
the board of directors takes in proj-
ects, programs, and portfolios within
the project-oriented organization. We
use Pinto’s (2013) definition of project
governance:
The use of systems, structures of
authority and processes to allocate
resources and coordinate or control
activity in a project.
The governance of projects is the
application of that to the portfolio of
projects and the wider area of responsi-
bility, from concept to early operation,
rather than from charter to close-out.
In this paper we address the gov-
ernance of projects and use Müller’s
(2009) model to categorize governance
structures. This is based on the gover-
nance theories of Clarke (2004), who
suggests firms can adopt a stakeholder
or shareholder orientation, and the the-
ory of control in organizations devel-
oped by Brown and Eisenhardt (1997)
and Ouchi (1980), who suggest orga-
nizations can control their employees
through their behavior (process compli-
ance) or outputs (goal achievement).
This leads to four governance para-
digms:
August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
1. The Conformist emphasizes compli-
ance with existing procedures to keep
costs low.
2. The Agile Pragmatist maximizes tech-
nical usability, often through a time-
phased approach to release function-
ality of a product over a period of
time.
3. The Flexible Economist controls proj-
ect outcomes and requires economic
delivery.
4. The Versatile Artist maximizes ben-
efits by balancing a diverse set of
requirements arising from different
stakeholders and their diverging needs.
The governance of projects com-
prises a procedural and human dimen-
sion (Clegg Pitsis, Rura-Polley, &
Marosszeky, 2002; Clegg, 1994). The
procedural dimension allows for sta-
bility through structured planning and
control using governance frameworks,
enabled through clearly defined pro-
cesses, roles, and responsibilities. This
is supported at the organizational level
through flat organization structures and
standardized reporting, which allow
for short communication links among
actors. The human dimension includes
people’s willingness to accept responsi-
bility and collaborate for the good of the
organization or the society as a whole;
thus, this dimension allows for flexible
responses to changing circumstances
(Müller, Pemsel, & Shao, 2014).
The existence of the human dimen-
sion does not allow governance to
become a law-like straightjacket, which
can prescribe every reaction to every
ethical issue in projects; otherwise col-
laboration and flexible responses would
be impossible. Therefore governance
provides a contextual framework, which
shapes, but does not necessarily deter-
mine the actions of project managers
(Clegg et al., 2002; Clegg, 1994). We
propose:
P3: The behaviors adopted by project
managers to respond to ethical issues
differ by the type of governance struc-
ture, such as the governance para-
digm.
41
 Ethics, Trust, and Governance in Temporary Organizations
PAPERS
This proposition addresses research
question RQ2.
Trust in Projects
Trust, like ethics and governance, is con-
ceptually approached from many different
directions. For example, the economi-
cal perspective aims for identification of
situations under which it is rational to
trust (Banerjee, Bowie, & Pavone, 2006);
in comparison, a sociological perspec-
tive of trust “argues that trust arises
from sociologically embedded norms
that govern the relationship” (Banerjee
et al., 2006). Within the present study
we adapt the conceptualization of trust
by Mayer, Davis, and Schoorman (1995),
who see trust as a function of trustworthi-
ness, whose dimensions are ability (the
skills, competencies, and characteristics
that allow a person to influence within
a specific area), benevolence (the extent
to which the person being trusted wants
to do good to the person who trusts him
or her), and integrity (the trustee’s [per-
son being trusted]) adherence to a set
of principles as judged by the trustor
(person trusting). To that end, we adopt
a cognitive-based view of trust, which
focuses on reliability and dependence on
other actors (McAllister, 1995).
Research on trust building through
governance in projects has been scarce.
Most of the studies identify the roles of
different types of trust in projects (Hart-
man, 2000) or roles of trust in organi-
zational relationships (Pinto, Slevin, &
English, 2009). Clases, Bachmann, and
Wehner (2003) showed that too much
control leads to erosion of trust, which
was explained by Kadefors (2004), who
found that it signals to employees that
they are not trusted and that opportu-
nistic behavior is expected. We build on
these findings and propose that:
P4: The level of trust between the proj-
ect manager and governance struc-
ture influences the behaviors adopted
by project managers to respond to
ethical issues.
P5: The level of trust between the proj-
ect manager and governance struc-
42 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
ture differs by the type of governance
structure, such as the governance
paradigm.
P6: The level of trust in projects (espe-
• Questions on RQ2 included a ten-
cially between project manager, proj-
ect team, and external stakeholders) is
influenced by the level of systems trust
between the project manager and
governance structure and so differs by
the type of governance structure, such
as the governance paradigm.
These propositions address research
question RQ3.
Methodology
We build on our qualitative study
(Müller et al., 2013) by validating their
results and exploring the understanding
of ethics and trust in different paradigms
of the governance of projects. We follow
Morgan (2007) in designing a study that
uses an abductive approach by going
back and forth between induction and
deduction in converting observations
to theories, and then testing them. That
implies intersubjectivity in the relation-
ship between researcher and research
process by alternating between objec-
tivity and subjectivity (neither exists in
a pure form) to overcome incommen-
surability of inductive and deductive
approaches. Finally it implies transfer-
ability of the research results, which
are neither generally applicable, nor
particular for one case, but assume
that parts of the research results can
be transferred to other circumstances
(Morgan, 2007).
A worldwide, web-based ques-
tionnaire was used to collect data.
Respondents were asked to answer
the questions in relation to their last
project. The questionnaire consisted of
four parts, one for questions on each
research question and one for demo-
graphic data.
• Questions on RQ1 included the types of
ethical issues and their severity, ques-
tions on the authority of the project
manager to decide on and implement
actions in response to ethical issues,
the help sought by others, and the
measures taken by organizations to
prepare project managers for dealing
with ethical issues.
question construct to assess the gov-
ernance of projects paradigm. This
was operationalized through a modi-
fication of the construct developed by
Miles, Covin, and Heely (2000), based
on the work of Khandwalla (1977),
and was used successfully in previ-
ous studies in project management
(Müller & Lecoeuvre, 2014). Items
were assessed using five-point seman-
tic differential Likert scales. The con-
struct consisted of two dimensions,
corporate governance orientation and
organizational approaches to control.
With the study’s aim of creating a cat-
egorization system, the intent is to
identify the overall direction of the
organization governing the project,
accepting that there might be different
approaches in other parts of the orga-
nization. The dominance of a share-
holder orientation is indicative of an
underlying value of maximizing share-
holder wealth relative to the require-
ments of other stakeholders; whereas
the dominance of stakeholder orien-
tation indicates a wider spectrum of
stakeholders to serve, of which share-
holders is one (Clarke, 2004; Davis,
Schoorman, & Donaldson, 1997). In
line with Miles et al. (2000), we mea-
sured the dominance of shareholder
or stakeholder orientation along the
dimensions of: decision making being
in the best interest of shareholders
or stakeholders; remuneration as
being based on shareholder return
on investment or community incen-
tives; legitimacy of actions being based
on profitability of the results or by
achievement of wider social interests;
financial objectives being prioritized
over or under stakeholder satisfac-
tion; and the organization’s long-term
objective being to maximize value for
the owners of the organization or for
society. The dimension for organi-
zational control was used to identify
 merely a behavior or outcome orien-
tation in the control structure of the
organization. Similarly, the aim was
to identify the overall trend, to cat-
egorize into a behavior controlled
(process compliance) or outcome con-
trolled (meeting expected results) gov-
ernance approach. Following Miles
et al. (2000), the following items were
addressed: rule-orientation, being the
organization’s priority for following the
rules or creating expected outcomes,
level of control being the preference
for more formal and tight or more
informal and loose control, adherence
to job descriptions, being the need for
individuals to comply with their job
description or decide on their own
appropriate on-job behavior, the role
of support institutions (such as PMOs)
being process or results oriented, and
compliance expectations by the organi-
zation, such as prioritizing methodol-
ogy compliance over an individual’s
own experience.
• Questions on RQ3 included those
on the most important stakeholders
in the project, and those on project
managers’ trust in their team and
teams’ trust in their project manag-
ers, as well as the perceived trust
of the project managers by stake-
holders, and perceived trust of the
project teams by stakeholders. The
question items from Chen, Chen, and
Xin (2004) were used, applying five-
point Likert scales (1 = low, 5 = high
trust). For each of the three groups
(project manager, project team, and
stakeholders), the following items
were assessed: trust in the project,
confidence in integrity, confidence in
right decision making, consistency of
actions with words, and guidance by
correct principles.
• Demographic data included the role of
the respondent, the project type, proj-
ect size, and country of execution.
Data Gathering
The questionnaire was piloted in
March 2012, and a few minor changes
were made. The answers of the pilot
respondents were not included in the
final sample.
Snowball sampling was used by
sending an invitation and weblink to
presidents of professional organizations
for project management and their
special interest groups (SIGs), includ-
ing the Project Management Institute
(PMI), International Project Manage-
ment Association (IPMA), Association
for Project Management (APM), and
others. Furthermore, we contacted our
own network of project management
practitioners. Data collection was done
for a period of five weeks in April and
May 2012.
The number of responses totaled
337, six of which were not answered
at all, leading to 331 usable responses.
Snowball sampling does not allow cal-
culating a traditional response rate;
however, the number of responses
approached the minimum sample size
for generalization for infinite popula-
tion sizes (384 responses at a confi-
dence level of 95% at margin of error
±5%) (Polaris, 2010).
Data Analysis
Analysis was done by using:
1. Unrotated Factor Analysis to test for the
internal consistency of measurement
constructs, such as those for project
governance paradigms and trust
2. Descriptive analyses were used to
extract patterns, preferences, and
average behaviors from the data
3. Chi-square tests were used to identify
significant differences between the
patterns found in the four project
governance paradigms, and
4. Correlation analyses were done to
identify the relationships between gov-
ernance and trust.
Validity was ensured through the
use of tested measurement constructs
where possible, like those used for the
governance paradigms and the mea-
sure of trust, where item-to-item and
item-to-total correlations were used
(and respective thresholds of 0.3 and 0.5
August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
being met) as quantitative validity tests,
in addition to the more qualitative test
for face validity during piloting. Other
questionnaire items were assessed for
their construct validity through assess-
ments of fellow researchers (professors
in project management from other uni-
versities). Piloting was done through
members of the sponsoring organi-
zation (Norwegian Centre for Project
Management). Reliability was tested
using Cronbach Alpha with a thresh-
old value of 0.7 (Hair, Black, Babin, &
Tatham, 2006).
The majority of respondents (70%)
were in a project management role. We
used ANOVA to test for differences in
answers by role, but found no signifi-
cant differences; therefore we kept the
sample in its entirety for the further
analysis. We collectively refer to the
sample as “project managers” in this
paper. (See Table 1)
Analysis
The data satisfied the underlying
assumptions of the analysis tech-
niques, such as those for normality with
skewness and kurtosis being within the
range of ±2.
Governance Paradigm
Unrotated factor analysis was done to
test the validity of the measurement
construct for the four governance para-
digms. This tested for:
• Convergent validity within each of the
measurement dimensions (shareholder-
stakeholder orientation and behavior-
outcome control). This most popular
method for internal consistency analysis
(Clark & Watson, 1995) tests that the
major portion of variance in the data
collected for a measurement dimension
“should be reflected as a general fac-
tor, a factor on which most of the items
positively load” (Snyder & Gangestad,
1986, p. 127). All items of each of the
two dimensions loaded clearly on their
respective dimension with loadings
higher than 0.40 (Table 2), thus they are
“good indicators of the construct” (Clark
& Watson, 1995, p. 317).
43
 Ethics, Trust, and Governance in Temporary Organizations
PAPERS

Respondents Roles Frequency Percent Geographical Distribution Frequency Percent

Valid Project manager 231 69.8 Valid North America 57 17.2
Project team member 40 12.1 Europe w/o Scandinavia 52 15.7
Consultant 9 2.7 Scandinavia 47 14.2
Line manager 9 2.7 Middle and South America 25 7.6
PMO member 8 2.4 Middle East 20 6
Program manager 8 2.4 Asia 19 5.7
Manager of project managers 5 1.5 Africa 9 2.7
Portfolio manager 4 1.2 Australia 8 2.4
Steering group member 4 1.2 Total 237 71.6
Trainer 3 0.9 Missing System 94 28.4
Other 1 0.3 Total 331 100
Total 322 97.3
Missing System 9 2.7
Total 331 100 Project Size Frequency Percent
Valid <€1 million 79 23.9
Project Type Frequency Percent €1 – 4.9 million 63 19
Valid IT & Telecommunication 103 31.1 €5 – 9.9 million 26 7.9
Orgl. Change & Business 75 22.7 €10 – 50 million 35 10.6
Engineering & Construction 54 16.3 >€50 million 32 9.7
Total 232 70.1 Total 235 71
Missing System 99 29.9 Missing System 96 29
Total 331 100 Total 331 100
Table 1: Sample demographics.

• Discriminant validity across the two
construct-dimensions to test their
orthogonal relationship showed a sig-
nificant two-factor model (p = 0.000,
KMO.783, Eigenvalue = 1). The fac-
tor on Orientation explains 30.0% of
the variance at a reliability measure
(Cronbach Alpha) of 0.82, and the fac-
tor on Control explains a 26.0% vari-
ance at a Cronbach Alpha of 0.77, thus
in total 56% of the variance, at accept-
able reliability levels (Hair et al., 2006).
• Haman’s unrotated factor analysis was
done to test for common methods bias.
As shown in Table 2, the clear loading
of each measurement dimension on
its respective factor did not indicate an
issue of that kind (Podsakoff & Organ,
1986).
This confirmed the eligibility of the
measurement construct for the gover-
nance paradigms.
Each dimension was measured on stakeholder oriented. Similarly, scores
a five-point scale. Orientation scores below 3 on the control dimension were
below 3 were classified as shareholder scored as behavior control and those at
oriented and those at and above 3 as or above 3 as outcome control.
Component
Measurement Dimensions 1 2
Orientation: long-term objectives 0.778
Orientation: shareholder versus stakeholder 0.755
Orientation: profit versus social interest 0.754
Orientation: remuneration 0.715
Orientation: financial objectives versus stakeholder satisfaction 0.653
Control: procedures 0.826
Control: control 0.789
Control: job conformance 0.726
Control: method compliance 0.595
Control: tactical PMO 0.450
Note. Extraction Method: Principal Component Analysis.
Table 2: Unrotated factor analysis of the governance paradigm construct.

44 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj

Research Question 1: Types of Ethical
Issues
Categories and Frequencies of Ethical
Issues
We asked the respondents to what extent
they identified the three ethical issues
identified in the qualitative study, by
asking them to rank them on a 5-point
Likert scale (ranging from 1 = never to 5
= always); 97% of the respondents (321)
replied to this question that they had
these issues in their last project. From a
frequency perspective this is significant.
It supports proposition P1. Transpar-
ency issues, with a mean of 2.75, were
the most highly recognized, with opti-
mization issues a close second, with a
mean of 2.69. Relationship issues were
the lowest recognized, with a mean of
2.31. The differences were not signifi-
cant (at 0.05).
We also asked the respondents to
identify other possible issues. Only 5%
of the respondents (16) replied to this,
but we were able to identify four more
ethical issues encountered by project
managers:
4. Power and politics issues: these emerge
from the use of power or politics in
order to enforce decisions or changes
in projects.
5. Illegal actions: these include fraud,
corruption, blackmailing, and bribery.
6. Role conflicts: these arise from differ-
ences in cultural, religious, legal, or
career values.
7. Underperforming governance struc-
ture: these issues arise from low or
non-involvement of governance insti-
tutions, when their role is crucial for
project progress.
Of these, power and politics issues
were encountered most frequently
(mean = 3.0), but were only mentioned
by 8 respondents (2.4%), which supports
proposition P2, but only marginally.
The seven categories derived from
the earlier and present study are induc-
tively derived and they should not be
understood as being mutually exclu-
sive, or strictly different. Just as in other
categorization systems (as opposed to
classification systems) it is possible that
perceptions of categories differ by per-
spectives or situations of individuals.
The appropriateness of the three
generic types of issues (transparency,
optimization, and relationship) as a
measurement construct to test for fre-
quency of ethical issues in general was
tested through unrotated factor analy-
sis. The three issue types loaded on one
unrotated factor (all loadings > 0.68),
which explained 59.3% of the variance
(p = 0.000, KMO = 0.622). Cronbach
Alpha of 0.86 showed reliability. This
confirms the eligibility of the three cat-
egories as a measure for the general fre-
quency of generic ethical issues, further
confirming Proposition P1.
An important finding was that com-
panies providing training in ethics have
a significantly lower frequency in the
occurrence of optimization issues than
other companies (ANOVA, p = 0.021;
Scheffe, p = 0.037). No significant dif-
ferences in frequencies were found by
country, project type, project size, or the
use of codes of ethics by organizations.
Severity of Ethical Issues
Respondents were asked for their
most severe ethical issue. Across all
responses, transparency issues were
mentioned most often (20.6%), fol-
lowed by optimization issues (18.4%).
The most often reported ethical issue
(mode) differs by governance para-
digm. Behavior-controlled paradigms
(Conformist and Agile Pragmatist)
report transparency issues most often,
whereas outcome-controlled paradigms
(Flexible Economist and Versatile Art-
ist) report optimization issues. ANOVA
analysis with post-hoc Scheffe test was
done to detect differences in the fre-
quency of ethical issues by paradigm.
Results showed that the Versatile Art-
ist paradigm has a significantly higher
frequency of issues than the Conformist
paradigm (ANOVA p = 0.008, Scheffe
p = 0.013).
Analysis per category of most
severe ethical issues showed that the
August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
distribution differs across paradigms.
Transparency issues occur most often
under the Conformist paradigm (40%),
whereas 50% of all relationship issues
are reported within projects governed
by the Flexible Economist paradigm.
Optimization issues occur roughly to
a third in both the Flexible Economist
and Versatile Artist paradigms, whereas
power and politics issues occur most
often in the Flexible Economist para-
digm (42.1%), and illegal actions and
role conflicts occur most often in the
Versatile Artist paradigm. Underper-
forming governance structures occur
most often (44.4%) in the Flexible Econ-
omist paradigm as the most severe ethi-
cal issue.
The distribution of most severe
ethical issues within each paradigm is
shown in Table 3. Half of all issues
(50%) within the Conformist paradigm
and slightly less (42.4%) in the Agile
Pragmatist paradigm are transparency
related, thus are in behavior-controlled
environments. The Flexible Economist
paradigm is dominated by a mix of
transparency and optimization issues,
and the Versatile Artist suffers mainly
from optimization issues.
Table 3 shows that behavior control
based paradigms are prone to transpar-
ency issues, whereas outcome control
based paradigms face more optimiza-
tion issues. This is also reflected in the
correlations. The project governance
control dimension is positively and
significantly correlated with transpar-
ency issues (p = 0.016, r = 0.156). The
higher the behavior control, the more
transparency issues. Similarly is the
shareholder–stakeholder orientation
negatively correlated with relationship
issues (p = 0.035, r =—0.133). Thus, the
more shareholder oriented the gover-
nance structure is, the more relation-
ship issues will appear.
Trust (as the degree to which the
governance system trusts the project
managers) was tested by asking proj-
ect managers’ about their authority
to decide on ethical issues and imple-
ment their decision themselves. We
45
 Ethics, Trust, and Governance in Temporary Organizations
PAPERS

Project Governance Paradigm

Most Severe Issue (type) Conformist Economist Artist Pragmatist
Transparency % within Project Governance paradigm 50.0% 24.6% 11.4% 42.4%
Relationship % within Project Governance paradigm 6.8% 12.3% 4.5% 6.1%
Optimization % within Project Governance paradigm 18.2% 28.1% 38.6% 24.2%
Power and politics % within Project Governance paradigm 6.8% 14.0% 11.4% 9.1%
Illegal action % within Project Governance paradigm 11.4% 8.8% 20.5% 6.1%
Role conflict % within Project Governance paradigm 4.5% 5.3% 9.1% 6.1%
Governance structure % within Project Governance paradigm 2.3% 7.0% 4.5% 6.1%
% within Project Governance paradigm 100.0% 100.0% 100.0% 100.0%
Table 3: Distribution of most severe issues within each governance paradigm.

Governance Paradigm
Conformist Flexible Economist Versatile Artist Agile Pragmatist
(shareholder orienta- (shareholder orienta- (stakeholder orienta- (stakeholder orienta-
tion/behavior control) tion/outcome control) tion/outcome control) tion/behavior control)
Frequency of those not
60% 50% 69% 86%
seeking help
Supervisor (51%) Supervisor (49%) Steering Committee (38%) Supervisor (41%)
Top three sources turned to
Steering Committee (33%) Colleagues (41%) Supervisor (35%) Steering Committee (39%)
for help* (% mentioning**)
Colleagues (31%) Steering Committee (31%) Colleagues (24%) Colleagues (36%)
* = difference in patterns between Flexible Economist and other paradigms is significant at 0.05.
** = multiple mentioning possible.
Table 4: Seeking help with ethical issues.

found no correlation with the gover-
nance paradigm dimensions; so these
authorities are granted independent
of the governance paradigm. However,
we found that 70% of the governance
structures allow project managers to
decide and act on ethical issues them-
selves, and 80% of the project manag-
ers trust their governance structures
to be supportive in addressing ethical
issues. This indicates a mutual rein-
forcement of system trust and personal
trust.
Research Question 2: Behavioral
Implications of Different Governance
Structures
We asked respondents to indicate
whether they would seek help if they
could not address an ethical issue on
their own, and if so from whom: 69.8%
(231) indicated they would ask for help;
15.4% (51) said they would not; and
14.8% (49) did not answer the question.
The main reason given for not seeking
help was they did not want to make it
an issue, and 65.5% (269) said they often
solved the issue themselves. A small
number, 5.4% (18), said they could not
raise the issue because it was illegal.
Others delegated or escalated the issue,
3.4% (11). Table 4 shows the frequen-
cies by governance paradigm, and the
actors from whom help is sought. The
frequency of seeking help differs by
governance paradigm. People on proj-
ects governed by a Versatile Artist para-
digm seek help least often (66.7%) and
have the lowest number of people they
contact when they do (mean = 1.67).
Contrarily, 77.2% of respondents in a
Conformist paradigm ask for help and
contact an average 2.18 people; thus,
people in organizations with the most
control seek help most often from the
most people, and those in the firms with
the least control, seek help least often
from the fewest people.
Those who sought help were asked
to indicate from whom. Answers dif-
fered by governance paradigm, level of
authority, type of ethical issue, project
type, size of project, and geography.
This supports proposition P3.
Governance paradigms: Supervisors
are the preferred source for help in the
Conformist, Flexible Economist, and
Agile Pragmatist paradigms, and Steer-
ing Groups in the Versatile Artist para-
digm. Chi-square tests showed that the
search pattern of the Flexible Economist
paradigm differs significantly (at p =
0.05) from the patterns in other para-
digms.
Level of authority: We also looked for
difference by level of authority. Respon-
dents who do not seek help have a sig-
nificantly higher authority to decide on
their own on ethical issues (p < 0.05).

46 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj

 Governance Paradigm
Shareholder Orientation Stakeholder Orientation
All Conformist Flexible Economist Versatile Artist Agile Pragmatist
Number % Number % Number % Number % Number %
Sponsor 145 60.7 36 64.3 53 68.6 33 52.4 22 56.4
End user 71 29.7 14 25.0 18 23.4 23 36.5 13 33.3
Suppler 2 0.8 1 1.8 0 0.0 1 1.6 0 0.0
Other 21 8.8 5 8.9 6 7.8 6 9.5 4 10.3
Total 239 100.0 36 100.0 77 100.0 63 100.0 39 100.0
Table 5: Importance attached by project managers to different stakeholders.

Seeking help seems to compensate for
lack of authority. This explains the rela-
tive popularity of supervisors and steer-
ing committees for these questions.
Types of ethical issues: The source
of help sought differs slightly by type of
ethical issue. Supervisors are most often
referred to, except for power and poli-
tics and underperforming governance
structures, where the steering commit-
tee is most popular. In cases of illegal
actions, both the supervisor and rules
and regulations are equally popular. In
the case of role conflicts, supervisors
and colleagues are most often referred
to. Help is sought most often and from
the most people, for power and political
issues (91.3%) and least often for illegal
actions.
Project type: The source sought for
help differs also by project type. Super-
visors are the main source of help in
all project types. Help is sought most
often in ITT projects and least often in
engineering and construction projects.
The most severe issues are transpar-
ency issues in ITT and organizational
change and business projects. Optimi-
zation issues are most often reported in
engineering and construction projects.
Size of projects: The source sought
for help differs also by size of project.
Supervisors are most popular for that.
In terms of project size, help is most
often sought for in the projects above
€50 million and least often in projects
between €10 and 50 million. Most con-
tacts for help are sought in the larg-
est projects and the least in projects
between €5 and 9 million. Optimiza-
tion issues dominate the smallest (<€1
million) and the largest projects (>€50
million), whereas transparency issues
dominate the projects in between.
Geography: The source also differs
by region/continents. Supervisors are
preferred in almost all regions, except
Scandinavia and the Middle East,
where the Steering Committee is more
popular. Help is most often sought by
respondents in the Middle East and in
Middle and South America, and least
often in Australia. Transparency issues
dominate in Europe, North America
and Asia, and optimization issues in
the Middle East and Middle and South
America.
Research Question 3: Trust Between
Different Actors
We explored the level of trust between
different actors on the project and
looked at how to build trust through the
governance structure. But first we asked
project managers who were the most
important stakeholders in their projects.
Importance of Stakeholders
Table 5 shows the importance project
managers attach to different stake-
Project Manager
Trustee Project manager * 3.27 (0.901)
Project team 3.85 (0.680)
Table 6: Level of trust between different project actors, mean (standard deviation).
holders under different governance
paradigms. Under all four paradigms,
sponsors are ranked the highest and
end users the next highest. However, the
paradigms with a shareholder orienta-
tion rank sponsors more highly than
those with a stakeholder orientation,
and those with a stakeholder orienta-
tion rank end users more highly than
those with a shareholder orientation.
Significant differences were found using
the Chi-square test. Results show that
the pattern in importance ranking differ
significantly between the Conformist
and Agile Pragmatist paradigms (p =
0.026), Flexible Economist and Versatile
Artist paradigms (p = 0.004), Flexible
Economist and Agile Pragmatist para-
digms (p = 0.000), and Versatile Artist
and Agile Pragmatist paradigm (p =
0.03). This is to be expected. The spon-
sor represents the shareholders and so
will have higher importance attached to
governance paradigms with shareholder
orientation, but end users will receive
greater significance in those paradigms
with a stakeholder orientation.
Trust Between Different Actors on Projects
We asked different project actors, the
trustors, a series of questions to gauge
Trustor
Project Team Other Stakeholders
3.97 (0.552)
* 3.50 (0.569)

August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj 47

 Ethics, Trust, and Governance in Temporary Organizations
PAPERS

Corporate Governance Project Project Managers Project Managers

Orientation Governance Authorized to Authorized to
(shareholder- Control Orientation Implement Measures Decide on Ethical
stakeholder) (behavior-outcome) on Ethical Issues Issues
T1: Project managers Pearson 0.197* –0.110 0.156 0.137
trust in project team Correlation
Sig. (2-tailed) 0.011 0.160 0.051 0.087
N 165 165 156 158
T2: Project managers Pearson 0.146 0.053 0.083 0.119
perceived trust by Correlation
project stakeholders Sig. (2-tailed) 0.062 0.500 0.306 0.138
N 164 164 155 157
T3: Project teams trust Pearson 0.430* 0.332 0.286 0.368
in project managers Correlation
Sig. (2-tailed) 0.022 0.091 0.148 0.054
N 28 27 27 28
T4: Project teams per- Pearson 0.203 0.008 0.202 0.148
ceived trust by project Correlation
stakeholders Sig. (2-tailed) 0.301 0.969 0.313 0.453
N 28 27 27 28
Corporate governance Pearson 1 0.023 0.110 0.057
orientation (share- Correlation
holder-stakeholder) Sig. (2-tailed) 0.728 0.090 0.379
N 254 240 241 244
Project governance Pearson 0.023 1 0.019 0.016
control orientation Correlation
(behavior- Sig. (2-tailed) 0.728 0.770 0.810
outcome)
N 240 240 227 230
* = significant at p < .05.
Table 7: Correlations of governance paradigms, trust, and authority.

the extent to which they trusted other
actors on the project, the trustees. First,
we gauged the level of trust between the
project manager and project team. We
asked each as a trustor to rate the other
as trustee (for details, see the methodol-
ogy section).
Table 6 shows the mean scores
across the six questions. We then asked
each to say to what extent they per-
ceived that they are trusted by other
stakeholders. Against a similar set of six
questions, we asked them to say to what
extent they thought other stakeholders
as trustors trusted them as trustees. The
results are shown in the last column
of Table 6. Project managers perceive
the trust of other stakeholders in the
project managers significantly higher
(at p = 0.05) than the trust these project
managers have in their teams. The trust
of the project team in the project man-
ager is nominally lowest, but not signifi-
cantly different from the perceived level
of trust that stakeholders have in the
project team.
Correlations Between the Governance
Paradigm, Trust, and Authority
We used Pearson correlations to assess
the trust between the parties against
the project governance paradigm
dimensions and the project managers’
authorities to decide on and implement
measures in response to ethical issues.
Table 7 shows the results.
Results show that:
1. The governance orientation, (share-
holder to stakeholder), is positively
correlated (p = 0.011, r = 0.197) with
project managers trust in the project
team (T1). The higher the stakeholder
orientation, the higher the project
managers trust in the project team.
This explains (in R2) about 4% of the
project manager’s trust in his or her
team (T1).
2. Project managers’ authority to imple-
ment their own decisions on ethical
issues is positively correlated with

48 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj

 project managers’ trust in the proj-
ect team. However, this result is at
the borderline of insignificance (p =
0.051) at a 5% threshold, but would
be acceptable at 10% threshold. The
correlation explains about 2.5% of the
project manager’s trust in his or her
team (T1).
3. The governance orientation (share-
holder to stakeholder) is positively
correlated (p = 0.022, r = 0.430) with
project team’s trust in the project
manager (T3). The higher the stake-
holder orientation, the higher the
teams trust in the project manager.
This explains about 19% of the trust
of team’s in their managers (T3).
4. Authority to decide on ethical issues is
positively correlated with team mem-
bers’ trust in the project manager. Simi-
lar to the results on the authority to
implement, this result is at the border-
line of insignificance (p = 0.054) at a 5%
threshold, but would be acceptable at a
10% threshold. It explains about 14% of
the trust of teams in their managers (T3).
Practical significance of these results
can be interpreted using Cohen’s (1988,
p. 413) classification of effect sizes in
the behavioral sciences. He classified
R2 measures above 0.02 as small, above
0.13 as medium, and above 0.26 as large.
Small effect sizes are of a magnitude
often found in relationships pursued
in the ‘soft’ behavioral science (Cohen,
1988, p. 79). Medium effect sizes are of a
magnitude that ‘would be perceptible to
the naked eye of a reasonably sensitive
observer’ (Cohen, 1988, p. 80), and large
effect sizes mark the ‘practical upper
limit of predictive effectiveness’ in the
behavioral science (Cohen, 1988, p. 81,
citing Ghiselli, 1964, p. 61).
Notwithstanding the borderline of
significance of two of the correlations,
we see small effect sizes in result (1)
and (2) above and medium effect sizes
in (3) and (4).
Conclusion
The aim of this study was to obtain quan-
titative verification for the qualitative
results obtained in the first stage of the
study (Müller et al., 2013) and to further
extend the propositions of that study.
The study addressed three research
questions and the results were as fol-
lows:
Research Question 1: Types of Ethical
Issues
Research Question 1 is:
RQ1: What are the ethical issues that
managers of temporary organizations
are experiencing in their work?
with the following propositions:
P1: The three categories of ethical
issues (transparency, optimization,
and relationship issues) are experi-
enced by the wider population of proj-
ect managers.
P2: Project managers experience
additional ethical issues.
Proposition P1 was strongly sup-
ported, and Proposition P2 was weakly
supported. Project managers experience
the three ethical issues identified in the
previous study: transparency, optimiza-
tion, and relationship issues, and in addi-
tion we identified four additional issues:
power and political issues, illegal actions,
role conflicts, and underperforming gov-
ernance structure. The four additional
issues were not identified by many peo-
ple, but they may change if they were
offered them as options. The most fre-
quently encountered issues were trans-
parency issues followed by optimization
issues. The frequency of issues differed
by governance paradigm. Organizations
using behavior control are more likely
to encounter transparency issues. When
people’s work is more tightly controlled,
they are more likely to compromise
reporting about their progress. Firms
with a shareholder orientation are more
likely to encounter relationship issues.
Where relationships within the organi-
zation are important, they can be more
frequently compromised.
We were also able to investigate
the amount of trust of the governance
August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
system in the project manager and
found it was not dependent on the gov-
ernance paradigm, and so that did not
support part of Proposition P5.
Research Question 2: Behavioral
Implications of Different Governance
Structures
Research Question 2 is:
RQ2: In what way do different gov-
ernance structures influence the
behavior of project managers when
responding to ethical issues?
with the following proposition:
P3: The behaviors adopted by project
managers to respond to ethical issues
differ by the type of governance struc-
ture, such as the governance paradigm.
Proposition P3 was supported. Peo-
ple from the Versatile Artist paradigm
sought help the least often and from
the fewest people, whereas people from
the Conformist paradigm sought help
the most often from the most people.
The paradigm with the highest level
of control has the people least willing
to address issues themselves and the
people with the weakest control are
the most willing to address issues by
themselves. This confirms the findings
of Schaubroeck et al. (2012) that the cul-
ture that senior managers engender in
an organization influences the behavior
of managers at all levels. Supervisors
were the preferred source of help in all
paradigms except the Versatile Artist,
where the Steering Committee was the
preferred source. Behaviors also dif-
fered by level of authority, type of ethi-
cal issue, project type, size of project,
and geography.
Research Question 3: Trust Between
Different Actors
Research Question 3 is:
RQ3: To what extent do governance
structures influence the level of trust
within the project team and between
the project team and other stake-
holders?
49
 Ethics, Trust, and Governance in Temporary Organizations
PAPERS
with the following propositions:
P4: The level of trust between the proj-
ect manager and governance struc-
ture influences the behaviors adopted
by project managers to respond to
ethical issues.
P5: The level of trust between the proj-
ect manager and governance struc-
ture differs by the type of governance
structure, such as the governance
paradigm.
P6: The level of people trust in projects
(especially between project manager,
project team, and external stake-
holders) is influenced by the level
of systems trust between the project
manager and governance structure
and so differs by the type of gover-
nance structure, such as the gover-
nance paradigm.
Data analyzed for Research Ques-
tion 2 show that project managers’
behavior differs by the level of trust
granted by the governance structure.
Project managers with higher levels of
trust to decide on ethical issues and
implement their decisions asked sig-
nificantly less people for help than their
less trusted colleagues. This supports
Proposition P4. Research Question 2
suggests the behaviors adopted by proj-
ect managers differ by governance para-
digm, but data gathered under Research
Question 1 suggested that there was
no difference in the level of systems
trusts between the governance structure
and project manager by governance
paradigm. Thus, Proposition P5 was
not supported by this. Proposition P6
was partially supported. The answer to
Research Question 3 is: In governance
paradigms with a shareholder orienta-
tion, project managers trust end users
more. End users provide the returns
for shareholders. In governance para-
digms with a stakeholder orientation
project managers trust sponsors more.
Sponsors are the contact with other
stakeholders. The levels of trust vary by
governance paradigm. Project managers
have greater trust in the project team,
and the team in the project manager,
50 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
under paradigms with a stakeholder
orientation. Higher levels of stakeholder
orientation in the governance structure
are associated with higher levels of trust
between project managers and teams.
We also found that trust between the
project manager and project team is
correlated with the amount of author-
ity granted to the project manager to
take decisions. This indicates that trust
is reflective, and that trust granted
by the system is reflected in the trust
between the actors, partially supporting
Proposition P4. To increase trust, the
governance structure should empha-
size a stakeholder orientation and trust
the project manager to address ethical
issues appropriately.
Practical Implications
This research can help organizations to
understand the different types of ethi-
cal issues that project managers face
and design the governance structure
to help project managers dealing with
these issues. For example, by adjust-
ing their governance paradigm toward
more stakeholder orientation, organiza-
tions are able to increase the level of
trust between project managers and the
governance structure. How this can be
done is described by Hernandez (2012).
Doing this may also enhance trust
between other project actors. A further
practical implication is the role of train-
ing in ethical issues, which significantly
reduces the amount of optimization
issues in projects, which is in line with
Trevino’s (1986) proposition that train-
ing in ethics increases moral judgment.
Knowing the types of issues to expect
in a governance paradigm (as outlined
above) points organizations toward
measures needed to prepare for or pre-
vent these issues. A portfolio of pos-
sible measures is outlined in our earlier
paper (Müller et al., 2013).
Academic Implications
The findings on ethics support the work
of Schaubroeck et al. (2012) and take it
into the realm of project management
by showing the impact of (higher level)
governance structures on (lower level)
temporary organizations and their
types and measures for handling ethical
issues. The study also shows how dif-
ferent contexts lead to different actions
and behaviors of managers; thus, differ-
ent results of their framings of ethical
issues, in the sense of Kelley and Elm’s
(2003, pp. 139–140) findings that “orga-
nizational setting and organizational
factors influence the way that managers
frame ethical issues, particularly since
framing involves embedding decisions
and problems in a context.”
Writers on corporate governance
emphasize the importance of transpar-
ency as a basic principle of good gov-
ernance (e.g., Aras & Crowther, 2010).
The present study showed that trans-
parency is also a major issue in projects.
This implies a future research ques-
tion: Are the ethical issues in projects
predominantly influenced by corporate
governance or project governance? The
findings on transparency issues, here
mainly related to compromising the
reporting of real project performance,
are supported by Shalvi, Handgraaf, and
De Dreu (2011, p. S17) who, in reference
to Schweitzer and Hsee (2002), propose
that “uncertainty about the real-world
state of affairs increases the likelihood
that people will bend the rules in their
own favour.” The reasons for this behav-
ior were not assessed in the present
study. However, traditional agency
theorists would relate this behavior to
the utility maximization intents of the
“homo economicus” (Jensen & Meck-
ling, 1994), while recent research in psy-
chology showed that decision makers
tend to prioritize the improvement of
outcomes for others in need (pro-social
behavior) over improving the outcomes
for themselves (egoistic behavior) in
an attempt to reach a positive moral
self-regard (Schaumberg & Wiltermuth,
2014). Taken together, project manag-
ers, when compromising the truth in
their reporting, may do so in the best
interests of the project and its team,
including themselves—an aspect that
requires further investigation.
 The study’s findings on trust in
project settings complement several
studies in general management and
psychology. For example, the 70% to
80% reciprocity of personal and sys-
tems trust between managers and gov-
ernance structures indicates that (1)
trust is used as a governance mecha-
nism, potentially reducing transaction
costs (Duyer & Chu, 2003); (2) personal
trust and trust based on decontextu-
alized rules are mutually supportive,
and not alternative options for building
relationships (Clases, et al., 2003); and
(3) medium levels of trust are prefer-
able over extreme levels of high or low
trust, which can be harmful (Jeffries
& Reed, 2000; Langfred, 2004). Taken
together this indicates the important
role of trust between projects and their
context. Little research has been done
in this area and more is needed.
Moreover, the study showed that
different contexts, such as project
types, governance paradigms, ethical
issues, and so forth, make project man-
agers turn to a variety of different roles
and sources for help, thus trusting dif-
ferent people, institutions, or policies
for good advice, contingent on the situ-
ation. This supports Kramer’s (2006)
model of people using intuitive social
auditing before they decide whom
to trust. Here situational sensemak-
ing (situation specific interpretation)
precedes the decision on appropriate
action in a situation. The present study
showed how situational characteristics
lead project managers to trust different
roles in seeking their advice in different
circumstances.
Project managers with higher levels
of power in the form of decision-making
authority on ethical issues yield higher
levels of trust from their project teams.
Conversely, project managers trust
their teams more when they have the
power to implement measures against
ethical issues themselves. This find-
ing contributes to the ongoing debate
and research agenda on the complex
relationship between power and trust
(Bachmann, 2006; Sydow, 2006) by sup-
porting the role of institutional-based
trust, “where power has a considerable
potential to foster the development of
trust between social actors” (Sydow,
2006, p. 393). This is indicative of the
crucial role governance institutions
play for trust building in organizations
through their granting of power to orga-
nizational actors. More research in this
area is also indicated.
The strengths of the study lie in its
combination of often separately inves-
tigated topics. The combined effect of
governance, trust, and ethics was, to
the best of our knowledge, not a sub-
ject of project management research
before. The use of existing measure-
ment constructs and a relatively large
sample size of 331 answers to a global
survey also add to the strengths of the
study. Weaknesses of the study lie in
the low number of responses to the
newly identified ethical issue catego-
ries, 4 to 7 (see above), which requires
further investigation. Other weaknesses
include the relative small effect size and
borderline of significance of some of the
correlations.
Future studies should also investi-
gate the next level of detail in both gov-
ernance structures and ethical issues, as
well as the relationship between system
trust and people trust in governance.
This will help to develop theories of
how different governance structures
impact on the development of trust in
different ways. Furthermore, a process
study should be able to bring up some
complementary views on ethical issues,
such as those suggested by Langley,
Smallman, Tsoukas, and Van de Ven
(2013).
Project managers encounter ethi-
cal issues, and the governance structure
influences the types of issues encoun-
tered and the way they are responded to.
Acknowledgments
The researchers in this study thank the
Norwegian Centre for Project Manage-
ment for their financial and in-kind
support, without which this study would
not have been possible.
August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
References
Aras, G., & Crowther, D. (2010).
Corporate social responsibility: A
broader view of corporate governance. In
G. Aras & D. Crowther (Eds.), Handbook
of corporate governance and social
responsibility. Farnham, UK: Gower
Publishing Limited.
Association of Project Management.
(2004). Directing change: A guide to
governance of project management. High
Wycombe, UK: Association for Project
Management.
Bachmann, R. (2006). Trust and/or
power: Towards a sociological theory
of organizational relationships. In R.
Bachmann & A. Zaheer (Eds.), Handbook
of trust research. Northampton, MA:
Edwards Elgar Publishing Inc.
Banerjee, S., Bowie, N. E., & Pavone, C.
(2006). An ethical analysis of the trust
relationship. In R. Bachmann & A.
Zaheer (Eds.), Handbook of trust research
(pp. 303–317). Cheltenham, UK: Edward
Elgar Publishing Limited.
Barnett, J. H., & Karson, M. J. (1989).
Managers, values, and executive deci-
sions: An exploration of the role of
gender, career stage, organizational level,
function, and the importance of ethics,
relationships and results in managerial
decision-making. Journal of Business
Ethics, 8(10), 747–881.
Brown, S., & Eisenhardt, K. M. (1997).
The art of continuous change: Linking
complexity theory and time-paced evolu-
tion in relentlessly shifting organizations.
Administrative Science Quarterly, 42(1),
1–34.
Buchholz, R. A., & Rosenthal, S. B.
(1996). Towards a new understand-
ing of moral pluralism. Business Ethics
Quarterly, 6(3), 263–275.
Chen, C. C., Chen, Y. R., & Xin, K.
(2004). Guanxi practices and trust in
management: A procedural justice
perspective. Organization Science, 15(2),
200–209.
Child, J. (2002). The international crisis
of confidence in corporations. Academy
of Management Review, 16(3), 145–148.
51
 Ethics, Trust, and Governance in Temporary Organizations
PAPERS
Clark, L. A., & Watson, D. (1995).
Constructing validity: Basic issues
in objective scale development.
Psychological Assessment, 7(3), 309–319.
Clarke, T. (2004). The stakeholder
corporation: A business philosophy
for the information age. In Theories of
corporate governance: The philosophical
foundations of corporate governance (pp.
189–202). London, UK: Routledge.
Clases, C., Bachmann, R., & Wehner, T.
(2003). Studying trust in virtual orga-
nizations. International Studies of
Management & Organization, 33(3), 7–27.
Clegg, S. R. (1994). Weber and Foucault:
Social theory for the study of organiza-
tions. Organization, 1(1), 149–178.
Clegg, S. R., Pitsis, T. S., Rura-
Polley, T., & Marosszeky, M. (2002).
Governmentality matters: Designing an
alliance culture of inter-organizational
collaboration for managing projects.
Organization Studies, 23(3), 317–337.
Cohen, J. (1988). Statistical power analy-
sis for the behavioral sciences. Hillsdale,
NJ: Lawrence Erlbaum Associates, Inc.
Cooper, R. W., Frank, G. L., & Kemp,
R. A. (2000). A multinational comparison
of key ethical issues, helps and chal-
lenges in the purchasing and supply
management profession: The key impli-
cations for business and the professions.
Journal of Business Ethics, 23(1), 83–100.
Davis, J. H., Schoorman, F. D., &
Donaldson, L. (1997). Toward a steward-
ship theory of management. Academy of
Management Review, 22(1), 20–47.
Duyer, J. H., & Chu, W. (2003). The role
of trustworthiness in reducing transac-
tion costs and improving performance:
Empirical evidence from United States,
Japan and Korea. Organization Science,
14(1), 57–68.
Gareis, R., Huemann, M., &
Martinuzzi, A. (2013). Project man-
agement and sustainable development
principles. Newtown Square, PA: Project
Management Institute.
Ghiselli, E. E. (1964). Dr. Ghiselli com-
ments on Dr. Tupes note. Personnel
Psychology, (17), 61–63.
52 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
Godbold, A. (2007). Managing ethics. In
J. R. Turner & S. J. Simister (Eds.), Gower
handbook of project management (4th
ed., Vol. 3rd, pp. 838–854). Aldershot, UK:
Gower Publishing.
Hair, J. F., Black, W. C., Babin, B., &
Tatham, R. L. (2006). Multivariate data
analysis. Upper Saddle River, NJ: Pearson
Education Inc.
Hartman, F. T. (2000). The role of TRUST
in project management. In D. P. Slevin,
D. Cleland, & J. K. Pinto (Eds.), Project
management research at the turn of the
millennium (pp. 23–35). Newtown Square,
PA: Project Management Institute.
Helgadóttir, H. (2008). The ethi-
cal dimension of project manage-
ment. International Journal of Project
Management, 26(7), 743–748.
Hernandez, M. (2012). Toward an
understanding of the psychology of
stewardship. Academy of Management
Review, 37(2), 172–193.
Jeffries, F. L., & Reed, R. (2000). Trust
and adaptation in relational contracting.
Academy of Management Review, 25(4),
873–882.
Jensen, M. C., & Meckling, W. H. (1994).
The nature of man. Journal of Applied
Corporate Finance, 7(2), 4–19.
Kadefors, A. (2004). Trust in proj-
ect relationships—inside the black
box. International Journal of Project
Management, 22(3), 175–182.
Kelley, P. C., & Elm, D. R. (2003). The
effect of context on moral intensity of
ethical issues: Revising Jones’s issue-con-
tingent model. Journal of Business Ethics,
48(2), 139–154.
Khandwalla, P. N. (1977). The design of
organizations. New York, NY: Harcourt
Brace Jovanovich, Inc.
Kim, P. S., Halligan, J., Cho, N.,
Oh, C. H., & Eikenberry, A. M. (2005).
Toward forum on and participatory on
transparent governance: Report the
Sixth Global Forum on Reinventing
Government. Public Administration
Review, 65(6), 646–654.
Kohlberg, L. (1969). Stage and sequence:
The cognitive-developmental approach
to socialization. In D. A. Goslin (Ed.),
Handbook of socialization theory and
research. Chicago, IL: Rand-McNally.
Kramer, R. M. (2006). Trust as situated
cognition: An ecological perspective
on trust decisions. In R. Bachmann &
A. Zaheer (Eds.), Handbook of trust
research. Northampton, MA: Edwards
Elgar Publishing Inc.
Langfred, C. W. (2004). Too much
of a good thing? Negative effects of
high trust and individual autonomy
in self-managing teams. Academy of
Management Journal, 47(3), 385–399.
Langley, A., Smallman, C., Tsoukas, H.,
& Van De Ven, A.H. (2013). Process stud-
ies of change in organization and man-
agement: Unveiling temporality, activity,
and flow. Academy of Management
Journal, 56, 1–13.
Mayer, R. C., Davis, J. H., &
Schoorman, F. D. (1995). An integrative
model of organizational trust. Academy
of Management Review, 20(3), 709–734.
McAllister, D. J. (1995). Affect- and
cognition-based trust as foundations for
interpersonal cooperation in organiza-
tions. Academy of Management Journal,
38(1), 24–59.
Miles, M. B., Covin, J. C., & Heeley,
M. B. (2000). The relationship between
environmental dynamism and small firm
structure, strategy, and performance.
Journal of Marketing Theory and Practice,
8, 63–78.
Morgan, D. L. (2007). Paradigms
lost and pragmatism regained:
Methodological implications of combin-
ing qualitative and quantitative meth-
ods. Journal of Mixed Methods Research,
1(1), 48–76.
Morris, P. (1997). The management of
projects (p. 358). London, UK: Thomas
Telford.
Müller, R. (2009). Project governance.
Aldershot, UK: Gower Publishing.
Müller, R., Andersen, E. S., Kvalnes, Ø.,
Shao, J., Sankaran, S., Turner, J. R.,
Biesenthal, C., Walker, D.H.T., &
Gudergan, S. (2013). The interrelation-
ship of governance, trust, and ethics
in temporary organizations. Project
Management Journal, 44(4), 26–44.
Müller, R., & Lecoeuvre, L. (2014).
Operationalizing governance catego-
ries of projects. International Journal of
Project Management (in press).
Müller, R., Pemsel, S., & Shao, J. (2014).
Organizational enablers for governance
and governmentality of projects: A
literature review. International Journal of
Project Management (in press).
Ouchi, W. G. (1980). Markets, bureaucra-
cies and clans. Administrative Science
Quarterly, 25, 129–141.
Pinto, J. K. (2013). Project management,
governance, and the normalization of
deviance. International Journal of Project
Management, 32(3), 376–387.
Pinto, J. K., Slevin, D. P., & English, B.
(2009). Trust in projects: An empirical
assessment of owner/contractor relation-
ships. International Journal of Project
Management, 27(6), 638–648.
Podsakoff, P. M., & Organ, D. W. (1986).
Self-reports in organizational research:
Problems and prospects. Journal of
Management, 12(4), 531–544.
Polaris. (2010). Sample size calculator.
Retrieved from www.polarismr.com
/education/tools_ss_
Schaubroeck, J. M., Hannah, S.
T., Avolio, B. J., Kozlowski, S.
W., Lord, R. G., Trevinño, L. K.,
Dimotakis, N., & Peng, A. C. (2012).
Embedding ethical leadership within
and across organization levels.
Academy of Management Journal,
55(5), 1053–1078.
Schaumberg, R. L., & Wiltermuth, S.
S. (2014). Desire for a positive moral
self-regard exacerbates escalation of
commitment to initiatives with pro-
social aims. Organizational Behavior
and Human Decision Processes, 123(2),
110–123.
Schein, E. H. (1985). Organizational
culture and leadership (1st ed.). San
Francisco, CA: Jossey-Bass Publishers.
Schein, E. H. (2010). Organizational cul-
ture and leadership (4th ed.). Hoboken,
NJ: Jossey-Bass Publishers.
Schweitzer, M. E., & Hsee, C. K. (2002).
Stretching the truth: Elastic justifica-
tion and motivated communication of
uncertain information. Journal of Risk
and Uncertainty, 25(2), 185–201.
Shalvi, S., Handgraaf, M.J.J., & De
Dreu, C.K.W. (2011). Ethical manoeu-
vring: Why people avoid both major
and minor lies. British Journal of
Management, 22, S16–S27.
Snyder, M., & Gangestad, S. (1986). On
the nature of self-monitoring: Matters of
assessment, matters of validity. Journal of
Personality and Social Psychology, 51(1),
125–139.
Stoker, G. (1998). Governance as theory:
Five propositions. International Social
Science Journal, 50(155), 17–28.
Sydow, J. (2006). How can systems trust
systems? A structuration perspective on
trust-building in inter-organizational
relations. In R. Bachmann & A. Zaheer
(Eds.), Handbook of Trust Research.
Northampton, MA: Edwards Elgar
Publishing Inc.
Trevino, L. K. (1986). Ethical decision
making in organizations: A person-situ-
ation interactionist model. Academy of
Management Review, 11(3), 601.
Turner, J. R. (2009). The handbook of
project-based management (3rd ed.). New
York, NY: McGraw-Hill.
Turner, J. R., Huemann, M., Anbari, F.T.,
& Bredillet, C.B. (2010). Perspectives on
projects. New York, NY: Routledge.
Yin, R. K. (2009). Case study research:
design and methods (4th ed.). Thousand
Oaks, CA: SAGE Publications.
Ralf Müller is a Professor of Project
Management at BI Norwegian Business
School in Norway. His principal research
interests are in leadership and governance of
projects, programs, portfolios, and PMOs. He
is department editor at Project Management
Journal ®, the author or co-author of more
than 150 publications, and, among other
accolades, the receiver of the 2012 IPMA
Research Award, and Project Management
Journal ®’s 2009 Paper of the Year Award. He
holds an MBA from Heriot Watt University,
August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
a DBA degree from Brunel University
in the United Kingdom, and is a Project
Management Professional (PMP)® credential
holder. Before joining academia, Professor
Müller spent 30 years in the industry consult-
ing with large enterprises and governments
in more than different countries for their proj-
ect management and governance and also
held related line management positions, such
as the worldwide director of project manage-
ment at NCR Teradata. He can be contacted
at ralf.muller@bi.no
Rodney Turner is a Professor of Project
Management at Kingston Business School
and at SKEMA Business School, in Lille,
France, where he is Scientific Director
for the PhD in Project and Programme
Management. He is also Adjunct Professor
at the University of Technology Sydney
and was Visiting Professor at the Technical
University of Berlin for 2012–2013.
Rodney is the author or editor of sixteen
books and editor of The International
Journal of Project Management. His
research areas cover project management
in small to medium-sized enterprises, the
management of complex projects, the
governance of project management, includ-
ing ethics and trust, project leadership
and human resource management in the
project-oriented firm.
Rodney is Vice President, Honorary
Fellow, and former chairman of the UK’s
Association for Project Management, and
Honorary Fellow and former President
and Chairman of the International Project
Management Association. He can be
contacted at rodney.turner@skema.edu or
rodneyturner@europrojex.co.uk
Erling S. Andersen is professor emeritus
of project management at BI Norwegian
Business School, Oslo, Norway. He has
been visiting professor to the University of
Tokyo, Japan and to Nanyang Technological
University, Singapore. He has been dean
for BI’s China and Vietnam activities. He
is honorary professor at the University of
Southern Denmark. Professor Andersen
has published several books and articles
53
 Ethics, Trust, and Governance in Temporary Organizations
PAPERS
on information technology, systems
development, project management, and
management in general. His book, Goal
Directed Project Management has been
translated in nine languages and his
latest book, Project Management–An
Organizational Perspective has been
published by Prentice-Hall. He can be con-
tacted at erling.s.andersen@bi.no
Jingting Shao is a post-doctoral
researcher at the Institute of Industrial
Economics at the Chinese Academy of
Social Sciences and the Vice President of
China’s Young Crew project manager orga-
nization within the International Association
of Project Management (IPMA). She holds
two doctoral degrees, one from SKEMA
Business School (Lille, France) in Strategy,
54 August/September 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj
Programme and Project Management
and one from Northwestern Polytechnical
University (Xi’an, China) in Management
Science and Engineering. Her research
interests are in program management,
leadership, and project governance. In 2011
she was awarded the “IPMA Outstanding
Research Contribution of a Young
Researcher Award” and in 2012 the “China
Project Management Research Contribution
Award.” She has participated in several
international research projects sponsored
by the Project Management Institute
and the Norwegian Centre for Project
Management. She can be contacted at
sjt1107@gmail.com
Dr. Øyvind Kvalnes is an Associate
Professor at BI Norwegian Business
School, Department of Leadership and
Organizational Behaviour. He has a PhD
in philosophy from the University of
Oslo, on the topic of moral luck. For ten
years, he has worked as a philosophical
consultant for Nordic organizations mainly
organizing dilemma training sessions with
leaders and employees and he has facili-
tated processes in a range of projects,
focusing on ethics and communication
in project management. His research
interests are in business ethics, moral
psychology, communication climates,
and identity and values in organizations.
At BI he is responsible for a course
in applied business ethics, a compul-
sory course for all master’s of science
degree students. He can be contacted at
Oyvind.Kvalnes@bi.no