Project Charter: Components and Purpose | Project Management

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Project Charter: Components and Purpose

Project Management · Chapter 2: Launching and Defining a ProjectSection 2.4 · lesson 13 of 739 min · free with a free account

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In this lesson

How a signed charter authorizes a project and limits the manager.

  • Explain the purpose of a project charter and why the sponsor issues it
  • Identify the components of a charter and write measurable objectives
  • Distinguish assumptions from constraints
  • Compare the charter with the scope statement and project plan

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Transcript

Everything said in the video, section by section (1,231 words). Read along, or search it.

Opening Question

Who Authorized This Deposit

Theo works at a garden center, and he's been asked to lead a small project: an online plant-care guide, so staff stop answering the same questions by phone all day. Keen to start, he books a web developer, and asks two colleagues to start writing plant pages. Then Bea, the bookkeeper, refuses to pay the developer's deposit. Who authorized this? And the colleagues' supervisor wants to know why her staff are off the shop floor. Theo is competent. So what gives a project manager the right to spend money, and direct people who don't report to him?

Definition

Three Jobs of a Project Charter

Competence alone doesn't give that right. The instrument that does is a project charter: a document that formally authorizes a project, and gives the project manager authority to use organizational resources. It does three jobs. It records that the organization has decided the project should happen, so the decision can't later be denied. It transfers authority: the manager may spend, assign and decide, within the limits it states. And it gives everyone a short, shared statement of why the project exists, and what it must achieve. It rests on the business case: the case argues for the decision, and the charter records it.

Issuer

Why the Sponsor Signs

The charter is issued by the sponsor, or another authority outside the project, like a board or an executive, with the standing to commit those resources. Here, that's Marta, the owner. It is not issued by the project manager, for two reasons. A manager who authorizes their own project is granting themselves authority, which has no force with anyone else. And the manager has a personal interest in the project going ahead. In practice the manager often drafts the charter, because they know the work. But the sponsor's signature is what makes it valid.

Components

Justification, Objectives, Requirements and Budget

Theo drafts the charter, component by component. Justification says why: customers phone for plant-care advice, staff time is eaten up, and the answers vary. Objectives state measurable results. Within three months of launch, at least half of advice requests are answered by the guide instead of the phone, against a baseline taken before launch. High-level requirements say broadly what the result must do: searchable by plant name, readable on a phone, and checked by a staff horticulturist. Summary milestones: content agreed in month one, a draft in month two, launch by the end of month three. And the summary budget: twelve thousand in total, split between content and website setup.

Components

Assumptions, Constraints, Stakeholders and Approval

Assumptions list what's believed but not yet known: the horticulturist can give four hours a week. Constraints list the limits imposed from outside: launch before spring, stay under the budget ceiling, and use only photographs the shop owns. Key stakeholders: the owner, shop staff, regular customers, and the horticulturist. Not just the senior supporters. Manager authority says what Theo may decide alone. Approval is Marta's signature and the date. Without it, the whole document is only a proposal.

Objectives

Outcome, Measure, Target and Date

Look closer at objectives. A usable one names the outcome, the measure, the target, and the date or period. At least half of advice requests answered by the guide, within three months, against a baseline: someone can check that later. Compare improve customer service. Nobody could ever show it was achieved, or missed. Objectives should also trace to the benefits the business case promised. If the case claimed staff time would be saved, an objective should measure it. Otherwise the project can finish, without delivering what justified it.

Common Confusion

Assumptions Versus Constraints

Assumptions and constraints are often mixed up. An assumption is believed true, for planning purposes, but not yet verified. A constraint is a known limit imposed from outside the plan: a fixed date, a budget ceiling, a legal requirement. They're used differently. No plan may breach a constraint without the sponsor's agreement. But each assumption is something to check, and if it proves false, the plan must change. The horticulturist's four hours is an assumption: if her employer cuts them, the schedule is threatened. Launch before spring is a constraint. It won't move because the team would like it to.

Quick Check

Where the Web Host Price Belongs

Quick check. A draft charter says: the web host will keep its current prices through the year. Which component does that belong in? Pause, and decide. Assumptions. Nobody has verified it; it's a belief about the future, and if prices rise, the budget must be revisited. A constraint would be a limit imposed on the project, like a budget ceiling. And an objective is a result the project must achieve.

Authority

What the Manager Decides Alone

The authority section answers the opening question most directly. It states what the manager may decide alone, what needs the sponsor, and any spending or staffing limits. Theo may spend up to five hundred per item within the budget, and assign tasks to staff by agreement with their supervisor. Changing the total budget or the launch date needs Marta. Writing limits down isn't distrust. It prevents two opposite failures: a manager who must ask permission for every purchase, and one who commits the organization beyond what the sponsor intended.

Comparison

Charter, Scope Statement and Project Plan

Three documents often blur together. The charter authorizes the project at a high level, at the end of initiation, and the sponsor approves it. The scope statement defines precisely what will and won't be delivered, early in planning, agreed with the sponsor and key stakeholders. The project plan explains how the work will be done, with tasks, dates, resources and risks. It's built during planning, and updated during delivery. Each elaborates the one before it. So a later document that contradicts the charter signals that someone changed the project without authority.

Common Mistakes

Four Recurring Charter Defects

Four charter defects recur. Vague objectives can't be checked, so success gets argued instead of shown. Missing authority leaves the manager responsible, without power. A missing signature means the document is a draft, and anyone can say the project was never authorized. And a charter that's too long doesn't get read, which defeats its purpose. A good one fits on a page.

Quick Check

Which Purchase Needs the Sponsor

Quick check. A bakery chain is opening a central kitchen. Its charter lets the project manager buy any pre-listed equipment, and spend up to five thousand on other items. She may also hire temporary fit-out contractors, within a sixty-thousand budget line. Which of these still needs the sponsor? Pause, and decide. The permanent head baker. Nothing in her authority covers permanent hires, and they create payroll that runs on long after the project ends. The oven is on the pre-approved list, and the mixer is under the five-thousand limit. The sponsor traded control of small items for speed on the big ones.

Case Resolution

A Signed Charter Unlocks the Work

Back to Theo. Marta signs and dates the charter, and it goes to Bea and to the shop supervisor. Now the developer's deposit is within budget, and under Theo's limit, so Bea pays it. And the supervisor agrees which hours her staff give to writing, because the charter says tasks are assigned by agreement with her. That answers the opening question. Competence isn't enough. A signed charter, issued by the sponsor, gives the project manager the right to act, and says exactly where that right stops.

Key Takeaways

Authorization and Its Limits

To recap. A charter formally authorizes a project, and gives the project manager authority over resources. The sponsor issues and signs it, even when the manager drafts it. Objectives name an outcome, a measure, a target and a date. Assumptions are checked; constraints bind the plan. And the authority section says what the manager decides alone, and what needs the sponsor.

About Project Management at UPI Study

Project Management (Business 230) is a self-paced online course of 73 video lessons in 12 chapters, from starting and defining a project to planning, budgets, scheduling tools, proposals, contracts, execution, monitoring, closure, teams and certification. It carries a NCCRS credit recommendation for 3 semester credits.

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Why students take Project Management with UPI Study

How projects are planned, run and closedProject Management teaches how to deliver work on time and on budget: scope, schedules, the critical path, budgets and earned value, risk, contracts, monitoring and closing a project, and leading the team. It is a common course in business, management and engineering degrees.
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130,000+students helped with college creditsACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Where the credit goes

Universities that work with NCCRS

Project Management carries a NCCRS credit recommendation. These universities work with NCCRS; some are UPI Study's signed partners. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Thomas Edison State UniversityThomas Edison State UniversitySigned partnerUniversity of the PeopleUniversity of the PeopleSigned partnerCharter Oak State CollegeCharter Oak State CollegeSigned partnerStrayer UniversityStrayer UniversitySigned partnerColumbia Southern UniversityColumbia Southern UniversitySigned partnerIndiana TechIndiana TechSigned partnerPenn StatePenn StateWorks with NCCRSSouthern New Hampshire UniversitySouthern New Hampshire UniversityWorks with NCCRSSUNYSUNYWorks with NCCRS +many more cooperating universitiesFind my college →

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FAQ

Questions students ask us

About Project Charter: Components and Purpose

What is a project charter and what does it do?
A project charter is a document that formally authorizes a project and gives the project manager authority to use organizational resources. It records the organization's decision, transfers authority within stated limits, and gives everyone a short shared statement of why the project exists and what it must achieve. It rests on the business case, which argued for the decision.
Who signs a project charter?
The sponsor, or another authority outside the project such as a board or executive, issues and signs the charter. The project manager often drafts it because they know the work, but cannot authorize their own project, since self-granted authority has no force with others and the manager has a personal interest. Without the sponsor's signature, the charter is only a proposal.
What are the main components of a project charter?
A charter typically includes justification, measurable objectives, high-level requirements, summary milestones, a summary budget, assumptions, constraints, key stakeholders, the project manager's authority, and the sponsor's approval with a date. A good one fits on a page. The authority section states what the manager may decide alone, what needs the sponsor, and any spending or staffing limits.
How is a project charter different from a scope statement?
A charter authorizes the project at a high level at the end of initiation and is approved by the sponsor. A scope statement defines precisely what will and will not be delivered, early in planning, agreed with the sponsor and key stakeholders. The project plan then explains how the work will be done. A later document contradicting the charter signals an unauthorized change.

About the Project Management course

How many college credits is Project Management?
Project Management (Business 230) carries a NCCRS credit recommendation for 3 semester credits. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.
How much does Project Management cost and what is included?
$250, paid once, with lifetime access: all 73 video lessons, a practice quiz after each, the graded work and final exam, and an official transcript when you finish. Students who want several courses choose UPI Study PRO instead.
Which universities accept UPI Study credits?
UPI Study has signed partner agreements with universities such as Thomas Edison State University, University of the People and Charter Oak State College, and works with universities such as Penn State, SNHU and SUNY. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities. Use "Find my college" on this page to check yours.
How long does Project Management take?
It is self-paced with no deadlines. The 73 lessons total about 15 hours of video; most students add reading and practice time and finish in a few weeks to a few months, on their own schedule.
How are the exams done?
Quizzes and assignments are online in the course. The final exam is taken online with proctoring; a person on the UPI Study team checks assignments, usually within two days.
How do my credits reach my college?
When the course shows 100% complete, request the official transcript from your dashboard. It is sent to the college you name, and you can send it to more than one. Check your college first with "Find my college" on this page, or ask Athena.

Ready for the full course? Earn 3 credits in Project Management.

73 video lessons, a quiz after each one, and the graded work that earns the credit. Recommended for credit by NCCRS.

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