The Project Charter: Initiation, Authority, and Strategic Alignment
PMBOK v8 Definition
The approved project charter formally initiates the project, identifying and assigning a project manager as early as possible, ideally during the development of the charter and always before planning begins. The project charter can be developed by the sponsor or the project manager in collaboration with the initiating entity, allowing the project manager to gain a better understanding of the project’s purpose, objectives, and expected benefits. This document grants the project manager the authority to allocate organizational resources to project activities, establishing a direct link between the project, the business case, and the organization’s strategic goals.
Why It Matters for the Exam
The project charter is one of the most frequently tested concepts on the PMI exam, appearing in questions about project initiation, authority, stakeholder alignment, and strategic alignment. You will see it in situational questions where a project manager is assigned, planning is about to begin, or resource allocation is needed—the correct answer almost always ties back to the charter’s role in providing formal authorization and authority.
Key Points to Remember (for the exam)
- Main Purpose: Formally authorizes the project or phase; establishes the link between the project, business case, and strategic goals
- Project Manager Assignment: Assigned as early as possible, ideally during charter development, and always before planning begins
- Authority Granted: The charter grants the project manager the authority to allocate organizational resources to project activities
- Key Content Elements: Project purpose, objectives, expected benefits, summary milestone schedule, preapproved financial resources, key stakeholder list, project approval requirements, project exit criteria, assigned PM with responsibility/authority level, sponsor name/authority, project scope description (progressively elaborated), deliverables, acceptance criteria, and exclusions
- Common Confusion: The charter is NOT developed during planning—it is created before planning begins; the PM can help develop it but the sponsor or initiating entity also develops it
- Stakeholder Alignment: The Initiating Focus Area aligns stakeholders’ expectations with the project’s purpose, informs stakeholders of scope/objectives, and discusses how participation helps meet expectations
- Business Documents Relationship: The charter references and links to the business case and benefits management plan
Typical PMI Exam Example
A project manager is assigned to a new project after the project charter has been approved. The sponsor asks the PM to begin planning immediately. However, the PM realizes the charter does not include the project’s acceptance criteria or exit criteria. What should the PM do first? → The correct answer is to request that the charter be updated before planning begins, because the charter must contain these elements and planning cannot start without a complete, approved charter.
PMI Exam Traps
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Trap: Confusing the project charter with the project management plan
- Reality: The charter authorizes the project and assigns the PM; the plan describes how to execute, monitor, and control the project
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Trap: Thinking the project manager must always write the charter alone
- Reality: The charter can be developed by the sponsor OR the project manager in collaboration with the initiating entity
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Trap: Believing planning can start before the PM is assigned
- Reality: The PM must be assigned before planning begins; the charter identifies and assigns the PM as early as possible, ideally during charter development
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Trap: Confusing the Initiating Focus Area with planning activities
- Reality: Initiating defines scope initially, commits initial financial resources, identifies stakeholders, and assigns roles—planning comes after charter approval
Important PMI Connections
| Related Concept | Relationship Type | Exam Attention Point |
|---|---|---|
| Business Case | Input to charter development | The charter demonstrates the organization’s commitment to the project and links to strategic goals; the business case justifies the project |
| Benefits Management Plan | Input to charter development | The charter includes expected benefits; the benefits management plan defines how benefits will be measured and achieved |
| Stakeholder Register | Output of Initiating Focus Area | Stakeholders are identified during initiating; their expectations are aligned with the project’s purpose via the charter |
| Project Management Plan | Developed after charter approval | Planning cannot begin until the charter is approved and the PM is assigned; the plan is created during the Planning Process Group |
Quick Review Questions
- When must the project manager be assigned relative to the project charter and planning?
- What authority does the approved project charter grant to the project manager?
- List five essential elements that must be included in a project charter according to PMBOK v8.
- Who can develop the project charter?
- What is the relationship between the project charter, the business case, and the organization’s strategic goals?
PMBOK v8 Reference
Section 2.2.1 – Initiating Focus Area (Project Charter and Authorization)