Adaptive project governance and organizational effectiveness: the mediating roles of trust and coordination

Purpose Faced with today’s digital and uncertain environments, especially in dynamic and innovation-driven contexts such as new product development (NPD) projects, traditional project governance often ignores adaptive capabilities needed to sustain organizational effectiveness. This study investigates how adaptive project governance (APG) influences organizational effectiveness (OE), with an emphasis on the mediating roles of trust and coordination. It thereby addresses a critical gap in understanding the trust and coordination mechanisms through which APG shapes OE in digital and uncertain project environments. Design/methodology/approach A structured survey was administered to project management professionals in Chinese enterprises engaged in NPD projects. The measurement instrument was refined based on validated scales and expert review to ensure relevance to agile and digital project environments. Partial least squares structural equation modeling (PLS-SEM) was employed to evaluate the effects of APG on OE and to test mediation through competence-based trust, benevolence-based trust, intra-team coordination, and inter-team coordination. Findings Governance of projects and self-organizing teams have significant positive effects on OE, both directly and indirectly via competence-based trust and intra-team coordination, confirming their partial mediation roles. However, adaptive development approaches act mainly as enabling conditions rather than direct performance drivers, and benevolence-based trust and inter-team coordination do not exhibit significant mediating effects. Overall, these findings provide empirical evidence on explaining the micro-mechanisms of trust and coordination in translating APG into OE in agile NPD projects. Originality/value This study extends existing adaptive governance research by revealing the micro-foundations (competence-based trust and intra-team coordination) through which APG transforms high-order capabilities into OE. Then, it establishes a priority ordering for effective governance implementation and provides a crucial boundary condition by demonstrating that APG’s iterative component acts merely as an enabler, refining models of agile governance effectiveness in dynamic NPD contexts.