Keeping project finances from PMs does seem counterintuitive; however, there are some reasons why it may be beneficial. One of the reasons could be that organizations want to encourage creativity and innovation and limiting knowledge of the budget could force the PMs to find creative, cost-effective solutions that otherwise would not have been developed with a full knowledge of the budget. Moreover, by not disclosing the full budget, organizations can prevent PMs from utilizing the entirety of the budget to come to a solution that may have been able to develop with a limited budget. Although these reasons may be incentive enough for organizations to limit the budget knowledge to PMs, it could potentially have drawbacks such as having some mistrust between the PM and the management or hindering the PM's ability to make informed decisions without having the full knowledge of the budget. 

In our recent lectures, we discussed project managers (PMs) but not much of project finances, which is interesting. Adding to the excellent points, restricting project teams from knowing the budget may help them be more creative and provide new ideas. Without a budget, project managers may be forced to think creatively and use resources efficiently to make the project go more smoothly. Organizations can prevent project managers from assigning resources only on cost by not providing full budget information. This could make people consider new approaches and prioritize tasks based on project importance rather than cost.

However, this technique's drawbacks must be considered. Openness and honesty are crucial to good interactions, therefore it could make PMs and senior management less trusting of each other. Without budget knowledge, PMs may struggle to make effective decisions, which could affect the project's long-term success. While there may be compelling reasons to keep project money secret, organizations should examine the merits and cons and consider strategies to ensure transparency and accountability throughout the project's existence. By balancing innovation and economic prudence, firms may equip project managers to operate projects efficiently and accomplish goals.

Echoing many of the sentiments shared above, working with a limited scope of the budget overall would "force" creativity and innovation on the "limited" resources that may be available. Often times, an overly expanded budget would just result in misuse and taking the most practical/easy approach. This would be good for R&D and the design engineers since it makes the job simpler, but if it was a medical device to be marketed, it would result in two negatives for the consumers: an increased overall cost of the product based on prices of material, and increased repair costs due to the parts that went into it.

However, the assumption of a limited budget (within a healthy margin) would definitely provoke innovation since it would require design engineers and R&D to think beyond the practical intended aspect of each part and seek greater usage of it within the overall structure of the product, OR maybe even seek cheaper but effective alternatives to reduce costs.

Keeping the financial resources of the project secret from the project managers can be attributed to various reasons, although this method is not applicable in many government-affiliated organizations and institutions. But according to my experiences, I will state two things about this practice, which are:

1. Risk Management: In certain circumstances, disclosing the entire budget to the project manager may cause unnecessary stress or anxiety, especially if the project is operating on a limited budget. By limiting information, top management may intend to shield the project team from potential concerns and allow them to focus on their tasks.

2. Negotiating leverage: Some organizations may negotiate contracts, deals, or resource allocations based on the budget information they have. By keeping the budget confidential, senior management retains the flexibility to negotiate without disclosing full financial details to project managers, potentially maintaining negotiating leverage.

While this may provide some insight, it is important to note that transparency and open communication are generally considered best practices in project management. Clear communication, including financial details, can contribute to better decision-making and project success. If confidentiality is standard practice, it is worthwhile for organizations to assess whether it fits with their overall project management philosophy and whether changes could lead to more effective collaboration.

Thank you for your question. I agree with others opinion. However, I want to add some more points. In my opinion, I assume several reasons. first of all, financial information is very sensitive. Secondly, managers want to make all the financial decisions and maintain control over others. Thirdly, managers want cost-effective solutions. They don't want to waste money. Managers will get an easy solution to the problem by doing it. Sometimes, it may be company policy. Then, managers are unable to share this information. 

This was definitely a surprising component of this week's lecture series. Although I agree with many of the previously stated points in this feed, I do think that there could be benefits from keeping the finances a secret from the PM. First, let's start with the bad. Similar to aforementioned statements, keeping finances a secret from a PM can lead to a lot of miscommunication, misalignment of expectations, project delays, and failure. For example, one theme we constantly discuss about project managers, especially in the context of project planning, is being able to comprehensively develop a hierarchy of project tasks, duration, and by extension an estimate of cost/resources. Obviously, if you don't know the budget restrictions, a PM would not be able to make an accurate project timeline. This would also probably lead to frequent delays because the PM would effectively have to get approval from stakeholders/company officials to perform more costly tasks (all of which could have been clearly defined and planned for if the budget was initially disclosed).

However, there are some instances where I could see benefits to keeping the project budget a secret from PMs. Hypothetically, imagine a Project Based Organization, where each project has a PM with team under them and there are 2 departments with a total project budget is 10 million dollars. One department is dedicated towards Research and one for Marketing. If the Marketing team is only receiving 1 million dollars, while the research team is getting $9 million dollars, this could lead to tension between both departments, especially if either team feels that they are not being allotted an appropriate budget. Or if a company plans to restructure departments, I could see them hiding general budgets as well. 

I agree with your point that withholding project financial information from a PM seems extremely detrimental. Reading this thread I did see some seemingly reasonable answers as to why this practice would be implemented but it seems like ultimately the core reasoning is a lack of trust in the PM do their job effectively. Withholding financial information to "encourage" the PM the innovate more, or prevent them from wasting budget unnecessarily, shows a complete lack of faith in the PM. Part of PM's job is to effectively manage the budget to ensure that the project is not only done, but also done cost effectively while minimizing the risk to the project's success. Without complete information, the ability of a PM do to this is jeopardized. bs725 did bring up a good point on how withholding information could prevent inter department tension from budget discrepancies but this also is a lack of trust towards their employees to remain professional. Ultimately, I am not sure if these reasons are good enough to justify this practice.

One additional reason finances might be partially hidden from a PM is to help manage scope and expectations. If the full budget is visible, teams may assume the entire amount is available to spend and may expand the scope of the project to match it. By limiting visibility, senior management can sometimes ensure that teams focus on meeting the core requirements rather than designing solutions around the maximum available funding. At the same time, I agree with others that completely hiding financial information can make it difficult for a PM to make effective planning decisions. Since project managers are responsible for balancing scope, schedule, and cost, at least some level of financial transparency is usually necessary for realistic timelines and resource allocation.

I agree with many of the points mentioned, especially about creativity and negotiation leverage, but another possible reason could be strategic flexibility for upper management. Sometimes the total budget for a project is part of a larger portfolio of projects, and leadership may want the ability to shift funding between them depending on progress or priorities. If the full budget is disclosed early, the PM and team might plan around resources that management later decides to reallocate elsewhere. That said, I also think there’s a balance that needs to be maintained. Even if the exact budget isn’t shared, providing the PM with clear cost constraints or spending guidelines would still allow them to plan resources and timelines effectively without limiting management’s flexibility.

While I think transparency is important, one practical reason finances might not necessarily be fully disclosed to a PM is that the budgets are often tied to a larger portfolio of projects and upper management might want flexibility to shift funds between them as priorities change. In this case, revealing the full budget early could lead to the PM trying to plan around resources that may later be reallocated elsewhere. With that said, completely hiding financial information could still create inefficiencies because the project manager is responsible for balancing scope, resources, and timelines. A better approach could be providing general budget constraints or spending guidelines so the PM can plan effectively while also managing financial flexibility.

I don't know if there's a good reason to keep the PM out of the loop financially. Everything in a company relates to finances. "Time is money," and when it comes to the development of a medical device, it can be a very long and costly process. A good PM would already try to minimize costs where possible, so I disagree with the points made above about a lack of transparency about financials causing a PM to be "more creative." I think that it would honestly have the opposite effect. If I were managing a project where I knew none of the financials, I would assume the worst and feel restricted in what decisions I could make. I think it just shows a lack of trust, as some people mentioned, and I think it would be overall detrimental to the project.