Performers, trackers, lemmings and the lost: sustained false optimism in forecasting project outcomes—evidence from a quasi-experiment
TL;DR: In this article, the authors investigate whether optimism bias persists beyond the planning phase and into the execution phase, and if so, explore the reasons why, and demonstrate on-going or sustained false optimism.
Abstract: The consistently successful delivery of projects remains an ambition that many organisations do not achieve. Whilst the reasons behind project failure are many, one recognised factor is the ‘planning fallacy’ – over-optimism in the planning phase of a project. Whilst the planning phase of a project may be a battle for acceptance and resource allocation, the execution phase is a battle for delivery. Based on both qualitative and quantitative data gathered from a project management simulation, this study set out to establish whether optimism bias persists beyond the planning phase and into the execution phase, and, if so, to explore the reasons why. The results confirm the extent and impact of optimism bias in initial project planning. More importantly, the contribution of this study is to demonstrate on-going or sustained false optimism.
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TL;DR: The paper attempts to address the risk response factors that lead to successful achievement of project scope & quality, schedule and cost targets, by using a series of regressions followed with Seemingly Unrelated Regression Equations (SURE) modelling.
Abstract: Risk management and success in projects are highly intertwined – better approaches to project risk management tend to increase chances of project success in terms of achieving scope & quality, schedule and cost targets. The process of responding to risk factors during a project’s life cycle is a crucial aspect of risk management referred to as risk response strategies, in this paper. The current research explores the status of risk response strategies applied in the software development projects in India. India provides a young IT-savvy English-speaking population, which is also cost effective. Other than the workforce, the environment for implementation of software projects in India is different from the matured economies. Risk management process is a commonly discussed theme, though its implementation in practice has a huge scope for improvement in India. The paper talks about four fundamental treatments to risk response – Avoidance, Transference, Mitigation and Acceptance (ATMA). From a primary data of 302 project managers, the paper attempts to address the risk response factors that lead to successful achievement of project scope & quality, schedule and cost targets, by using a series of regressions followed with Seemingly Unrelated Regression Equations (SURE) modelling. Mitigation emerged as the most significant risk response strategy to achieve project targets. Acceptance, transference, and avoidance of risk were mostly manifested in the forms of transparency in communication across stakeholders, careful study of the nature of risks and close coordination between project team, customers/end-users and top management.
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TL;DR: This article analyzed the usage of such framing in 20 business cases for large information systems (IS) projects of the Dutch government and found that newly proposed systems are systematically framed using positive adjectives, whereas the existing systems are framed using negative adjectives.
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TL;DR: In this article , the authors tried to answer whether bidders exhibit optimism bias-like behavior when bidding for construction projects and whether financial ramifications would follow, and they found that optimistic bias is one of the undisputed factors or reasons affecting cost underestimation and cost overrun.
Abstract: In the construction management literature, it is not an ultimately settled matter that optimism bias is one of the undisputed factors or reasons affecting cost underestimation and cost overrun. This study tried to answer whether bidders—usually legal entities, not natural persons—would exhibit optimism bias-like behavior when bidding for construction projects and whether financial ramifications would follow. Two hundred eighty-six projects delivered to the Ohio Department of Transportation between 2011 and 2020 were analyzed to test the proposed hypothesis. It was observed that bidders were more optimistically biased when bidding for long-duration projects than short-duration projects. The observation strengthens the causal nature between optimism bias and cost underestimation and encourages stakeholders to develop internal or external monitoring systems that call out optimism bias at the organizational level.
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TL;DR: A review of literature on optimism bias and transport infrastructure project cost overruns can be found in this paper , where the authors identify significant gaps and unanswered questions about the relationship between optimism bias in project cost appraisal and cases of transport infrastructure cost overrun.
Abstract: There is a growing face-value acceptance of optimism bias as the primary cause of transport cost overruns. This article provides a timely review of literature on optimism bias and transport infrastructure project cost overruns. The article identifies significant gaps and unanswered questions about the relationship between optimism bias in project cost appraisal and cases of transport infrastructure cost overruns. The presence and nature of optimism bias in the complex institutional environment of project cost appraisal are largely understudied and not well understood. Consequently, this has significant implications for the development of effective mitigation strategies for improving transport project cost performance.
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TL;DR: In this paper , the authors synthesize management science concepts such as strategic alignment with enterprise architecture concepts and artificial intelligence (AI)-driven business process optimization to increase innovation productivity and master the increasing rate of business dynamics at the same time.
Abstract: New business opportunities, driven by smart digitalization technology and initiatives such as Industry 4.0, significantly change business models and their innovation rate. The complexity of methodologies developed in recent decades for balancing exploration and exploitation activities of digital transformation has risen. Still, the desired integration levels across organizational levels were often not reached. Systems thinking promises to holistically consider interdisciplinary relationships and objectives of various stakeholders across supply chain ecosystems. Systems theory-based concepts can simultaneously improve value identification and aligned transformation among supply networks’ organizational and technical domains. Hence, the study proposes synthesizing management science concepts such as strategic alignment with enterprise architecture concepts and artificial intelligence (AI)-driven business process optimization to increase innovation productivity and master the increasing rate of business dynamics at the same time. Based on a critical review, the study explores concepts for innovation, transformation, and alignment in the context of Industry 4.0. The essence has been compiled into a systems engineering-driven framework for agile value generation on operational processes and high-order capability levels. The approach improves visibility for orchestrating sustainable value flows and transformation activities by considering the ambidexterity of exploring and exploiting activities and the viability of supply chain systems and sub-systems. Finally, the study demonstrates the need to harmonize these concepts into a concise methodology and taxonomy for digital supply chain engineering.
References
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TL;DR: In this paper, the authors report the results of a study of business strategy content and processes where performance was operationalized as both return and risk, and the effects of processes on performance were varied; some processes were associated with risk only, some with return only, and others with both risk and return.
Abstract: Performance is an important variable in strategic management research. But, although managers must deal with performance on two dimensions, its level return and the variation in that level risk, performance has traditionally been studied only in terms of return. This paper reports the results of a study of business strategy content and processes where performance was operationalized as both return and risk.
In a field study of 20 firms in the banking industry in one state, different strategies were found to be associated with differences in risk but not in return. The effects of processes on performance were varied; some processes were associated with risk only, some with return only, and others with both risk and return.
These results suggest that the relationships among strategy, processes and performance are more complex than most researchers have acknowledged. Further theoretical and managerial insights may be gained into these relationships if risk is included as a dimension of performance in strategic management research.
111 citations
"Performers, trackers, lemmings and ..." refers background in this paper
...However, when they are not able to identify an attainable goal, these individuals tend to stay committed to the unattainable goal or disengage from goal attainment (give up on the project) (Jemison, 1987)....
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01 Dec 1979
TL;DR: In this paper, the authors present a theory of the bargaining process and the formal properties of the concept of potential surprise, as well as a comparison with the orthodox view of the potential surprise.
Abstract: Preface to second edition Preface to first edition 1. Introduction 2. The nature of expectation 3. Expected clarifying of expectations and its influence on the pace of investment 4. The choice of assets to be held for speculative gain 5. Design of taxation to maintain the incentive to enterprise 6. A theory of the bargaining process 7. A comparison with the orthodox view Appendix. The formal properties of the concept of potential surprise.
101 citations
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TL;DR: Pre-partnering lets clients and vendors develop a clear understanding of a project, including how well the other will handle its inevitable complexities as discussed by the authors. But it is not suitable for large projects.
Abstract: Pre-partnering lets clients and vendors develop a clear understanding of a project---including how well the other will handle its inevitable complexities.
89 citations
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TL;DR: In this paper, the authors propose a flexible framework to facilitate the efforts for general and project management development and learning with an appreciation of the paradox and ambiguity in business environments, and open up some scope for a discussion about the fit between project management and TQM.
Abstract: Offers an insight into the renaissance of project management discipline in the context of strategic management and organizational design, and the need for increased awareness of and organizational learning in the subject. Proposes a flexible framework to facilitate the efforts for general and project management development and learning with an appreciation of the paradox and ambiguity in business environments. Opens up some scope for a discussion about the fit between project management and TQM.
78 citations
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26 Aug 2011
TL;DR: Efforts to develop better estimation tools must address two issues: First, are more accurate tools necessarily better?
Abstract: Efforts to develop chedule estimation has historically method. Our objective in this article is to better estimation tools been, and continues to be, a major address these two issues. U difficulty in managing software An ongoing research effort to study the must address two development projects.1 Farquhar articudynamics of software development issues: First, are more lated this problem's significance: resulted in our system dynamics model of
68 citations