Trade‐Offs, Biases, and Uncertainty in Project Planning and Execution: A Problem‐Based Simulation Exercise

Abstract

ABSTRACTThe ability to plan and execute projects is a fundamental skill required among managers and business school graduates. In the opening phase of a project, the project team makes decisions about the relative priority of project time, cost, and performance objectives, oftentimes without complete information about customer and stakeholder requirements. Existing project management curriculum assists in developing skills to decide among these priorities in the abstract through paradigms such as the time–cost–performance triangle, with limited attention to the improvement of skills required to develop solutions to these trade‐offs, particularly in uncertain and ambiguous project environments. Further, there is often an underlying bias in project teams toward consideration of the project task and project deliverables and reduced attention to time and cost objectives. This study demonstrates the benefits of a balanced approach to setting project time, cost, and performance objectives using a goal‐based simulation exercise entitled “The Bridge to Project Leadership.” Results for 124 project teams illustrate the tendency to ignore this balanced approach, resulting in reduced project performance, even among experienced project managers.