When cost–effective design strategies are not enough: Evidence from an experimental study on the role of redundant goals

Abstract

Projects have to meet interrelated time, cost and effectiveness goals. Surveys, such as CHAOS, consistently indicate that over 50% of the projects either significantly deviate from these goals or fail. Therefore, there is room for improvement in terms of project outcomes. This motivated us to explore improvement possibilities for the outcomes of design strategies that account for the interrelations between time, cost and effectiveness. We focus on a cost–effective (CE) design strategy that aspires to maximize the effectiveness-to-cost ratio (ECR) by deciding on: project schedules, resource allocations and a product performance level (i.e. effectiveness). We suggest a mathematical formulation to capture trade-offs between project scope decisions (such as project scheduling and resource allocations) and effectiveness. We conduct experiments, in which participants use a simulator to plan and execute a project according to the CE strategy with and without goals, based on solutions for the mathematical formulation. Contrary to some of the literature on goal-setting theory for complicated tasks, we found that appropriate goals improved the expected ECR while others did not have any impact. A better understanding of appropriate goal-setting in the context of project management may be important for improving projects outcomes.