Project Escalation Research Articles

The effect of mood and information sequence on third party evaluation of escalating capital investment projects

Third party evaluation of capital investment projects has been proposed as an effective means of controlling escalation of commitment. Prior research shows that such effectiveness can be limited by cognitive bias or task-related affective reactions but has not examined the influence of moods, known to impact how people process information, on third party evaluation of escalating capital investment. We argue that incidental moods (caused by factors unrelated to the decision context) can affect third party consultants’ evaluation of capital investment projects by influencing: (1) the consultants’ effort in processing project information; and (2) the consultants’ susceptibility to arrive at different decisions when presented with the same project information in different sequences. We conducted an experiment to test our propositions in an escalation of commitment context. We find that consultants in a negative mood spend more effort processing project information during the decision task than those in a positive mood. We also observe an interaction between mood and information presentation sequence, such that consultants in a positive mood are more likely to recommend project continuation when a project’s narrative information is viewed after numerical information rather than the reverse. In contrast, we observe no differences in project continuation recommendations for consultants in a negative mood irrespective of sequence. These results suggest that moods can influence the effectiveness of consultants as a control mechanism to prevent project escalation, and that organizations wishing to adopt a more conservative approach to preventing escalation of commitment should design project reports to present numerical information after narrative information.

Rethinking Project Escalation: An Institutional Perspective on the Persistence of Failing Large-Scale Information System Projects

ABSTRACT Project escalation involves the continued, persistent commitment to a failing project. Through a qualitative meta-analysis of 15 published cases of large information systems (IS) projects in escalation situations, we develop an institutional perspective on IS projects in escalation situations. This perspective describes how project persistence emerges from a plurality of legitimizing institutional logics that decision-makers draw upon at different project stages to maintain and reduce their commitment to the project. Logics related to the project’s approval are not the same logics that guide decisions throughout the project. For example, while we find that innovation and economic logics of return on investment are salient before approval, economic costs tend to be more salient after approval, along with technical impositions and managerial concerns. We further find that managerial logics are particularly salient in reducing commitment to projects, and we detail the differences and point out contextual triggers of external scrutiny and leadership changes that can contribute to reduced commitment to a project and eventual de-escalation.

When Good Theories Backfire

As project management scholars, we should not automatically assume that theories borrowed from other fields will produce desirable results when applied to the project management domain. To illustrate this, I focus on the problem of project escalation and discuss how three theories that have been widely touted as producing good outcomes in other fields may produce undesirable consequences when applied to the project escalation context. I argue that when good theories backfire, this creates an opportunity for project management scholars to expose the boundary conditions of such theories.

An assessment of cost escalation in building construction project

Estimating of cost for building construction projects with minimum error at the conceptual stage of project development is quite essential for planning. This study seeks to evaluate factors responsible for cost escalation of building construction projects. Questionnaires were administered to examine and assess these factors. Subsequently, the mean score value of each factor was determined. In addition, Correlation and Linear regression analyses were used to establish the relationship between these factors. Factors responsible for cost escalation in projects were examined as well as the impact of those factors, and occurrence of those factors on project cost. The result of the analysis showed that, the most agreed factors responsible for project cost escalation were; inadequate supervision, irregular payment, and design error, having high mean values of 4.25, 4.20, and 4.15, respectively. Also, correlation analysis result established that the factors responsible for cost escalation and the impact of cost escalation had significant R and R2 of 0.81 and 0.70 respectively. Addressing these factors would go a long way in reducing the escalation of building project cost. Never the less, an effective cost management strategy is absolutely necessary to safeguard and sustain the construction industry.
 Keywords: cost escalation, building project, construction, regression analysis

Influence of Construction Risks on Cost Escalation of Highway-Related Projects: Exploring the Moderating Role of Social Sustainability Requirements

Influence of Construction Risks on Cost Escalation of Highway-Related Projects: Exploring the Moderating Role of Social Sustainability Requirements

Role of Non-government Organizations in Escalation of Educational Projects and Community Development in Balochistan: a Case of Balochistan Rural Development & Research Society

Non-Government Organizations (NGOs) have been considered as the key player in the provision of services to address the economic, environmental and socio-cultural developmental issues. United Nations global sustainable development goals (SDGs) focused the role of partnerships between different sectors in addressing sustainable development issues. The study focuses on the role of NGOs especially the local organization called as Balochistan Rural Development & Research Society (BRDRS) in empowering community in Balochistan. We conducted a cross-sectional survey in two districts of Balochistan province to investigate role of NGOs among beneficiaries of BRDRS education projects and programs in focused communities by following the quantitative research approach. By using proportionate random sampling technique, 400 respondents were selected out of the total beneficiaries. The results indicated significant associations between BRDRS educational projects (i.e. Arranging Students Exposure Visits, Conducted Speech Competitions, Arranging Enrollment Campaigns, Renovation of the Schools, and Follow-up Mechanism to Schools) and level of satisfaction among the beneficiaries. The study recommends that government should also be involved to improve the policy and make a supportive and conducive environment through partnerships in the education sector with NGOs for the sustainable community development.

From ignorance to familiarity: Contextual knowledge and the field researcher

From ignorance to familiarity: Contextual knowledge and the field researcher

When a growth mindset can backfire and cause escalation of commitment to a troubled information technology project

AbstractThis research focuses on information technology (IT) project managers' growth mindset concerning IT project management (PM) ability and investigates how such a mindset can promote escalation of commitment to a troubled IT project. Specifically, we suggest that the growth mindset of IT PM ability promotes prospective achievement motivation and can lead IT project managers to escalate their commitment to an IT project despite negative feedback suggesting that the project may not be completed successfully. Through a series of three experiments with 351 IT project managers, we obtained consistent support for our hypotheses suggesting that the growth mindset of IT PM ability promotes IT project escalation and this effect is partially mediated by anticipated regret about project failure and anticipated likelihood of project success. In addition, in the three experiments we found that when the project involves an unfamiliar technology the indirect effect of the growth mindset of IT PM ability through anticipated likelihood of project success is stronger than when the project involves a familiar technology.

Factors Contributing to Cost Escalation and Delay of Public-Private Partnership Projects in Maldives Construction Industry

The purpose of the research is to identify the factors that contributes to cost escalation and delay of PPP construction projects in Maldives and to identify the significant factors in the perspective of the actors (client, contractor and consultant). In this quantitative research, a survey comprising the actors who have had previous experience in the field of PPP construction projects were used. The data analysis was carried out using Relative and Important Index (RII). The key findings indicate that the most significant factor for cost escalation is scope changes, followed by schedule delay and technical challenges and the most significant factor for project delay was delayed payments, followed by financial process, changes in drawings and poor supervision. The study contributes to the body of knowledge in construction industry by identifying the most significant factor which contributes to cost escalation and project delay in Maldives. The study is particularly useful for policymakers as a guide for planning and implementing PPP projects in the construction industry of Maldives.

Is a fresh pair of eyes always better? The effect of consultant type and assigned task purpose on communicating project escalation concerns

Prior research suggests that the use of third party (independent) consultants to review on-going projects is an effective way to recognize and prevent escalation of commitment. This study uses an experiment to investigate whether the type of consultant (internal or external) and the stated purpose of the task assigned to the consultant influences willingness to communicate concerns about a project manager’s decision to escalate an unprofitable project to top management. We find that explicitly asking internal consultants to communicate concerns reduces both their tendency to disagree with the project manager’s escalation decision and their willingness to communicate their concerns. In contrast, external consultants’ willingness to communicate escalation concerns is not affected by the stated purpose of their assigned task. Our findings have implications for organizations seeking to engage consultants as part of their management control to prevent project escalation.

Better late than never, but never late is better: Risk assessment of nuclear power construction projects

This work seeks to evaluate overnight construction costs (OCC) and lead-time escalation of nuclear power construction projects from 1955 to 2016. To this end, a comprehensive database of commercial Light Water Reactors (LWR) was developed and a statistical analysis was conducted. Findings reveal a significant delay in lead-time, especially for the last generation reactors constructed from 2010s, with ¾ of the sample showing significant construction delays. This results in an escalation of capital costs rather than in a decline. Average OCC of newer reactors is 60% higher than the ones implemented in the earlier stages of the nuclear era. This suggests a discontinuity of the learning curve for both OCC and lead-time, which threats the market and financial sustainability of current and future nuclear energy projects. Although this is a general trend, this discontinuity is country specific and, thus, induced by national policies and regulatory frameworks. Therefore, the role of nuclear technology as an alternative to cope with the need for a decarbonisation of the power sector must be better evaluated, taking into account the real cost impacts of nuclear technology implementation.

Political Satire and the Counter-framing of Public Sector IT Project Escalation

Political Satire and the Counter-framing of Public Sector IT Project Escalation

Modeling schedule overrun and cost escalation percentages of highway projects using fuzzy approach

PurposeModeling represents the art of translating problems from an application area into tractable mathematical formulations whose theoretical and numerical analysis provides insight, answers and guidance useful for the originating application. The purpose of this paper is to determine the causal causes of schedule overrun and cost escalation of highway projects in Egypt in order to be used as independents variables in mathematical models for predicting the percentages of schedule overrun and cost escalation of such projects in Egypt.Design/methodology/approachA survey of a randomly selected samples yielded responses from 40 owners, 15 consultants and 56 contractors. The survey includes 38 schedule overrun factors and 26 cost escalation factors. The effectiveness degree of the identified factors has been identified by the triangle fuzzy approach.FindingsThe results of the survey show that “contractor’s technical staff is insufficient and ineligible to accomplish the project” is the most important cause of schedule overrun, while the major cause of cost escalation is inadequate preparation of the project concerning planning and execution.Originality/valueThe main contribution of this study is predicting the percentages of schedule overrun and cost escalation of highway projects in Egypt. Through the application of the linear regression analysis method and statistical fuzzy theory, four predictive models have been developed and it has been noted that the linear regression-based model shows prediction accuracy better than statistical fuzzy-based model in predicting percentages of schedule overrun and cost escalation.

Realizing value from project implementation under uncertainty: An exploratory study using system dynamics

Project Implementation is not a trivial task even after careful planning and scheduling. One of the reasons is the existence of unexpected events at strategic and operational levels during the project execution process. This paper presents a system dynamics model of a project monitoring and control system. Embedded with both strategic and tactical uncertainties, the model experiments with typical remedial actions to disturbances during the implementation of a project under a behavioral paradigm. Simple proportional adjustment seems to work well under low levels of unexpected disturbances but prospect theory-based behavior works better under extreme situations. Our findings indicate over-reacting behavior, which is influenced by biases and reporting errors, can generate project escalation. Thus, thresholds for remedial actions should be implemented in project control and monitoring systems to avoid over-reacting behavior leading to escalation and waste of resources.

Collaborative partner or opponent: How the messenger influences the deaf effect in IT projects

Prior research suggests that information technology (IT) project escalation can result from the deaf effect, a phenomenon in which decision makers fail to heed risk warnings communicated by others. Drawing inspiration from stewardship theory, we posited that when messengers carrying risk warnings about a project are seen as collaborative partners, decision makers are more likely to heed the message. Conversely, we theorized that when messengers are seen as opponents, decision makers are more likely to exhibit the deaf effect. We further posited that certain psychological factors (i.e., framing and perceived control) would moderate the effect of the messenger-recipient relationship on the deaf effect. To test these ideas, we conducted two experiments. When messengers were seen as collaborative partners, recipients assigned more relevance to the risk warning and perceived a higher risk, making them less willing to continue the project. Framing the outcomes associated with redirecting or continuing the project in terms of losses (rather than gains) weakened this effect. However, when recipients perceived a high degree of control over the project the effect was strengthened. Implications for both research and practice are discussed.

How organizational escalation prevention potential affects success of implementation of innovations: electronic medical records in hospitals.

BackgroundEscalation of commitment is the tendency that (innovation) projects continue, even if it is clear that they will not be successful and/or become extremely costly. Escalation prevention potential (EPP), the capability of an organization to stop or steer implementation processes that do not meet their expectations, may prevent an organization of losing time and money on unsuccessful projects. EPP consists of a set of checks and balances incorporated in managerial practices that safeguard management against irrational (but very human) decisions and may limit the escalation of implementation projects. We study whether successful implementation of electronic medical records (EMRs) relates to EPP and investigate the organizational factors accounting for this relationship.MethodsStructural equation modelling (SEM), using questionnaire data of 427 doctors and 631 nurses who had experience with implementation and use of EMRs in hospitals, was applied to study whether formal governance and organizational culture mediate the relationship between EPP and the perceived added value of EMRs.ResultsDoctors and nurses in hospitals with more EPP report more successful implementation of EMR (in terms of perceived added value of the EMR). Formal governance mediates the relation between EPP and implementation success. We found no evidence that open or innovative culture explains the relationship between EPP and implementation success.ConclusionsThere is a positive relationship between the level of EPP and perceived added value of EMRs. This relationship is explained by formal governance mechanisms of organizations. This means that management has a set of tangible tools to positively affect the success of innovation processes. However, it also means that management needs to be able to critically reflect on its (previous) actions and decisions and is willing to change plans if elements of EPP signal that the implementation process is hampered.Electronic supplementary materialThe online version of this article (doi:10.1186/s13012-016-0435-1) contains supplementary material, which is available to authorized users.

The Dynamics of IT Project Status Reporting: A Self-Reinforcing Cycle of Distrust

Accurate project status reporting is important to avoid the problem of information technology (IT) project escalation and to successfully manage and deliver IT projects. One approach that some organizations have taken is to audit their IT projects to avoid surprises that are frequently associated with inaccurate status reporting. Little is known, however, about the effects that such auditing arrangements can have on the dynamics of project status reporting. To examine the process of IT project status reporting in this context, we followed a grounded theory inspired approach in which we investigated nine IT projects in one U.S. state’s government agencies. All of the projects we studied were subject to the state’s IT oversight board. Based on 118 interviews with a variety of stakeholders including technical personnel, managers, users, and contractors, we present a grounded theory of project status reporting dynamics in which the reporting process can best be characterized as a self-reinforcing cycle of distrust between the project team and the auditors. Specifically, in some projects, we observed a pattern whereby project teams interpreted the auditor’s scrutiny as unfair and as not adding value to their projects. As a result, they responded by embracing some defensive reporting tactics. The auditors interpreted the project team’s actions as indicating either deception or incompetence, and they then increased their scrutiny of the reports, thus exacerbating the situation and further fuelling the cycle of distrust. We discuss implications for both theory and practice.

The role of a bad news reporter in information technology project escalation

This paper presents a study of the deaf effect response to bad news reporting in an IT project management context. Using a mixed method approach that included both quantitative and qualitative data obtained through a laboratory experiment, our findings suggest that individuals turn a deaf ear to bad news reporting when bad news is received from a person who is not role prescribed to report bad news or is not perceived to be credible. Further, it was found that perceived message relevance and risk perception mediate these relationships. We also found that men are more willing to take risk, and also less likely to perceive risk compared to women in IT project escalation situations. Consequently, men are more likely to turn a deaf ear, thus causing IT project escalation to occur. In this paper, we discuss several implications of the findings of this study for both research and practice.

Collaborative Partner or Opponent: How the Messenger Influences the Deaf Effect in IT Projects

Prior research suggests that information technology (IT) project escalation can result from the deaf effect, a phenomenon in which decision makers fail to heed risk warnings communicated by others. Drawing inspiration from stewardship theory, we posited that when messengers carrying risk warnings about a project are seen as collaborative partners, decision makers are more likely to heed the message. Conversely, we theorized that when messengers are seen as opponents, decision makers are more likely to exhibit the deaf effect. We further posited that certain psychological factors (i.e., framing and perceived control) would moderate the effect of the messenger-recipient relationship on the deaf effect. To test these ideas, we conducted two experiments. When messengers were seen as collaborative partners, recipients assigned more relevance to the risk warning and perceived a higher risk, making them less willing to continue the project. Framing the outcomes associated with redirecting or continuing the project in terms of losses (rather than gains) weakened this effect. However, when recipients perceived a high degree of control over the project the effect was strengthened. Implications for both research and practice are discussed.

IS Project Escalation: A Case Study of Off-shore Development

This is an empirical qualitative article. It attempts to study the phenomenon of project escalation in Information Systems. The methodology employed has been to choose a project that escalated, carry out an in depth analysis of the various endogenous and exogenous factors involved and identify possible reasons for such escalation. The antecedants of project esacalation thus identified can be subjected to empirical research in future.