Optimism bias within the project management context

James Prater (School of Natural and Built Environments, University of South Australia, Adelaide, Australia)
Konstantinos Kirytopoulos (School of Natural and Built Environments, University of South Australia, Adelaide, Australia)
Tony Ma (School of Natural and Built Environments, University of South Australia, Adelaide, Australia)

International Journal of Managing Projects in Business

ISSN: 1753-8378

Publication date: 4 April 2017

Abstract

Purpose

One of the major challenges for any project is to prepare and develop an achievable baseline schedule and thus set the project up for success, rather than failure. The purpose of this paper is to explore and investigate research outputs in one of the major causes, optimism bias, to identify problems with developing baseline schedules and analyse mitigation techniques and their effectiveness recommended by research to minimise the impact of this bias.

Design/methodology/approach

A systematic quantitative literature review was followed, examining Project Management Journals, documenting the mitigation approaches recommended and then reviewing whether these approaches were validated by research.

Findings

Optimism bias proved to be widely accepted as a major cause of unrealistic scheduling for projects, and there is a common understanding as to what it is and the effects that it has on original baseline schedules. Based upon this review, the most recommended mitigation method is Flyvbjerg’s “Reference class,” which has been developed based upon Kahneman’s “Outside View”. Both of these mitigation techniques are based upon using an independent third party to review the estimate. However, within the papers reviewed, apart from the engineering projects, there has been no experimental and statistically validated research into the effectiveness of this method. The majority of authors who have published on this topic are based in Europe.

Research limitations/implications

The short-listed papers for this review referred mainly to non-engineering projects which included information technology focussed ones. Thus, on one hand, empirical research is needed for engineering projects, while on the other hand, the lack of tangible evidence for the effectiveness of methods related to the alleviation of optimism bias issues calls for greater research into the effectiveness of mitigation techniques for not only engineering projects, but for all projects.

Originality/value

This paper documents the growth within the project management research literature over time on the topic of optimism bias. Specifically, it documents the various methods recommended to mitigate the phenomenon and highlights quantitatively the research undertaken on the subject. Moreover, it introduces paths for further research.

Keywords

Citation

Prater, J., Kirytopoulos, K. and Ma, T. (2017), "Optimism bias within the project management context", International Journal of Managing Projects in Business, Vol. 10 No. 2, pp. 370-385. https://doi.org/10.1108/IJMPB-07-2016-0063

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Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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