Search results

Business managers are constantly faced with the decision to continue or abandon new product development projects. However, this type of decision may not be easy. These decisions are usually prone to bias of managers. Managers are known to escalate their commitment toward failed projects. It is also not easy to identify projects that are suffering from escalation of commitment. The purpose of this paper is to propose an objective escalation identification method.

This paper proposes an objective escalation identification method using data envelopment analysis (DEA). The results from DEA are compared with those of subjective methods of identifying escalation.

The objective estimate of escalation given by DEA was comparable to the subjective estimate of escalation given by the managers in the survey.

DEA is sensitive to outliers and managers should be careful in selecting projects that are to be included for comparison. DEA does not give statistical fit indices as it is an operational research based technique.

DEA is an objective and automatic tool that makes the decision of managers easier. Managers can use this tool by inputting the output and input variables of their projects and then see which ones are escalated, therefore need to be abandoned. As a consequence, escalation of commitment and big losses can be prevented especially in new product development area.

By using the proposed objective approach, escalation of commitment and associated big losses can be prevented especially in new product development area.

This study investigates the potential of actor‐network theory (ANT) for theory development on information technology project escalation, a pervasive problem in contemporary organizations. In so doing, the study aims to contribute to the current dialogue on the potential of ANT in the information systems field. While escalation theory has been used to study “runaway” IT projects, two distinct limitations suggest a potential of using ANT: First, there is a need for research that builds process theory on escalation of IT projects. Second, the role of technology as an important factor (or actor) in the shaping of escalation has not been examined. This paper examines a well‐known case study of an IT project disaster, the computerized baggage handling system at Denver International Airport, using both escalation theory and ANT. A theory‐comparative analysis then shows how each analysis contributes differently to our knowledge about dysfunctional IT projects and how the differences between the analyses mirror characteristics of the two theories. ANT is found to offer a fruitful theoretical addition to escalation research and several conceptual extensions of ANT in the context of IT project escalation are proposed: embedded actor‐networks, host actor‐networks, swift translation and Trojan actor‐networks.

The purpose of this paper is to examine how the real option theory is applicable to evaluation of cases of escalation and premature termination of Management Information Systems (MIS) projects.

The paper compares the implications of psychological and economic escalation theories with lessons from the real option theory as applied to MIS projects. Then, it examines published case studies, and discuss when project continuation enhances and reduces value for the manager and the firm.

Escalation of commitment is continuation of an investment project after receiving negative signals. Escalation was identified as a significant problem in MIS projects often explained by the desire of the manager to avoid recognizing mistakes and to protect reputation. The opposite problem of premature termination of certain investment projects was also identified. This study argues that accurate application of real option theory is critical to distinguish between escalation and premature termination. Under the real option theory, an investment project is analogous to a financial option, in that there is an opportunity to continue the project, but no obligation. Continuation has value when there is uncertainty and new information about the project may be revealed. Failure to account for the real options in a project is value‐reducing as it may lead to mistakes in premature termination of projects when projects with real option value are labeled as cases of irrational escalation.

The paper details the implications of real option theory to evaluating project continuation in the MIS setting.

This paper applies insights from real option theory to studies of escalation in MIS. Continuing a project may be seen as escalation when it actually has value for the firm, as new information received by continuing the project reduces uncertainty.

Modeling 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.

A 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.

The 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.

The 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.

The heavy civil engineering industry (railways, sewage treatment, chemical and pharmaceutical facilities, oil and gas facilities, etc.) is one of the major contributors to the British economy and generally involves a high level of investment. Clients in this industry are demanding accurate cost estimate, proper analysis of out‐turn cost and cost escalation and a high quality risk analysis throughout the construction processes. Current practice in the industry has suggested that there is a lack of structured methodologies and systematic cost escalation approach to achieve an appropriate cost analysis at the outset of projects and throughout the construction processes. In this context the prime objective of this research work is to develop a structured cost escalation methodology for improving estimating management and control in the heavy engineering industry construction processes. The methodology is composed of a forecasting model to predict cost indices of major items in industry and a risk knowledge base model for identifying and quantifying causes of cost escalations. This paper, as part of the research, reviews and discusses a knowledge‐based model for applying a cost escalation factor. The cost escalation factor is made up of market variation, a risk element and a component for bias. A knowledge elicitation strategy was employed to obtain the required knowledge for the model. The strategy included questionnaires, interviews and workshops and deliverables came in the form of influences and their effect on project cost escalation. From these deliverables, the concepts of a decision support model and system specification for applying cost escalation to base estimates is proposed.

In the UK, major IT public procurement projects regularly fail at significant cost to the taxpayer. The prevalence of these failures presents scholars with a challenge; to both understand their genesis and to facilitate learning and prevention. Functional approaches have revealed numerous determinants of failure ranging from procurement specifications to risk escalation, but true and definitive causes remain elusive. However, since failure is not itself an absolute truth, but rather a concept which is reached when support is withdrawn, the survival of a project depends on there being sufficient belief in its legitimacy. We use critical hermeneutic methods and the conceptual lens of legitimacy to reveal powerful legitimating influences that enable and constrain action, but which are not analysed in the retrospective government inquiries that determine lessons learned.

Cultural studies in business and economics research are still limited to particular cultures. Knowledge on cultural differences may help international corporations to adapt management practices according to the markets they are operating in. The purpose of this paper is to study the issue of escalation of commitment and framing in a new cultural setting involving Germany and Vietnam. This setting is unique and particularly interesting, for Germany being the biggest European market and Vietnam being one of the fastest growing emerging markets in Asia.

The authors use a lab experiment with student participants from Germany and Vietnam.

In a 2×2 in between-experiment, the authors find strong support that Vietnamese participants have a stronger tendency to invest additional resources and evidence that negatively framed information leads to the higher escalation of commitment. Implications are discussed.

The unique empirical comparison is important because differences between other western and eastern countries do not necessarily generalize to the setting.

The purpose of this paper to report an analysis of project management issues in Central Public Works Department (CPWD), India.

This research draws on the insights gained through case study development and analysis and interaction with executives of CPWD.

The paper reports on a case study on project management complexities in a typical government body, CPWD, India. The findings indicate that basic project management principles/skills is lacking in projects performed by government departments in India.

Delivering of all construction and maintenance project on time, within budget and in accordance to the desired quality had been identified as one of the major challenges in present scenario especially when it comes to any government project. The insights reported in the paper are based on a detailed analysis of one case and hence outcomes are contextual.

This research addresses real life complexities in infrastructure project and outlines various risks in such projects.

The purpose of this paper is to address the problem of ensuring that the capabilities are in place to identify when a project can no longer deliver value and to take appropriate action to terminate the project.

Focus groups with project management practitioners were used to collect in-depth qualitative data. This was then supplemented with a questionnaire, which included both closed questions and the opportunity for free text answers.

The problem of getting better at stopping projects is both common and difficult to solve. It has many facets, which include complex people and cultural issues, processes and procedures as well as financial reporting and project governance. In order to improve, therefore, it is useful to address these different facets in a coordinated way using a capability approach with a focus on business value.

The data from practitioners are retrospective, as their actions were not actually observed by the researchers as they were happening. This means that faulty recollection may influence the results but, it also allows for insights from reflection to be incorporated.

An organizational capability approach focusing on all three aspects of capability; people, processes and technology, can help organizations get better at stopping projects. Specific recommendations are provided and analyzed in terms of their respective capability focus.

If performance in terminating projects is improved, it has the potential for significant benefits and cost saving for society in terms of improved government services and the ability to halt projects around new policy initiatives when emerging evidence shows they will not work.

It provides detailed practitioner input on the problem of stopping projects and suggests recommendations for improvement in the context of a structured organizational capability approach with reference to a particular framework, IT-CMF.