Rajabi Asadabadi, M and Zwikael, O (2024) Unrealistic project goals: Detection and modification. Journal of Construction Engineering and Management, 150(3): 04023166, ISSN 0733-9364
Abstract
Determining whether to invest in a project is a complex and challenging decision. This project investment decision relies heavily on its promised strategic goals (i.e., target benefits) stated in its business case and which are expected to be realized following project completion. However, in many cases, the proposed project benefits are far greater than those that the project realistically can achieve, leading to the risk of projects being funded erroneously. The construction management literature has offered approaches such as reference class forecasting (RCF) to rectify unrealistic project estimates. This paper identifies weaknesses in the current approaches, exposes their inefficiency, and proposes a step-by-step stratified approach as an effective alternative to detect, measure, and rectify unrealistic estimates of project benefits, and utilizes the proposed approach on a light rail construction project. The contribution of this approach is that each project benefit target can be rectified differently, based on the measurable levels of deviation from more-realistic estimates. This paper advances the construction management literature by enabling managers to set realistic project goals in the project front end, increase the reliability of estimates in the project business case, and improve the quality of project investment decisions.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | business case; project investment decision; project target benefits |
| Index terms: | business case, construction project, manager, estimate, investment decision, deviation, forecasting |
| Subjects: | production management, practitioner, economic analysis, prediction and forecasting, strategic project management, financial and cost management |
| Topics: | Roles and Professions, Cost Management, Business Strategy, Research Practice, Project Management |
| Descriptive scope: | 3 PCA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here