Fortune, C and Lees, M (2001) Systematic errors of judgement and the formulation of strategic cost advice for construction clients. Journal of Financial Management of Property and Construction, 6(2), pp. 81-93. ISSN 1366-4387
Abstract
Clients in the construction industry need reliable stratgic project cost information. A factor that affects the quality of this information is human judgement. Previous work has established that construction professionals exercise judgement when involved in the preperation of strategic cost advice for clients. The exercise of judgement is a human cognitive process that can be subject to errors, bias and heuristics. This works seeks to improve the quality of early stage strategic cost advice by developing a better understanding of the role of human judgement in its formulation. In particular, this paper reports a study that was conducted to establish whether construction professionals involved in the formulation of strategic cost advice for clients have a propensity to make systematic errors of judgement. The first section of the paper defines and discusses judgement and decision-making in the context of cost modelling and human judgement theory in order to develop a conceptual module of the stratgic cost advice process. The conceptual model illustrates the significnance of human judgement in the formulation of the strategic cost advice. The paper then reports an empirical study that has investigated the propensity of construction professionals to make systematici errors of judgement when formulating strategic cost advice for clients. The design and development of an appropriate measuring tool for the study and its application is described. The results indicate that practitioners are liable to make systematic errors of judgement when involved with the formulation of stategic cost advice for clients. The paper concludes by making the case for further work to be undertaken with constrution clients in order to develop a more complete understanding of the role of judgement in the formulation of strategic cost advice.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction economics, decision-making, strategic cost modelling, human judgement, systematic errors |
| Index terms: | exercise, heuristic, design and development, construction client, module, construction professional, empirical study, modelling, construction industry, project cost, practitioner, construction economics, bias, decision-making |
| Subjects: | analytical methods, health behaviours and lifestyles, practitioner, financial analysis, design process, architectural elements, research methods, risk assessment, industry analysis, decision analysis, probability and distributions, professional development, economics |
| Topics: | Roles and Professions, Information Management, Research Practice, Cost Management, Design Practice, Risk Management, Engineering Principles, Health and Safety |
| Descriptive scope: | 4 PCTA |
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