Ahiaga-Dagbui, D D and Smith, S D (2014) Exploring escalation of commitment in construction project management: Case study of the scottish parliament project. In: Raiden, A and Aboagye-Nimo, E (eds.) Proceedings of 30th Annual ARCOM Conference, 1-3 September 2014, Portsmouth, UK.
Abstract
Successfully managing large construction projects within defined budget and time constraints has always been a major challenge largely because crucial decisions about the project's ultimate fate have to be made within an environment of significant uncertainty at the beginning of the project. It is not surprising that cost and time overruns are commonplace on construction projects. Existing literature often suggests economical, technical, political or managerial roots to this phenomenon. A less explored possible cause within construction management framework is the escalation of commitment to a course of action. This theory, grounded in social psychology and organisation behaviour, suggests the tendency of people and organisations to become 'locked-in' and 'entrapped' in a particular course of action and thereby 'throw good money after bad' to make the venture succeed. This defies conventional rationality behind subjective expected utility theory. Through a critical analysis of the literature, we identify different frequently cited enablers of escalation of commitment. Using a hindsight constructivist approach, we then demonstrate references to some of these enablers on the Scottish Parliament project. We found strong evidence in support of possible strategic misrepresentation, confirmation bias, self-justification and optimism bias. We highlight the importance of setting realistic time and budget constraints to circumvent escalation and make several recommendations to attenuate unwarranted escalation of commitment, including the use of an objective outsider to evaluate responses to disconfirming information and the structuring of incentive systems that do not punish for inconsistency in order to curb the effects of self-justification and reputation management.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | cost overruns; confirmation bias; escalation of commitment; self-justification; strategic misrepresentation |
| Index terms: | bias, construction project, evidence, construction project management, optimism bias, psychology, rationality, case study, large construction project, time overrun, commitment, cost overrun, utility theory, budget constraint |
| Subjects: | psychology, financial and cost management, evaluation and assessment methods, data collection methods, cognitive psychology, project controls, behavioral psychology, economic theory, decision-making and reasoning, probability and distributions, project management theory and practice, production management, organizational theory |
| Topics: | Cost Management, Project Management, Research Practice, Organizational Design, Time Control |
| Descriptive scope: | 5 PCTEA |
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