Posted: April 18th, 2015

discussion of bounded rationality

Discussion 8

Key project actors, including project managers, project owners and project funders are all boundedly rational.  For present purposes, bounded rationality simply means that there are cognitive limits to what key project actors know about a project and the consequences of the project-related choices and decisions they make. Bounded rationality in project management means that key project actors learn as they develop the  project business case and prepare the project plan.  To capture such learning, Zwikael & Smyrk advocate an iterative approach to preparation of both the project business case  and the project plan .  In week 8 we explore the practicalities of an iterative approach to project planning.

Set readings:

• For a discussion of bounded rationality, March, J. and H. Simon: Organizations, Wiley, 1958, New York, pp 136-171
• For a discussion of iterative development of the business case & project plan, Zwikael & Smyrk pp140-143 and 188-189.
• For a discussion of uncertainties in projects,
• Atkinson, R., L. Crawford and S. Ward: Fundamental uncertainties in projects and the scope of project management, International Journal of Project Management, 24, (2006) pp 687-698,

Discussion topic:

Simon has argued that “Most human decision making, whether individual or organisational, is concerned with the discovery and solution of satisfactory alternatives; only in exceptional cases is it concerned with the discovery and selection of optimal alternatives.” (Extract from set reading for Week 8: March, J. and H. Simon: Organizations, Wiley, 1958, New York, pp140-141).  In an implicit recognition of Simon’s argument,  Zwikael and Smyrk  propose a spiral approach to gathering the information required in preparing a plausible project business case (text book section 5.1.5 pp140-143) and a robust project plan (text book section 6.1.4 pp188-189).Students might discuss, having regard to Simon’s satisficing hypothesis, how their respective organisations assemble the information required to formulate a project business case and a project plan. 

Answer to discussion topic: (250-350 words)

 

 

 

 

 

 

Discussion 9

As we discussed in the session on project governance (week 5), the project manager is accountable to the project owner for delivery of project outputs fit for purpose, on time, within budget and without causing adverse outcomes (Text book, pp233-234).  Similarly, the project owner is accountable to the project funder for the achievement of the target project outcomes, anticipated achievement of which justified the funder’s decision to invest in the project (text book pp97-99).  Proper discharge of these accountabilities requires measurement of project output generation, communication of such metrics to decision makers and interpretation of what the metrics mean in terms of business objectives.  In week 9 we discuss the connection between the project plan, the reporting of project progress and realisation of business objectives.

Set readings:

• for an overview of roles, responsibilities and accountabilties, Zwickael & Smyrk pp 28-35;
• for a discussion of the project managers role, Zwikael & Smyrk pp 233-244;
• for a discussion of the project owner’s role, Zwikael & Smyrk, pp 247-250;
• for a discussion of business oriented reporting arrangements, Zwikael & Smyrk pp 251-257;
• For a discussion of project monitoring: Meredith, Jack R. & Mantel, Samuel J. c2009, ‘Monitoring and information systems’in Meredith, Jack R. & Mantel, Samuel J.,Project management : a managerial approach, 7th ed., Wiley, Hoboken, N.J., pp. 435-474.
• for a discussion of project control Meredith, Jack R. & Mantel, Samuel J. c2012, ‘Project control’in Meredith, Jack R. & Mantel, Samuel J., Project management : a managerial approach, 8th ed., Wiley, Hoboken, NJ., pp. 475-519.

Discussion topic:

A common cause of project failure is project scope creep (defined as the gradual expansion of a project, typically without any adjustment of endorsed project outcomes, increased budget or extended schedule).[1] But our discussion of bounded rationality in week 8 suggests that some deviation from that plan is probably inevitable.  If this is the case, then the efficacy of arrangements for identifying and controlling such deviation are critical to project success.[2] The notes for week 9 suggest that action by:

the project manager to control deviation from the project plan could take the form of a control loop comprising monitoring, assessment, judgement and intervention;[3]

the project owner to control deviation from organisational objectives could take the form of, for example, phase gate reviews.[4]

I invite students to discuss, with examples:

Whether or not their respective organisations have instituted recognised, understood and accepted arrangements for identifying and controlling deviation from the project plan;

The effectiveness of otherwise of those arrangements in managing such deviations.

[1] See text book section 5.2, page 145.

[2] See text book section 7.1.1.2, page 227.

[3] See text book section 7.1.1, pages 226-228.

[4] See Meredith & Mantel, set readings, page 484.

Answer to discussion topic: (250-350 words)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discussion 10

In week 10 we focus on Zwikael & Smyrk’s event-impact model of risk identification and assessment.  The event impact model of risk comprises three time related components (a triggering event, a chain of immediate consequences and an impact which lowers the worth of the project.  To clarify the link between the event-impact model of risk and business objectives, we introduce notions of business risk appetite, business risk tolerance and business risk threshold.

Set readings:

• For a discussion of risk appraisal in gauging the attractiveness of a project, Zwikael & Smyrk pp 177-180;
• For a discussion of the event-impact model of risk management, Zwikael & Smyrk pp207-214;
• For a PMBOK-oriented perspective of risk management, Kloppenborg, T.: Contemporary Project Management (3ed), Cengage, 2015, pp 270-284;

Discussion topic:

For a discussion of risk from a project portfolio perspective, Teller, J. and A. Kock: An empirical investigation on how portfolio risk management influences project portfolio success, International Journal of Project Management, 2012 .

The notes for week ten addressed the notion of delegated risk management and canvassed the idea of including in project governance arrangements risk management “trigger points”.  The latter are agreed levels of risk appetite beyond which hierarchically organised project actors (team members, project managers, project owners etc) can escalate risk management action to the next management level.  Students might discuss the extent to which they have been involved in such delegated risk appetite arrangements and how well they worked. 

Answer to discussion topic: (250-350 words)