When cost–effective design strategies are not enough: Evidence from
an experimental study on the role of redundant goals
Izack Cohen and Michal Iluz
Abstract
Projects
have to meet interrelated time, cost and effectiveness goals. Surveys, such as
CHAOS, consistently indicate that over 50% of the projects either significantly
deviate from these goals or fail. Therefore, there is room for improvement in
terms of project outcomes. This motivated us to explore improvement
possibilities for the outcomes of design strategies that account for the
interrelations between time, cost and effectiveness. We focus on a
cost–effective (CE) design strategy that aspires to maximize the
effectiveness-to-cost ratio (ECR) by deciding on: project schedules, resource
allocations and a product performance level (i.e. effectiveness). We suggest a
mathematical formulation to capture trade-offs between project scope decisions
(such as project scheduling and resource allocations) and effectiveness. We
conduct experiments, in which participants use a simulator to plan and execute
a project according to the CE strategy with and without goals, based on
solutions for the mathematical formulation. Contrary to some of the literature
on goal-setting theory for complicated tasks, we found that appropriate goals
improved the expected ECR while others did not have any impact. A better understanding
of appropriate goal-setting in the context of project management may be
important for improving projects outcomes.
Keywords: Cost-effective, Design strategy, Goal setting