Decision Making and Analysis in Projects

Vignesh Sivadass

MANG6312-Week2-PMandDM-21-22-Bb-Full.pdf

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Week 2

“PM, DM and Decision

Making in Projects”

Dr Ramesh Vahidi [email protected]

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Southampton Business School

10 Feb 22

Review: Week 1

DM is a Multidisciplinary

Area

Aspects of DM in

Projects

Introduction to Module

Introduction to Decision

Making • Decision Science

•Economics

•Public Policy

•Psychology

•Social Psychology

•Law: Adjudication

•Neuroscience

•Philosophy

A General

Classification of Decisions

Intertwined with our lives

Significance in PM

•Conceptual •Decision makers •Decision Elements •Decision Methods & Processes •Decision Context

Aims of Week 2

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“To provide you with further essential conceptual

backgrounds and some practical examples for

analysing decisions in the context of ‘projects’.”

Learning Outcomes of Week 2

By actively attending the sessions and following up with further background studies

you are expected to develop:

The ability to identify decisions in case study projects.

The ability to breakdown a decision to its main components for analysis.

Discuss when decisions are made in projects and their significance.

Define approaches to decision studies and classify project decisions.

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Decision Analysis & Synthesis

• Observing

• Reflecting

• Learning

• Unlearning

• Improving

• Creating

Concepts of Analysis & Synthesis in General

Synthesis: “the act of combining separate ideas, beliefs, styles, etc.; a mixture or combination of ideas, beliefs, styles, etc.”

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Analysis: “to examine the nature or structure of something, especially by separating it into its parts, in order to understand or explain it”

(Oxford Dictionary, nd)

Situation: Messy, complex, uncertain, challenging, specially for the first time!

Basic ANALYSIS of a Decision: Identifying Decision Components

Ask Yourself

• What did I ultimately want to achieve?

• What courses of action I could/could not take?

• What result(s) did I get by making the decision?

• Why couldn’t I choose whatever I wished for?

• Who else was involved in?

What it means

• This was your GOAL (Objective, Purpose, Aim)

• These were your OPTIONs (Choices, Alternatives).

• These were the OUTCOMEs.

• These were the LIMITATIONS (Constraints).

• These could have been DECISION MAKERS [RV: or Influencers].

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Your critical decision: Studying an MSc!

Start/End Points of Decisions: A Long Process or an Immediate Action?

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Minor Decision

Major Decision

Decision Chain - Interdependency

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“General Approaches to DM”

“Common Approaches to DM Studies

in PM”

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Southampton Business School

Info on Accessing Highfield Campus

• Describing and showing the Campus and its surroundings for your knowledge

• Showing different ways you could come to the campus, their time, means, etc. and you could ‘choose’ the option that works best for you each time you come to campus

• How exactly you should access the campus (via route for cycling)

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Variety of Approaches to DM in the Literature

Theories, studies and methods of making decisions could

take different forms:

• Descriptive

• Normative

• Prescriptive

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Sources: (Bell, Raiffa and Tversky, 1988; Kleindorfer, Kunreuther and Schoemaker, 1993; Virine and Trumper, 2008; Teale, et al., 2003; Frame, 2012)

Theories of and Studies in DM Descriptive

• Descriptive theories try to describe:

• How decisions are made by people

• Why they make them in the way they do

• Example of the fields: behavioural, psychological, sociological, organizational

• Assessment criteria: empirical validity (potential issues: DM at exec level based on studying school pupils!)

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Theories of and Studies in DM Normative

• Normative theories suggest: How the decisions should be made

• Perception: the “decision-makers possess perfect knowledge, know all available options and can predict all possible outcomes” (Teale, et al., 2003, p.268)

• Deal with: “how idealized, rational, super-intelligent people should think and should act” (Bell, Raiffa and Tversky, 1988, p.16)

• Examples of the fields: mathematical and statistical formulations of Operations Research (OR)

• Assessment criteria: accuracy of the methods based on the applied theories

* Programmed Decisions would benefit more!

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Theories of and Studies in DM Prescriptive

• Prescriptive* theories/studies: How can people make better decisions in ‘complex’, ‘real life situations’ with ‘constraints’:

– Try to ‘improve’ DM by ‘helping’ and ‘training’ decision makers in making ‘better’ decisions

– Perception: decision makers are real people trying to make ‘better’ decisions [“… as opposed to imaginary, idealized, super-rational people without psyches …” (Bell, Raiffa and Tversky, 1988, p.9)]

• Examples of the fields: organizational behaviour, planning, strategy, team theory, economics and political science.

• Assessment criteria: ‘pragmatic value’ of theories/studies or their capability in assisting people with making better decisions.

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*As Bell, Raiffa and Tversky (1988, p.9) define! (not all the other textbooks/papers that use this term)

“General Approaches to DM”

“Decisions in Projects: where in PLC,

classification, impact”

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Southampton Business School

When do we need to make decisions in projects?

Definition

E.g.: Why, what;

project selection;

goals and

objectives;

feasibility;

sponsorship;

structure, etc.

Planning

E.g.: What, Who,

When, How

many/much;

detailed roles &

responsibilities;

detailed plans; etc.

Implementation

Closure

E.g.: Further tests;

approve

deliverables;

approve payments;

further

collaboration; etc.

E.g.: How many,

when, who;

technical details;

supplier selection;

changes &

adjustments of

requirements/

plans/design; etc.

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Are these the only DM points? ‘Gateway reviews’ or ‘Milestone approach’?!

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Reflection: Gateway reviews’ or ‘Milestone approach’

In your projects so far:

• Did you only make your decisions in gateways or Milestones?

• Could you exactly spot these points in your project?

• Did you make ‘go-no-go’ decisions at the start of each phase?

Critical Paradox on Projects

MAX

Very Low

min

Planning Execution & control

Initiation &

definition

Closure

Information Availability

Impact of Decisions (changes)

PROJECT INFORMATION AVAILABILITY

DECISIONS IMPACT

Example: Think about these in the context of your dissertation!

20Larson and Gray (2011) & Gardiner (2005)MANG6312©RameshVahidi 2021-22

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A Possible Classification of Project Decisions

Strategic

Long term Impact:

Highest level authorities: CEO, project manager, main external stakeholders, etc.

Highest impact.

Examples from a project?

Tactical

Mid to Short-term Impact

Mid level authorities: Project manager, department managers, technical managers, main internal stakeholders, etc.

High impact.

Examples from a project?

Operational

Very short-term impact

Low level authorities: Project coordinator, project members, department managers, technical managers, etc.

Low Impact.

Examples from a project? 21

27 March 2008:

All Eyes on

Heathrow Terminal 5

“Decision To Maintain the

Opening Date”

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T5 Before and After Opening

Promised to Be:

• State-of-the-art architecture

and systems;

• An end to queuing;

• A transformation of

Heathrow.

It led to:

• 500 flights cancellation;

• Hundreds of flight delays;

• More than 23,000

passengers had to take off

without their bags.

Chaos at Heathrow Terminal 5: https://www.youtube.com/watch?v=fA0mQDMX8JI

Heathrow Terminal 5 Chaos: https://www.youtube.com/watch?v=CtD0pQC8OJ0

Heathrow Terminal 5 - Success or Failure?:https://www.youtube.com/watch?v=HFEuzPgkQTc

https://www.youtube.com/watch?v=CtD0pQC8OJ0

https://www.youtube.com/watch?v=HFEuzPgkQTc

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"It was a combination of factors," Walsh [BA's chief executive] said. "We could have coped with a couple of the problems. But all of the problems hitting us led to a cascade."

Main issues of T5:

The construction work was delayed and the negotiations with authorities for delaying the terminal’s opening failed. So, the IT System’s tests were compromised and …

Another main issue: Lack of training.

http://www.computerweekly.com/news/2240086013/British-Airways-reveals- what-went-wrong-with-Terminal-5

What went wrong?

http://www.computerweekly.com/news/2240086013/British-Airways-reveals-what-went-wrong-with-Terminal-5

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Significance of Decision Types?

Significance does not depend solely on the given decision’s classification (i.e. strategic, tactical, operational) or size

Interdependency might escalate the impact

Practitioners’ views:

Small, operational decisions might have big consequences

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Who should be blamed?

Some of the Key Stakeholders

Tasks or

Decisions

Internal Stakeholder External Stakeholders

BA BAA PM … T5 Staff IT

Consultants Auditors

Compromise of IT Test

A/R? A/R? R/C/I?! R?! C? I?

Skills analysis and approval

A/R? A/R? R/C/I?! R? C? I?

R: Responsible A: Accountable C: Consulted I: Informed

“It will not help for passengers to abuse them [T5 staff] and will add to their demoralisation and lead to further problems.”

“One member of Heathrow's staff … : 'We knew it wasn't going to work. The computers are too quick for people - you still have to have a human at the other end unloading the bags.”

British Airways (BA) is the largest airline in the United Kingdom BAA plc, a former British airport operator, now called Heathrow Airport Holdings

Discuss whether and why you agree or not

“Project manager is ultimately and solely responsible for making project decisions and for the decisions outcomes.”

• Who did give them this responsibility?

• Do they have all the authority?

• What if they do not have authority but become aware of a problem/issue?

• Do you remember the sponsor and governance?!

Task: Decisions in PM Practice

• Find a real Project Manager! (a relative, a friend, a classmate, etc.)

• Have an informal conversation with him/her about decision making in projects.

*Bring back some ideas from the real world to the next lectures.

• Ask for their consent first, don’t ask for any confidential or company specific information and make sure they are happy with you bringing back their ideas!

Exercise in your own time

‘Self-Assessment –

Following Lecture Week 2’

Southampton

Business School

Learning Outcomes of Week 2

By actively attending the sessions and following up with further background studies

you are expected to be able to:

Ability to identify decisions in case study projects.

Ability to breakdown a decision to its main components for analysis.

Discuss when decision are made in projects and their significance.

Define approaches to decision studies and classify project decisions.

• Have I looked at the references for this lecture?

• Did I take note from the references? Have I added citations to my notes?!

• Did I pay full attention during the WEEK 2?

• Did I take notes of the main points in the lecture?

• Did I bring in the exercise from WEEK 1 for the teamwork in WEEK 2?

• Did I fully participate in the class activities/discussions?

• Have I reviewed the lecture slides and tried to remember the discussions?

• Have I read the suggested and essential readings for this lecture?

• Have I done the exercise in my own study time?

• How many hours I have spent on my independent study so far?

Self-Assessment - 1

How well you are catching up with

MANG6312!

Self-Assessment - 2

Achievement of Learning Outcomes You would hopefully be able to more or less answer the following questions (or know where/how to find the answers) if most of your answers to previous slide were ‘yes’:

• How many decisions had you identified in the Splot Case study before the

lecture?

• How many more decisions did your learn about in your team and in the lecture?

• Reflect on how you should find more decisions when reading a project case.

• Did you note the difference between the decisions already made and the

decisions to be made later in a project?

• Could you describe goal (purpose, objective); outcome; options and constraints

of a decision in general?

• Review the Splot case study and read your notes, and slides. Make sure these

make sense, if not, ask the lecturer or teammates.

You would hopefully be able to more or less answer the following questions (or know

where/how to find the answers) if most of your answers to previous slide were ‘yes’:

• Can you describe the three different approaches to studies on ‘decision making’?

How could these help you in better appreciation of the DM literature?

• If you are doing a study on DM, what can improve the quality of your study? (refer

to findings of Ahlemann et al., 2013)

• Discuss ‘when’ we make decisions in projects. Discuss the ‘Gateway reviews’ or

‘milestone approach’ to project decisions.

• Discuss significance of decisions in projects and identify the three types of project

decisions (based on the decision impact).

• Could you review and reflect on the Terminal 5 decisions as discussed in the class?

• Who is ultimately responsible for making project decisions and their outcomes?

Self-Assessment - 3

Achievement of Learning Outcomes

Finally, self-evaluation …

• How would I rate my study for this module so far on a scale of 1-5?!

• What feedback I could give myself?

• How could I use the feedback from my Sem1 in this module?

• What things I did very well?

• What are the things I could improve?

References Ahlemann, F., Arbi, F., Kaiser, M. & Heck, A. (2012) ‘A process framework for theoretically grounded prescriptive research in the project management field’. International Journal of Project Management, 31, pp. 43-56.

Bell, D.E., Raiffa, H. & Tversky, A. (1988) Decision making: Descriptive, normative, and prescriptive interactions. Reprint, Wiltshire: Cambridge University Press, 1998.

Gardiner, P. (2005) Project Management – A strategic Planning Approach. Palgrave. Chapter 2.

Kleindorfer, Kunreuther & Schoemaker (1993) Decision sciences: an integrative perspective. Cambridge: Cambridge University Press.

Larson, F.G. & Gray, E.K. (2011) Project Management – The Managerial Process. 4th ed. McGraw-Hill. Chapter 7.

Turner, R., Huemann, M., Anbari, F. & Bredillet, C. (2010). Perspectives on Projects. Oxon: Routledge. Chapter 9.

Virine, L. & Trumper, M. (2008) Project decisions-The art and science. Vienna: Management Concepts Inc.

https://www-lib.soton.ac.uk/uhtbin/cgisirsi/?ps=u8SK4AYCen/HARTLEY/76470121/18/X245/XTITLE/Decision+sciences+:+an+integrative+perspective+%5e2F

Lecture Contents and Plan

• Work on Basic Decision Identification and Analysis in teams: the Splot Case Study

• DM Literature: Approaches to DM studies

• Overview of project decisions

• Case study on impact of project decisions

• Decisions & responsibility

• Exercise

• Self-assessment pack

• Readings/References