Realizing value from project implementation under uncertainty: An exploratory study using system dynamics

Project Implementation is not a trivial task even after careful planning and scheduling. One of the reasons is the existence of unexpected events at strategic and operational levels during the project execution process. This paper presents a system dynamics model of a project monitoring and control system. Embedded with both strategic and tactical uncertainties, the model experiments with typical remedial actions to disturbances during the implementation of a project under a behavioral paradigm. Simple proportional adjustment seems to work well under low levels of unexpected disturbances but prospect theory-based behavior works better under extreme situations. Our findings indicate over-reacting behavior, which is influenced by biases and reporting errors, can generate project escalation. Thus, thresholds for remedial actions should be implemented in project control and monitoring systems to avoid over-reacting behavior leading to escalation and waste of resources.