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Advances in Project Management: When people make decisions: Thinking and deciding in projects

SERIES ARTICLE

By Prof Darren Dalcher

Director, National Centre for Project Management

University of Hertfordshire

UK
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Introduction to the February 2014 Advances in PM Series Article 

A significant part of economics is predicated on the assumption of homo economicus, the rational economic human who seeks to maximise economic benefit and profit.

The idea of ‘rational man’, or a rational human, originally appears in the writing of John Stuart Mill (1836):

“[Political economy] does not treat the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end.”

The rational human endeavours to obtain the highest potential reward for himself/herself given the information at their disposal. The choices they make are therefore based on their desire to fulfil their utility function in a given situation.

The underpinning assumption is that decisions are made in clearly defined, well understood and narrowly constrained situations, where rational choice can be reduced to a simple selection between a clearly defined and mutually exclusive set of alternatives. This implies a closed or a controlled environment devoid of unknowns and uncertainties and a high degree of structure in terms of processes.

The normative prescriptive nature of the model relies on simplifications suggesting a mechanistic underpinning. Indeed, the prevalence of the idea of rational economic thinking has positioned decision making and decision science as intrinsically quantitative endeavours.

Yet despite unprecedented access to information, unimaginable processing capability of our computers, dedicated business intelligence and analytics software, significant advances in decision making theory and an increasingly savvy workforce mistakes, errors and misjudgements abound.

Moreover, many failures, accidents and disasters are ultimately attributed to faulty, incomplete, biased or late decisions.

While Homo economicus has never had as a rich a dataset of facts and observations, the results of our decisions imply that the models and assumptions are not up to the task.

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Editor’s note: The PMWJ Advances in Project Management series includes articles by authors of program and project management books published by Gower in the UK.  Each month an introduction to the current article is provided by series editor Prof Darren Dalcher, who is also the editor of the Gower Advances in Project Management series of books on new and emerging concepts in PM.  Prof Dalcher’s article is an introduction to the invited paper this month in the PMWJ by Gower author Michael Cavanagh.  Information about the Gower series can be found at http://www.gowerpublishing.com/advancesinprojectmanagement. 

About the Author 

flag-ukdarren-dalcherDarren Dalcher, PhD 

Series Editor 

Director, National Centre for Project Management

University of Hertfordshire

UK

Darren Dalcher, Ph.D. HonFAPM, FRSA, FBCS, CITP, FCMI is Professor of Project Management at the University of Hertfordshire, and founder and Director of the National Centre for Project Management (NCPM) in the UK.  He has been named by the Association for Project Management (APM) as one of the top 10 “movers and shapers” in project management in 2008 and was voted Project Magazine’s “Academic of the Year” for his contribution in “integrating and weaving academic work with practice”. Following industrial and consultancy experience in managing IT projects, Professor Dalcher gained his PhD in Software Engineering from King’s College, University of London.  Professor Dalcher has written over 150 papers and book chapters on project management and software engineering. He is Editor-in-Chief of Software Process Improvement and Practice, an international journal focusing on capability, maturity, growth and improvement. He is the editor of the book series, Advances in Project Management, published by Gower Publishing of a new companion series Fundamentals of Project Management.  Heavily involved in a variety of research projects and subjects, Professor Dalcher has built a reputation as leader and innovator in the areas of practice-based education and reflection in project management. He works with many major industrial and commercial organisations and government bodies in the UK and beyond.  He is an Honorary Fellow of the APM, a Chartered Fellow of the British Computer Society, a Fellow of the Chartered Management Institute, and the Royal Society of Arts, and a Member of the Project Management Institute (PMI), the Academy of Management, the Institute for Electrical and Electronics Engineers, and the Association for Computing Machinery. He is a Chartered IT Practitioner. He is a Member of the PMI Advisory Board responsible for the prestigious David I. Cleland project management award and of the APM Professional Development Board.  Prof Dalcher is an academic editorial advisor for the PM World Journal.  He can be contacted at [email protected].