Archive for Juli, 2008

In the 25 years since The Mythical Man-Month what have we learned about project management? (Verner et al., 1999)

Donnerstag, Juli 17th, 2008

Mythical Man Month

Verner, J. M.; Overmeyer, S. P.; McCain, K. W.: In the 25 years since The Mythical Man-Month what have we learned about project management?; in: Information and Software Technology, Vol. 41 (1999), No. 14, pp. 1021-1026.
http://dx.doi.org/10.1016/S0950-5849(99)00077-4

The original Fred Brooks‘ book ‚The Mythical Man-Month‚ (1975) explored why IT projects usually deliver late. It states a couple of reasons

  • Poor estimations and the assumption that everything will go well
  • Estimation techniques which confuse effort with progress and vice versa
  • Managers are uncertain about estimates and the do not stubbornly support them
  • No one publishes productivity figures, thus no one can defend his estimates
  • Poor schedule monitoring and control
  • If slippage occur man power is added, which makes it worse – here Brooks introduces the concept of the n*(n-1)/2 communication channels on a team

Verner et al. revisit the original claims and check them against critical success factor research. They found that most of these claims still hold true – but that ‚recently‘ a lot more factors touching the human side of project management have been discovered, e.g., senior management support, customer relationships, knowledgeable and experienced project manager.

A Case Study of Project and Stakeholder Management Failures: Lessons Learned (Sutterfield et al., 2006)

Donnerstag, Juli 17th, 2008

Stakeholder Management

Sutterfield, J. S. Friday-Stroud, S. S. Shivers-Blackwell, S. L.: A Case Study of Project and Stakeholder Management Failures – Lessons Learned; in: Journal of Project Management, Vol. 37 (2006), No. 5, pp. 26-35.

Sutterfield et al. describe a framework for managing the project’s stakeholders from the perspective of the project manager. Their framework includes the following 9 steps

  1. Identify project vision and mission
  2. Conduct project SWOT analysis
  3. Identify the stakeholders and their goals
  4. Identify selection criteria for strategies on how to manage the stakeholders and identify alternative strategies to manage the stakeholders
  5. Select PSM strategy for each stakeholder (PSM in this case is neither project safety management, nor procurement strategy management, but rather project stakeholder management)
  6. Acquire and allocate resources to manage stakeholders
  7. Implement the selected PSM strategies
  8. Evaluate the implemented PSM strategies
  9. Seek and incorporate continuous feedback

A Framework for the Life Cycle Management of Information Technology Projects – ProjectIT (Stewart, 2008)

Donnerstag, Juli 17th, 2008

 ProjectIT

Stewart, Rodney A.: A Framework for the Life Cycle Management of Information Technology Projects – ProjectIT; in: International Journal of Project Management, Vol. 26 (2008), pp. 203-212.

Stewart outlines a framework of management tasks which are set to span the whole life cycle of a project. The life cycle consists of 3 phases – selection (called „SelectIT“), implementation (called „ImplementIT“), and close-out (called „EvaluateIT“).

The first phase’s main goal is to single out the projects worth doing. Therefore the project manager evaluates cost & benefits (=tangible monetary factors) and value & risks (=intangible monetary factors). In order to evaluate these the project manager needs to define a probability function of these factors for the project. Then these distribution functions are aggregated. Stewart suggests using also the Analytical Hierarchy Process Method (AHP) and the Vertex method [which I am not familiar with, neither is wikipedia or the general internet] in this step. Afterwards the rankings for each project are calculated and the projects are ranked accordingly.

The second phase is merely a controlling view on the IT project implementation. According to Stewart you should conduct SWOT-Analyses, come up with a IT diffusion strategy, design the operational strategy, some action plans on how to implement IT, and finally a monitoring plan.

The third stage („EvaluateIT“) advocates the use of an IT Balanced Score Card with 5 different perspectives – (1) Operations, (2) Benefits, (3) User, (4) Strategic competitiveness, and (5) Technology/System. In order to establish the Balanced Score Card measures for each category need to be defined first, then weighted, then applied and measured. The next step is to develop a utility function and finally overall IT performance can be monitored and improvements can be tracked.

On the broadening scope of the research on projects: a review and a model for analysis (Söderlund, 2004)

Donnerstag, Juli 17th, 2008

Broadening research of PM

Söderlund, Jonas: On the broadening scope of the research on projects: a review and a model for analysis; in: International Journal of Project Management, Vol. 22 (2004), No. 8, pp. 655-667.
http://dx.doi.org/10.1016/j.ijproman.2004.05.011

Söderlund reviews the research literature on project management. He then illustrates briefly the different developments within this profession. Finally he suggests four different directions on how to broaden the scope of project management research to make it more useful than just adding another project success factor to it.

  • Broaden research to include wider organisational issues (e.g., processes, politics)
  • Broaden research to include inter-organisation aspects and authority system issues (e.g., contracting, cooperation)
  • Broaden the level of analysis (e.g., organisational issues, company-wide issues)
  • Broaden research to include industry-wide matters (e.g., cooperation between firms, network of professionals)

Building theories of project management: past research, questions for the future (Söderlund, 2004)

Donnerstag, Juli 17th, 2008

Theories of Project Managment

Söderlund, Jonas: Building theories of project management – past research, questions for the future; in: International Journal of Project Management, Vol. 22 (2004), No. 3, pp. 183-191.
http://dx.doi.org/10.1016/S0263-7863(03)00070-X

Söderlund reviews the ideas around building a theory of project management. He identifies the roots of project management research in the scheduling technique school of Gannt, CPM, and PERT. He argues that these are basically applications of engineering science and optimization theory. Furthermore he identifies two different philosophies right from the beginning. The first one is Gaddis with the notion of a project as an organizational unit devoted to attain a single goal. The second philosophy is Miles et al. who see a project as an organisational form.

Subsequently he identifies three streams of theory building. (1) Universal theory building which focuses on the temporariness of the project as an organisational form and action researc. (2) Normative (Positivist) tradition which is concerned to generate best practices and generic factors of project success, which results in a multitude of textbooks, check lists, and literature on how to optimize the project’s processes. (3) Contingency theory approaches which value the context of projects. These efforts lead to studies into categories of projects and industry specifics of project management.

Söderlund concludes with a set of questions for future research

  • Why do projects exist?
  • Why do they differ?
  • How do project organisations behave?
  • What is the function of the value-add of a project unit?
  • What defines success?

Project management of unexpected events (Söderholm, 2007)

Donnerstag, Juli 17th, 2008

Management of Unexpected Events

Söderholm, Anders: Project management of unexpected events; in: International Journal of Project Management, Vol. 26 (2007), No. 1, pp. 80-86.
http://dx.doi.org/10.1016/j.ijproman.2007.08.016

Söderholm qualitatively studies in four cases how unexpected events are dealt with on projects. The author finds three most common root causes for unexpected events, re-openings of topics (mostly due to outside pressure, e.g., new definitions, new issues, politics), revisions of plans, and fine tuning of the project. Furthermore Söderholm identifies four different tactics to manage unexpected events. (1) innovative action, (2) applying detachment strategies, (3) setting up intensive meeting schedules, and  (4) negotiating project conditions.

ad (1) – Innovative action is an inside, short term action to counter the event, examples for this action are the shuffling of resources, delaying activities, and problem solving
ad (2) – Detachment strategies are typical MaxiMin-strategies, the project tries to make itself independent from the event’s consequences as much as possible
ad (3) – Intensive meeting schedules are set up to closely monitor a problematic work package of the project and to assure the best communication flow possible
ad (4) – Negotiating conditions and project safe guarding are mostly used by project managers to gain access to additional resources

Toward a typological theory of project management (Shenhar & Dvir, 1996)

Donnerstag, Juli 17th, 2008

Typological Theory of PM

Shenhar, Aaron J.; Dvir, Dov: Toward a typological theory of project management; in: Research Policy, Vol. 25 (1996), No. 4, pp. 607-632.
http://dx.doi.org/10.1016/0048-7333(95)00877-2

Basing their text on the metaphor of incremental vs. radical innovations Shenhar & Dvir develop a typological framework for projects. In their model the two factors System Scope (assembly, system, array) and Technological Uncertainty (low, medium, high, and super high tech) distinguish projects. Furthermore the authors give some example and characterise each of the 12 types of projects.

Management competences, not tools and techniques: A grounded examination of software project management at WM-data (Rose et al., 2007)

Dienstag, Juli 15th, 2008

7 Competencies of SW Project Mgrs

Rose, Jeremy; Pedersen, Keld; Hosbond, Jens Henrik; Kræmmergaard, Pernille: Management competences, not tools and techniques – A grounded examination of software project management at WM-data; in: Information and Software Technology, Vol. 49 (2007), No. 6, pp. 605–624.
http://dx.doi.org/10.1016/j.infsof.2007.02.005

Rose et al. approach software management with a competence perspective and identify 7 competencies for a successful software project management by using an qualitative approach of grounded theory. They investigate the project managers of a medium sized software development company in Denmark. The 7 competencies they find are

  1. Technical management (code and techniques)
  2. Process management (traditional project mgmt. processes)
  3. Team management (form and develop a team)
  4. Customer management (maintain customer relationships)
  5. Business management (achieve financial results)
  6. Personal management (develop soft skills)
  7. Uncertainty management (manage interrelated complex problems)

The impact of project portfolio management on information technology projects (De Reyck et al., 2005)

Dienstag, Juli 15th, 2008

De Reyck, Bert; Grushka-Cockayne, Yael; Lockett, Martin; Calderini, Sergio Ricardo; Moura, Marcio; Sloper, Andrew: The impact of project portfolio management on information technology projects; in: International Journal of Project Management, Vol. 23 (2005), No. 7, pp. 524-537.
http://dx.doi.org/10.1016/j.ijproman.2005.02.003

In their article de Reyck et al. argue that project portfolio management (PPM) is essential to create value with IT project. The research focus is the management of resources and risk. Moreover most articles are from vendors of the software, promoting the value of the PPM process, a claim not based on any empirical evidence.

Based on findings from a survey about PPM adoption, de Reyck et al. introduce a three-stage classification scheme of PPM adoption. Furthermore they show that a strong correlation exist between increasing adoption of PPM processes and a reduction in project related problems, and between PPM adoption and project performance.

Their maturity model shows how the elements of PPM (centralisation of project control, financial analysis, risk analysis, interdependencies, constraints, overall portfolio analysis, categorisation/selection/accountability and governance, optimisation, and specialised software) are adopted in each of their 3 stages:

PPM Maturity Model (de Reyck et al. 2005, p. 530)

from: De Reyck et al. (2005), p. 530

In my opinion the question remains if organisations in stage 3 follow a controlling agenda more than they actually empower their project managers.

Managing Knowledge and Learning in IT Projects: A Conceptual Framework and Guidelines for Practice (Reich, 2007)

Dienstag, Juli 15th, 2008

Knowledge gaps and risks

Reich, Blaize Horner: Managing Knowledge and Learning in IT Projects – A Conceptual Framework and Guidelines for Practice; in: Project Management Journal, Vol. 38 (2007), No. 2, pp. 5-17.

This paper won the PMI award for the best paper in 2007. She identifies 10 risks on the projects which arise due to knowledge gaps. Reich structures the risks from a systems and process perspective. Risks 1&2 are project inputs, Risks 3&4 are linked to the project governance, Risks 5-8 are operational risks, Risk 10 is an output risk.

  1. Previous lessons are not learned
  2. Team selection is flawed
  3. Volatility in the governance team
  4. Lack of role knowledge
  5. Inadequate knowledge integration
  6. Incomplete knowledge transfer
  7. Exit of team members
  8. Lack of knowledge map
  9. Loss between phases
  10. Failure to learn

Since learning the way to bridge knowledge gaps, Reich concludes that the best way to address the risks is 4-fold (1) establish a learning climate, (2) establish and maintain knowledge levels, (3) create channels for knowledge flow, and (4) develop a team memory.

Project management information systems: An empirical study of their impact on project managers and project success (Raymond & Bergeron, 2008)

Dienstag, Juli 15th, 2008

 PMIS

Raymond, Louis; Bergeron, Francois: Project management information systems – An empirical study of their impact on project managers and project success; in: International Journal of Project Management, Vol. 26 (2008), pp. 213-220.

To make a long article short: Project management information systems (PMIS) have a positive impact on project managers and project success. The cause-effect-chain is as follows: PMIS Quality –> PMIS Information Quality –> PMIS Useage –> Project Manager –> Project Success.

How to build a critical chain!

Dienstag, Juli 15th, 2008

This is not a summary of an article per se; but it summarizes the description on how to build a Critical Chain as it was published in
Rand, Graham K.: Critical chain – the theory of constraints applied to project management; in: International Journal of Project Management, Vol. 18 (2000), No. 3, p. 173-177. http://dx.doi.org/10.1016/S0263-7863(99)00019-8

Critical Chain

The Theory of Constraints was outlined by Eliyahu M. Goldratt in his book „Theory of Constraints“, which subsequently Goldratt applied to project management in „Critical Chain“, which interestingly is a novel similar to Tom DeMarco’s Deadline.  Anyway, the basic idea of the Theory of Constraints is according to Wikipedia

[…] every organization has – at any given point in time – at least one constraint which limits the system’s performance relative to its goal. These constraints can be broadly classified as either an internal constraint or a market constraint. In order to manage the performance of the system, the constraint must be identified and managed correctly […] (from Wikipedia)

The Theory of Constraints outlines a 5 step process to tackle the whole problem

  1. Identify the constraint
  2. Decide how to exploit the constraint
  3. Subordinate everything else to above decision
  4. Elevate the constraint
  5. If constraint has been broken, go back to (1) and never allow inertia to cause a system’s constraint

So what is the constraint on a project? Of course it is the time of critical resources. What is the problem with them? They do suffer from something called student’s syndrome – no matter how much buffer they get, the work is only done in the last few days.
The solution? Exploit the constraint – then elevate it. In other words: finish task on time before trying to decrease total time.
How can one exploit the constraint? Remove all buffers into a big one at the end of the project. All tasks or streams which are not on the critical path get a feeding buffer right before they feed into the critical path again.
How do I manage it? Project Management needs to ensure that no time is lost on hand-overs. Furthermore if the time comes everything must be dropped and everyone works on tasks on the critical chain only. Never ever shall multi-tasking occur!

The changing paradigms of project management (Pollack, 2007)

Dienstag, Juli 15th, 2008

Changing Paradigm

Pollack, Julien: The changing paradigms of project management; in: International Journal of Project Management, Vol. 25 (2007), No. 3., pp. 266-247.
http://dx.doi.org/10.1016/j.ijproman.2006.08.002

This article is closely related to the 2006 article by Atkinson et al., which are all based on the hard-soft-framework first published in

Crawford, Lynn; Pollack, Julien: Hard and soft projects – a framework for analysis, in: International Journal of Project Management, Vol. 22 (2004), No. 8, pp. 645-653.

In this article Pollack analyses project management literature in order to identify paradigms associated with project management research. He uses the concept of the paradigm as defined by Kuhn in 1962 as a „commonly shared set of assumptions, values and concepts within a community, which constitutes a way of viewing reality. Individuals within the community may embody these assumptions in different ways, and so paradigm is used in his context to refer to a general tendency for thought“ (Pollack 2007, p. 266).

Pollack then describes the hard and soft paradigm he helped establishing with research on best practice organisational change projects. The hard paradigm is characterised by

  • Predefined project goals
  • Positivist and Realist philosophies
  • Emphasis on control
  • Quantitative measures
  • Reductionist techniques
  • Emphasis on structure
  • No need for participation
  • Project Manager as Expert

Whereas the soft paradigm is characterised by

  • Ill-defined and ambiguous goals
  • Qualitative measures
  • Emphasis on learning
  • Need for participation
  • Interpretivist philosophies
  • Emphasis on social processes
  • Project Manager as Facilitator

Furthermore Pollack argues that most of the current research is deeply rooted in the hard paradigm, although the literature on the soft paradigm is growing significantly. He then argues that a paradigmatic expansion could provide increased opportunity for practitioners and researchers. Since choosing a paradigm automatically defines certain assumptions for the research and thus limiting it. Nevertheless he points out that neither one perspective is appropriate to all situations.

How to fail in project management – without really trying (Pinto & Kharbanda, 1996)

Dienstag, Juli 15th, 2008

 How to ensure failure

Pinto, Jeffrey K.; Kharbanda, Om P.: How to fail in project management – without really trying; in: Business Horizons, Vol. 39 (1996), No. 4, pp. 45-53.
http://dx.doi.org/10.1016/S0007-6813(96)90051-8

Since Pinto popularised the critical success factor and failure factor research, which established a large body of research I wanted to include this paper though it is a bit dated. Pinot & Kharbanda basically illustrate how one can ensure complete and utterly failure as an owner of an IT project:

  • Ignore the environment (espy. stakeholders)
  • Push a new technology in a market too quickly
  • Don’t bother building fall back options
  • When problems occur shoot the most visible one
  • Let new ideas starve to death by inertia
  • Don’t bother conducting feasibility studies
  • Never admit project is a failure
  • Over manage project managers and their team
  • Never ever conduct post-failure reviews
  • Never bother to understand project trade-offs
  • Allow political expediency and infighting dictate crucial project decisions
  • Make sure project is run by a weak leader

Defining uncertainty in projects – a new perspective (Perminova, 2008)

Dienstag, Juli 15th, 2008

 Uncertainty

Perminova, Olga; Gustafsson, Magnus; Wikström, Kim: Defining uncertainty in projects – a new perspective; in: International Journal of Project Management, Vol. 26 (2008), No. 1, pp. 73-79.
http://dx.doi.org/10.1016/j.ijproman.2007.08.005

Perminova et al. argue that traditional project risk management focuses on risk and that the notion of uncertainties is generealy overlooked. In their literature review the authors show the difference between risk and uncertainties in 6 selected areas of research – Economics, Psychology, Philosophy, Organisational Theory, Dictionary, Project Management. Finally they establish a working definition for project managers: „[uncertainty occurs] when existing factors/assumptions are questioned and therefore the basis for calculating risks is questionable“. Perminova et al. argue that essential for managing uncertainty are reflective learning and sense-making, since they enable  flexibility and rapidness in decision-making especially since they do not restrict the choice of alternative actions in response to the situation.

The importance of context in programme management: An empirical review of programme practices (Pellegrinelli et al., 2007)

Dienstag, Juli 15th, 2008

 Context in Programs

Pellegrinelli, Sergio; Partington, David; Hemingway, Chris; Mohdzainb, Zaher; Shah, Mahmood: The importance of context in programme management – An empirical review of programme practices; in: International Journal of Project Management, Vol. 25 (2007), No. 1, pp. 41-55.
http://dx.doi.org/10.1016/j.ijproman.2006.06.002

Pellegrinelli et al. study actual practices on programs which mainly consist of projects. Surprisingly they find that the OGC’s Managing Successful Programmes framework (MSP) is not consistently adopted even when its use is mandated by the organisation. Furthermore they found that following MSP rigorously leads to a controlling dominated management agenda and not a empowering agenda. Their main findings for each MSP category are

  • Organisation & Leadership – mostly living on paper only, IT rather than business counterparts perform the roles needed
  • Benefits Management – mostly unquantifiable benefits or intangible benefits, general perception that this approach doesn’t fit RUP  (or any of the other unified processes of software development)
  • Stakeholder Management & Communication – n/a
  • Risk Management & Issue resolution – mostly risk management is missing completely on a program level
  • Program Planning & Control – often overruled by central head quarter
  • Business Case Management – Only symbolic artifact or only used to secure funding and never updated afterwards
  • Quality Management – are more adoptions of organisational practices already in place than the MSP processes

In short Pellegrinelli et al. revealed significant and on-going crafting of programme content, structures and processes to reconcile divergent aims and interests, to expedite progress in the face of adversity and to engage multiple sponsors, contributors and stakeholders. Thus the authors showed the importance and influence of context, namely the dynamic cultural, political and business environment in which the programmes operate, and the organisationally embedded nature of programme management.

Inquiring into the temporary organization: New directions for project management research (Packendorff, 1995)

Dienstag, Juli 15th, 2008

Inquiring temp orga

Packendorff, Johann: Inquiring into the temporary organization: New directions for project management research; in: Scandinavian Journal of Management, Vol. 11 (1995), No. 4, pp. 319-333.
http://dx.doi.org/10.1016/0956-5221(95)00018-Q

Firstly Packendorff gives a brief overview about the research on project management. He roots PM research in operations research with the development of the Gantt-Chart in 1910. The other big themes of research Packendorff identifies are

  • scheduling techniques (1950s and onwards)
  • Organisation Theory/HR Management/Leadership (1960s and onwards)
  • software tools/2nd generation Operations Research (1980s and onwards)
  • critical success factor research (1990s and onwards)
  • team building and matrix organisations (1995 [the year the article was written])

In this article Packendorff identifies three main shortcomings of project management research and theory. (1) Project Management is usually seen as a general theory and a theoretical field in its own right, (2) research on project management offers an abundance of normative advice despite being not sufficiently empirical, and (3) projects are seen as “tools” and not organisations.

Furthermore Packendorff recommends three changes in project management research to overcome these shortcomings. (1) Middle range theories for different kinds of projects should replace the general theory focus. (2) The aim of research should be to provide a descriptive theory (instead of the normative advice) which is grounded in empirical narrative studies on human interaction on projects = comparative case studies. (3) Projects should be seen as temporary organisations (instead of management tools) which are an aggregate of individuals temporarily enacting a common cause.

Matching the project manager’s leadership style to project type (Müller & Turner, 2007)

Montag, Juli 14th, 2008

Leadership Schools

Müller, Ralf; Turner, Rodney J.: Matching the project manager’s leadership style to project type; in: International Journal of Project Management, Vol. 25 (2007), No. 1, pp. 21-32.
http://dx.doi.org/10.1016/j.ijproman.2006.04.003

Müller & Turner shortly describe 6 modern and 3 historical schools of leadership before they investigate if leadership styles have an impact on the success of projects and whether there are different styles needed for different projects. The 9 schools they outline briefly are

  1. Confucius – it’s all about relationships, moderation, values, and process
  2. Aristotle – it’s all about relationships, values, and process
  3. Barnard – it’s all about relationship vs. processes
  4. Trait Theory – leaders are born not made
  5. Behavioural Theory – leadership skills can be developed
  6. Contingency Theory – effective leadership depends on the situation
  7. Visionary/charismatic leadership – transformation vs. transaction
  8. Emotional Intelligence – your (gut) feelings matter
  9. Competency – all matters (traits, behaviours, styles, emotions, processes, intellect…)

Furthermore the authors link each item of their 3 dimensional leadership model (Emotional, Managerial, Intellectual) to project performance in different project categories. Their results show that in general IT projects motivational skills and a strategic perspective positively influence the project’s success. In the case of high performing IT projects Self-Awareness, Communication and Self-Development impact the success positively, whereas visionary capacities have a negative impact on the success.

Determinants for external communications of IT project managers (Müller 2003)

Montag, Juli 14th, 2008

 Determinants of Communication

Müller, Ralf: Determinants for external communications of IT project managers; in: International Journal of Project Management, Vol. 21 (2003), No. 5, pp. 345-354.
http://dx.doi.org/10.1016/S0263-7863(02)00053-4

Müller analysis empirically the determinants of external communication of IT project managers in a business-to-business market. The study is based on the concepts of Media Richness Theory (which postulates that the richer the medium the more effective the communication) and Transaction Economics.

Müller finds no evidence for an influence of the organisation’s structure. The risk in the project has a negative impact on communication frequency and communication contents in general. Specifically he finds that higher risk increases communications frequency and preference for face-to-face meetings whilst decreasing the preference for written reports.
Relational norms have a positive influence on communication frequency, media, and contents.

The impact of principal–agent relationship and contract type on communication between project owner and manager (Müller & Turner, 2005)

Montag, Juli 14th, 2008

Communication and Contract type

Müller, Ralf; Turner, Rodney J.: The impact of principal–agent relationship and contract type on communication between project owner and manager; in: International Journal of Project Management, Vol. 23 (2005), No. 5, pp. 398-403.
http://dx.doi.org/10.1016/j.ijproman.2005.03.001

Müller & Turner argue that a project should be analysed in two distinctive stages pre and post contract. The pre contract perspective follows the laws outlined in Transaction Economics (or Transaction Cost Theory), which postulates that companies choose the governance structure with the lowest transactions costs. Specifically the degree of asset specificity, the degree of uncertainty, and the frequency of transactions determine the transaction costs both parties (vendor and buyer) consider in this phase.

The post-contract perspective is best conceptualised by the Principal-Agent-Theory, specifically by with the phenomena of moral hazard and adverse selection. Game theory usually calls this equilibria with correlated strategies and calls for contractual design in a way that each player is receiving incentives for compliance.

On a side-note: This behaviour is a classical chicken game. Imagine a vendor and a buyer who build up an integrated team. Both agree (orally) to send their most experienced experts (unfortunately they cost more), which would be best for the project work to be done. In this game each party can choose to give the work either to experts or to rookies:

  Rookies Experts
Rookies (0,0) (8,2)
Experts (2,8) (6,6)

Thus it is better for each team to sent rookies if the other team sends experts (which gives us the two Nash-equilibria of the game). If vendor and buyer send their rookies no one will know what is going on and what they have to do and both earn nothing (0,0). On the other hand the oral agreement of both parties to send their experts is not credible. Since this is a one-shot game the strategy (6,6) can only be reached if both parties agree on binding contracts or a negotiator.

Müller & Turner show that decisions made in the pre-contract phase with the objective to minimize the transaction costs (e.g. fixed-price or cost-plus contracts) can potentially have
have adverse effects on the project in the post-contract phase – by increasing the administrative costs for communication due to their negative impact on owner–manager
collaboration.