The impact of limited rationality on the creation and management of complex infrastructure projects: The cases of Heathrow and Berlin- Brandenburg airports
DOI:
https://doi.org/10.21638/spbu18.2020.404Abstract
The article aims to examine the impact of decision-makers’ limited rationality on creating and managing infrastructure projects. The object of the study is transportation enterprises that have critical importance for the national and global economy. I argue that the success of the infrastructure projects depends on the external environment state and is most evident during macroeconomic recovery. Authorities make less rational decisions and approve more innovative and expensive projects at the micro level if the national economy approaches the peak of growth. The productivity of operating objects depends on the interplay between the external environment and the internal functional and isolated levels of the enterprise — physical, distribution, economic, technological, and design. I suggest that these levels differ dramatically by their innovativeness and planning horizon. The physical level implies the routine and short-term planning, whereas the project level implies the higher level of innovativeness and long-term planning horizon. The remaining levels occupy an intermediate position between these two poles. A significant deviation from the
indicated distribution at the functional levels can undermine the productivity of transportation enterprise and infrastructure projects. I illustrate this assumption using the cases of the construction projects of Terminal 5 at Heathrow and Berlin–Brandenburg Airports. In both projects, the obtained results were far from the planned ones, which proves the distortions in the way their activities were distributed between functional levels.
Keywords:
functions, airport, organizational structure, hierarchy, structure, Heathrow, Brandenburg, routine, innovation
Downloads
References
Коваль И. 2017. Берлинский аэропорт-долгострой откроют в октябре 2020 г. Deutsche Welle. [Электронный ресурс]. https://www.dw.com/ru/%D0%B1%D0%B5%D1%80%D0%BB%D0%B8%D0%BD%D1%81%D0%BA%D0%B8%D0%B9-%D0%B0%D1%8D%D1%80%D0%BE%D0%BF%D0%BE%D1%80%D1%82-%D0%B4%D0%BE%D0%BB%D0%B3%D0%BE%D1%81%D1%82%D1%80%D0%BE%D0%B9-%D0%BE%D1%82%D0%BA%D1%80%D0%BE%D1%8E%D1%82-%D0%B2-%D0%BE%D0%BA%D1%82%D1%8F%D0%B1%D1%80%D0%B5-2020-%D0%B3%D0%BE%D0%B4%D0%B0/a-41820040 (дата обращения: 27.07.2020).
Крылова М. 2018. Архитектурный триумф, инженерный провал. Tatlin. [Электронный ресурс]. https://tatlin.ru/articles/arxitekturnyj_triumf_inzhenernyj_proval (дата обращения: 27.07.2020).
Ощепков В. М., Мальцева Н. В. 2017. Оценка успеха и провала проекта как способ повышения эффективности деятельности современной организации. Вестник Пермского университета. Экономика 12 (1): 136–147. https://doi.org/10.17072/1994-9960-2017-1-136-147
Проблемы лондонского аэропорта Хитроу. 2011. Коммерсантъ. [Электронный ресурс]. https://www.kommersant.ru/doc/1827584 (дата обращения: 27.07.2020).
Рождественская Я. 2016. Новый берлинский аэропорт может никогда не открыться. Коммерсантъ. [Электронный ресурс]. https://www.kommersant.ru/doc/2975285 (дата обращения: 27.07.2020).
REFERENCES IN LATIN ALPHABET
Alberts H. C., Bowen J. T., Cidell J. L. 2009. Missed opportunities: The restructuring of Berlin’s airport system and the city’s position in international airline networks. Regional Studies 43 (5): 739–758. https://doi.org/10.1080/00343400701874248
Bahu J.-M., Hoja C., Petillon D., Kremers E., Ge X., Koch A., Pahl-Weber E., Grassl G., Reiser S. 2017. Integrated urban energy planning for the redevelopment of the Berlin-Tegel airport. In: Bisello A., Vettorato D., Stephens R., Elisei P. (eds). Smart and Sustainable Planning for Cities and Regions. SSPCR 2015, 407–419. Springer: Cham. https://doi.org/10.1007/978-3-319-44899-2_23SSPCR
Baum H. Esser K., Kurte J., Schneider J. 2005. Wirtschaftliche Effekte des Airports Berlin Brandenburg. Bundesministerium für Verkehr und digitale Infrastruktur. (In German)
Beria P., Scholz A. 2008. Strategies for infrastructure development of airports: A comparison between Milan Malpensa and Berlin Brandenburg International. ATRS Conference, 1–21.
Cerezo-Narváez A., Pastor-Fernández A., Otero-Mateo M., Ballesteros-Pérez P. 2020. Integration of cost and work breakdown structures in the management of construction projects. Applied Science 10 (4): 1–33. https://doi.org/10.3390/app10041386
Civil Aviation Authority. 2014. Economic Regulation of BAA London Airports (Heathrow, Gatwick and Stansted) 2003–2008 CAA Decision. The National Archives. [Electronic resource]. https://webarchive.nationalarchives.gov.uk/20140605063754/https://www.caa.co.uk/default.aspx?catid=78&pageid=11827 (accessed: 27.07.2020)
Clark D. 2009. Integrated management: P5 students can learn several valuable lessons from Heathrow airport’s terminal 5 project. Financial Management, 54–55.
Climbing the Curve. 2015. Global Construction Project Owner’s Survey. KPMG International: Amstelveen, The Netherlands. [Electronic resource]. https://assets.kpmg/content/dam/kpmg/pdf/2015/05/construction-survey-201502.pdf (accessed: 27.07.2020).
Cranfield University Department of Air Transport. 2005. Analysis of the EU Air Transport Industry. Final Report. [Electronic resource]. https://ec.europa.eu/transport/sites/transport/files/modes/air/observatory_market/doc/annual_report_2005.pdf (accessed: 27.07.2020).
Davies A., Gann D., Dodgson M. 2010. From iconic design to lost luggage: Innovation at Heathrow Terminal 5. International Journal of Project Management 28 (2): 151–157.
Elston A., Lindop E., Priest C., Storry R., Trewhitt L. 2013. Benchmarking Employment Costs: A Research Report for the CAA. Incomes Data Services (IDS). [Electronic resource]. https://webarchive.nationalarchives.gov.uk/20150602030556/http://www.caa.co.uk/docs/78/Q6IDSHeathrowEmployment.pdf (accessed: 27.07.2020)
Europe Economics. 2013. Heathrow Airport’s Cost of Capital. A report on behalf of Heathrow. [Electronic resource]. https://webarchive.nationalarchives.gov.uk/20150602030556/http://www.caa.co.uk/docs/78/HeathrowCostOfCapitalStudy.pdf (accessed: 27.07.2020).
Flughafen Berlin (BER) Kosten. [Electronic resource]. https://www.flughafen-berlin-kosten.de (accessed: 27.07.2020).
Flyvbjerg B., Holm M. S., Buhl S. 2002. Underestimating costs in public works projects: Error or lie? Journal of the American Planning Association 68 (3): 279–295. https://doi.org/10.1080/01944360208976273
Geraldi J., Stingl V. 2016. From Visions of Grandeur to Grand Failure: Alternative schools of descriptive decision theories to explain the Berlin Brandenburg Airport fiasco. EURAM. European Academy of Management 16: 1–41. Paris.
Habibia F., Birganib O.T., Koppelaarc H., Radenovićd S. 2018. Using fuzzy logic to improve the project time and cost estimation based on Project Evaluation and Review Technique (PERT). Journal of Project Management 3 (4): 183–196.
Herrera R. F., Sánchez O., Castañeda K., Porras H. 2020. Cost overrun causative factors in road infrastructure. Applied Science 10: 1–25. https://doi.org/10.3390/app10165506
Hinterleitner M. 2019. Salami tactics and the implementation of large-scale public projects. Journal of European Public Policy 26: 1696–1714. https://doi.org/10.1080/13501763.2018.1544654
Jones D., Womack J. 2000. Seeing the Whole: Mapping the Extended Value Stream. Lean Enterprise Institute: Cambridge, MA.
Lykotrafiti A. 2017. The white elephant in the room… Annotation on European Commission Decision of 3 August 2016: State aid SA.41342 (2017/N). Germany. Financing of Berlin Brandenburg Airport. European State Aid Law Quarterly 2: 299–309.
Nickel J. 2011. Why Some Airport-rail Links Get Built and Others Do Not: The Role of Institutions, Equity and Financing. Thesis. Massachusetts Institute of Technology.
Olaniran O. J., Love P. E. D., Edwards D., Olatunji O. A., Matthews J. 2016. Cost overruns in hydrocarbon megaprojects: A critical review and implications for research. Project Management Journal 46 (6): 126–138.
Omotayo T., Bankole A., Olanipekun A.O. 2020. An artificial neural network approach to predicting most applicable post-contract cost controlling techniques in construction projects. Applied Science 10: 1–24.
PwC. 2014. When Will You Think Dierently about Programme Delivery. PwC: London, UK.
Simon H. A. 1978. Rationality as process and as product of thought. American Economic Review 68 (2): 1–16.
Vu T. Q., Pham C. P., Nguyen T. A., Nguyen P. T., Phan P. T., Nguyen Q. L. 2020. Factors influencing cost overruns in construction projects of international contractors in Vietnam. Journal of Asian Finance, Economics and Business 7 (9): 389–400. https://doi.org/10.13106/jafeb.2020.vol7.no9.389
Wagner D. N. 2017. Learning from aviation project resource management to avoid project failure. PM World Journal 5 (2): 1–11.
Walkowska M. 2020. Risk and Uncertainty Management in the Heathrow Terminal 5. Project and Programme Strategy.
Yildirim H. A., Akcay C. 2019. Time-cost optimization model proposal for construction projects with genetic algorithm and fuzzy logic approach. Revista de la Construcción. Journal of ConstructionJournal of Construction 18 (3): 554–567. https://doi.org/10.7764/RDLC.18.3.554
Translation of references in Russian into English
Koval I. 2017. Berlin airport-term construction will open in October 2020. Deutsche Welle. [Electronic resource]. https://www.dw.com/ru/%D0%B1%D0%B5%D1%80%D0%BB%D0%B8%D0%BD%D1%81%D0%BA%D0%B8%D0%B9-%D0%B0%D1%8D%D1%80%D0%BE%D0%BF%D0%BE%D1%80%D1%82-%D0%B4%D0%BE%D0%BB%D0%B3%D0%BE%D1%81%D1%82%D1%80%D0%BE%D0%B9-%D0%BE%D1%82%D0%BA%D1%80%D0%BE%D1%8E%D1%82-%D0%B2-%D0%BE%D0%BA%D1%82%D1%8F%D0%B1%D1%80%D0%B5-2020-%D0%B3%D0%BE%D0%B4%D0%B0/a-41820040 (accessed: 27.07.2020). (In Russian)
Krylova M. 2018. An architectural triumph, an engineering fiasco. Tatlin. [Electronic resource]. https://tatlin.ru/articles/arxitekturnyj_triumf_inzhenernyj_proval (accessed: 27.07.2020). (In Russian)
Oschepkov V. M., Maltseva N. V. 2017. Assessment of success and failure of a project as a way to increase the efficiency of modern organization activity. Vestnik Permskogo Universiteta. Seria Ekonomika 12 (1): 136–147. https://doi.org/10.17072/1994-9960-2017-1-136-147 (In Russian)
Problems of London Heathrow Airport. 2011. Kommersant. [Electronic resource]. https://www.kommersant.ru/doc/1827584 (accessed: 27.07.2020). (In Russian)
Rozhdestvenskaya Ya. 2016. New Berlin airport may never be open. Kommersant. [Electronic resource]. https://www.kommersant.ru/doc/2975285 (accessed: 27.07.2020). (In Russian)
Downloads
Published
How to Cite
Issue
Section
License
Articles of the Russian Management Journal are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.
