7. Conclusions
To analyze the impact of uncertainties on project implementation, we developed a system dynamic behavioral model to evaluate the value realization of on-going projects. Our model extracts the fundamental dynamism of project implementation and provides a transparent interpretation for project managers, which can be adapted to projects in multiple industries. We do not focus on the conventional triangle (cost, budget and quality) performance existing in project management literature but provide an open systems frame for strategic project management. Analyzing the possible losses caused by strategic and tactical uncertainties, the impacts of remedial actions and disturbances of behavioral biases are discussed from an individual perspective. Specifically, two unanticipated events are modeled, which gives a clue on how to efficiently response to unexpected crises. The results demonstrate the development of project escalation and the impact of prospect theory, a cornerstone in behavioral economics. We also evaluated the impact of reporting processes on the final results. Therefore our study contributes to three areas: project management under ‘unk unks', the impact of behavioral biases on the achievement of project objectives, and system dynamics applied to project management.
