“Cracking the megaproject puzzle: A stakeholder perspective?” advocates the perspective ” new stakeholder theory ” to make sense of empirical regularities in megaprojects, so make sense of delays, cost growth, and scope creep. It is suggested that empirical regularities are not isomorphic with bad management and/or dishonesty, but rather an outcome of the ‘rules of the game’.
In this essay, to move forward the debate beyond ‘bad’ management and dishonesty arguments, the author advocates a novel perspective: mobilizing new stakeholder theory (NST).
NST is a nascent conceptualization of strategic management that draws mainly on organizational economics to explore and analyse how organizations create ‘socially valuable outcomes’. In other words, how organizations create value in a broad sense – so, beyond nominal fiduciary economics – through the orchestration of coordinated collective action with their stakeholders.
As a descriptive theory, NST seeks to discern economic and legal criteria that justify alternative strategic choices through which organizations enfranchise stakeholders in value creation activities and stakeholders experience the value being created (aka “value distribution“)
A NST perspective exhorts us to look at the economic and legal criteria that enable and constrain joint value production. Preliminary insights suggest a fundamentally different explanation for empirical regularities: one rooted in a link that has been overlooked in the last two decades between slippages in megaproject performance targets and value distribution. This link puts us on the cusp of a theoretical breakthrough.
Specifically, a NST perspective suggests that managers are torn between two conflicting choices: keep the purpose of a project narrow to meet criteria that restrict value to pecuniary rewards that can be quantified and measured, or widen the purpose of the project to attend to today’s deepest challenges and UN SDGs. Keeping the purpose narrow before project appraisal is thus not dishonesty or bad management. Rather, it is playing by the ‘rules of the game’.
By illuminating this puzzle, a NST perspective moves us away from normative claims that collaborating with stakeholders is the right thing to do from a moral and ethical perspective to asking why megaprojects behave the way they do.
In sum, the author advocates mobilizing new stakeholder theory, and recent developments in strategy research more broadly, to shed light on what the facts have been telling us, persistently, for decades: project-based capital investments are approved based on what we can measure, but what gets built is what society (“us all”) permits.
This insight goes beyond the old adage ‘projects are not islands’. Fundamentally, it suggests slippages in megaproject targets are not isomorphic to bad management or dishonesty, but rather reflect the struggle of appraisal methods to codify expectations for megaprojects to be moral entities committed to the well-being of society.
Investigating how the institutions enable and constrain choice moves us towards a positive research agenda that charts an exciting path ahead of us.
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