Melecardi Zani, Carolina; Denicol, Juliano; Broyd, Tim; (2024) What is the cost of the wrong organisational design decisions in megaprojects? Designing a multi-level integration strategy. In: Proceedings of the 2024 IRNOP Conference. Internatio​nal Research Network on Organizing by Projects (IRNOP): Stockholm, Sweden. (In press).

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Abstract

Megaprojects historically experienced cost overrun and time delays, usually taken as failures from the client organisation. Organisational Design (OD) enables costs calculation and management through structuring and organising different elements of the project. However, OD has not yet been linked with the cost issues on megaprojects, culminating in OD choices that are not the most economically advantageous to the overall project. This work takes a Transaction Cost Economics (TCE) perspective to analyse the relation between OD and cost overrun. The study contributes to answer the following questions: 1. what is the cost of the wrong OD choices for megaprojects? and 2. How OD can help to avoid extra costs in megaprojects? To answer the research questions, we have performed a case study with High Speed-Rail 2 (HS2) in the UK. The main data source was interviews with key people from the organisation and document analysis. We have identified four organisational wastes rooted in the OD: rework, duplicated work, misspend time and misused talent. Those wastes are interrelated, and a holistic approach was necessary to cope with them. Eight integration enablers are proposed to avoid organisational waste. We contribute to practice by proposing the Integration Structure Framework, which comprises eight integration enablers to avoid organisational waste. Theory contribution regards the capability’s literature, in which we show that some capabilities should overlap and work together in a symbiotic way. Moreover, we propose that TCE could be also analysed in term of transaction of relationships, to include coordination and integration through different levels and stakeholders of the organisation.

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