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Complex Contracted Governmental Projects and the Challenge of Shared Understanding
Recent studies have revealed a wide range of factors that contribute to failure in complex, governmental projects based on multi-party contracts. A major argument is that in complex projects, there are more opportunities for different self-interested parties to exploit the contract, and therefore project failure is likely. The inherent assumption of this argument is that organizations normally lack shared incentives to pursue mutual benefits. We relax this assumption in this multi-method approach investigating the complex nature of governmental projects in the aerospace industries. First, based on analyses of data from 30 semi-structured interviews, we report a case study that identifies five primary causes of miscommunication as viewed by project participants. Then, drawing on theories of interaction and informed by communication patterns observed in the data, we build a simulation model that represents characteristics of communication across organizational boundaries and conduct a set of additional analyses that explores how communication patterns, not financial incentives, contribute to project failure. The findings show that delays in the iterative nature of communicating in complex projects can impede shared understanding, and therefore drive project failure, even if the organizations truly want to perform effectively for their mutual benefit. The simulation analyses suggest that there is an optimal level for how fast an organization should respond to other parties, which interacts with the level of communication clarity. The implications are that efforts to build shared financial incentives for project outcomes will be insufficient to achieve successful collective action from complex contracting, and attention should be also paid to creating incentives, processes, and skills to improve communication and increase shared understanding across organizations throughout projects.