Cracking the megaproject puzzle: A stakeholder perspective?

Megaprojects are social tools that are designed by humans to produce large-scale, capital-intensive technology. Intriguingly, despite major advances in megaproject management practice, policy, and tools in the last decades, delays, budget blowouts, and scope creep remain empirical regularities. In this essay, to crack the megaproject puzzle, I advocate drawing on new stakeholder theory - a nascent stakeholder perspective in strategy research that invites us to look at the legal and economic criteria that enable and constrain strategic choice. Preliminary insights from ongoing work deploying this cognitive lens suggest that managers and sponsors of the legal entity in charge of a new megaproject are in a bind. To get a capital investment sanctioned, they must follow a normative tradition, where ‘on time and budget’ is gold standard and ‘value for money’ is defined by an additive logic that establishes user willingness to pay for the project outcomes must outweigh the production costs. But, ex-post, for the project to progress, managers and sponsors must distribute the value to be jointly produced with essential stakeholders in ways that go above the threshold necessary to conform to the law and regulations. These insights suggest that empirical regularities are not isomorphic with bad management and/or dishonesty, but rather an outcome of the ‘rules of the game’. I call on future research to explore the incentives that lie behind strategic choices to make non-credible commitments before a capital investment is sanctioned, and post hoc, to renegotiate the value distribution towards the production of a socially valuable outcome.