Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE (www.oxfordhandbooks.com). © Oxford University Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy and Legal Notice).

date: 20 February 2019

Abstract and Keywords

This chapter characterizes the propensity of big capital investments to systematically deliver poor outcomes as “fragility”—a notion suggested by Nassim Taleb. A thing or system that is easily harmed by randomness is fragile. It is argued that, contrary to their appearance, big capital investments break easily—they deliver negative net present value—due to various sources of uncertainty that impact them during their long gestation, implementation, and operation periods. The existence of economies of scale and scope is not refuted; instead, it is argued that big capital investments have a disproportionate (non-linear) exposure to uncertainties that deliver poor or negative returns above and beyond their economies of scale and scope. It is further argued that to succeed, leaders of capital projects need to carefully consider where scaling pays off and where it does not. To automatically assume that “bigger is better,” which is common in megaproject management, is a recipe for failure.

Keywords: project management, fragility, economies of scale, scaling, capital investment

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.