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FLEXIBILITY IN ENGINEERING PROJECTS: BLESSING OR CURSE?Nils O. E. Olsson [The Norwegian University of Science and Technology]ABSTRACTDepartment of Civil and Transport Engineeringnils.olsson@ntnu.noThis paper gives an overview of research on project flexibility in engineering projects. Projectflexibility is viewed from different perspectives. Firstly, the concept of flexibility in projects isdiscussed. Secondly, the cases against and in favour of flexibility are presented. Finally, a shortoverview is made to identify under which circumstances and during which part of a project thatflexibility proves most useful and most damaging. The paper suggests that project owners are morelikely to be in favour of flexibility than contractors. Viewed in a time perspective, flexibility in thefront-end phase could help to increase the probability of success, while flexibility in the executionphase is claimed to reduce efficiency of projects. Furthermore, industrial development projects aremore likely to benefit from flexibility than civil engineering projects are. Related to the degree ofuncertainty, flexibility is claimed to be desirable in high uncertainty environments and less important insituations with low uncertainty. Flexibility is discussed as a double-edged sword. Flexibility for onestakeholder is often viewed as another's risk. The case in favour of flexibility emphasise the possibilityto increase a project’s effectiveness while the case against flexibility highlights that it might reduceefficiency. Project flexibility can be used to increase the project owner’s value of a project. The majordrawbacks lie in the negative effects of changes on the project organizations and a possible frustrationregarding lack of decisions and commitment.KEYWORDSProject, Management, Flexibility, Efficiency, Effectiveness.1. INTRODUCTIONThe ability to adapt to changes along with short response time is heavily emphasised in disciplines suchas strategic management and supply chain management (Bettis & Hitt, 1995). However, study afterstudy (including Hall, 1980; Morris & Hough, 1991; Miller & Lessard 2000) indicate that a clearproject definition is a key success criterion for projects. It appears as a paradox that the mainstream ofproject management focuses on stability for the project, while major parts of other managementdisciplines strongly emphasise flexibility.The purpose of this paper is to give an overview of research on project flexibility in engineeringprojects. The following issues are covered: (1) the concept of flexibility in projects, (2) the casesagainst and in favour of flexibility and (3) under which circumstances and during which part of aproject that flexibility proves most useful or most damaging. While many authors on the issue offlexibility have clear standing in favour or against the use of flexibility in projects, the paper is anattempt to summarise the arguments used by both sides.Research methodologyThe paper is based primarily on literature search of flexibility management in projects. However, thepresentation is also influenced by a number of case studies and personal experience from consultingand research engagements. In the case studies, a research methodology based on the works of Yin(2003) regarding case studies as a qualitative paradigm has been used. One of the characteristics ofcase studies is that multiple sources of information are used, including archives, interviews andobservations. The research has primarily been of a qualitative nature.