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Engineering Disasters: The Role of Engineering versus Management. Cumulative

Failure Risk Factor

Article · August 2019

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 The Journal of Management and Engineering Integration Vol. 12, No. 1 | Summer 2019

Engineering Disasters: The Role of Engineering versus Management

Cumulative Failure Risk Factor

Andrzej J. Gapinski1
1The Pennsylvania State University - Fayette

[email protected]

Abstract

The article investigates engineering disasters as failures of either engineering design, project
management decisions, or management processes in general. The paper points out that more often
than not the failures of engineering endeavors were due to shortcomings of project management
and organizational culture irrespective of the area of engineering discipline involved. The cumulative
failure risk factor is proposed to assess an overall project failure risk, which can assist in project failure
risk assessment and consequently in identifying the shortcomings in an organization.

1. Introduction

The engineering field has delivered numerous marvels and achievements through the millennia
in various civilizations. The pace only accelerated in the last two centuries. These achievements not
only improved the lives of many societies worldwide, but also delivered breakthrough discoveries
and technologies. While nobody questions the engineering achievements of the past, there have
been some disasters along the way. The article analyzes engineering disasters and their causes, which
may vary from faults in engineering design, faults in the implementation processes, failures in project
management with respect to decision making processes, and other factors. The article identifies the
human aspect, specifically, the interplay between engineering and management, as the culprit of
engineering disasters and project failures.

2. Examples of Project Failures

From the time of antiquity with its architectural and civil engineering marvels to modern times,
failures and project disasters were part of the learning process in human engineering endeavors.
Antiquity provides examples of disasters in the areas of design shortcomings, exceeding design
specifications, and poor workmanship. In his article, Rogers (2014) lists examples and illustrations of
such structural disasters in ancient and medieval times: the Bent Pyramid of Egypt 2600 BCE, the
Fidenae Amphitheater collapse in Italy 27AD, the Circus Maximus upper tier collapse, Italy 140 AD,
the Beauvais Cathedral collapse, France (1284), and the Rialto Bridge collapse, Italy (1444). The
causes of the above-mentioned failures include exceeding carrying weight limits, faults in the design
including facts unknown to builders at the time of design, physical phenomena (mechanical
resonance), poor workmanship, or overambitious designs by commissioning authorities.

2.1 Examples of Engineering Failures in Modern Times

The practicum of engineering provides many examples of failures in modern times. Some well
publicized examples that occurred in the USA are: the Tacoma Narrows Bridge collapse in 1940 in
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the state of Washington (Tacoma, 1940), the collapse of a cooling tower in 1978 in West Virginia
(Willow Island, 1978), the Three Mile Island nuclear power plant disaster in Pennsylvania (Three Mile
Island, 1979), and the more recent shuttle Challenger disaster in 1986 (Challenger, 1986). These were
dramatic examples of catastrophic failures in civil, nuclear, and aerospace engineering. Specifically,
the shortcomings in the understanding of the resonance effect (Tacoma Bridge), rushing through
tower construction and evident violation of construction methods (Willow tower), a series of
mechanical and human errors leading to nuclear core meltdown (Three Mile Island, 1979), the flaw
in the design of the shuttle booster sealing-rings and management’s overrule of engineering staff
safety concern (Challenger, 1986), respectively, were identified causes of the listed accidents. One
may list additional illustrations of industrial and environmental disasters such as the Donora Smog of
1948 in Pennsylvania where air inversion trapped toxic gasses around the industrial town of Donora
killed its inhabitants (Koetz, 2018), the Quecreek Mine accident where the close vicinity of the poorly
documented abandoned Saxman mine led to barrier penetration and accidental flooding of
Quecreek Mine, Pennsylvania (Quecreek, 2013), the Deepwater Horizon (Deepwater Horizon, 2010)
Gulf of Mexico oil spill accident due to faulty well design that did not include enough cement, and
disasters on foreign soil such as the Chernobyl nuclear power plant disaster in Ukraine, 1986 due to
“improper testing of the nuclear reactor” and “lack of safety mechanism on the reactor” (Chernobyl,
1986), or Bhopal, India where a toxic gas leak due to “slack management and deferred maintenance”
or outright “sabotage” as claimed by plant owner Union Carbide Corporation, caused the death of
thousands of inhabitants in towns adjacent to the plant (Bhopal, 1984).
Love et al. (2011) analyzed failures in structural engineering and construction based on many
examples including: the Hyatt Regency Hotel multistory atrium collapse in 1981 (faulty modified
design with no needed calculations performed; the design supported only 60% of the minimum load
required by building codes as reported by Moncranz and Taylor, 2000), the Charles de Gaulle
International Airport in France, 2004 (the vaulted roof collapsed due to exterior temperature swings;
insufficient margin for safety in the design), Melbourne’s West Gate Bridge 115 meter span collapse
in 1970 (structural failure due to structure overweight), or Singapore’s New World Hotel collapse in
1986 (faulty concrete composition as reported by Thean et al., 1987).
Workforce (2018) analyzed less dramatic cases than above mentioned ones, the failures in project
or product development or product marketing that include: Sony Betamax, Polaroid Instant Home
Movies, Apple Lisa, IBM PCjr, DeLorean DMC-12, Ford Edsel, etc. Some of the reasons for failures
were: failing to follow up on project relevancy (Sony), failure of staying abreast of current market
needs (Polaroid), over promising and under delivering with a product (Apple), low product quality
(IBM), production and quality issues (DMC-12), and inadequate speed to market (Edsel).

2.2 Electrical Systems and Information Technology Disasters

Countless electrical devices, equipment, and computer networks provide not only convenient
amenities, but also critically important services responsible for the overall efficient functioning of
modern infrastructure. Consequently, it is justified to address electrical systems and information
technology (IT) failures separately.
Electrical failures include: failures of power/distribution station, failures of transformers
(overloading, sudden surges of currents/voltages exceeding circuit breakers specifications), arc-flush
accidents (safety precautions not taken, lack of PPE, poor maintenance, etc.), occasional power grid
blackouts, etc. Electrical power system failures include smart grid malfunctions, which may
increasingly be caused by IT deficiencies (Electrical Disasters, 2018; Transformers, 2018). Electric
power blackout of 2003 affecting north-eastern continental USA and Canada was caused by power
overloading and software bug in the alarm system (Blackout, 2003).

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Rae and Eden (2002), in their paper, discuss failures in engineering projects based on the analysis
of twelve projects related to the electrical power generation industry. They pointed out that the
greatest impact on project management outcomes were: “project delays, engineering advisors failing
in controlling project engineering, and changes in (project) specification.”

3. Project Disaster Defined

Morris and Hough (1987) gave the following description: a project disaster occurs when the
answers to the following questions are all negative, as noted by Storm and Savelsbergh (2014):
1. “Project functionality: does the project perform financially, technically, or otherwise in the way
expected by the project sponsors?
2. Project management: was the project implemented to budget, on schedule, to technical
specifications?
3. Contractors’ commercial performance: did those who provided a service for the project
benefit commercially?
4. Cancellation: in the event that a project needed to be canceled, was the cancellation made on
a reasonable basis and terminated efficiently?”
Peter Hall (1980) defines project disaster as: “any planning process that is perceived by many
people to have gone wrong.” In establishing the prospects for a project to be successful one has to
assess the risks involved. Larson and Gary (2014) write “in the context of projects, risk is an uncertain
event or condition that, if it occurs, has a positive or negative effect on project objectives.”
Naturally, in the classification of failures, one has to take into account the severity and impact of
the accidents. Here, a disaster is understood as a catastrophic failure resulting in major
inconveniences, more drastic effects causing fatalities of personnel or a population, or a major
degradation of the environment.
The substantial subjectivity in defining what constitutes a project failure or disaster is pointed out
by many researchers. Authors such as Hall (1980), Weick and Sutcliffe (2001) stressed that for proper
identification of causes of a project failure, it is necessary to understand the whole project’s process
as a dynamic entity. Consequently, the recent trends in analyses of project failures assign more
significance to objective criteria where project failures are assessed from the perspective of meeting
the process and design specifications and efficiencies of process inner-working. Organizational
propensity for failure is a subject of study in the discipline of risk management (Chapman and Ward,
2003; Heldman, 2005; Crouhy et al., 2005).

4. Project Failures Causes

The discipline of risk management, according to Gido and Clements (2015), “involves
identification, assessments, control, and response to project risks to minimize the likelihood of
occurrence and/or potential impact of adverse events on the accomplishment of the project
objective.” Larson and Gray (2014) provide the following categories of project failures: “technical,
external, organizational, and project management”.
Many authors have performed analysis of project failures using multi-criteria approaches and
provided a classification of causes. Based on an empirical study performed and reported by Storm
and Savelsbergh (2014), the causes in descending reported frequency or importance are:
1. “Poor project management.
2. Weak business case and inadequate attention to business needs and goals.
3. Lack of top management support.
4. Lack of attention to the human and organizational aspects.

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5. Failure to involve users appropriately.

6. Inappropriate contracts.
7. Inadequate design solutions.
8. Incompetence and lack of experience.”
Based on their surveys among project managers, Discenza and Forman (2007) list the following
factors causing project failures in descending order of significance:
1. project communications (business value vs technical aspects, customer involvement) – 43% of
responding project managers
2. project’s process inner-working factors (accountability, consistency in planning & execution,
having checkpoints) – 42% of responders
3. the human factor (managing and motivating people, providing needed tools) – 32% of
responders.
These causes of failures are listed by many authors. Rae and Eden (2002) in their paper on the
electric power generation systems projects conclude that the major contributing factors to project
failures were: “project management system, ineffective organizational procedures, or practices.” In
a Computerworld article, Rosencrance (2007) referred to a CompTIA web poll that stated that poor
communication causes most IT project failures. In the report, communication was understood as the
ability to “communicate the project objectives, the expected results, and the budget restrictions.”
Furthermore, the CompTIA’ poll listed “insufficient resource planning” and “unrealistic deadlines” as
other factors. Although the CompTIA analysis was drawn from IT sector, the conclusions of the
analysis are applicable to other areas as well. Many authors classify over-runs in time and costs as
project failures, but according to empirical data over-runs are not uncommon. In their analysis of
3500 projects performed all over the world in various industries, Morris and Hough (1987)
discovered that cost over-runs are “normal,” varying between 40% and 200%, especially in large-
scale projects. Consequently, the over-runs either in time or in costs merit a separate subcategory
as a failure cause.

5. Engineering vs Management: Does Wearing a Different “Hat” Affect Risk Tolerance?

The Role of Groupthink, Communication, and Organizational Culture in Decision
Making

Many authors singled out shortcomings in communication as a main contributor to the overall
success or failure of any project. Thus, the human factor cannot be underestimated in any business
or engineering project endeavor. Management and engineers perform different functions that have
different objectives. While engineers’ task focuses on delivering a design to meet product
specifications, management is concerned with costs and time limits. In addition, management is
often the subject of external pressure to meet customer expectations. Shortcuts taken to mitigate
external pressure may result in catastrophic outcomes. To address the issue of conflicting demands
put on engineering and management, this article analyzes the case of the Challenger Shuttle disaster.
The Challenger disaster was the subject of extensive studies including a report by a government
commission (Rogers Commission, 1986) and books written by people directly involved in the project.
The analysis presented in the book by McDonald and Hansen (2009) provides a rare insight into inter-
organizational dependencies where various interests collide, and safety is sacrificed to meet project
deadlines.
The Rogers Commission, according to McDonald and Hansen (2009), “reported four major
findings…First, the cause of the accident was frozen rubber O-rings in the SRB [solid rocket booster]
joints, which allowed a leak of burning fuel. Second, engineers working at Marshall and at Morton
Thiokol in Utah, the SRB contractor, knew that the joint design was dangerous, especially in cold

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temperatures. Third, Marshall [Space Flight Center in Huntsville Alabama] project managers had
known for some time that the joints were hazardous but failed to communicate that understanding
to chief Shuttle officials at Johnson Space Center in Houston and to NASA headquarters during
preflight reviews in Washington. Fourth, MSFC [Marshall Space Flight Center in Huntsville Alabama]
officials botched the last-minute teleconference with Thiokol, held the evening prior to launch. They
pressured Thiokol’s top managers to overrule their engineers and recommend launch even in the
cold weather expected the next morning at Cape Canaveral.” Thus, the Morton Thiokol engineering
staff was overruled in their decision not to launch. McDonald writes that Roger Boisjoly (a Morton
Thiokol leading engineer) “has been charging that NASA management in its MSFC center played ’fast
and loose’ with astronauts’ lives, ‘absolutely abdicating their professional responsibility’ in
pressuring Thiokol to reverse its original recommendation not to launch.”
Regarding the deficiencies in communication by NASA, the Rogers Commission (1986) in its report
points out shortcomings in communication by NASA Marshall Space Flight Center: “The Commission
found that Marshall Space Flight Center project managers, because of a tendency at Marshall to
management isolation, failed to provide full and timely information bearing on the safety of flight
51-L to other vital elements of Shuttle program management.”
McDonald points out that Morton Thiokol management should also take responsibility for caving
to NASA’s pressure and reversing its engineering staff recommendation not to launch. Collins
Michael (command module pilot for Apollo 11 mission), among others, suggested a “cult of
arrogance,” writes McDonald, which pervaded NASA and contributed ultimately to the shuttle
incident. According to Boisjoly, writes McDonald, “NASA officials were so determined to launch
Challenger that the top Shuttle experts forced Thiokol to prove beyond any doubt that it was not
safe to do so – when in most flight readiness reviews officials had to prove just the opposite.”
Thus, the engineering and management staff were subject to conflicting interests and were
positioned on opposite sides of safety and timely deliverables. Organizational culture definitely plays
a role in creating an environment prone to an increased probability of failure. In his book, Tompkin
(1985) expresses the view that organizations may suffer from ”ignorantia affectata” or a cultivated
arrogance, and individuals must take responsibility for their own actions” ultimately to minimize or
prevent the failures.
In their analysis of the shuttle disaster, Pinkus et al. (1997) point to communication shortcomings,
if not breakdowns within NASA: “NASA’s top decision makers were never informed of Thiokol’s
concerns. Marshall (Marshall Space Flight Center) officials chose not to pass this information to their
superiors.” They conclude that “no doubt the organizational hierarchy of NASA was a considerable
impediment for negative information reaching the top of the organization.” However, the authors
point out that NASA’s administration was frequently facing, during multiple launches, objections to
launching from “engineers who, like those at Thiokol, advised against the launch, claiming that the
shuttle could experience a catastrophic failure.”
Pinkus et al. (1997) in their analysis from the ethical consideration point of view note deficiencies
in core ethical attributes such as individual and organizational competency (understanding of
technical data, lack of understanding/appreciation of statistical data analysis, obligation to seek
knowledge even outside an organization, etc.) and responsibility (obligation to voice the concern
about safety issues, lack of organizational responsiveness, etc.), violation of “Cicero Creed II” wherein
“engineers should understand and characterize the risks associated with technology.” Pinkus et al.
(1997) claim, based on existing records, that the NASA and Thiokol engineering staff was lacking
“statistical knowledge” that “might have been critical in making the O-ring performance decision.”
To illustrate this they constructed, using a regression technique, a probability estimation model of
joint failure to fit the pre-Challenger data that shows that at 53-degree Fahrenheit the probability of

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joint failure is 0.8, and at freezing temperature, which was experienced during launch time,
probability of failure is almost 1.0, thus in essence catastrophic.
Vaughan (1996) in her extensive and comprehensive analysis of the Challenger accident points
out deficiencies within NASA’s culture and Morton Thiokol, which prevented any of the working
engineers from developing an awareness that there was a performance trend in which temperature
might be important. She writes that the company failed to provide a continuity in engineering staffing
to analyze post flight observational data “across all launches where temperature could be personally
experienced.” She writes that the events just prior to the Challenger launch showed that
“professional accountability took a back seat” to “bureaucratic and political accountability.”
Vaughan’s book points to a “normalization of deviance” and “group think” that had developed within
NASA and Thiokol, which contributed to the accident. Namely, she argued that “it is possible that
the process of deviance normalization …may play a role in facilitating rule violations and misconduct
when they occur in the organization.” Such organizational cultures and group thinking enable taking
unnecessary risks in decision making processes. Vaughan (1996) points out the existence of a link
between culture and individual choice, reported in scientific literature, where the culture factor is “a
cause of organizational deviance and misconduct.” She clearly puts “conformity” as the ultimate
culprit of the Challenger Shuttle catastrophe. Vaughan (1996), based on that finding, strongly
suggests incorporation of external objective evaluator in a decision making.
The Challenger accident happened despite, what Vaughan (1996) notes, NASA’s ability to “create
a decision-making structure absolutely suited to preventing the normalization of deviance.” The
NASA’s decision making system did incorporate decentralized mode if needed but it did not prevent
the accident.
Interestingly, Vaughan (1996) observed that many managers involved in the Challenger accident
were former engineers and concludes that the new role gave them a new perspective on risk. Thus,
changing the scope and character of job responsibilities can definitely affect risk tolerance.
Ann Skeet (2019) in her recent article on Boeing Max 737 plane accident points out “unhealthy
corporate culture” as a main culprit and consequently proposes to increase the importance of the
organizational culture and its management within organization. To signify the importance of a culture
management as an ethics component she suggests to assign a “hard skill” attribute to it. Phil Hughes
(2019) points out the age of the plane control design and plausible different internal views on the
design technical aspects and consequently a different take on the airplane safety by Boeing
engineering staff and management.
In a recently published work, Peacock (2014) investigated the normalization of deviance (NoD),
the cause of the Challenger disaster proposed by Vaughan (1996) and how prevalent it is still in
organizations based on empirical data. In particular he looked at the conflict between engineers and
management from the perspective of psychological and sociological factors affecting decision
making. He claimed that “engineers and managers could be argued to hold contrasting stakeholder
perspectives linked to their respective professional obligations and exposure to risk.” While
engineers are considered “generally politically naïve” and averse to risk, management, due its
obligation to stakeholders, has a much higher tolerance for risk. This anecdotal evidence was
supported by Peacock’s findings (Peacock, 2014). Namely, to Peacock’s survey question: “If we
followed their averse attitude to risk, no project would even go ahead, nor would we get anything
done!” while only 24% of surveyed engineers answered “agree strongly” or “agree,” 53% of surveyed
managers answered positively. Peacock’s chi-square test for association between role and risk
aversion show a “statistically significant association” confirming that “engineers were more risk
averse than managers.” Peacock (2014) was looking at reasoning and the decision making process
using the two perspectives utilized in the area of rationality of human cognition and decision making:

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meliorism (in this approach human reasoning and decision making could be improved) and
Panglossian method (human reasoning, competence and performance is almost always normatively
correct) (Book Review, 2014.)
For a summary of findings of the discussed topics see Table 1 which differentiates engineers from
managers with respect to various attributes related to ethical code paradigms, decision making, risk
tolerance, rational reasoning, and value system.
Table 1. Engineers vs Managers: Roles, Rationality, Judgement Attributes (based on Peacock, 2014;

Vaughan, 1996; Pinkus et al., 1997)

Attribute Engineers Managers

Codes of Practice Professional ethics More dichotomy especially when

inequitable distribution of
responsibility (IDR) is involved

Competency Professional / technical Managerial w/appreciation of

technical data if needed

Responsibility Professional / technical Organizational / admin

Cicero’s Creed II* High adherence Considered to various degree

Model of judgement Tend to be more meliorist Tend to be more Panglossian

Susceptibility to group Low Medium to high

think within
organizational culture

Risk tolerance Low High

Rationality /value Tend to be epistemic Instrumental rationality / focus

system rationality / deliberation of on most effective to achieve a
facts specific end

Decision process Design: subjective / intuitive Tend to be meliorist

based on experience

Accountability nature Professional Bureaucratic / political

Conformity to group High if agrees w/professional High adherence to organizational

rules and norms ethics culture / rules & norms

Inequitable distribution Less applicable / more More prone to apply

of responsibility (IDR) reluctant to apply

*Note: Cicero’s Creed II: The engineer should be cognizant of, sensitive to, and strive to avoid the potential for harm and opt for doing good (Pinkus et
al., 1997)

Peacock’s (2014) analysis points to managers’ instrumental rationality as a “smoking gun,” the
most likely culprit for normalization of deviance experienced by organizations. He found that large
firms show a higher propensity to develop normalization of deviance, which promotes a higher
probability of failure. Peacock (2014) reports on cases where the normalization of deviance (NoD)

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was induced either directly (“demands imposed by management leading to compromising normative
procedures”) or indirectly (“erroneous procedures”).
In summary, Table 2 contrasts a hypothetical small company with a large company with respect
to various attributes of decision making discussed above, based partially on the findings of Peacock
(2014).
Table 2. Small vs Large Firms: Decision Making Attributes

Attribute Small company Large Company

culture Varies / more prone to admin Tend to be strong formal

subjectivity / more organic culture (which promotes
melioristic decision making) /
more mechanistic

operation More experimental type Tend to be operational

Judgement/decision Varies: meliorist to Panglossian Tend to be more meliorist

NoD Lower tendency to occur Higher tendency to occur

Project management process and its affecting factors have been subject of analysis by many
disciplines including social sciences, psychology, and business among others that tried to understand
formation of trust, effectiveness, and inner dependencies in decision making process (McAllister,
1995; Gapinski, 2017a,b, 2018; Robert, 2015). The findings point again to the importance of
organizational culture among other factors and its impact on an effectiveness of the project
management processes.
Deming (1987), in his approach to quality, stressed importance of systemic changes within any
organization to improve quality, not merely watching production floors and seek attainment of
quotas or meeting the production specifications. Had his philosophy of continuous improvement and
open communication been followed, the rational decision making might have prevailed in overriding
political conformity during the events leading to Challenger disaster.

6. Risk Assessment and Cumulative Failure Risk Factor

The literature on risks in a project, especially in the business discipline, provides risk assessment
methodologies that incorporates probability assessment of events and their impacts in various
formats. Larson and Gray (2014) provide a matrix that shows the impact scale of risk on project
categories such as cost, time, scope, quality. Their risk severity matrix (RSM) graphically shows risk
likelihood vs impact designed for specific risks. Similarly, Gido and Clements (2015) illustrate an
example of risk assessment matrix for a specific web-based reporting project. To assess a risk of an
event, the failure mode and effect analysis (FMEA) formula, that extends RSM method can be used
(Larson and Gray, 2014). The multiplicative formula used for FMEA which considers severity of failure
impact, probability of occurrence, and easiness of failure detection allows to assign a quantitative
numerical value to a risk of an event to occur. Furthermore, to assess the project risks there are
statistical techniques and tools available to project management although they focus mainly on
financial risks.
All these methods and forms mentioned above usually describe risk assessment for very specific
projects and lack universality, lack an additive, accumulative effect of risks, and don’t take into
account the factors described in this article that affect failure risks more profoundly. The models are

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devoid of critical factors such as organizational culture, communication, competency among others
that affect decision making and, ultimately, determine the success or failure of a project.
Consequently, the next segment defines the Cumulative Failure Risk Factor (CFRF), which can assist
organizations in overall risk of failure assessment and the prompting of remedial actions.
The above analysis of the contributing factors affecting the project outcome motivated the author
to propose the following model for the Cumulative Failure Risk Factor (CFRF). A calculated value of
the CFRF serves as an indicator of the risk of project failure with a value expressed in percent
determined by values assigned to the following contributing factors: Risk Tolerance (management’s
view), Communication Channels (open/top-bottom/bottom-up), Competency/Technical (at all levels
at organization), Groupthink/Conformity, Cost/Time Overrun.
Thus, using the following labels and abbreviations for risks associated with contributing factors
and their corresponding coefficients:
1. α coefficient for Risk Tolerance (RT)
2. β coefficient for Communication Channels (CCH)
3. γ coefficient for Competency/Technical (CT)
4. δ coefficient for Groupthink/Conformity (GC)
5. ε coefficient for Cost/Time Overrun (CTO)
the Cumulative Failure Risk Factor (CFRF) can be assessed as (equation 1):
CFRF = α + β + γ + δ + ε. (1)

where: α, β, γ, δ, ε are risk factor coefficients to be determined by the local project circumstances.
The sum of all coefficients cannot exceed, naturally, 100 percent. If all contributing factors have
the same importance each of the coefficient is assigned value not exceeding 20 percent. The sum of
all coefficients in any scenario must not exceed 100 percent, i.e., α + β + γ + δ + ε <= 100%. It is
assumed that contributing factors as defined are independent and mutually exclusive. Graphically
the CFRF is described on Figure 1. The simplicity of CFRF allows for relatively fast risk assessment and
corrective actions to be taken at any stage of the project execution.
Each contributing factor coefficient, i.e., α, β, γ, δ, and ε, is to be evaluated and assigned value in
percent based on perceived risks of each of the contributing factors of RT, CCH, CT, GC, and CTO,
respectively. The assigned value represents an actual risk towards project failure posed by a
particular factor within the organization in the eyes of an evaluator for example, a high risk tolerance
assumed by management poses a high probability for overall project failure. Consequently, the α
coefficient for the RT factor should reflect it and be of much higher value than other factors,
exceeding 20 percent. A poor communication culture within the organization, not promoting open
communication in either top-bottom or bottom up setting would assign a higher value to the β
coefficient for CCH factor than the others. A good communication climate, on other hand, would
pose a much lower risk of a project failure by detecting shortcomings early on and the value assigned
to the β coefficient for CCH factor should be low, close to 0%. The factor of competency within the
organization encompasses the technical, organizational, and managerial competency. If competency
including technical aspect is high the γ coefficient for CT factor should be low in value reflecting low
risk of failure coming from that factor. The GC factor, representing groupthink and conformity
reflects a risk of failure posed by these shortcomings. So, if a groupthink/conformity climate prevails
within an organization, the value assigned to the δ coefficient for GC factor should be higher than
others. In the case of costs and time overruns in a project, the ε coefficient for CTO factor should
carry a higher value than others. If risks are distributed uniformly without a dominant factor, each
individual coefficient value should not exceed 20 percent of contribution, otherwise a dominant risk
factor value may exceed significantly all others.

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Furthermore, based on fact that a risk tolerance may differ dramatically among various entities
within an organization, it is advisable to assess the CFRF separately by different departments
(management, engineering, etc.) prior to deriving final conclusions. The process of comparing and
obtaining the consensus regarding overall project failure risk within an organization may bring
additional useful insights and prompting corrective actions.

Figure 1. Cumulative Failure Risk Factor and its contributing factors

The CFRF through individual contributions of risk factors is tailored to individual circumstances
and needs of the involved project. The ability to individually changing the importance of CFRF
affecting factors gives organizations and project management’s entities the flexibility to address the
known or unknown but suspected project shortcomings or weaknesses.
While most of the evaluation of risk factors are usually performed internally within an
organization, following Vaughan’s recommendation, it is suggested to involve external viewpoints.
As Vaughan (1996) writes, the external evaluators can deliver “outside the box” observations in
determining the risk factors and consequently may assist in finding the numerical values assigned to
the CFRF contributing factors. Thus, it is suggested to include the external evaluators to assess the
risks and establishing CFRF value. This will provide an external and more objective reference for risk
assessment within organization.
Adopting the occurrence probability scale after Engert and Lansdowne (1999) as:
0 – 10% very unlikely to occur
11 – 40% unlikely to occur
41 – 60% may occur about half of the time
61 – 90% likely to occur
91 – 100% very likely to occur,
it is suggested to assign threshold values for CFRF assessment as follows: a CFRF value between 0
and 40% as a low risk, between 41 and 50% represents a warning, between 51 and 60% a strong
warning, any value in the range of 61% and 90% may indicate a high risk of failure occurrence,
and a value above 91% represents a very high probability of a catastrophic failure. One may
develop a more detailed scale depending on local needs such as in Garvey (2001). The scale and
specific value ranges are left to local settings and interpretation.

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In order to check the performance of the proposed risk of failure assessment model the
Challenger case was considered in two assessment simulation scenarios: one performed by “insiders”
and one performed with inclusion of external evaluators based on available literature and reports.
The author obtained the following results: CFRF1 = in the range of 50 - 65% for first scenario, where
the project technical aspect and conformity issues were not internally fully recognized, and CFRF2 =
in the range of 90 - 100% for second scenario, where technical aspect of high probability of
booster joint failure and high conformity in organizational culture were realized. In both cases it is
worth of mentioning that the higher risk tolerance displayed by management comparing to
engineering staff that was caused by political pressures affected CFRF values as well. The second
value of CFRF2 points to a very high probability of a failure, which agrees with result of Pinkus et
al. (1997) probability estimation model. The proposed model to assess a risk of failure is
currently subject of further testing.

7. Conclusions

The article analyzes engineering project failures and disasters. The article provides examples from
antiquity to modern times covering civil engineering, construction, electrical and information
technology sectors. It identifies and reviews project failure causes and provides their classification.
The author analyzes engineering and management interdependencies and conflicting demands
placed upon them, which may result in a catastrophic failure. The Challenger Shuttle disaster is
analyzed from the perspective of conflicting demands and expectations faced by management and
engineering. Shortcomings in communication, conformity, decision making, a culture of arrogance
are analyzed as failure culprits. The cumulative failure risk factor (CFRF), which considers risk
tolerance, communication, competence, groupthink, and overruns aspects, is proposed, subject to
individual settings, to assess a project’s failure risk.

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