Impact of Poor Project Planning, Financial Mismanagement and Poor Communication on Cost Overrun

Abstract

This study aims to examine the impact of poor project planning on cost overrun, and the mediating role of financial mismanagement. The study draws on a sample of 278 from the population of 1000 (Planning and Development Board), construction public projects in the Punjab-Pakistan to test the proposed hypotheses. Smart PLS statistical software has been used to calculate the structural modelling equation results for the subject study. The results indicate that both Poor project planning and financial mismanagement have a positive impact on cost overrun. Furthermore, financial mismanagement behavior partially mediates the relationship between poor project planning and cost overrun where poor communication negligible impact financial mismanagement and cost overrun. These findings highlight the importance of planning and budget in public construction projects. Organizations can benefit from implementing strategies that enhance planning and minimize cost overrun while decreasing a culture of financial mismanagement to overcome excess of cost overrun.