Engineering Consultant Project Cash Flow Controls: An Empirically-Supported System Dynamics Conceptual Model

Extant literature shows different measures for business performance of a 'for-profit' organisation; including both financial performance and non-financial dimensions. Key financial performance measures, evident in existing literature, include: profit; revenue; cash flow; and return on investment, among others. Some previous scholars highlighted that without a healthy cash flow, an organisation can fail to sustain itself, even when it records huge profits and high return on investment. This paper explores further the issue of cash flow, as a key financial (and business) performance measure, with a particular focus on controls taken by an Engineering Consultant during the design stage of project execution when he/she forecasts a project cash flow shortfall. A System Dynamics conceptual model of the Engineering Consultant's project cash flow controls (and their associated unintended and undesirable effects) is formulated, in this paper, from existing literature, mental models of contemporary project managers (from an Engineering Consulting firm with many infrastructure projects in South Africa), and Systems Thinking. Results suggest some counterintuitive dynamic hypothesis: controls taken by an Engineering Consultant (aimed at increasing his/her project cash flow) when he/she forecasts a project cash flow shortfall, tend to generate some unintended and counteractive effect - a reduction of the Engineering Consultant's project cash flow.