One reason might be to motivate employees to work harder. The novices will think that a short duration overtime will solve the crisis and they will be back to normal where in fact it will take months. You can fool people only once, and when they find out, you won't be able to motivate them again.
Another reason is to avoid conflict with upper management and after some time, starting to believe in your own optimisim, see Waltzing with Bears.
When management continues to live in fantasy land, after a couple of months people will be disillusioned, morale drops and the project takes longer with lower quality than would be the case at a normal pace. This type of mismanagement is only rational if the manager is expecting a change of position soon, meaning that he/she won't have to deal with the mess.
Quality suffers because everyone thinks that this will be over quickly with a firm push, resorting to quick and dirty fixes, reasoning that the mess will be cleaned up soon. The longer the crisis mode drags on, the more technical debt is accumulated, which in the end becomes so large that no one is eager to refactor the system, fearing that the slightest change will break it. This leads to high cost maintenance and can cause catastrophic failures whose root cause can be impossible to find. Due to endless rework and troubleshooting, total cost of project increases dramatically.
Intellectual work like software development requires good concentration which in turn requires a rested, motivated individual. Long overtimes are like killing the goose that laid golden eggs.
My suggestions in a nutshell:
- If you are a manager, avoid more than a couple of weeks per year overtime. Have a look at my reading list. Always look at past data, be aware that avoiding conflict with upper management might lower your stress in the short run but it has a high price down the road.
- If you are one of the "managed" ones, politely point out the risks. But if you see that no one is interested in that, shut up and concentrate on improving the quality of your work and documentation so that when disaster strikes, you will be able to quickly demonstrate that your piece of work is not to blame. Read Death March.
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