An experimental investigation of factors influencing perceived control over a failing IT project

Abstract

Some failing IT projects may exhibit the characteristics of escalation of commitment as managers may continue to pour more resources into failing projects. If project managers continue to believe that the project is under their control, they may be more likely to recommend continuation of a failing project. While research in IT project management has identified many risk factors, little attention has been paid to the impact of these risk factors on decision making in projects. An experiment using a computer simulated task investigated the influence of self-efficacy and project risk characteristics on perceived control over a failing IT project. The study found that participants with higher task-specific self-efficacy were likely to perceive greater control over a failing project even when the project risk factors were less within the control of the participants.

Errors, lies and misunderstandings: Systematic review on behavioural decision making in projects

“…[ Table 2] 4.1 Reductionist school in project studies Table 3 provides A series of empirical studies have researched the relevance of individual biases in specific project phenomena. The two main project phenomena studied were escalation of commitment (Du et al, 2007;Hällgren, 2010;Jani, 2011Jani, , 2008Keil et al, 2000;Martinsuo et al, 2013;Meyer, 2014), and overoptimistic plans and forecasts (Flyvbjerg, 2013;Kutsch et al, 2011;Son and Rojas, 2011). Other topics of interest in the reductionist literature are furthermore inefficient resource allocation (Eweje et al, 2012), gold plating (Shmueli et al, 2014), lack of learning (Sengupta et al, 2008), or failure to communicate early warning signs (Ekrot et al, 2015).…”

“…Reductionist research provides various explanations based on cognitive limitations for this phenomena, among which Jani (2008) lists self-justification theory, prospect theory, agency theory, or hypotheses like the 'sunk cost effect' (Keil et al, 2000) and the 'project completion effect'. Project research specifically adds the long-term impact of early formation of value judgments (Martinsuo et al, 2013), groupthink (Hällgren, 2010), and most prominently: optimism bias (Du et al, 2007;Jani, 2011Jani, , 2008Meyer, 2014), Optimism bias describes the overestimation of positive outcomes and/or the underestimation of potential negative outcomes. It is an umbrella term for a subset of various cognitive biases like self-efficacy theory, illusion of control, or outcome desirability.…”

“…Illusion of control has been of particular interest to reductionist research, when perceived control over specific project risks leads to downplaying and underestimating the risk. Research showed increased levels of perceived control in endogenous (vs. exogenous) project risks (Du et al, 2007;Jani, 2011Jani, , 2008, or for tasks with high perceived self-efficacy (Jani, 2011(Jani, , 2008. Keil et al (2000) also linked culturally moderated risk propensity and uncertainty avoidance with risk perception and the willingness to continue a risky project.…”

“…The literature draws from different general theoretical foundations in organizational theory, and cognitive and behavioural sciences, including Groupthink (Hällgren, 2010), sensemaking (Musca et al, 2014), self-justification theory (Jani, 2008), risk propensity and uncertainty avoidance (Keil et al, 2000), or 'planning fallacy' (Flyvbjerg, 2013), among others. All in all, the research displays strong heterogeneity in terms of theoretical background and researched phenomena, thus reflecting the multi-faceted nature of project decision behaviour.…”

Two Schools of Risk Analysis: A Review of past Research on Project Risk

“…However, it incorporates psychological factors and organizational interests into the analysis of risk. This group considers that the perception of risk is subjective (Jani, 2008; Piney, 2003) although risk itself is objective. Probability is considered as the main epistemological dimension of risk.…”