ISRC-WP-19970701 Abstract

Factors That Cause IS Development Projects to Escalate Out of Control. Richard A. Huff, Mark Keil, Leon Kappelman, and Victor Prybutok

Project management is a major component of productivity and innovation in our high-technology society (Zmud et al. 1984). It is a symbol of the importance placed on systems in current culture. Project management is currently a topic of particular interest in the business press. According to one author, the reason for the emphasis is the demise of the middle manager, as firms continue to downsize and flatten their organizations (Stewart 1995). The problem occurs when project management, either an individual or a controlling group, does not recognize the potential pitfalls of the project and consequently fails to achieve the goal of completing a project in an acceptable manner, either in terms of time, cost, speed, and/or functionality.

The purpose of this research is to continue examining the project management process. The management of projects is complicated. It is the complexity of the process that makes a project so difficult to control. This research examines the effect of particular facets of the project manager's skill set and operating environment on management decisions.

Prior research in information systems (IS) used students as surrogates for operating project managers and manipulated cost variables to examine their influence on simulated project management decisions (Keil and Mixon 1994; Keil, Truex, and Mixon 1995). The research design replicates the Keil et al. (1995) work by using working project managers as subjects.

This empirical research aimed at identifying the influence of prior experience, risk propensity, expected cost, organizational context, competing projects, and sunk cost on the decision making process in an escalation situation. The design for this experiment is a 2 x 2 x 2 x 2 factorial. The manipulation involved with or without the additional organizational context issue, two different levels of expected cost, with or without a competing product, and two different levels of sunk cost. The target population for this research is all decision makers in escalation situations.

This research continues the exploration of the factors associated with runaway projects. The emphasis is on the decision making that leads to or allows projects to runaway. Given the enormity of the problem and the very large sums of money that runaways cost businesses everywhere, the findings of this study have far reaching implications.

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