Strategic Decision Bias by Role in Failed Technology Projects

Abstract

MANAGEMENT OF TECHNOLOGY

STRATEGIC DECISION BIAS BY ROLE IN FAILED TECHNOLOGY PROJECTS

KENNETH ROSSON PENCE

Thesis under the direction of David M. Dilts

This empirical research examines how personnel, from different levels of an organization, reach decisions to terminate technical projects. Termination decisions are often considered ‘failures’ and this research investigates strategic decision-making using ‘failure’ as an outcome measure. Upper management personnel (executives) with the authority to cancel a technical project and the middle management (project managers) who manage the day-to-day operations of the project are surveyed in phase one of this research to determine what, if any, biases may have affected the decision to terminate a project under their control. Information gathering (scanning and interpretation) and environmental factors (importance, resources, complexity), leading to the decision to terminate a project, are also examined from an individualistic, not a monolithic, viewpoint among innovative technology organizations. Termination decisions are shown not to be related to the scale of a project but that different levels of the organization use different decision weighting levels with regard to project termination. Additionally, hindsight and sunk-cost biases are clearly shown by the two levels of decision-makers within an organization. Phase two of the research develops a model from two concurrent case studies portraying how bias affects project outcome perceptions.