IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v48y2002i8p1008-1023.html
   My bibliography  Save this article

On Uncertainty, Ambiguity, and Complexity in Project Management

Author

Listed:
  • Michael T. Pich

    () (INSEAD, 1 Ayer Rajah Avenue, Singapore 138676)

  • Christoph H. Loch

    () (INSEAD, Boulevard de Constance, 77305 Fontainebleau Cedex, France)

  • Arnoud De Meyer

    () (INSEAD, 1 Ayer Rajah Avenue, Singapore 138676)

Abstract

This article develops a model of a project as a payoff function that depends on the state of the world and the choice of a sequence of actions. A causal mapping, which may be incompletely known by the project team, represents the impact of possible actions on the states of the world. An underlying probability space represents available information about the state of the world. Interactions among actions and states of the world determine the complexity of the payoff function. Activities are endogenous, in that they are the result of a policy that maximizes the expected project payoff. A key concept is the adequacy of the available information about states of the world and action effects. We express uncertainty, ambiguity, and complexity in terms of information adequacy. We identify three fundamental project management strategies: instructionism, learning, and selectionism. We show that classic project management methods emphasize adequate information and instructionism, and demonstrate how modern methods fit into the three fundamental strategies. The appropriate strategy is contingent on the type of uncertainty present and the complexity of the project payoff function. Our model establishes a rigorous language that allows the project manager to judge the adequacy of the available project information at the outset, choose an appropriate combination of strategies, and set a supporting project infrastructure---that is, systems for planning, coordination and incentives, and monitoring.

Suggested Citation

  • Michael T. Pich & Christoph H. Loch & Arnoud De Meyer, 2002. "On Uncertainty, Ambiguity, and Complexity in Project Management," Management Science, INFORMS, vol. 48(8), pages 1008-1023, August.
  • Handle: RePEc:inm:ormnsc:v:48:y:2002:i:8:p:1008-1023
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.48.8.1008.163
    Download Restriction: no

    References listed on IDEAS

    as
    1. Robert P. Smith & Steven D. Eppinger, 1997. "A Predictive Model of Sequential Iteration in Engineering Design," Management Science, INFORMS, vol. 43(8), pages 1104-1120, August.
    2. Christoph H. Loch & Christian Terwiesch & Stefan Thomke, 2001. "Parallel and Sequential Testing of Design Alternatives," Management Science, INFORMS, vol. 47(5), pages 663-678, May.
    3. Shantanu Bhattacharya & V. Krishnan & Vijay Mahajan, 1998. "Managing New Product Definition in Highly Dynamic Environments," Management Science, INFORMS, vol. 44(11-Part-2), pages 50-64, November.
    4. Dvir, D. & Lipovetsky, S. & Shenhar, A. & Tishler, A., 1998. "In search of project classification: a non-universal approach to project success factors," Research Policy, Elsevier, vol. 27(9), pages 915-935, December.
    5. Williams, Terry, 1995. "A classified bibliography of recent research relating to project risk management," European Journal of Operational Research, Elsevier, vol. 85(1), pages 18-38, August.
    6. Brucker, Peter & Drexl, Andreas & Mohring, Rolf & Neumann, Klaus & Pesch, Erwin, 1999. "Resource-constrained project scheduling: Notation, classification, models, and methods," European Journal of Operational Research, Elsevier, vol. 112(1), pages 3-41, January.
    7. Genaro J. Gutierrez & Panagiotis Kouvelis, 1991. "Parkinson's Law and Its Implications for Project Management," Management Science, INFORMS, vol. 37(8), pages 990-1001, August.
    8. Salah E. Elmaghraby, 1964. "An Algebra for the Analysis of Generalized Activity Networks," Management Science, INFORMS, vol. 10(3), pages 494-514, April.
    9. Stefan H. Thomke, 1998. "Managing Experimentation in the Design of New Products," Management Science, INFORMS, vol. 44(6), pages 743-762, June.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:48:y:2002:i:8:p:1008-1023. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc). General contact details of provider: http://edirc.repec.org/data/inforea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.