On Uncertainty, Ambiguity, and Complexity in Project Management
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.
Volume (Year): 48 (2002)
Issue (Month): 8 (August)
|Contact details of provider:|| Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA|
Web page: http://www.informs.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stefan H. Thomke, 1998. "Managing Experimentation in the Design of New Products," Management Science, INFORMS, vol. 44(6), pages 743-762, June.
- 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.
- 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.
- 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.
- Shantanu Bhattacharya & V. Krishnan & Vijay Mahajan, 1998. "Managing New Product Definition in Highly Dynamic Environments," Management Science, INFORMS, vol. 44(11-Part-2), pages S50-S64, November.
- Salah E. Elmaghraby, 1964. "An Algebra for the Analysis of Generalized Activity Networks," Management Science, INFORMS, vol. 10(3), pages 494-514, April.
- 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.
- 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.
- 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.
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)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.