On Uncertainty, Ambiguity, and Complexity in Project Management

Michael T. Pich (), Christoph Loch () and Arnoud De Meyer ()
Additional contact information
Michael T. Pich: INSEAD, 1 Ayer Rajah Avenue, Singapore 138676
Arnoud De Meyer: INSEAD, 1 Ayer Rajah Avenue, Singapore 138676

Management Science, 2002, vol. 48, issue 8, 1008-1023

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.

Keywords: project management; uncertainty; complexity; instructionalism; project selection; ambiguity (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (89)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.48.8.1008.163 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:48:y:2002:i:8:p:1008-1023

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().