On Uncertainty, Ambiguity, and Complexity in Project Management

By Michael T. Pich, Christoph H. Loch, A. Meyer. Management Sciences, 2002

927 citations recorded by the source corpus.

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 theadequacy 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.

Subfields: Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/790729238a14de8bfd664179b0dd02c5017e10ba

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In Management Science and Operations Research

Citations in the corpus

Bridging Behavioral Models and Theoretical Concepts: Effectuation and Bricolage in the Opportunity Creation Framework (2016, neutral): “…emerging insights about entrepreneurial actionwith the literature on search and experimentation processes (Davis, Eisenhardt, and Bingham, 2007; Pich, Loch, and Meyer, 2002; Sommer, Loch, and Dong, 2009) to contribute to active conversations in strategy about the relationship between search…”
The challenge of transactional and transformational leadership in projects (2014, background): “…characteristics which distinguish temporary organizations from permanent organizations: limited duration, unique outcome, missing/ blurred hierarchies, higher uncertainty/risks, and heterogeneous work teams (Bakker, 2010; Brockhoff, 2006; Maaninen-Olsson and Müllern, 2009; Pich et al., 2002).”
Manager emotional intelligence and project success: The mediating role of job satisfaction and trust (2016, background): “In complex projects, project managers are prone to unexpected problems and challenges due to task interdependency and complexity (Pich et al., 2002; Sun and Meng, 2009).”
Innovation processes: Which process for which project? (2015, background): “These studies also do not address instances of product design with significant uncertainty or complexity (Pich et al., 2002; Sommer and Loch, 2009).”
Selectionism and Learning in Projects with Complexity and Unforeseeable Uncertainty (2004, background): “Pich et al. (2002) showed theoretically that these two approaches, or combinations of them, are fundamentally the only two available.3 Selectionism assumes that “success depends upon generating enough variations that at least some will prove ex post to yield desirable results” (McGrath 2001, p.…”
System-of-Systems Engineering Management: A Review of Modern History and a Path Forward (2008, background): “, [71]; Shenhar and Dvir [12]; Turner and Cochrane [72]; Youker [73]), much of this literature has been focused on a single industry and often on small projects (Soderlund [74]; Tatikonda and Rosenthal [75]).”
Does risk management contribute to IT project success? A meta-analysis of empirical evidence (2010, background): “Risk management then becomes a sequence of activities with the aim to gather information about situations that may or may not occur in a speciﬁc project (Chapman and Ward, 1997; Pich et al., 2002).”
Complexity of Information Systems Development Projects: Conceptualization and Measurement Development (2005, methodology): “Consistent with prior research, we define structural complexity as (1) variety [56], multiplicity [16, 55, 70, 80, 82], and differentiation [2] of project elements; and (2) interdependency [2, 7, 16, 72, 80], interaction [55, 70], coordination [82] and integration [56] of project elements.”
Understanding project complexity: implications on project management (2008, result): “This paragraph illustrates how project complexity can be a source of uncertainty, thus making a distinction between these two concepts as some research works argued for it before ( Pich et al. , 2002”
Explicating the dynamics of project capabilities (2016, background): “The distinction between unique and repetitive projects is addressed in research that identifies the structures, processes and cultures of project management have to be adapted to the different requirements of exploration and exploitation (Eisenhardt and Martin, 2000; Lenfle, 2008; Loch et al., 2006;”