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Information Resources Management Association
Advancing the Concepts & Practices of Information Resources Management in Modern Organizations

An Agency Theory Examination of Information Systems Project Success

An Agency Theory Examination of Information Systems Project Success
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Author(s): Robert C. Mahaney (Northern Kentucky University, USA) and Albert L. Lederer (University of Kentucky, USA)
Copyright: 2002
Pages: 5
Source title: Issues & Trends of Information Technology Management in Contemporary Organizations
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-930708-39-6.ch084
ISBN13: 9781930708396
EISBN13: 9781466641358


Agency theory offers a potential explanation for the low success rate of information systems (IS) development projects. The theory suggests that the use of appropriate monitoring plus incentives and rewards increases the likelihood of project success. A survey instrument was developed from previously used scales and content analysis of notes taken during twelve structured interviews. Four hundred thirty project managers completed a Web-based survey. After analysis for reliability and validity, the data were used to test eight agency theory hypotheses related to IS project success. The study contributes to the understanding of IS project management by showing that contract type, monitoring, goal conflict, shirking, and privately-held information are multi-dimensional constructs and by providing an instrument for future research. It validates existing instruments for measuring task programmability and project success. It provides support for agency theory predictions that more outcome-based contracts, more monitoring, less shirking, and less misrepresentation of privately-held information lead to project success. Finally, it contradicts expectations that more goal conflict and more task programmability lead to more outcome-based contracts and that more outcome-based contracts lead to less monitoring.

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