Risk management and agency theory in IS projects — an exploratory study

The way in which project teams respond to problems and manage risks during IT project developments is affected by the organizational context. In particular, it is affected by the implicit ‘contract’ between the team and the organization. This contract is controlled through the adherence to formal methodologies and the use of organizational control system. This paper looks at risk management from the point of view of team behaviour, focusing on behavioural response to risks in terms of effort and risk aversion. Three case studies of project team behaviour are used to illustrate the types of risk management behaviour which may arise under different contracts between project team and organization.