Optimism Bias in Managing IT Project Risks: A Construal Level Theory Perspective



Prior research has shown that people have a tendency to be optimistic about future events (i.e., to exhibit optimism bias) in a variety of settings.  In this study, we suggest that optimism bias has significant implications for IT project risk management, as it may impede individuals’ judgment and decision-making in managing IT project risks.  Motivated by this, we investigated optimism bias in managing IT project risks by drawing upon construal level theory (CLT).  In this presentation, we report the findings of two experiments in which we manipulated construal level and examined how this influenced IT risk management decisions. The findings suggest that a high-level construal of an IT project risk leads IT project team members to have an optimistic belief about successfully managing the risk, and to evaluate a plan to manage the risk in a more optimistic manner.  Further, we found that a high-level construal of IT project risks leads IT project managers to have an optimistic estimate of the effort required to manage the risks.  Implications for both theory and practice will be discussed.