Reporting Bad News
The code of ethics of the Project Management Institute (PMI), forbids the project manager from misleading, erroneous, or partial reporting (PMI, 2005). However, empirical studies provide ample evidence that PMs tend to “gloss over” the reality in their reports. This may include exaggerated estimation of completion rates – the “ninety percent” syndrome (Abdel-Hamid, 1988), the reluctance to report bad news about a troubled project - the “Mum Effect” (Smith et al., 2001), and biased, generally optimistic, status reporting in more than 60% of the reports examined (Snow et al., 2007). The traditional view sees such behavior as a moral hazard (Tuttle, Harrell & Harrison, 1997). Furthermore, it has been recognized as a key contributor to software project failure (Tan et al., 2003).
To date, bad news reporting has received only limited attention from IS researchers (Park et al., 2008). One of the questions that are raised in the studies is what are the factors that may affect the PM' s decision to report or withhold bad news? So far a relatively small number of factors have been investigated. Empirical studies have focused on the impact of organizational factors such as organizational climate and information asymmetry (Keil et al., 2004), or project aspects such as level of risk (Snow et al., 2007), time urgency, fault responsibility (Park et al., 2008), the level of impact associated with the outcome of no reporting, and the level of observed behavioral wrongdoing associated with the project (Smith et al., 2001). Recently, Keil, Tiwana, Sainsbury and Sneha (2010) have found relationships between PMs' reporting intentions and various social and organizational factors. They have also suggested that the PMs' perceived “benefit-to-cost differential” mediates this relationship. Nevertheless, little attention has been given in these studies to the question of PMs personality factors.