Managers' Judgments of Performance in IT Services Outsourcing.

Author List: Ramachandran, Vandana; Gopal, Anandasivam;
Journal of Management Information Systems, 2010, Volume 26, Issue 4, Page 181-218.
An important task for managers in information technology (IT) service settings is the judgment of service performance. The complex and intangible nature of IT services, however, renders this task especially difficult. We use a sample of 85 outsourced software development projects to test for the presence of the "input bias," which is defined as the systematic misuse of nondiagnostic input information in forming managerial judgments of outcomes. The service outcome we examine is process performance. The diagnostic inputs are given by objective performance metrics based on the final cost and duration of completed projects, whereas the nondiagnostic inputs are risk anticipations formed by managers prior to the start of the project. We find strong evidence of the input bias, which leads managers' subjective assessments to diverge considerably from objective outcomes, and that it is moderated by contract type. Our study contributes to better service management by improving our understanding of managers' judgments of service performance and how these judgments are formed.
Keywords: Decision-making biases; field studies; Input bias; judgment; regression analysis; service science
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#183 0.200 explanations explanation bias use kbs biases facilities cognitive making judgment decisions likely decision important prior judgments feedback types difficult lead
#135 0.120 project projects development management isd results process team developed managers teams software stakeholders successful complex develop contingencies problems greater planning
#211 0.115 service services delivery quality providers technology information customer business provider asp e-service role variability science propose logic companies especially customers
#181 0.111 outcomes theory nature interaction theoretical paradox versus interpersonal literature provides individual levels understanding dimensions addition foundation various understand productivity work
#93 0.110 performance results study impact research influence effects data higher efficiency effect significantly findings impacts empirical significant suggest outcomes better positive
#148 0.089 productivity information technology data production investment output investments impact returns using labor value research results evidence spillovers industries analysis gains
#88 0.087 managers managerial manager decisions study middle use important manager's appropriate importance context organizations indicate field experience management major organizational results