Risk Factors in Distributed Projects

In this manuscript we develop a conceptual understanding of how key risk factors associated with Information Technology development projects are magnified or multiplied when dealing with distributed project teams as might be seen in global corporations or with the use of outsourced development resources. The analysis goes beyond the typical cultural or time zone view to include additional dimensions of project team distribution such as perceived distance (spatial and temporal), national culture, systems methodologies, task structure, and organizational distance. How these dimensions interact with key project risk factors is explored through the lens of agency theory and transaction cost theory and further developed providing useful insight on the challenge of managing distributed project teams. Data from several prior research studies by the authors and extant published data is presented in support of the key arguments presented.