Information Asymmetry and Risk in Agile Projects: The Role of Project Governance and Trust

Abstract

Over the years, researchers and practitioners have been puzzled over the low efficiency and poor performance of the IT projects. Previous literature has tried to uncover the variety of critical factor, including project governance, project risk management and agile project methodology, which can trigger the performance of the project. Information asymmetry concept has been widely used in different areas and subfield of management research and its existence is the main assumption of many leading theories on organizations such as agency theory. However, the area remains underdeveloped. The main objective of the study is to examine the impact of project governance and agile methodology on project performance in the presence of information asymmetry and project risk as mediator and trust as moderator. The survey yields 374 responses from the IT industry of Pakistan. Hayes Process and IBM SPSS were utilized for data analysis. The study finds that project governance and agile project methodology have significant positive impact on the level of information asymmetry directly. The study also found significant relationship between level of information asymmetry and project risk, whereas serial mediation and moderation was found to be insignificant. The findings of the study have managerial and theoretical contribution for this unique area of research. It will also help the IT firms of developing countries who want to improve their performance through the use of project governance and agile project methodology.