ABSTRACT
Projects are established to serve another organization, the base organization. The members of the project organization will inevitably develop detailed knowledge about the project to which members of the base organization do not have access. This asymmetric information (Akerlof 1970) means that you and the other members of the project organization will be in a position in which you may keep information hidden from the base organization and at times this might be to that organization’s detriment. This is called the principal-agent problem (Rees 1985a, 1985b, Eisenhardt 1989). The ethical touchstone in this situation is that you should keep in mind at all times that the project is established to serve your base organization. You should give this particular focus at any stage when the interests of the base organization appear to conflict with the interests of the members of the project organization. For example, you and your project team members may learn that a competitor is almost ready to introduce a product to market making the product currently under development by your project team obsolete. Arguably, it would be better for your base organization to terminate the project immediately
and allocate financial and non-financial resources to other activities or projects. However, you and your project team members may enjoy the technical challenge of this particular product development and be tempted to delay passing on the information about the competitor for as long as possible. Your ethical dilemma may be further complicated if the information you receive is open to interpretation. This could be the case if you can rationalize to yourselves that the information was unsubstantiated rumour or that the launch of the product might not entirely undermine the commercial basis for the product on which you are working. The same holds true when the project is threatened by sudden, perhaps unanticipated, risks. It can be tempting for project managers and their project teams to withhold these risks from the project owner and the steering committee to prevent them from withdrawing resources from the project. You are faced with this ethical dilemma because clearly you cannot burden your resource providers by communicating ALL risks related to the project. On the other hand, if knowledge about the risks would have altered their decisions, not offering this information is problematic. In a case like this project teams may be so focused on providing solutions and not problems that they may be tempted to delay disclosure in the hope that a solution can be found.
