This project seeks to use a novel application of agency theory to understand the problem of software failure with the assumption that software development is risky. Introduction Software failure still exists. Software development is a risky undertaking where decisions must be made without complete information. Part of the problem is that software development projects are not always undertaken as if they were risky projects using effective risk management and having the expectation that some projects will fail. Another problem is that the individuals making risky choices may not always have the same interests as the organization.
Risk management is a good setting for discussion of improved software methodologies.
However, the behavior of decision makers using any methodology is critical. Agency theory is a management theory that puts the principle agent dilemma at center stage and may be a good way to understand the software development process and how to improve it. This project seeks to apply agency theory to the problem of software failure with the assumption that software development is risky. Lyytinen et al. Although each is important and all must be in balance for best organizational function, the actors are quite central in the sense that the purpose of the theory itself is to shape managerial action.