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Project Manager Confidence and Risk Awareness

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Project Manager Confidence and Risk Awareness PROJECT MANAGER CONFIDENCE AND RISK AWARENESS by Carol S. Davis _______________________ Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration ______________________ Liberty University, School of Business August 2018 Abstract The purpose of this quantitative study was to examine the relationship between project manager confidence and the ability to assess risk during the early planning stages for a new product development project in a business environment. The problem addressed was that a project manager’s confidence level may lead to insufficient risk awareness and contribute to project failure. The study was conducted among 257 project manager practitioners in the US. The study expanded on the research conducted by Fabricius and Büttgen (2015) which found that project manager overconfidence affects expectations of project success and plays a critical role in the inaccurate assessment of project risk during project planning. A secondary correlation analysis (excluding outliers) found a statistically significant result leading the researcher to reject the null hypothesis, meaning there is evidence to show that overconfident project managers exhibit lower risk awareness. The study has practical implications to project manager practitioners by raising the awareness of understanding how project managers influence risk management in their projects as a prelude to potential project success or failure. Key words: project manager, confidence, risk awareness, overconfidence, overoptimism PROJECT MANAGER CONFIDENCE AND RISK AWARENESS by Carol S. Davis Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Liberty University, School of Business August 2018 ___________________________________________________ Date:____________ Dr. David G. Duby, Chair ___________________________________________________ Date:____________ Dr. Melanie A. Hicks, Committee Member ___________________________________________________ Date:____________ Dr. Edward M. Moore, DBA Program Director ___________________________________________________ Date:____________ Dr. David R. Calland, Dean- School of Business Dedication This dissertation is dedicated to Jesus Christ, my Lord and Savior. He is the light of the world who gives eternal life to anyone who believes upon his name. Thank you for your saving grace, love, and mercy and for being with me through this journey and all journeys in my walk with you. Acknowledgements I want to thank my family for their love and support through this dissertation challenge. First, I thank my husband for his patience, his sacrifice, and his mentorship as he has been the person most directly affected by this journey. You have helped me tremendously with your unique perspective on research and knowledge of statistics. Second, I thank my Mom who prayed for me daily, Lyndon, sister Debbie, brothers Bret and Eric, Uncle Bob, and all my family for their words of encouragement and prayers. I thank my support network of friends: my dear friends Linda, Randi, Renee, GBC Patchwork & Prayer ministry (Cynthia, Pat, Peggy, and Faye), Encouragers Sunday School Class, Laura, Lauren, Ashley, David (for translating the questionnaire), Fellowship team (Jeff, Rick, and the two Davids), all my friends and professional network who have provided tremendous support, my company's tuition assistance program, and Dr. Joyce Boeringer and Dr. Harald Henderson for advice on work/life balance. I want to thank the local PMI Chapter presidents and the members who took the time to take the survey and Dr. Fabricius and Dr. Büttgen for their professional courtesy in allowing me permission to use their study. Lastly, I thank those at Liberty University for providing the opportunity to pursue a DBA. I thank my Chair, Dr. David Duby, who simply became Dave at some point -- your continued prayers, words of encouragement, and sage advice propelled me to see this journey through. I thank Dr. Hicks and Dr. Moore for their guidance and participation in my committee. I thank Dr. Sullivan for starting off my cohort in the best way possible. And, I thank Dale, Kacy, and all the friends in my cohort for their continued support in sharing encouragement in the struggle. Table of Contents List of Tables ...................................................................................................................................v List of Figures ................................................................................................................................ vi Section 1: Foundation of the Study ..................................................................................................1 Background of the Problem ................................................................................................ 2 Problem Statement .............................................................................................................. 3 Purpose Statement ............................................................................................................... 4 Nature of the Study ............................................................................................................. 4 Discussion of method. ............................................................................................. 6 Discussion of design. .............................................................................................. 6 Summary of the nature of the study. ....................................................................... 6 Research Questions ............................................................................................................. 7 Hypothesis........................................................................................................................... 7 Theoretical Framework ....................................................................................................... 7 Definition of Terms........................................................................................................... 11 Assumptions, Limitations, Delimitations ......................................................................... 12 Assumptions. ......................................................................................................... 13 Limitations. ........................................................................................................... 13 Delimitations. ........................................................................................................ 13 Significance of the Study .................................................................................................. 14 Reduction of gaps. ................................................................................................ 14 Implications for Biblical integration. .................................................................... 15 i Relationship to field of study. ............................................................................... 17 Summary of the significance of the study............................................................. 18 A Review of the Professional and Academic Literature ................................................... 19 Project management in practice. ........................................................................... 19 Project management research. .............................................................................. 23 New product development. ................................................................................... 25 Project risk management. ...................................................................................... 29 Project success. ..................................................................................................... 31 Theoretical framework. ......................................................................................... 33 Risk assessment heuristics and biases................................................................... 35 Optimism bias ....................................................................................................... 37 Overconfidence bias.............................................................................................. 40 Project manager characteristics............................................................................. 43 Measures of confidence ........................................................................................ 46 Summary of the literature review. ........................................................................ 48 Transition and Summary of Section 1 .............................................................................. 49 Section 2: The Project ....................................................................................................................50 Purpose Statement ............................................................................................................. 50 Role of the Researcher ...................................................................................................... 51 Participants ........................................................................................................................ 53 Research Method and Design ........................................................................................... 54 Discussion of method. ..........................................................................................
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