'Why didn't somebody tell me?': climate, information asymmetry, and bad news about troubled projects

The reluctance to transmit bad news is a problem that is endemic to many organizations. When large projects go awry, it often takes weeks, months, and sometimes even years, before senior management becomes fully aware of what has happened. Accurate communication concerning a project and its status is therefore critical if organizations are to avoid costly and embarrassing debacles. This paper describes the results of an experiment designed to explore some key variables that may influence an individual's willingness to report bad news in an information systems project context. We extend a basic theoretical model derived from the whistle-blowing literature by considering relevant constructs from agency theory. We then test the entire model using a controlled experiment that employs a role-playing scenario. The results explain a significant portion of the variance in the reluctance to report negative status information. Implications for research and practice are discussed, along with directions for future research.