Human Behavior in Project Portfolio Selection: Insights from an Experimental Study

ABSTRACT Choosing the right subset from a set of candidate projects is a key driver of success and failure in new product development (NPD). In many cases, managers make these decisions based on intuition or simple rules. We investigate how human decision makers act in the context of project portfol...

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Bibliographic Details
Published inDecision sciences Vol. 49; no. 6; pp. 1061 - 1087
Main Authors Schiffels, Sebastian, Fliedner, Thomas, Kolisch, Rainer
Format Journal Article
LanguageEnglish
Published Atlanta American Institute for Decision Sciences 01.12.2018
Subjects
Adherence
Adhesion
Behavior
Behavioral Operations
Candidates
Cognitive impairment
Decision Heuristics
Decision makers
Decision making
Heuristic
Human behavior
Intuition
Knapsack problem
New Product Development
Product development
Project Portfolio Selection
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Summary:ABSTRACT Choosing the right subset from a set of candidate projects is a key driver of success and failure in new product development (NPD). In many cases, managers make these decisions based on intuition or simple rules. We investigate how human decision makers act in the context of project portfolio selection conducting experimental studies based on the knapsack problem. We address the question about which decision rules people apply to select a portfolio and how cognitive limitations influence their selection process. Grounded in portfolio selection practice, we investigate subjects' adherence to four heuristics. Decision making is partially explained by adherence to one simple decision rule, but decision makers' cognitive capacity limits the application of this heuristic. Subjects' cognitive deficits can be avoided by offering basic decision support, thereby increasing their heuristic adherence and their performance. 
Bibliography:Correction added on 27 December 2018 after online publication 21 February 2018: Grammatical and formatting changes have been made to the article to improve clarity.
ObjectType-Article-1
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ISSN:0011-7315
1540-5915
DOI:10.1111/deci.12310