Project Managers' Practical Intelligence and Project Performance in Software Offshore Outsourcing: A Field Study

Abstract

This study examines the role of project managers' (PM) practical intelligence (PI) in the performance of software offshore outsourcing projects. Based on the extant literature, we conceptualize PI for PMs as their capability to resolve project related work problems, given their long-range and short-range goals; PI is targeted at resolving unexpected and difficult situations, which often cannot be resolved using established processes and frameworks. We then draw on the information processing literature to argue that software offshore outsourcing projects are prone to severe information constraints that lead to unforeseen critical incidents that must be resolved adequately for the projects to succeed. We posit that PMs can use PI to effectively address and resolve such incidents, and therefore the level of PMs' PI positively affects project performance. We further theorize that project complexity and familiarity contribute to its information constraints and the likelihood of critical incidents in a project, thereby moderating the relationship between PMs' PI and project performance. To evaluate our hypotheses, we analyze longitudinal data collected in an in-depth field study of a leading software vendor organization in India. Our data include project and personnel level archival data on 530 projects completed by 209 PMs. We employ the critical incidents methodology to assess the PI of the PMs who led these projects. Our findings indicate that PMs' PI has a significant and positive impact on project performance. Further, projects with higher complexity or lower familiarity benefit even more from PMs' PI. Our study extends the literatures on project management and outsourcing by conceptualizing and measuring PMs' PI, by theorizing its relationship with project performance, and by positing how that relationship is moderated by project complexity and familiarity. Our study provides unique empirical evidence of the importance of PMs' PI in software offshore outsourcing projects. Given that PMs with high PI are scarce resources, our findings also have practical implications for the optimal resource allocation and training of PMs in software offshore services companies.