Reporting bad news about software projects: impact of organizational climate and information asymmetry in an individualistic and a collectivistic culture

The reluctance of people to report bad news can be a major contributor to the phenomenon of runaway software projects. If senior managers receive bad news sooner, they may be able to prevent runaway software projects through corrective action. Two factors that are known to impact predisposition to report bad news are organizational climate (whether reporting bad news is likely to result in reward or punishment) and information asymmetry (whether hiding bad news is likely to be possible over time). Using matching experiments in an individualistic (United States) and a collectivistic culture (Singapore), this study investigates how the individualism-collectivism dimension of national culture may moderate the impact of organizational climate and information asymmetry on human predisposition to report bad news. The results revealed that individualism appeared to amplify the impact of organizational climate on predisposition to report bad news (compared to collectivism) whereas collectivism appeared to amplify the impact of information asymmetry on predisposition to report bad news (compared to individualism). When deciding on whether to report bad news about software projects, people from an individualistic culture seemed to be more sensitive to organizational climate whereas people from a collectivistic culture seemed to pay greater attention to information asymmetry. These results have useful implications for practice and research involving cross-cultural software project teams. Beyond these implications, these results add a cultural dimension to our existing knowledge on software project management.