The Effect of Task Uncertainty and Decentralization on Project Team Performance

This paper investigates relationships among task uncertainty, level of centralization, and project team performance. Team performance is measured in three dimensions: cost, time, and quality. Adopting an information processing view and contingency theory, the authors discuss tradeoffs among the three performance dimensions of a project team. Results from the simulation study indicate that, under high task uncertainty, a decentralized team performs better in terms of cost and time, but a centralized team performs better in terms of quality. Under low task uncertainty, there is no performance difference between a centralized team and a decentralized team in terms of cost and time, but a centralized team performs better in terms of quality. The paper suggests that researchers pay attention to the relative impact of centralization and decentralization on different dimensions of organizational performance, and managers adopt an organizational structure that performs better in a performance dimension that counts more to enhance overall performance.