Archive of Journal - Financing

Financing – scientific magazine for economy

ISSUE 2023, No. 2, Article 4, Year of publication: 14, June, 2023
Reducing agency costs and improving the quality of information systems projects


Boris Todorović, PhD*; Marija Todorović**

*PhD Assistant Professor, University in Banja Luka, Faculty of Economics, Department for Quantitative Analysis and Informatics
**Aska Media, Belgrade



Agency theory offers a potential explanation for the low rate of success and quality of information systems projects. Agency theory explains that relationships between owners and managers cause agency problems. Agency problems arise due to the opportunistic behavior of managers. Opportunistic behavior of managers causes agency costs. Agency costs can be reduced or eliminated by an adequate contract between the owner and the manager. The research was conducted as a case study, and survey, interview and content analysis methods were used. The design of the research systematically links agency problems with agency costs and presents response variables related to contracts between owners and managers and/or designers of information systems development that need to improve project management, success and quality of information systems development projects. Owners and managers and/or designers of information systems development will primarily benefit from the results of the research. The original value of the research refers to new scientific facts and a model of project management for the development of information systems where agency problems and agency costs arise. The article suggests that reducing negative impacts related to conflict of interest, avoiding tasks, creating and using private information, not using techniques and tools related to programmability of tasks and fraud, leads to improvement of project success and quality.

Keywords: agency theory, agency problems, agency cost, quality of the information systems development project, contracts between
owners and managers

DOI: 10.7251/FIN2302039T

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