Effects of organizational politics on decision-making and project performance in project-based environments

Abstract

Organizational politics is a pervasive element in modern project environments, influencing both managerial decision quality and project success. Guided by Behavioral Decision Theory (BDT), this study investigates the direct relationship between decision-making and project performance, and the moderating role of organizational politics in this relationship. A quantitative research design was employed, drawing on survey data collected from 322 project professionals across diverse industries in Sri Lanka. The moderation analysis was performed with SPSS and PROCESS Macro. The results reveal a strong positive relationship between effective decision-making and project performance. Conversely, organizational politics negatively affects both decision-making and performance and weakens the relationship. These findings empirically validate the moderating role of organizational politics within the BDT framework. Practically, it underlines the need for open governance arrangements, political risk management, and stakeholder arrangement strategies to safeguard project success.