"Dominant Logic, Decision-making Heuristics, and Escalation of Commitment in Small Family Firms"

Abstract

This paper expands the escalation of commitment literature by examining the impact of dominant logic and decision-making heuristics as antecedents of escalation. Dominant logic is an oft-researched construct among strategic management scholars, but it has not been extensively studied as an antecedent to escalation of commitment. Different types of dominant logic employ cognitive simplification processes such as decision-making heuristics to focus decision-makers’ attention on different key pieces of information while disregarding others. This paper outlines a set of propositions for how “relationships logic” and “operational logic” can lead to escalation of commitment in small family firms due to the potential of the representativeness and availability heuristics to screen out negative information which might otherwise be considered in decision-making. Investigation of these propositions has the potential to significantly impact value creation by practitioners while extending the extant literature on escalation of commitment, family business, strategic management, and the psychology of decision-making.