Escalation of Commitment in Response to a Threat: How Family Factors Matter

Abstract

We advance current knowledge of escalation of commitment - a phenomenon in which actors persist with a losing course of action - by examining the influence of cross level factors and their interaction. We seek to understand distinctive family factors and underlying mechanisms that can lead to escalation and do so by exploring escalation of commitment in response to a threat within a highly pervasive, yet often overlooked organizational form: family firms. We adopt a qualitative approach to investigate a family firm’s two-year campaign to win financial support to relocate away from the proposed site of the London 2012 Olympic Games. Our findings suggest that the interaction of four factors –family personification, family proximity, family business resilience and family business tradition– can render family firms vulnerable to escalation behaviors, offering important contributions to both escalation of commitment and family business literatures.