Abstract
PurposeThe purpose of this paper is to investigate the effects of self-efficacy, process feedback and task complexity on decisions by managers to continue or discontinue a new product after receiving negative performance feedback.Design/methodology/approachThis paper uses a classroom experiment design and uses logistic regression and a chi-square test to analyze the data.FindingsThe findings of this paper show that self-efficacy, process feedback and task complexity have not only main effects but also interactive effects on managers’ go or no-go decisions; further, the main effects are mediated by interactions. The effect of self-efficacy is moderated by process feedback and task complexity. Process feedback and task complexity also have an interactive effect on decisions about new products by decision-makers.Research limitations/implicationsThis paper extends the theory of escalation of commitment (EOC) by showing that self-efficacy, process feedback and task complexity can influence decision-makers’ go or no-go decisions after they have received negative performance feedback.Practical implicationsThis paper provides useful guidelines for managers on how to reduce the likelihood of EOC.Originality/valueThe originality and value of this paper lie in its being the first to examine the effects of process feedback and task complexity on the EOC.
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