Escalation Of Commitment Research Articles

Using Design Thinking to Address Bias in Management Decision‐Making

It is easy to dismiss staying with a bad plan as foolish, but most people are at risk of falling into this trap under the right circumstances.Plan continuation bias and escalation of commitment are two traps that have doomed many a project and plan. Thoughtfully applying design thinking can help overcome these obstacles and lead to successful outcomes.

The Moderating Effect of Monitoring on The Relationship Between Adverse Selection and Decision-Making Involving Escalation Situations: An Experimental Study

The streams of research on adverse selection and escalation of commitment are still inconclusive and limited by only manipulating adverse selection in 2 conditions, namely the presence and absence of adverse selection. Meanwhile, the literature shows that adverse selection will always exist in agency contracts even though the information asymmetry mechanism has been modified. This study considers adverse selection manipulation into two levels: high and low. This research investigates the moderating effect of supervision on the impact of adverse selection and commitment escalation. This research used an experimental method with a 2 x 2 factorial design between subjects. This study involved undergraduate accounting students as extension practitioners. The test results show that different levels of adverse selection impact levels of commitment escalation. The research also indicates that supervision is quite effective in filtering the impact of adverse selection on commitment escalation behavior

Personality and Crisis Preparedness: The Mediation and Moderation of Narcissistic-Rivalry and Escalation of Commitment

Despite extensive research on organizational crises, there is a need for deeper insight into the personalities of managers involved in crisis management and the interplay of personality traits in crisis preparedness. Crisis management (CM) is pivotal in today’s complex and rapidly changing world, involving the strategic process of anticipating, preparing for, and effectively responding to crises that can potentially disrupt an organization. Recent surges in business failures and related corporate crises, along with the varied consequences of COVID-19, emphasize the acute need for effective CM, particularly crisis preparedness (CP). Given that CP in organizations is influenced by various factors, we aimed to develop a model that accurately assesses the impact of individual and situational aspects on CP, drawing on crisis management theory and trait theory as the overarching theoretical basis. Based on a sample of 314 executives and utilizing moderation-mediation analysis, our main findings reveal that narcissistic rivalry fully mediates the positive relationship between conscientiousness and CP. Additionally, Escalation of Commitment (EoC) moderated the relationship between conscientiousness and narcissistic rivalry, such that managers with high conscientiousness disposed to EoC show a desirable low level of rivalry. In conclusion, while EoC is typically viewed as a negative organizational trait, organizations are advised to prioritize hiring conscientious managers who exhibit a propensity for EoC, provided that the organization can effectively manage this tendency. By taking the proper steps, organizations can benefit from the advantages of managers disposed to EoC while reducing crisis risks.

Entrepreneurs' use of imagination in pivot decision: Toward a conceptual model

AbstractThe purpose of the paper is to open the black box of pivot decisions and to deepen our understanding of how entrepreneurs use their imagination in such a crucial moment of the entrepreneurial process. A pivot is a strategic decision made after a failure and challenges central assumptions about the entrepreneurial project. In turn, entrepreneurs can remain quite conservative in the generation of new options for their business and expose themselves to the risks of path dependency and escalation of commitment. Reconfiguring an initial idea requires specific cognitive skills and mechanisms. In this paper, we sketch a conceptual model explaining the relationships between creative, social, and practical imaginativeness and the generation of new business options, and how founders' cognitive mechanisms may moderate this relationship.

Medical residents’ perceptions of group biases in medical decision making: a qualitative study

BackgroundSystematic biases in group decision making (i.e., group biases) may result in suboptimal decisions and potentially harm patients. It is not well known how impaired group decision making in patient care may affect medical training. This study aimed to explore medical residents’ experiences and perspectives regarding impaired group decision making and the role of group biases in medical decision making.MethodsThis study used a qualitative approach with thematic analysis underpinned by a social constructionist epistemology. Semi-structured interviews of medical residents were conducted at a single internal medicine residency program. Residents were initially asked about their experiences with suboptimal medical decision making as a group or team. Then, questions were targeted to several group biases (groupthink, social loafing, escalation of commitment). Interviews were transcribed and transferred to a qualitative data analysis software. Thematic analysis was conducted to generate major themes within the dataset.ResultsSixteen interviews with residents revealed five major themes: (1) hierarchical influence on group decision making; (2) group decision making under pressure; (3) post-call challenges in decision making; (4) interactions between teamwork and decision making; and (5) personal and cultural influences in group decision making. Subthemes were also identified for each major theme. Most residents were able to recognize groupthink in their past experiences working with medical teams. Residents perceived social loafing or escalation of commitment as less relevant for medical team decision making.ConclusionsOur findings provide unique insights into the complexities of group decision making processes in teaching hospitals. Team hierarchy significantly influenced residents’ experiences with group decision making—most group decisions were attributed to consultants or senior team members, while lower ranking team members contributed less and perceived fewer opportunities to engage in group decisions. Other factors such as time constraints on decision making, perceived pressures from other staff members, and challenges associated with post-call days were identified as important barriers to optimal group decision making in patient care. Future studies may build upon these findings to enhance our understanding of medical team decision making and develop strategies to improve group decisions, ultimately leading to higher quality patient care and training.

Pengaruh Negative Framing dan Monitoring Control terhadap Eskalasi Komitmen dalam Pengambilan Keputusan Investasi

This study aims to examine the effect of Negative framing and Monitoring Control on escalation of commitment in investment decision making. This study uses a 2x2 factorial design with four treatments. The hypothesis in this study was tested using the One Way ANOVA test. This study used Accounting SI students at UNP. Using 4 scenario cases, participants were asked to make decisions to see how negative framing and monitoring control affect escalation of commitment when managers will make decisions. The results of this study indicate that negative framing affects managers when making decisions, this is due to the information received by managers. While monitoring control shows the same thing, monitoring control makes managers not escalate their decisions because of supervision.

Turnover by Non-CEO Executives in Top Management Teams and Escalation of Commitment

This article investigates the relationship between the decision-making bias known as escalation of commitment and the turnover of non-CEO executives in top management teams. The phenomenon of escalation of commitment is observed when decision makers persist with business investments that have a low likelihood of success. Theoretical explanations for the association between executive turnover and escalation include self-justification and reputation protection. Top managers may conceal prior errors, escalate commitment to earlier decisions, and exit the organization before the outcome of decisions is observed. Successor managers do not have a commitment to earlier decisions and have the capability to stop investments that are discovered to be failing. Empirical analysis utilizing a sample of over 1600 U.S. firms confirms that departures by non-CEO executives from top management teams are associated with an increased likelihood of new reporting of discontinued operations and extraordinary items by firms and a reduction in the firms’ performances relative to their industry. These effects reflect de-escalation activities and are amplified in the years concurrent with and following a joint departure of multiple management team members. Prior empirical studies on escalation and de-escalation behavior focused on CEO turnover. The contribution of this article is its documenting of the key role of non-CEO managers and team turnover in the context of escalation.

Effect of Cognitive Reflection on Escalation of Commitment

Effect of Cognitive Reflection on Escalation of Commitment

Developing a new procurement model, using behavioural economics, to enable continuous improvement of productivity and better value in large UK infrastructure projects.

Global construction has been blighted by productivity inertia caused by behavioural bias for decades. While other industry sector productivity has grown more than fifteen-fold since 1960, construction has stagnated with no more than a seven to ten percent overall growth. McKinsey Global Institute’s report Reinventing Construction: A Route to Higher Productivity, reported infrastructure construction amongst a small group of outperforming market sub-sectors at 15 to 20 percent. This paper, which charts the development of a unique procurement model designed for high productivity, builds on that performance using behavioural insights to counter damaging and habitual biases. The new model changes trading relationships using a nudged ‘opt-out’ contract structure creating a different responsibility dynamic between client and supplier. A recognisable but different infrastructure construction procurement model to improve productivity using recognised behavioural economics and construction economics. Highways England was set up to run England’s strategic road network in 2015. The procurement model that resulted, Regional Delivery Partnerships can be refined for any infrastructure sector construction environment and sets up a key step forward in contracting based on integrated project delivery. Using a combination of counter bias strategies built from loss aversion and nudge theory this new construction procurement model uses ‘opt-out’ from lean construction to drive higher productivity. By setting up an integrator, to create an integrated project team, Regional Delivery Partnerships uses loss aversion as the motivational key to better innovation. It empowers the integrator to counter uniqueness bias and find and eradicate waste (process time and money) to enhance productivity. Reward is aligned to both optimised efficient design and high productivity working. As 100% of budget underspend can be kept rewarding the integrator, the potential of not achieving this triggers loss aversion and motivates change using the principles of escalation of commitment in favour of the client. Performance data is also used to motivate using reduced acquisition costs from secondary competition, long held as an inefficient market overhead.Using recognised pragmatic academic techniques, and constructionism; choice architectures were remodelled into a new outcome and value focused procurement model. Using applied research, the team used processes and techniques to develop, build, test, and deploy the model in open market competition. It can be used by any infrastructure sector construction client to replicate a sector specific version of Regional Delivery Partnerships that changes trading choice architecture towards higher productivity.

Social media and nonprofit fundraising: the influence of Facebook likes

PurposeThis paper aims to demonstrate that Facebook likes affect outcomes in nonprofit settings. Specifically, Facebook likes influence affinity to nonprofits, which, in turn, affects fundraising outcomes.Design/methodology/approachThe authors report three studies that establish that relationship. To examine social contagion, Study 1 – an auction field study – relies on selling artwork created by underprivileged youth. To isolate signaling, Study 2 manipulates the number of total Facebook likes on a page. To isolate commitment escalation, Study 3 manipulates whether a participant clicks a Facebook like.FindingsThe results show that Facebook likes increase willingness to contribute in nonprofit settings and that the process goes through affinity, as well as through Facebook impressions and bidding intensity. The total number of Facebook likes has a direct signaling effect and an indirect social contagion effect.Research limitations/implicationsThe effectiveness of the proposed mechanisms is limited to nonprofit settings and only applies to short-term effects.Practical implicationsFacebook likes serve as both a quality signal and a commitment mechanism. The magnitude of commitment escalation is larger, and the relationship is moderated by familiarity with the organization. Managers should target Facebook likes at those less familiar with the organization and should prioritize getting a potential donor to leave a like as a step leading to donation, in essence mapping a donor journey from prospective to active, where Facebook likes play an essential role in the journey. In a charity auction setting, the donor journey involves an additional step of bidder intensity.Social implicationsThe approach the authors study is shown effective in nonprofit settings but does not appear to extend to corporate social responsibility more broadly.Originality/valueTo the best of the authors’ knowledge, this study is the first investigation to map Facebook likes to a seller’s journey through signals and commitment, as well as the only investigation to map Facebook likes to charity auctions and show the effectiveness of this in the field.

BAEL: CAN PIVOTING TO BLOCKCHAIN HELP THE EARLY STAGE AGRITECH STARTUP IN INDIA?

Mithil Gandhi, co-founder of the AgriTech platform Bael, was in a dilemma. Gandhi was keen on using blockchain as a core technology for Bael to attract investor funds. His plan of action was to implement blockchain technology that offered a secure, transparent and trustworthy platform for the agri-transactions. However, there were challenges in scaling and attracting the stakeholders to adopt the technology, alignment issues with Bael’s business model, and his own lack of expertise in blockchain. The case also explores Gandhi’s escalation of commitment and how it affects decision making and business alignment.

Positively correlated choice

We provide an axiomatic foundation for a choice model with two periods between which preferences are updated, but the second period choices are positively correlated with past choices in a manner that is unrelated to the agent’s preferences. Specifically, in our model, the agent chooses alternative x over alternative y in contrast to his past choice if and only if the difference between the utility of x and that of y is higher than some fixed cost. While restrictive in its nature, this representation captures several related but distinctive phenomena: a taste for consistency, cognitive dissonance, the escalation of commitment, passive choice, and habit formation. We also provide a representation that allows for a more general form of cost and the revealed preference implications of our models. Finally, we connect our representation to the theories of imperfect discrimination.

Better Safe Than Sorry –The Role of Team Design in New Venture Teams’ Escalation of Commitment

Better Safe Than Sorry –The Role of Team Design in New Venture Teams’ Escalation of Commitment

Escalation of Commitment: Conceptual Clarity and Directions for Future Research

Escalation of Commitment: Conceptual Clarity and Directions for Future Research

Individual Differences in Escalation of Commitment: A Multi-level Adaptive Learning Perspective

Individual Differences in Escalation of Commitment: A Multi-level Adaptive Learning Perspective

Digging in the megaproject's graveyard: Why do megaprojects die, and how to check their health?

The pressure to complete Infrastructure Megaprojects (IMs) is enormous; once started, IMs are commonly considered too costly to be stopped. Still, despite this widespread belief, several IMs are terminated during delivery/construction. Notwithstanding its empirical and theoretical relevance, few studies investigate IMs termination during delivery/construction. This paper aims to develop further the “reverse escalation of commitment” theory which sense-makes the termination of IMs. We take a critical confrontation of the existing literature addressing two questions: (1) Why are IMs terminated during delivery/construction? and (2) How does the project termination process occur in IMs? By analysing 30 unfinished IMs, we identified the six determinants for IMs termination, contributing to the development of reverse-escalation of commitment theory by providing a processual perspective of the four most common patterns leading to IMs termination. Finally, we provide a checklist for identifying key elements leading to IMs termination.

Do IPL teams escalate commitment for costly players? When do player status and reputation matter?

This study examines the impact of individual-level factors on organisations' escalation of commitment (EOC) using self-justification theory and institutional perspective. We use the Cox proportional hazard model on Indian Premier League (IPL) players’ data from 2008 to 2019 to test the proposed hypotheses. We find that player sunk cost (salary paid), reputation, and high status are positively related to the IPL team's EOC (player survival in the same team) for the particular player. Results show that player reputation and high status positively moderate the relationship between player level sunk cost and the IPL team's EOC for the particular player.

The Effect of Project Names on Escalation of Commitment in Information Systems Projects

This study explores how project names may influence the tendency to escalate commitment through two experiments. Our findings from Experiment 1 show that a positive project name evokes positive affective reactions to the project. These, in turn, are associated with a greater willingness to continue a failing project. Results from Experiment 2 show that a technological project name can similarly evoke more positive affective reactions and a greater willingness to continue but only for decision makers with high technology readiness. For decision makers with low technology readiness the effect was reversed.

Open innovation and de-escalation of commitment in underperforming new product development projects

Escalation of commitment occurs when managers continue to devote efforts to underperforming new product development (NPD) projects, even though doing so carries a high risk of failure. This study investigates the role of open innovation as a de-escalation strategy to reduce managers' commitment to underperforming NPD projects. Two studies involving both qualitative and quantitative approaches were conducted. We began our investigation by interviewing 13 senior managers to provide an initial understanding of open innovation vis-à-vis the escalation of commitment phenomenon. A scenario-based experiment with a sample of 97 senior NPD managers from multiple international companies was further conducted to test the relationship between open innovation and NPD managers' escalation of commitment, as well as the mediation effect of managerial efficacy. We contribute to the field by proposing open innovation as a new de-escalation strategy, and by revealing the affect-based mechanism of open innovation that operates through managerial efficacy.

Investment decision in crisis: The alternative view of escalation of commitment in determining investment performance

This research attempts to apply Image Theory to examine whether the tendency to continue the initial strategy or maintain the status quo known as escalation of commitment (EoC) from institutional investors leads to positive investment performance in unstable real environmental conditions with certain changing trends. In the equity market, investors are always faced with the option of maintaining their existing portfolio (initial strategy) or modifying it (generate emergent strategy) to increase assets as the goal. However, they have a tendency to EoC. Based on this situation, the authors conduct a quantitative study with covariance-based structural equation models (CB-SEM) approach one of the fund management industry in the Indonesian equity market during bearish conditions in the midst of the 2008 global economic crisis and bullish conditions during the crisis recovery as the background. This study shows that EoC is not always associated with more negative performance because it can result in more positive performance in high image compatibility state.