Escalation of Commitment:
Is Success Really Just Around the Corner?
Special Topics Lecture
Jeremy Woods
University of Cincinnati
MHR 318 Course Objectives
•
“The ability to get along with people, to communicate
with them effectively and to understand people are
three critical skills necessary to be successful in
business.”
•
“You will be provided with a series of introductory
experiences in organizational behavior including
organizational socialization, teamwork, leadership,
group dynamics, problem solving, and ethics as they
apply to the manager in a multicultural economic and
political environment.”
What Is Escalation of Commitment?
• The tendency of individuals and
organizations to continue with a certain
course of action when there are
available indications that the course of
action is failing to accomplish the
individual’s or organization’s goals.
• Three very different examples:
• Individual
• Corporation
• Government
Individual Escalation of Commitment
• An individual has spent three years working on an
advanced degree in a field with minimal job prospects
[for example, Philosophy or English Literature]. The
individual chooses to invest more time and effort to
finish the degree rather than switching to an entirely
new field of study. Having obtained the degree, the
individual is faced with the options of unemployment,
working under dissatisfying conditions such as parttime or temporary status, or starting anew in a
completely unrelated field. (Staw, 1981)
Corporate Escalation of Commitment
• A company overestimates its capability to build an airplane
brake that will meet certain technical specifications at a
given cost. Because it wins the government contract, the
company is forced to invest greater and greater effort into
meeting the contract terms. As a result of increasing
pressure to meet specifications and deadlines, records and
tests of the brake are misrepresented to government
officials. Corporate careers and company credibility are
increasingly staked to the airbrake contract, although many
in the firm know the brake will not work effectively. At the
conclusion of the construction period, the government test
pilot flies the plane; it skids off the runway and narrowly
misses injuring the pilot. (Vandiver, 1972)
Government Escalation of Commitment
• At an early stage of the U.S. involvement in the Vietnam War,
George Ball, then Undersecretary of State, wrote the following in
a memo to President Johnson: "The decision you face now is
crucial. Once large numbers of U.S. troops are committed to
direct combat, they will begin to take heavy casualties in a war
they are ill equipped to fight in a non-cooperative if not downright
hostile countryside. Once we suffer large casualties, we will have
started a well nigh irreversible process. Our involvement will be
so great that we cannot—without national humiliation—stop short
of achieving our complete objectives. Of the two possibilities, I
think humiliation would be more likely than the achievement of
our objectives—even after we have paid terrible costs."
(Sheehan & Kenworthy, 1971, memo dated July 1, 1965)
How Does This Relate to MHR 318? (Part 1)
•
Getting along with people
–
•
Communicating with people effectively
–
•
Social antecedents to escalation
Project antecedents to escalation
Understanding people
–
Psychological & structural antecedents to escalation
How Does This Relate to MHR 318? (Part 2)
•
Organizational Socialization, Teamwork, & Group Dynamics
–
•
Problem Solving
–
•
Social antecedents to escalation
Project antecedents to escalation
Leadership & Ethics
–
Psychological & structural antecedents to escalation
Social Antecedents to Escalation*
(self-presentation theory)
• Decision makers facing outside evaluation are more likely to
escalate in order to manage the impressions others have of them
and “save face” (Brockner et al., 1981).
• Challenges from others increases accountability and evaluation,
and thus resistance attenuates pressure to escalate commitment
(Fox & Staw, 1979).
• Individuals identifying with cohesive groups are likely to
experience conformity of perception and judgment (Hogg &
Terry, 2000; Janis, 1972). Hence, as individuals acting alone
tend to exhibit an escalation bias, the same tendency is
especially likely to occur (cf. Myers & Lamm, 1976) in the
presence of a cohesive group.
*
Sleesman, Conlon, McNamara, & Miles (2012)
Project Antecedents to Escalation*
(subjective expected utility theory)
• Opportunity cost information provides clear decision benchmark
in calculations of whether or not to escalate (Northcraft & Neale,
1986). Concrete information about a decision reduces ambiguity
reinforcing the poor prospects for the decision (Bowen, 1987;
Bragger, Hantula, Bragger, Kirnan, & Kutcher, 2003).
• Uncertain information on decision prospects allows decision
makers to focus on positive indicators (Bragger, Bragger,
Hantula, & Kirnan, 1998).
• Positive trends allow decision makers to focus on the potential
positive outcomes of the situation and discount worst-case
scenarios (Moon & Conlon, 2002); thus, decision makers expect
greater utility in such circumstances.
*
Sleesman, Conlon, McNamara, & Miles (2012)
Psychological & Structural Antecedents to Escalation*
(self-justification theory, prospect theory, agency theory, & goal substitution effect)
•
Experience in a given domain may affect how decision makers react to
negative feedback and engage in pressures to justify the decision to
continue a course of action (Bragger et al., 2003; Garland et al., 1990).
•
Felt responsibility enhances the threat associated with decision failure
and activates self-justification needs (Staw, 1976).
•
When objectively negative situations are framed in a positive manner,
people become more risk-averse and are consequently less likely to
escalate (Schoorman, Mayer, Douglas, & Hetrick, 1994).
•
As decision makers approach completion, they substitute a completion goal
for their original project success goals (Conlon & Garland, 1993).
•
When agency problems exist, decision makers may act in a self-interested
way and escalate at the expense of their organization (Booth & Schulz,
2004).
*
Sleesman, Conlon, McNamara, & Miles (2012)