Escalation of Commitment

Imagine you are a consultant to an organisation. Write a report to the chief executive outlining the dangers of escalation of commitment and how these may be averted.

Author: George Baily 200641643

Module: Psychological Approaches to Decision Making ULMS 351

Date: 18th November 2011

Contents:

1. Executive Summary

2. Introduction

3. Process of Escalation of Commitment

4. Causes of Escalation of Commitment

i. Psychological

ii. Social

iii. Economic

iv. Organisational

5. Projects which may be most vulnerable to Escalation of Commitment

6. Preventing Escalation of Commitment

7. Conclusion

8. Reference List

1. Escalation of Commitment is a process in which decision makers continue to allocate resources to a project which has received negative feedback. It takes place when there is more than one decision associated with a course of action and may take place gradually. This phenomenon may occur having very insignificant implications but can also result in an organisation becoming trapped into a course of action resulting in the loss of many resources such as time, money and possible opportunities missed. Many theorists have researched their ideas into the causes of escalation with findings that most are linked to psychological, social, economic and organisational causes. Having identified that there is a problem to be addressed prevention models and ideas have been developed in an attempt to de-escalate any escalating situations.

2. Escalation of Commitment is seen ‘as the persistence with a course of action beyond an economically defensible point’ (H.Drummond, 1996, p99). Research has shown that this phenomenon of escalation takes place in both individual and group decision making. It occurs in situations ‘where losses have been suffered, where there is an opportunity to persist or withdraw, and where the consequences of these actions are uncertain’ (B.Staw, 1997 p192). This report will look into the process of...