Escalation of Commitment

International Journal of Management & Information Systems – 2009

Volume 13, Number 2

Escalation Of Commitment In MIS Projects:

A Meta-Analysis

Mayur S. Desai, Texas Southern University, USA

Dmitriy V. Chulkov, Indiana University Kokomo, USA

ABSTRACT

Escalation of commitment emerged as a major explanation for the propensity of management

information systems projects to exceed time and budget constraints. Earlier studies demonstrated

that escalation in MIS is a common event. This study presents a meta-analysis of the various

theories of escalation that allows for integration of the various escalation factors into a model of

irrational escalation and a model of rational escalation. The implications of rational and

irrational escalation for the decision making in management of information systems are discussed.

Keywords: Escalation of Commitment, Self-Justification, Prospect Theory, Agency Theory, Sunk Costs, Real

Options

INTRODUCTION

E

scalation of commitment is a phenomenon that involves continued commitment of resources to a

project after the decision maker receives negative feedback about the project’s performance (Brockner,

1992). There is a great deal of attention paid to the study of escalation of commitment in the

management literature. The seminal study of escalation by Staw (1976) introduced the concept of self-justification

as an explanation to escalation of commitment. In this study agents with high personal responsibility for the project

were more likely to escalate after getting negative feedback about the project due to the need to justify the original

decision in order to appear capable or competent to complete a task. Staw (1981) concludes that escalation is a

common event and that “individuals have the tendency to become locked in to a course of action, throwing good

money after bad or committing new resources to a losing course of action.”

Escalation has been linked to significant losses due to project failures...