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<The importance of escalation. why should manager read this reports?>

The most salient activity for managers in an organisation is the decision making. Thus, It isn't surprising that a variety kinds of literature on decision making exists in the administrative sciences. There are numerous analytical and quantitative models of optimal decision making, rules, and supportive computer-based systems have been developed to assure effective decision making in organisations. (Donald A. Hantula, 1992)

Despite the well-developed models of decision making taught in modern business curriculum, there still exists 'decision fiascoes'. Not every decision is perfectly results into the best outcomes in the major projects.

Through this report, there will suggest that the escalation of commitment leads to inefficient allocation of higher costs, funds and more severe organisational disruption by the project failures.

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< Explain the main causes of escalation in psychological >

By the explanation of escalation of commitment from the Staw, this chapter will summarize the main psychological factors that have been proposed over the last three decades. The table 1

3.1.1 Perception deficit

As the Matthias D (2007) suggested, a precondition of rational project termination is the perception of all relevant problems. A perception deficit is derived from cognitive limitation, and this is able to classify into two major problems.

1. According to the [ZG96], the individuals can only perceive certain information, and it is to be determined as "background noise" when the information exceeds a perception threshold. Thus, the information salience of the negative feedback plays an important role for escalation of commitment ([AB85], [Bow87] and

[Dru94]).

2. Individuals are far more likely to notice and overweight information that supports their existing point of view that...