Escalation Of Commitment

Topics: Decision making, Risk, Decision theory Pages: 12 (3105 words) Published: April 15, 2015
A report to the Chief Executive about the dangers of escalation of commitment and measures that organisation can take to curb escalations Contents
1.Executive summary1
2.Intoduction2
3.Causes of escalation of commitment3
3.1.Psychological3
3.2.Social3
3.3.Economic4
3.4.Organisational4
4.Dangers of Escalation of Commitment of the Ebola vaccine project5 4.1.Physiological Dangers5
4.2.Social Dangers5
4.3.Economical Dangers6
4.4.Organisational Dangers6
5.Measures to deal with Escalation of Commitment:7
5.1.Share and reduce responsibilities7
5.2.A good project evaluation and management7
5.3.Backup Options:8
6.Conclusion8
7.Bibliography8

1. Executive summary
Ebola outbreak in West Africa this year, it is one of the dangerous viruses since the past 40 years from now, over thousands of people have died in West Africa this year (BBC, 2014).1 To develop Ebola vaccine, this project would be a “long haul project” and definitely would face many obstacles. Since the past 40 years, no one can successfully develop medical method to curb this virus.2 One of the obstacles, escalation of commitment, is going to inquiry in this paper.

By examining the case of the Long Island Lighting Company, the company started a project to build a nuclear power plant in Long Island, New York. The management presumed that this project would cost 75 million dollars and would be finished by 1973. However, the project finally completed in 1986 at a cost more than 5 billion dollars because of the resistance of the local citizens, when a negative feedback was found, the decision maker was faced with a dilemma: should she terminate the project and withdraw the remaining resources to invest somewhere else, or should she stick with the initial decision (Hawks, n.d.).3 Why was the management in this case prone to the initial decision even the cost and time cost increased significantly? The answer is escalation of commitment. This case shows that escalation of commitment happens where the decision maker discovers that the previous course of action is failing, but they are still willing to put in more resources, including time and money into the ongoing project (Brockner, 1992).4 Staw (1981) concludes that escalation always happens between individuals and groups 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.”5 There are four main causes: physiological, social, economic and organizational. These causes will be discussed in this report, as well as will inquiry what are the dangers of the escalation that the Ebola vaccine development project would face. Finally, this report will suggest some measures to deal with the escalation. 2. Intoduction

Escalation can be defined “as persistence with a course of action beyond an economically defensible point”, escalation can happen while there are decisions involving allocation of resources (Drummond, 1996).6 Escalation has been examined by many school of thoughts, those researches show that substantial dangers are generated from escalation such as waste a great deal of time, energy and money in an organization (Colwell & Mowday, n.d.).7

The aim of this report is to inquiry the causes of the escalation of commitment, and also look at the dangers of escalation of commitment to a course of action from the project that began developing Ebola vaccine, as well as, to find out the methods that can effectively take to curb escalations. In order to reach the aim, this report focuses on the main causes of escalation which are psychological, social, economic, and organizational. After that, it explains why the project may be particular prone to escalation with escalation theory and examples. Then, it comes up with measures and suggestion that can prevent escalation.

3. Causes of escalation of commitment
3.1....

Bibliography: Barber, E, ‘WHO Pillories Drug Industry on Failure to Develop Ebola Vaccine’ Times (4 Nov 2014), from: http://time.com/3555706/who-ebola-vaccine-pharmaceutical-industry-margaret-chan/ accessed 1 November 2014
Bazerman, M
BBC (2014), ‘Why Ebola is so dangerous’, from: http://www.bbc.co.uk/news/world-africa-26835233
BBC (n.d.), ‘Vietnam War: History’, from: http://news.bbc.co.uk/1/shared/spl/hi/asia_pac/05/vietnam_war/html/introduction.stm, accessed 4 November 2014
Drummond, H (1996), ‘Case of Escalation in Decision Making’ [Online].
from: http://vital.liv.ac.uk/bbcswebdav/courses/ULMS351, accessed 5 November 2014
Geiger, S., Irwin, S & Robertson (1998), ‘The Impact of Cultural Values on Escalation of Commitment, EBSCO Business Source Premier’ [Online]
Staw, B.M. (1976). Knee-deep in the Big Muddy: A study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16, 27-44.
Staw, B.M. (1981). The escalation of commitment to a course of action. Academy of Management Review, 6(4), 577-587.
Staw, B. M. & Ross, J. (1989), ‘Understanding behavior in escalation situations. Science’ Volume 246
Whyte, H., (1986), ‘Escalating commitment to a course of action: A reinterpretation.’ Academy of Management Review,
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