BazermanMoore

104 Chapter 6: The Escalation of Commitment
failure that was provided to the previous group was provided to this group as well)
and that they were to make a second allocation of funds concerning that division.
When the outcome of the previous decision was negative (an unsuccessful investment),
the high-responsibility participants allocated significantly more funds to the
original division in the second allocation than the low-responsibility participants did.
In contrast, for successful initial decisions, the amount of money allocated in the
second decision was roughly the same across participants. Given that the greater
escalation of commitment occurred only for the participants who had made a previously
unsuccessful decision, Staw concluded that the mechanism underlying escalation
is self-justification. That is, once an individual makes an initial decision to
embark on a course of action, negative feedback is dissonant with the initial decision.
One way to eliminate this dissonance is to escalate commitment to the initial
action in the belief that it will eventually lead to success.
We also know a fair amount about the conditions that tend to lead people to escalate
commitment to a chosen course of action. Staw and Ross (1978) found that the
tendency to escalate commitment is more pronounced when the failure could be explained
away with a causal account unrelated to the individual’s initial decision (e.g., a
shift in the economy instead of poor market appeal). Bazerman, Giuliano, and
Appelman (1984) found that groups are less likely than individuals to escalate commitment;
however, groups that escalate tend to do so to a greater degree than individuals.
Apparently, the presence of multiple members increases the likelihood that the group
will recognize the irrationality of escalating commitment to previously unsuccessful actions.
If this realization does not occur, however, the group dynamic reinforces support
for the initial decision and increases the level of rationalization to escalate commitment.
Schoorman (1988) found that supervisors who participate in a hiring or promotion decision,
and who agree with the eventual decision to hire or promote, positively bias that
employee’s subsequent performance appraisals. In addition, supervisors who participate
in such a decision and disagree with the eventual decision to hire or promote an employee
bias subsequent performance appraisals for that employee in a negative direction.
Staw and Hoang (1995) found that National Basketball Association teams escalate
their commitment to their draft choices. The sunk costs that teams incur are the use of
draft choices and money to select and sign players. Staw and Hoang found that draft order
had strong effects on playing time, likelihood of being traded, and survival in the league,
even after taking into account the performance of players. Friedman’s (1996) account of
the decisions of mountain climbers to go for the peak provides chilling insight into the role
of escalation in vivid life-and-death situations. Interestingly, Friedman presented his paper
at a conference in memory of Jeffrey Z. Rubin, a noted escalation scholar and mountain
climber who died in a 1995 climbing accident. Rubin’s climbing partner had turned
around earlier, believing the weather conditions to be too dangerous.
Taken together, the foregoing evidence suggests that managers should beware of
the difficulty of separating initial decisions from related future decisions. Managers can
take steps within their organizations to combat nonrational escalation of commitment.
Some hedge funds rotate portfolios on a regular basis so that the trader who bought a
commodity does not also make the decision to sell it. Of course, mechanisms such as this
are not amenable to situations where it is necessary for one person to make a string of