Tolerance of Escalating Commitment to Troubled Projects

摘要

Escalation of commitment can commonly be characterized by a series of decisions to persist with a project despite minor yet repeated departures from prior expectations. Hampered by low cost visibility and vague progress metrics, software development project teams often tolerate seemingly minor slippages from project plans as inevitable consequences of embarking on large and complex ventures. These studies investigate how project support, escalation and failure are influenced through the limits of a decision-maker's tolerance (termed here 'Zones of Tolerance', or ZOTs) for variations from expected outcomes. ZOTs are the extant boundary conditions within which variations from expectations are recognized but carry no significant utility or disutility to the decision-maker, hence are not adequately corrected. In the first two studies we demonstrate empirically how allowing these seemingly innocuous variations can create the historically antecedent conditions typical of escalation of commitment episodes if they are allowed to cascade and compound over time. Paradoxically, we find that comparatively low budget overruns (which tend to be tolerated) lead greater total resource commitments than high budget overruns (which tend to be corrected). In addition, we find in the first experiment that investment alternatives have no significant effect on the decision to escalate commitment to troubled projects, contrary to prior studies. In the second study we find also that the stability of variances across time has a significant effect on the growth and diminution of ZOTs. The proposed third study investigates the effect of ZOTs in project portfolios over time.