The impact of cultural differences and group influence on the escalation of commitment

Abstract

One of the most challenging decisions that a manager has to take is whether or
not to abandon a project which is not going well. Previous studies have looked at
different reasons for why individuals perserve with a troubled project. What the
previous research has failed to consider is how cultural differences might affect decision-makers’ willingness to continue or abandon a project. To better understand the factors
that might cause escalation of commitment, this dissertation investigates the influence
of cognitive factors and cultural differences on the escalation dynamics. Since most
decisions in the business world are made in groups, differences between individual and
group decisions are analysed as well. Overall, the findings indicate the salience of
certain cognitive factors in escalation behaviour, as previous researchers have found.
In addition, this study found that cultural differences can also affect the decision to
continue or abandon a project. Concerning the differences between the individual
and the group decisions, these results suggest that in terms of some determinants,
individuals from all cultures act the same, while with other factors the predisposition to
escalate depends on a person’s cultural background. The implications of these results
and different recommendations for both practice and further research are discussed.