Escalation Of Commitment In Projects From The Perspective Of Regulatory Focus

The interplay between project completion levels and managers’psychological factors in a failing project situation entrap them to escalate their commitment in a different ways. Different theories explain the problem of escalation of commitment, but so far it is not studied in depth from the motivational theories perspective. This dissertation study using experimental approach to spotlights this problem from the Regulatory focus theory perspective (Higgins,1997). According to regulatory focus theory of Higgins (1997,1998) people behave differently depending on their self-regulatory foci and accordingly approach their target/goals. They have two different regulatory orientations i.e. a promotion focus and a prevention focus. Those with the Promotion-focused orientation focus on the advancement and sensitive towards the gain vs. non-gain outcomes, and prefer an eager approach to pursuing goals. On the other hand, those with Prevention-focused orientation focus on the safety aspect and are sensitive towards the loss vs. non-loss outcomes, and prefer a vigilant approach while moving towards their goals. Similarly, the critical decision whether to continue a runaway project or not, can be approached differently by the managers with different regulatory focus orientation i.e. promotion focus versus prevention focus. In this study, the scenario of failing project is used to investigate the influence of manager’s with promotion focus or prevention focus on their commitment towards a failing endeavor. Participants played the role of project managers and made a decision about whether to continue a failing project or not. Firstly the subjects are manipulated with the relevant regulatory focus motivation. Then using the entrapment project scenario, the study examines the participant’s commitment at three different project stages i.e. low, medium and high, and identifies the interaction between the regulatory focus and project stage. In order to eliminate the confounding effect of sunk cost from the project stage, the sunk cost was being kept constant across all stages. The hypothesis is to ensure that, with the increase in project completion level, the managers with prevention focus will escalate more as compared to those with promotion focus. The study is conducted in Southwest Jiaotong University, Chengdu, P. R. China and uses the local students as subject, which implies the scenarios to be provided in the Chinese. This paper extends the work on Regulatory focus theory and its strategic inclination on manager’s commitment in project environment. The results confirm that at medium and higher stages the prevention focus managers will significantly escalate more than those of the promotion focus managers, whereas, at earlier stage, the difference between the two groups is less. This confirms the critical nature of the project completion especially prevention managers are more vulnerable to this problem whereas on other side it can cautioned that promotion focus managers can do the premature termination of the project. Also the study confirms the mediating effect of anticipated regret between project stages and the escalation of commitment.This dissertation study contributes to behavioral research literature in projects by exploring the impact of motivational theory (regulatory focus theory) on manager’s decision and promotes new dimensions of analyzing escalation problem. Also highlight the interplay between the project and psychological factor in Staw’s Escalation of Commitment Model. From the managerial perspective, this study caution organizations and project managers that prevention focus manager’s are more prone to entrap into the escalation scenario as compare to promotion focus at medium and high project completion stage. Also manager’s anticipated regret presses more on them to continue their commitment to failing project, and it increases as project get closer to the completion.