Escalating commitment to unprofitable projects: replication and cross-cultural extension

• Autores: Anne Wu, Chee W. Chow, Timothy Lindquist, Paul Harrison
• Localización: Management accounting research, ISSN 1044-5005, Vol. 8, Nº 3, 1997, págs. 347-361
• Idioma: inglés
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• Resumen

  • In the current era of intensifying competition and globalization, two increasingly important management issues are how to ensure timely responses to threats and opportunities, and whether management practices need to be modified for application in diverse national settings.

    This study contributes insights into both questions by testing the effects of three factors: initial responsibility, the way in which economic information is ‘framed’, and national culture, on people's choice between continuance and abandonment of unprofitable projects. Experimental data from 192 U.S. and Chinese nationals showed only weak to moderately significant statistical effects due to responsibility and framing, but a significant difference between the U.S. and Chinese nationals, with the latter having a substantially greater preference for project continuance. The last finding is consistent with the culture-based prediction that due to the higher collectivism of Chinese culture, Chinese nationals have a greater aversion to admitting failure (via abandonment) as this would damage their ‘face’ and thus social standingvis-à-vistheir peers. Taken as a whole, the results of this study suggest the need to further test the robustness of prior escalation findings. They also provide support for the proposition that the design of management systems, including ones aimed at reducing escalation tendencies, needs to consider the employees' cultural values.