(Staw_1976). Knee-Deep in the Big Muddy, A Study of Escalating Commitment.pdf

8/18/2019 (Staw_1976). Knee-Deep in the Big Muddy, A Study of Escalating Commitment.pdf

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ORGANIZATION AL BEHAVIOR AND HUMAN PERFORMANCE

16 , 27 -4 4 1976)

Knee Deep in the B ig Muddy: A Study o f Esca la t ing Commitment

to a Chosen Course o f Ac t ion

B A R R Y M . S T A W

or thwes te rn Un iver s i t y

I t is c o m m o n l y e x p e c t e d t h a t i n d i v id u a l s w i l l r e v e r s e d e c i s i o n s o r c h a n g e

b e h a v i o r s w h i c h r e s u l t i n n e g a t i v e c o n s e q u e n c e s . Y e t , w i t h in i n v e s t m e n t d e c i s i o n

c o n t e x t s , n e g a t i v e c o n s e q u e n c e s m a y a c t u a l l y c a u s e d e c i s i o n m a k e r s t o i n c r e a s e

t h e c o m m i t m e n t o f r e s o u r c e s a n d u n d e r g o t h e r i sk o f f u rt h e r n e g a ti v e c o n s e -

q u e n c e s . T h e r e s e a r c h p r e s e n t e d h e r e e x a m i n e d t h i s p r o c e s s o f e s c a l a t in g

c o m m i t m e n t t h r o u g h t h e s i m u l a t i o n o f a b u s i n e ss i n v e s t m e n t d e c i s i o n . S p e c i fi -

ca l l y , 240 bus ines s s cho o l s t uden t s pa r t i c ipa t ed i n a r o l e -p l ay ing exe rc i s e i n wh ich

p e r s o n a l r e s p o n s i b i l i t y a n d d e c i s i o n c o n s e q u e n c e s w e r e t h e m a n i p u l a t e d i n d e p e n d -

e n t v a r ia b l e s . R e s u l t s s h o w e d t h a t p e r s o n s c o m m i t t e d t h e g r e a t e st a m o u n t o f

r e s o u r c e s t o a p r e v i o u s l y c h o s e n c o u r s e o f a c t io n w h e n t h e y w e r e p e r s o n a l l y

r e s p o n s i b l e f o r n e g a t i v e c o n s e q u e n c e s .

In tu i t i ve ly , one wou ld expec t i nd iv idua l s t o r eve r se dec i s ions o r t o

c h a n g e b e h a v i o rs w h i c h r e s u lt in n e g a ti v e c o n s e q u e n c e s . Y e t , t h e r e s e e m

t o b e m a n y i m p o r t a n t i n s t a n c e s i n w h i c h p e r s o n s d o n o t r e s p o n d a s

expec t ed to t he r eward / cos t con t ingenc i e s o f t he i r env i ronmen t s . Spec i f i -

c a ll y , w h e n a p e r s o n s b e h a v i o r le a d s t o n e g a t iv e c o n s e q u e n c e s w e m a y

f ind tha t the ind iv idua l wi l l , ins tead of changing h is behavior , cogni t ive ly

d i s t o r t t h e n e g a t i v e c o n s e q u e n c e s t o m o r e p o s i t i v e l y v a l e n c e d o u t c o m e s

( see , e . g . , Abe l son e t a l 1968; A ron son , 1966; S taw , 1976; W eick , 1966).

The ph eno m eno n unde r ly ing th is b i a sing o f behav io ra l ou t com es is o f t en

s a id t o b e a s e l f -j u s t if i c a t io n p r o c e s s i n w h i c h i n d i v i d u a l s s e e k t o

r a ti ona li ze t he i r p r ev ious beha v io r o r p sycho log ica l ly de fen d them se lves

aga ins t adv e r se c on sequ enc es (A ronso n , 1968 , 1972; Fes t i nge r , 1957).

N o d o u b t , t h e la r g e st a n d m o s t s y s t e m a t i c s o u r c e o f d a t a o n t h e

jus t i f i ca t i on o f behav io r fo l l owing adve r se consequences i s p rov ided by

t h e l i t e r a tu r e o f f o r c e d c o m p l i a n c e . T y p i c a l l y , i n f o r c e d c o m p l i a n c e

s tud ie s an i nd iv idua l i s i nduced to pe r fo rm an unp leasan t o r d i s sa t i s fy ing

a c t s u c h a s l y i n g t o f e l l o w s u b j e c t a b o u t t h e n a t u r e o f a t a s k ( e . g . ,

R e q u e s t s f o r r e p r i n ts s h o u l d b e s e n t t o B a r r y M . S t a w , D e p a r t m e n t o f O r g a n i z a t io n

B e h a v i o r , N a t h a n i e l L e v e r o n e H a l l , N o r t h w e s t e r n U n i v e r s i t y , E v a n s t o n , I L . 6 0 2 0 1 .

T h e a u t h o r w i s h e s t o e x p r e s s h i s g r a t i t u d e t o W i l l i a m B r i g h t o n f o r h i s h e l p i n t h e

p r e p a r a t i o n o f e x p e r i m e n t a l m a t e r i a ls , t o G r e g R . O l d h a m , L o u i s R . P o n d y , a n d G e r a l d

R . S a l a n c i k f o r t h e i r c o m m e n t s o n a n e a r l i e r v e r s i o n o f th i s m a n u s c r i p t , a n d t o T h e

C e n t e r f o r A d v a n c e d S t u d y a t th e U n i v e r s i t y o f Il fi n o is , U r b a n a - C h a m p a i g n f o r t h e

f ac i l i t i e s neces sa ry t o comple t e t h i s s t udy .

27

Copyright © 1976 by Academic Press Inc.

All rights of reproduction in any form reserved.


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28 BARRY M. STAW

F e s t i n g e r & C a r l s m i th , 1 9 5 9 ; C o l li n s & H o y t , 1 9 7 2 ; C a l d e r , R o s s &

In s k o , 1 9 7 3 ) , wr i ti n g a n e s s a y a g a in st o n e ' s o w n p o s i t io n ( e .g . , C o h e n ,

1 2 ; L in d e r , C o o p e r , & J o n e s , 1 9 6 7 ; S h e rm a n , 1 9 7 0 ) , e a ti n g a d i sl ik e d

fo o d (Bre h m , 1 9 5 9 ) , o r p e r fo rmin g a d u l l t a s k ( e .g . , F r e e d m a n , 1 9 6 3 ;

W e ic k , 1 9 6 4 ; P a l la k , S o g in , & Va n Za n te , 1 9 7 4 ) . Ne g a t iv e c o n s e q u e n c e s

r e s u l t f r o m c a r ry in g o u t e a c h o f t h e s e c o u n te r a t ti t u d in a l a c t s w h e n n o

e x te rn a l r e wa rd s a r e p r e s e n t t o c o mp e n s a t e f o r t h e d i s s a t i s fy in g n a tu r e o f

t h e e x p e r i m e n t a l t a s k ( C o l l in s & H o y t , 1 97 2). H o w e v e r , s i n c e i t i s

d i f f i c u l t f o r t h e s u b j e c t i n f o r c e d c o mp l i a n c e e x p e r ime n t s t o u n d o th e

co ns eq ue nc es o f h is ac t s , i t i s p re d ic te d tha t the ind iv idua l wi ll b ias h i s

a t t i tude on the exper imen ta l t a sk (o r change h i s op in ion on an a t t i tud ina l

i s s u e ) s o a s t o c o g n i t i v e ly r e d u c e a n y n e g a t iv e o u t c o me s r e s u l t i n g f ro m h i s

b e h a v io r . I n s h o r t , t h e i n d iv id u a l is p r e d i c t e d t o j u s t i f y h i s p r e v io u s

b e h a v i o r o r d e f e n d h i m s e l f f r o m n e g a t i v e c o n s e q u e n c e s t h r o u g h t h e

p e rc e p tu a l b i a sin g o f b e h a v io r a l o u t c o m e s . 1

R e c e n t e m p i r ic a l r e s e a r c h h a s s h o w n t h a t t h e r e a r e t w o b a s i c

p r e c o n d i t io n s f o r t h e b i as in g o f o u t c o m e s w i th i n f o r c e d c o m p l i a n c e

s i tu a t i o n s . F i r s t , t h e i n d iv id u a l mu s t h a v e c o m m i t t e d h ims e l f t o b e h a v io r a l

c o n s e q u e n c e s w h i c h a r e i r r e v o c a b l e o r a t l e a s t n o t e a s i l y c h a n g e d ( B r e h m

& Co h e n , 1 2 ). I f i t i s r e a d i ly p o s s ib l e t o r e v e r s e o n e ' s o w n b e h a v io r ,

t h e n t h is c o u r s e o f a c t i o n m a y o f t e n b e ta k e n t o r e d u c e n e g a t i v e

c o n s e q u e n c e s r a t h e r t h a n a n y bi as in g o f b e h a v i o r a l o u t c o m e s (S t a w ,

1 9 7 4 ) . S e c o n d ly , t h e i n d iv id u a l mu s t f e e l p e r s o n a l ly r e s p o n s ib l e f o r t h e

n e g a t iv e c o n s e q u e n c e s o f h is b e h a v i o r ( C a r ls m i t h & F r e e d m a n , 1 9 68 ;

C o p p e r , 1 9 7 1 ). Th a t i s , a p e r s o n m u s t p e r c e iv e a t le a s t a m o d e ra t e d e g re e

o f c h o i c e i n h is b e h a v i o r ( L i n d e r , C o o p e r , & J o n e s , 1 96 7), a n d t h e

p o s s ib i l it y o f n e g a t iv e c o n s e q u e n c e s s h o u ld h a v e b e e n a n t i c ip a te d a t a n

e a r li e r d e c i s io n p o in t (B re h m & J o n e s , 1 9 7 0 ; Co o p e r , 1 97 2).

S e l f j u s t i f i c a t io n in In v e s tme n t De c i s io n Co n te x t s

T h o u g h f o r c e d c o m p l i a n c e s t u d ie s h a v e p r o v i d e d a g r e a t d ea l o f d a t a o n

t h e b i a si n g o f b e h a v i o r a l o u t c o m e s , t h e r e r e m a i n a l ar g e n u m b e r o f

s i tu a t io n s i n wh ic h i n d iv id u a l s m a y b e a b l e t o g o b e y o n d th e d i sto r t io n o f

n e g a t iv e c o n s e q u e n c e s t o r a t i o n a l i z e a b e h a v io r a l e r ro r . F o r e x a mp le , o n e

s o c i e t a l l y i m p o r t a n t c o n t e x t i n w h i c h i n d i v i d u a l s m a y t a k e n e w a n d

c o n c re t e a c t i o n s t o j u s t i f y t h e i r b e h a v io r f o l lo win g n e g a t iv e c o n s e q u e n c e s

i s t h a t o f i n v e s tme n t d e c i s io n ma k in g . I n v e s tme n t d e c i s io n c o n te x t s a r e

c o n s id e r e d b ro a d ly h e r e a s s i t u a t i o n s i n wh ic h r e s o u rc e s a r e a l l o c a t e d t o

o n e d e c i s io n a l al t ern a t iv e o v e r o th e r s , a n d i n w h ic h t h e l e v e l o f r e s o u rc e s

1 An active cont rovers y exists over the theoretical interpretation of the data from

forced compl iance studies (see Bern, 1967, 1972; Jone s et al 1968; Ross Shulman,

1973). Howe ver, the i ssue of self-justification versus self-perception will be addressed in

a later section o f the paper.


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KNEE-DEEP IN THE BIG MUDDY

9

can be increased or decreased at the discretion of the decision maker.

When negative consequences are incurred within an investment context,

it is often possible for a decision maker to greatly enlarge the commitment

of resources and undergo the risk of additional negative outcomes in order

to justify prior behavior or demonstrate the ultimate rationality of an

original course of action. It follows, however, that committing additional

resources to a losing decisional alternative can also turn into a negative

cyclical process. That is, due to a need to justi fy prior behavior, a

decision maker may increase his commitment in the face of negative

consequences, and this higher level of commitment may, in turn, lead to

further negative consequences. Within the sphere of governmental policy

making, just such an example of committing resources to a costly

decisional alternative was described by George Ball, the former Under

Secretary of State, in some early observations on U.S. involvement in

Indochina.

Once large numbers of U.S. troops are committed to direct combat, they will begin

to take heavy casua lties in a war they are ill-equipped to fight in a non-cooperative if

not downright hostile countryside. Once we suffer large casualties, we will have

started a well-nigh irreversible process. Our involvement will be so great that we

cannot--without national humiliation--stop short of achieving our complete objec-

tives. Of the two possibilities, I think humilitation would be more likely than the

achieveme nt of our objec tives- -even after we have paid terrible costs. Memo from

George Ball to President Lyndon Johnson, July, 1965; source: The Pentagon Papers,

1971.)

Obviously, many factors may have influenced governmental decision

making in the commitment of men and material to the war in Indochina.

But, the comments of this high level official do underscore the need for

research on the possibility that important resource investment decisions

may be influenced by the reluctance of individuals to admit past mistakes

or a need to justify prior behavior.

A s s e s s i n g S e lf ju s ti fi c a ti o n in I n v e s t m e n t D e c i s i o n s

An empirical test of self-justification in an investment decision context

would seem to involve an assessment of whether or not negative

consequences serve to increase individual s commitment to a decisional

alternative. However, an unambiguous test of self-justification would

necessitate more than the simple manipulation of consequences and the

measurement of subsequent commitment. This is because other theoretical

mechanisms might also account for the same empirical relationship

between commitment and consequences. One such mechanism might be

the desire of decision makers to maximize their own outcomes, since

sometimes it is precisely when negative consequences have been incurred

that a new and larger commitment to a decisional alternative will pay off

in the future. A separate but related mechanism which may also account


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30 BARRY M STAW

f o r th e e f f e c t o f n e g a t iv e c o n s e q u e n c e s o n t h e c o m m i t m e n t o f re s o u r c e s

m a y b e a g a m b l e r ' s f a ll a c y t h a t r e s o u r c e s s h o u l d a l w a y s b e p l a c e d i n a

l o si n g d e c i s io n a l a l te r n a t i v e s i n c e t h i n g s a r e b o u n d t o g e t b e t t e r .

Imp l i c it i n t h e n o t io n o f a g a m b le r ' s f a l l a c y is t h e p e r c e p t io n o f l o n g - ru n

e q u a l it y o f in v e s t m e n t a l te r n at iv e s a n d t h e n o n i n d e p e n d e n c e o f o u t c o m e s

o v e r t ime ( s e e Le e , 1 9 7 1 ) .

Th e se para t io n o f se l f -jus t if i ca tion f rom a l te rna t ive theore t ica l m ech a-

n i s m s w i t h i n a n i n v e s t m e n t d e c i s i o n c o n t e x t m a y d e p e n d u p o n m a n i p u l a -

t i o n s c o n c e p tu a l l y s im i l a r t o t h o s e u s e d i n p r e v io u s fo r c e d c o mp l i a n c e

s tud ies . As no ted in severa l ea r l ie r s tud ies (e .g . , Co l l ins & Hoyt , 1972 ;

Ca ld e r , R o s s , & In s k o , 1 9 7 3 ) , t h e ra t io n a l iz a t io n o f o n e ' s b e h a v io r h a s

b e e n s h o w n to b e s ign i fi c an t ly a f f e c t e d b y t h e m a n ip u la t io n o f p r io r c h o i c e

a n d n e g a t iv e c o n s e q u e n c e s . W i th in a n i n v e s tme n t d e c i s io n c o n te x t , s e l f -

j u s t if i c a t io n m a y s imi l a rly d e p e n d u p o n th e l e v e l o f p e r s o n a l r e s p o n s ib i li t y

o n e h a s h a d i n d e t e rmin in g a p a r t i c u l a r c o u r s e o f a c t i o n a n d th e o u t c o me s

r es tl lt in g f r o m t h o s e a c t io n s . T h e e x p e r i m e n t d e s c r i b e d b e l o w w a s

th e r e fo r e d e s ig n e d to t e s t s e l f - j u s t i f i c a t i o n w i th in a n i n v e s tme n t d e c i s io n

c o n t e x t b y m a n i p u l a t i n g t h e s e t w o i n d e p e n d e n t v a r i a b l e s a n d m e a s u r i n g

t h ei r e f fe c t s u p o n t h e c o m m i t m e n t o f r e s o u r c e s t o a p r e v i o u s l y c h o s e n

c o u r s e o f a c t i o n . T h ro u g h th e m a x imiz a t io n o f g a in o r a g a mb le r 's f a l l a c y ,

o n e m i g h t e x p e c t n e g a t i v e c o n s e q u e n c e s t o c a u s e a n i n c r e a s e i n t h e

c o m m i tme n t o f r e s o u rc e s t o a d e c i s io n a l a l t e rn a t i v e . I n a d d it io n , d u e t o

t h e s i m p l e c o n s i s t e n c y o f a c t i o n s o v e r t i m e , o n e m i g h t a ls o e x p e c t

in d iv id u a l s t o i n c r e a s e t h e i r c o mmi tme n t t o a d e c i s io n a l a l t e rn a t i v e fo r

wh ic h t h e y h a v e h a d s o me p r io r c h o i c e . Ho we v e r , o n ly s e l f - j u s t i f i c a t i o n

w o u l d p r e d i c t a n in t e r a c t i o n o f p e r s o n a l r e s p o n s i b i l it y a n d d e c i s i o n

c o n s e q u e n c e s s u c h t h a t i n c r e as e s i n c o m m i t m e n t w o u l d b e e v e n g r e a t e r

th a n t h e a d d i t i v e e f f e c ts o f t h e s e tw o s e p a ra t e f a c to r s .

METHO

ubjects

T h e s u b j e c t s o f t hi s e x p e r i m e n t w e r e 2 4 0 u n d e r g r a d u a t e s t u d e n t s

e n ro l l e d i n t h e Co l l e g e o f Co mme rc e a n d Bu s in e s s Ad min i s t r a t i o n a t t h e

U n iv e r s i t y o f I ll in o is , Urb a n a -Ch a m p a ig n . S u b je c t s h a d v o lu n t e e r e d to

p a r t i c i p a t e i n a s t u d y o n f i n a n c i a l p r o b l e m - s o l v i n g a s o n e m e a n s o f

fulf il ling a co urs e rese a rch req u i rem ent . U po n a rr iva l, the sub jec t s w ere

a s k e d to w o r k o n t h e A & S F i n an c ia l D e c i s i o n C a s e i n w h i c h i t w a s

n e c e s s a r y t o p la y t h e r o l e o f a c o r p o r a t e e x e c u t i v e in m a k i n g s o m e

d e c i s io n s a b o u t t h e a l lo c a ti o n o f r e s e a r c h a n d d e v e l o p m e n t fu n d s .

As S tu d e n t s i n a b u s in e s s s c h o o l , s u b j e c t s g e n e ra l l y we re e x p e r i e n c e d in

wo rk in g o n w r i t te n c a s e s i n wh ic h a n o rg a n i z at io n a l o r f in a n c ia l s c e n a r io

i s p r e s e n t e d a n d s o m e a c t i o n o r s e t o f a c t i o n s a r e c a l l ed f o r b y t h e

s t u d e n t . H o w e v e r , i n o r d e r to m a x i m i z e t h e i n v o l v e m e n t o f s u b j e c t s a n d


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KNEE DEEP IN THE BIG MUDDY 31

to provide a rationale for the study, the experimenter told each subject

that the purpose of the case was to examine the effectiveness of business

decision-making under various amounts of information. Each subject was

told that the particular case on which he would be working contained only

a limited amount of information, but that the information provided should

still be sufficient for a business school student to make a good financial

decision. Subjects were asked to do the best job they could on the cases

and to place their names on each page of the case material.

The A S Financial Decision Case

The financial decision case used in this study describes a hypothetical

corporation in the year 1967. The case depicts the financial histo ry

(including ten prior years of sales and earnings data) of the Adams &

Smith Company, and a scenario is presented in which the subject is

asked to play a major role in financial decision-making. As stated in the

case, the profitability of the A & S Company, a large technologically-

oriented firm, has started to decline over several preceding years, and the

directors of the company have agreed that one of the major reasons for

the decline in corporate earnings (and a deterioration in competitive

position) lay in some aspect of the firm's program of research and

development. The case further states that the company's directors have

concluded that 10 million dollars of additional R & D funds should be

made available to its major operating divisions, but, that for the time

being, the extra funding should be invested in only one of the

corporation's two largest divisions. The subject is then asked to act in the

role of the Financial Vice President in determining which of the two

corporate divisions, Consumer Products or Industrial Products, should

receive the additional R & D funding. A brief description of each

corporate division is included in the case material, and the subject is asked

to make the financial investment decision on the basis of the potential

benefit that R & D funding will have on the future earnings of the

divisions. In addition to circling the chosen division, subjects were also

asked to write a brief paragraph defending their allocation decisions.

After completing the above section of the case and turning it in to the

experimenter, subjects were administered a second section of the case

which necessitated another financial investment decision. Part II of the

Financial Decision Case presents the subject with the condition of Adams

& Smith Company in 1972, five years after the initial allocation of

research and development funds. As stated in Part II, the R & D

program of Adams & Smith is again up for re-evaluation, and the

management of the company is convinced that there is an even greater

need for expenditure on research and development. In fact, 20 million

dollars has been made available from a capital reserve for R & D funding,


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32 B A R R Y M S T A W

and the subject, as the Financial Vice President, is again asked to decide

upon its proper allocation. This time, however, the subject is allowed to

divide the R D money in any way he wishes among the two major

corporate divisions. Financial data (e.g., sales and earnings) is provided

for each of the five years since the initial allocation decision and, as

earlier, the investment decision is to be made on the basis of future

contribution to earnings. Subjects made this second investment decision

by specifying the amount of money that should be allocated to either the

Consumer Products or Industrial Products division (out of a total of 20

million) and again wrote a paragraph defending the decision.

Manipulation o f Con sequences

Decision consequences were experimentally manipulated in this study

through the random assignment of financial information. One half of the

subjects were provided information that the division initially chosen for R

D funds subsequently performed better than the unchosen division,

while one half were given information showing the reverse. For example,

in the positive consequences condition, subjects received financial data

which showed that the chosen division had returned to profitable levels

while the unchosen division continued to decline. In a parallel manner,

subjects in the negative consequences condition received financial data

which showed a deepening decline in the profitability of the chosen

division but an improvement in the unchosen division. The exact nature of

the financial data provided to subjects is shown in Tables 1 and 2.

M anipulation o f Personal R esponsibility

One half of the subjects were randomly assigned to the high personal

responsibility condition in which two investment decisions were sequen-

tially made by the subject. This condition conformed to the two-part

financial decision case described above in which subjects made an initial

decision to allocate R D funds, discovered its consequences, and then

made a second investment decision. However, one half of the subjects

were also randomly assigned to a low personal responsibility condition in

which the entire financial decision case was presented in one section. In

the low personal responsibility condition, subjects were asked to make the

second allocation decision without having made a prior choice as to which

corporate division was most deserving of R D funds. Subjects in this

condition received one set of case materials which described the financial

condition of the Adams Smith Company

as o f 1972

the time of the

second R D funding decision. They were told in the case that an earlier

R D funding decision had been made in 1967

by another financial

of ficer o f the com pan y

and that the preceding officer had decided to invest

all the R D funds in the Consumer (or Industrial) Products division.

The financial results of each corporate division (e.g., sales and earnings


7/18


TABLE 1

CONSUMER PRODUCTS CONTRIBUTION TO SALES AND EARNINGS OF ADAMS 8£ SMITH

COMPANY a

Fiscal year Sales b Earnings b

1957 624 14.42

1958 626 10.27

1959 649 8.65

1960 681 8.46

1961 674 4.19

1962 702 5.35

1963 717 3.92

1964 741 4.66

1965 765 2.48

1966 770 (.12)

1967 769 (.63)

Firs t R D funding dec ision as of 1967

Manipulated improvement

Manipulated decfine

Fiscal year Sales b Earnings b Sales b Earnings ~

1968 818 .02 771 (1.12)

1969 829 (.09) 774 (1.96)

1970 827 (.23) 762 (3.87)

1971 846 .06 778 (3.83)

1972 (est) 910 1.28 783 (4.16)

Second R D funding decision as of 1972

a Pare nthese s denote net losses in earnings.

b In millions of dollars.

data) were presented from 1957 to 1972, and, like other subjects, persons

in the low responsibility condition were asked to make the (second) R

D funding decision based upon the potential for future earnings. In sum,

the information presented to low personal responsibility subjects was

identical to that given to other subjects except for the fact that the case's

scenario began at a later point in time (1972 rather than 1967) and

necessitated making the second investment decision without having

participated in an earlier choice.

ependent Variable

The dependent variable utilized in this study was the individuals'

commitment to a previously chosen investment alternative. This variable

was operationalized by the amount of money subjects allocated on the

second R D funding decision to the corporate division chosen earlier

(either chosen earlier by the subject or the other financial officer

mentioned in the case). The amount allocated to the previously chosen


8/18

4

BARRY M. STAW

TABLE

INDUSTRIAL PRODUCTS CONTRIBUTION TO SALES AND EARNINGS OF ADAMS SMITH

COMPANY a

Fiscal year Sales b Earnings b

1957 670 15.31

1958 663 10.92

1959 689 11.06

1960 711 10.44

1961 724 9.04

1962 735 6.38

1963 748 5.42

1964 756 3.09

1965 784 3.26

1966 788 (.81)

1967 791 (.80)

First R D funding decision as of 1967

Manipulated improvement

Manipulated decfine

Fiscal yea r Sales b Earnings ~ Sales b Earnings b

1968 818 .02 771 (1.12)

1969 829 (.09) 774 (1.96)

1970 827 (.23) 762 (3.87)

1971 846 .06 778 (3.83)

1972 (est) 910 1.28 783 (4.16)

Second R D funding decision as of 1972

a Parentheses denote net losses in earnings.

b In millions of dollars.

alternative could range between zero and 20 million dollars.

Summary of Treatment roups

Of the 120 subjects in the high personal responsibility condition, 64

initially chose the Consumer Products Division as the best investment for

R D funds, while 55 initially chose the Industrial Products Division.

(one subject was unable to make a choice between Consumer and

Industrial Products and therefore had to be excluded from further

analyses). Since subjects self-selected themselves to prior choices and then

financial information was randomly assigned, four cells were created by

initial choice and financial information. However, as shown in Table 3,

these four cells can be collapsed into two primary treatment groups of

positive decision consequences and negative decision consequences.

Of the 120 subjects assigned to the low personal responsibility

condition, thirty were also assigned to each of the four cells described

above. For example, thirty were given cases in which another financial


9/18

K N E E -D E E P I N T H E B I G M U D D Y 3 5

T A B L E 3

SCHEMATIC ANA LYSISOF THE CELLS TO W HICH SUBJECTSWERE ASSIGNED UNDER BOTH

HIGH AND LOW RESPONSIBILITY CONDITIONS

Ini t ia l

c h o i c e

In i t ia l

c h o i c e

H I G H P E R S O N A L R E S P O N S I B I L I T Y

F i n a n c i a l I n f o r m a t i o n

C o n s u m e r

P r o d u c t s

Indus t r i a l

P r o d u c t s

C~'I,L

Pos i t i ve

c o n s e q u e n c e s

(n = 32)

N e g a t i v e


(n = 27)

c i?

N e g a t i v e


(n = 32)

Pos i t i ve


(n = 28)

L O W P E R S O N A L R E S P O N S I B I L I T Y


C o n s u m e r

P r o d u c t s

Indus t r i a l

P r o d u c t s

C~'I

P o s i t i v e


(n = 30)

N e g a t i v e


(n = 30)

C I ~

N e g a t i v e


(n = 30)

N e g a t i v e


(n = 30)

o f f i c e r h a d c h o s e n t h e C o n s u m e r P r o d u c t s D i v i s i o n a n d i t c o n t i n u e d t o

d e c l i n e ; th i r t y w e r e g i v e n c a s e s i n w h i c h a n o t h e r f i n a n c ia l o f f i c e r h a d

c h o s e n t h e C o n s u m e r P r o d u c t s D i v i s i o n a n d i t s t a r te d to i m p r o v e ; t h i r ty

w e r e g i v e n c a s e s i n w h i c h a n o t h e r f i n a n c i a l o f f i c e r h a d c h o s e n t h e


10/18

3 6 BARRY M. STAW

Indus tr ia l Products Div i s ion and i t cont inued to dec l ine; and , th ir ty

w ork ed on cases in w hich Industr ia l Products wa s cho sen and i t started to

improve . Again , the four ce l l s can be co l lapsed in to two treatment groups

of pos i t ive and negat ive dec i s ion consequences compris ing 60 subject s in

each .

The f inal form of the des ign of this experiment was a 2 x 2 factorial in

which personal respons ib i l i ty and dec i s ion consequences were the manipu-

l a t ed i n d ep en d en t v a r i a b l e s . As s t a t ed ea r l i e r , t h e a m o u n t o f m o n ey

inves ted in the prev ious ly chosen corporate d iv i s ion (prev ious ly chosen

either by the subject or the other financial of f icer m ent ion ed in the case)

was the dependent measure ut i l i zed in the s tudy .

R E S U L T S

Preliminary nalysis

A prel iminary analys is was conducted to determine whether the object

of a subject 's pr ior cho ice (Consu m er Products -Indus tria l Products) or the

ex ac t form of financial information (C1'I or C I1') af fected the amo unt of

m on ey a l located to the previous ly ch ose n al ternat ive. I f there w ere m ain

ef fect s o f e i ther o f these two var iab les , then i t would not be poss ib le to

co l lapse the e ight ce l l s sho w n in Table 3 in to a 2 × 2 analys is o f variance .

As can be seen from the data o f Table 4 , there were no main e f fect s o f

TABLE 4

AMOUNT OF MONEY IN MILLIONS) ALLOCATED TO PREVIOUSLY CHOSEN ALTERNATIVE

BY LEVEL OF PERSONAL RESPONSIBILITY, OBJECT OF PRIOR CHOICE, AND FINANCIAL

INFORMATION

P e r s o n a l

r e s p o n s i b i l i t y

H i g h

Prior c h o i c e

o n s u m e r

P r o d u c t s

I n d u s t r i a l

P r o d u c t s


c~ I,~

9.36

p o s i t i v e


13.46

n e g a t i v e


c~ I1

12.56

n e g a t i v e


9.00

p o s i t i v e


L o w

o n s u m e r

P r o d u c t s

I n d u s t r i a l

P r o d u c t s

8.22

p o s i t i v e


9.65

n e g a t i v e


9.22

n e g a t i v e


8.48

p o s i t i v e



11/18

K N E E - D E E P I N T H E B I G M U D D Y 37

T A B L E 5

ANALYSI S OF VAR I ANC E O F EFFEC T S OF PER SONAL R ESPONSIB I LI TY AND DEC I SI ON

C ONSEQUENC ES UPON ALLOC ATI ON OF R ESOUR C ES TO A PREVI OUSLY C HOSEN

ALTERNATIVE

S o u r c e d f M S P

P e r s o n a l R e s p o n s i b i l i t y P ) 1 2 8 2 . 3 6 1 4 .4 0 < . 0 0 1

D e c i s i o n C o n s e q u e n c e s D ) 1 3 5 1 .5 7 1 7.9 3 < . 0 0 1

I n t e r a c t i o n P x D ) 1 1 0 9 .1 2 5 . 5 6 < . 0 1 9

E r r o r 2 3 5 1 9 .6 1 - -

e i t h e r t h e o b j e c t o f p r io r c h o i c e (F < 1 ,0 0, d f = 1/231, n.s . o r t h e e x a c t

fo rm o f f inanc ia l in fo rmat ion (F < 1 .00 ,

d f

= 1/231,

n.s. .

Effec ts o f Personal R esponsibi li ty an d Decision Con sequences

S i n c e t h e r e w e r e n o m a i n e f f e c t s o f t h e o b j e c t o f p r i o r c h o i c e a n d

f in a n c ia l i n fo rma t io n , a 2 x 2 a n a ly s i s o f v a r i a n c e w a s c o n d u c t e d i n wh ic h

p e r s o n a l r e s p o n s ib i l i t y a n d d e c i s io n c o n s e q u e n c e s we re t h e i n d e p e n d e n t

v a r i a b l e s. Ta b l e 5 s h o w s th a t t h e r e w e re s ig n if ic a n t ma in e f f e c t s o f b o th

p e r s o n a l r e s p o n s i b i l i t y a n d d e c i s i o n c o n s e q u e n c e s , a n d a s i g n i f i c a n t

in t e ra c t io n o f t h e tw o in d e p e n d e n t v a r i a b le s .2

U n d e r h i g h p e r s o n a l r e s p o n s i b i l i t y c o n d i t i o n s , s u b j e c t s a l l o c a t e d a n

avera ge o f 11 .08 mi ll ion do l la r s to the co rpo ra te d iv i s ions they had ea r l ie r

c h o s e n f o r e x t r a R D f u n d in g . U n d e r l o w p e r s o n a l r e s p o n s i b i l i ty

cond i t ions , sub jec t s a l loca ted an add i t iona l 8 .89 mi l l ion do l la r s to the

c o rp o ra t e d iv i s io n s p r e v io u s ly c h o s e n b y a n o th e r f i n a n c i a l o f f i c e r . Un d e r

p o s i t i v e d e c i s i o n c o n s e q u e n c e s , s u b j e c t s a l l o c a t e d a n a v e r a g e o f 8 . 7 7

mi l l i o n t o t h e p r e v io u s ly c h o s e n a l t e rn a t i v e , wh i l e 1 1 . 2 0 mi l l i o n wa s

a l lo c a t e d u n d e r n e g a t i v e c o n s e q u e n c e s .

Interaction o f Personal Responsibility an d Decision Co nseq uen ces

W h e n s u b j e c t s ( p e r s o n a l ly ) ma d e a n i n i t i a l i n v e s tme n t d e c i s io n wh ic h

dec l ined , they subsequen t ly a l loca ted an average o f 13 .07 mi l l ion do l la r s to

th is sa m e a l te rna t ive in the sec on d fund ing dec is ion . As sh ow n in F ig . 1 ,

t h e a mo u n t i n v e s t e d i n t h e p r e v io u s ly c h o s e n a l t e rn a t i v e wa s g r e a t e r i n

th e h ig h p e r s o n a l r e s p o n s ib i l i t y -n e g a t iv e c o n s e q u e n c e s c o n d i t i o n t h a n i n

a n y o f t h e o th e r t h r e e e x p e r ime n ta l c o n d i t io n s . A l th o u g h th is r e s u lt c o u ld

h a v e b e e n e x p e c t e d f r o m t w o s i g n if ic a n t m a i n e f f e c ts o f p e r s o n a l

r e s p o n s ib i l i t y a n d c o n s e q u e n c e s , t h e d i f f e r e n c e b e twe e n th e h ig h p e r s o n a l

I n a 2 x 2 § 2 a n a l y s i s o f v a r i a n c e t h e r e w a s a c o r r e s p o n d i n g m a i n e f f ec t o f p e r s o n a l

r e s p o n s i b i l i t y , a n i n t e r a c t i o n o f p r i o r c h o i c e a n d f i n a n c i a l i n f o r m a t i o n s a m e a s m a i n

e f f e c t o f d e c i s i o n c o n s e q u e n c e s ) , a n d a t r ip l e i n t e r a c t io n o f p e r s o n a l r e s p o n s i b i l i y , p r i o r

c h o i c e , a n d f i na n c i a l i n f o r m a t i o n s a m e a s i n te r a c t io n o f r e s p o n s ib i l i t y a n d d e c i s i o n

c o n s e q u e n c e s .


12/18

3 8 B A R R Y M . S T A W

r e s p o n s i b il it y - n e g a t iv e c o n s e q u e n c e c o n d i t io n a n d th e o t h er c e ll s w a s o f

s u c h m a g n i t u d e a s t o p r o d u c e a s i g n if ic a n t i n t er a c t io n . F u r t h e r m o r e , a

c l o s e a n a l y s is o f F i g . 1 s h o w s t h a t t h e o n l y s i g n i f i c a n t d i f f e r e n c e s a m o n g

a n y o f t h e f o u r e x p e r im e n t a l c o n d i t io n s w e r e b e t w e e n t h e h ig h r e s p o n si b il -

i t y - n e g a t iv e c o n s e q u e n c e s c e ll an d t he o t h e r t h re e e x p e r im e n t a l c o n d i -

t io n s . F o r e x a m p l e , c o n s e q u e n c e s d id n o t h a v e a si gn i fi ca n t e ff e c t u n d e r

l o w p e r s o n a l r e s p o n s i b i l i ty c o n d i t i o n s t = 1 .2 0 , d f = 118; n .s. , a n d

r e s p o n s i b i l i t y d i d n o t s i g n i f i c a n t l y a f f e c t r e s u l t s u n d e r p o s i t i v e c o n s e -

q u e n c e s c o n d i t i o n s t = 1 .1 3 , d f = 118, n .s. .

s

o

a o

13.00.

12.5b

12.0G

11.50

II.0G

10.5G

10.0C

9.50

9.00

8.5C

8.00

7.5C

• onditions

J ~ e : ~ n l ~ ty onditions

I

Positive Negative

onsequences onsequences

Decision onsequences

F IG . 1 . A m o u n t o f m o n e y a l l o c a t e d t o p r e v i o u s l y c h o s e n a l t e rn a t i v e b y p e r s o n a l

r e s p o n s i b i l i t y a n d d e c i s i o n c o n s e q u e n c e s .


13/18


DIS USSION

Interpretation o f Effects

T h e m a i n e f fe c t o f d e c i s io n c o n s e q u e n c e s u p o n c o m m i t m e n t t o a

p r e v io u s ly c h o s e n a l t e rn a t i v e c o u ld b e e x p la in e d b y a ma x imiz a t i o n o f

g a in h y p o t h e s i s . E i t h e r t h r o u g h t h e o b j e c t i v e r e a p p r a i s a l o f a c t i o n -

o u t c o m e c o n t i n g e n c i e s f o l l o w i n g n e g a t i v e c o n s e q u e n c e s o r t h r o u g h a

g a m b l e r ' s f a l l a c y t h a t t h e p r o b a b i l i ty o f g a in i s i n c r e a s e d b y p r i o r

f a i l u r e , i n d iv id u a l s c o u ld h a v e d e c id e d t o i n c r e a s e t h e i r i n v e s tme n t o f

r e s o u rc e s . Ho we v e r , i t i s i n t e r e s t i n g t o n o t e t h a t , a l t h o u g h a ma x imiz a t i o n

o f g a in h y p o th e s i s p ro v id e s a n a d e q u a t e e x p l a n a t io n o f t h e ma in e f f e c t i n

a n a l ys i s o f v a r i an c e t e r m s , i ts e x p l a n a t o ry p o w e r is s o m e w h a t w e a k e n e d

when ind iv idua l ce l l means a re cons ide red . Spec i f ica l ly , whi le max imiza -

t io n c a n a c c o u n t f o r t h e e f f e c t o f d e c is i o n c o n s e q u e n c e s u n d e r t h e h ig h

respons ib i l i ty cond i t ion , i t i s l e ss c lea r why the re was no s ign i f ican t e f fec t

o f c o n s e q u e n c e s u n d e r t h e l o w r e s p o n s ib il i ty c o n d i t i o n . 3

A r e l at e d i n t e rp r e ti v e p r o b l e m a l s o w e a k e n s t h e c o n s i s t e n c y o f c h o ic e

e x p la n a t io n o f t h e m a in e f f e c t o f p e r s o n a l r e s p o n s ib il i ty . F o r e x a m p le , i t

ma y we l l b e t r u e t h a t , d u e t o c o n s i s t e n c y in c h o i c e d e c i s io n s , i n d iv id u a l s

wi l l a l l o c a t e mo re mo n e y to a n i n v e s tme n t a l t e rn a t i v e t h a t wa s p e r s o n a l ly

c h o s e n a t a n e a r l i e r p o in t i n t ime ( e . g . , u n d e r h ig h r e s p o n s ib i l i t y ) t h a n o n e

c h o s e n p r e v i o u s l y b y s o m e o n e e l s e ( e . g . , u n d e r l o w r e s p o n s i b i l i t y ) .

H o w e v e r , w h e n t h e in d i v id u a l c e l ls o f t h e a n a l y s i s o f v a r i a n c e a r e

e x a m i n e d ( s e e F i g . 1 ), it a p p e a r s t h a t t h e m a i n e f f e c t o f p e r s o n a l

r e s p o n s ib i l i t y i s n o t f u l l y e x p l a in e d b y c o n s i s t e n c y . On ly u n d e r n e g a t iv e

c o n s e q u e n c e s wa s t h e r e a s i g ni fi c an t d i f f e r e n c e b e tw e e n th e h ig h a n d lo w

re s p o n s ib i l i t y c o n d i t i o n s , a l t h o u g h th e r e wa s a n o n s ig n i f i c a n t t r e n d u n d e r

p o s i t i v e c o n s e q u e n c e s .

Th u s , f r o m th e d a t a o f t h is s t u d y , i t i s n o t u n re a s o n a b le t o c o n c lu d e

t h a t t h e p r i m a r y e f f e c t o f r e s p o n s i b i li t y a n d c o n s e q u e n c e s w a s t h a t

i n d iv i du a ls i n v e s t e d a s u b s t a n ti a ll y g r e a t e r a m o u n t o f r e s o u r c e s w h e n t h e y

w e r e

personally responsible fo r nega tive consequen ces The

s ignif icant ly

g r e a t e r c o m m i t m e n t o f r e s o u r c e s u n d e r t hi s o n e e x p e r im e n t a l c o n d i t io n

c l e a rl y a c c o u n t e d f o r th e i n t e r a c ti o n o f p e r s o n a l r e s p o n s i b il i ty a n d

d e c i si o n c o n s e q u e n c e s . H o w e v e r , a c l o s e e x a m i n a t io n o f F ig . l a l s o

s h o w s t h a t t h e s u b s t a n t i a l d i f f e r e n c e b e t w e e n t h e c o n d i t io n o f h ig h

p e r s o n a l r e s p o n s ib i l i t y -n e g a t iv e c o n s e q u e n c e s a n d th e o th e r c e l i s c o u ld

a lso under l ie the s ta t is t i ca l s ign i f icance o f the tw o m ain e f fec t s . A s a

3 It i s p o s s i b l e , o f c o u r s e , t o p o s t u l a t e p o s t - h o c ) th a t t h e v a l e n c e o f f u t u r e o u t c o m e s

w a s l e s s f o r s u b j e c t s u n d e r l o w r a t h e r t h a n h i g h re s p o n s i b i l it y c o n d i t io n s , a n d , t h u s , t h e

m o t i v e t o m a x i m i z e g a i n w a s c o r r e s p o n d i n g l y w e a k e r i n l ow r a t h e r t h a n h i gh

r e s p o n s i b i l i t y c o n d i t i o n s .


14/18

40 BARRY M STAW

r e s u l t , t h e d a t a f r o m t h i s s t u d y p r o v i d e e v e n s o m e w h a t s t r o n g e r s u p p o r t

t h a n e x p e c t e d f o r t h e h y p o t h e s i s t h a t i n d i v i d u a l s w h o a r e p e r s o n n a l l y

r e s p o n s i b l e f o r n e g a t i v e c o n s e q u e n c e s w i l l i n c r e a s e t h e i n v e s t m e n t o f

r e sou rces i n a p rev ious ly cho sen couI' se o f ac t ion .

S e l f j u s t i f i c a t i o n v e r s u s S e l f p e r c e p t i o n

Frequent ly , when a se l f - jus t i f ica t ion process i s exper imenta l ly tes ted , i t s

o u t c r o p p i n g s a r e d i f f i c u l t t o s e p a r a t e f r o m t h o s e d e r i v e d f r o m s e l f -

p e r c e p t i o n t h e o r y ( B e rn , 1 9 6 7 , 1 9 7 2 ) . T h e d i s t in c t i o n b e t w e e n s e lf -

jus t i f ica t ion and se l f -percept ion i s a l so impor tan t to the in te rpre ta t ion of

t h e p r e s e n t s t u d y a n d s h o u ld b e c o n s i d e r e d i n s o m e d e p t h .

I n e s s e n c e , t h e q u e s t i o n o f s e l f - j u s t i f i c a t i o n v e r s u s s e l f - p e r c e p t i o n

revo lves a roun d dua l fo rmula t ions o f t he p ro ces s o f r a ti ona li za ti on . O n the

one hand , s e lf -j u st if ica ti on (Aro nson , 1%8, 1972) o r d i s sonance th eo r y

(Fes t inge r , 1957) pos i t s tha t ind iv idua ls possess a po ten t n eed to res to re

t h e a p p e a r a n c e o f r a ti o na l it y t o t h e i r o w n b e h a v i o r . A s a r e s u lt , t h e

t h e o r y p r e d i c t s t h a t i n d i v i d u a ls w ill c o g n i t i v e l y r e - e v a l u a t e d e c i s i o n a l

a l te r n a t iv e s a f t e r a n i m p o r t a n t c h o i c e ( e .g . , W a l s te r , 1 9 6 4 ; K n o x &

I n k s t e r , 1 9 6 8 ; V r 0 o m , 1 % 6 ) o r a c t iv e l y d i s to r t t h e c h a r a c te r i st ic s o f a

behav io ra l ta sk ( e . g ., Fes t i nge r & Car l smi th , 1959 ; W eick , 1966) O n the

o th e r hand , s e l f-pe rcep tion theo ry pos i ts t ha t i nd iv idua ls r e t rospec t ive ly

re s to re r a ti ona li ty t o t he i r behav io r by s imp ly in fe r r ing the cau ses o f t he i r

ow n ac t ions wi th in a soc i al con tex t . Se l f -pe rcep t ion the o ry p red i c t s t ha t

ind iv idual s w ill r e - eva lua t e t he i r behav io r so t ha t i t con fo rm s to t he i r ow n

n o t i o n s o f h o w o n e m i g h t f e e l o r b e h a v e i f h e w e r e a c t i n g r a t i o n a l l y .

Thus , l ike se r f - jus t i f ica t ion , the re t rospec t ive ana lys i s of behavior which

compr i se s s e l f -pe rcep t ion theo ry can a l so accoun t fo r t he r e - eva lua t ion o f

a l t e r n a t iv e s f o l lo w i n g a d e c i s i o n a l c h o i c e ( s e e K e l l e y , 1 % 7 , 1 9 7 1 ) o r

changes i n t he pe rcep t ion o f t he cha rac t e r i s t i c s o f a behav io ra l t a sk ( s ee

C ald er & S taw , 1975; D eci , 1971, 1972; Sala ncik , 197 5; Sta w , 1976).

I t i s pos s lo le t ha t a s e • pe rc ep t io n ana lys i s can a l so be use fu l ly app l ied

to t he e f f ec t s o f pe r sona l r e spons ib i l i t y and dec i s ion consequences wi th in

a n i n v e s t m e n t d e c i si o n c o n t e x t . F o r e x a m p l e , w h e n i n d iv i du a ls p e r s o n a l ly

s e l e c t a c o u r s e o f a c ti o n w h i c h r e s u l ts i n n e g a t i v e c o n s e q u e n c e s , t h e y m a y

re t rospec t ive ly i n f e r t ha t t he i r p r io r cho ices were e spec i a l l y mer i t o rous i n

t h a t t h e y r e q u i r e d s o m e s u f f e r i n g a n d , a s a r e s u l t , t h e y m a y s u b s e q u e n t l y

c h o o s e t o in v e s t e v e n g r e a t e r a m o u n t s o f r e s o u r c e s i n t h e lo s in g

a l t e rn a t i v e . T h i s c a u s e - - e f f e c t s e q u e n c e , h o w e v e r , d o e s n o t a p p e a r a s

p l a u s i b l e a n e x p l a n a t i o n o f t h e p r e s e n t d a t a a s a n i n d i v i d u a l n e e d o r

p red i spos i ti on to ji u sf ify behav io r . Th e p r im ary in t e rp re t i ve p rob lem fac ing

a se l f -pe rcep t ion ~ma lys i s i s t he f ac t t ha t t he re i s a subs t an t i a l body o f

ev idence wh ich shows tha t i nd iv idua l s a t t empt t o avo id t he s e r f - a t t r i bu t ion


15/18


41

of causality when behavior leads to negative consequences or results in

personal failure (see Weiner, Frieze, Kukla, Reed, Rest, & Rosenbaum,

1971). Thus, it would seem very unlikely for individuals to attribute

greater internal causality (and therefore invest more) in a previously

chosen alternative which has led to negative consequences. In contrast, it

would seem more likely for individuals to take concrete actions to reduce

negative consequences for which they are responsible or at least to

attempt to reduce those negative outcomes which cannot be attributed to

an external source. This latter interpretation is consistent with a serf-

justification notion that individuals actively seek to maintain or restore the

appearance of rationality to a previously chosen course of action. 4

Sel f jus t i f i ca t ion and the Escala t ion o f Commi tment

As we have seen, when individuals are personally responsible for

negative consequences, they may decide to increase the investment of

resources to a prior course of action. It follows that this same process of

escalation may also occur in many decision contexts in which additional

time, effort, and resources are committed to an unsatisfactory policy

alternative. Thus, further research should focus on the critical factors

underlying the escalation of resources, both in terms of the amount of

resources committed and the number of times an increase in resources will

be made to a decisional alternative. Specific independent variables worthy

of study may be the amount of loss already incurred by a decision maker

(see Weick, 1974, for discussion of the Vietnam Dollar phenomenon),

the perceived efficacy of the resources being committed (e.g., the ability

of R & D expenditures to increase future profits), the nature of the

decision making entity (e.g., individual decision maker vs group decision

making body), personal characteristics of the decision maker (e.g., self-

esteem, tolerance for ambiguity), and the evaluative consequences of the

situation.

One conceptual note which could prove useful in future studies of the

escalation of commitment is the distinction that, within investment

decision contexts, there may be two separate sources of self-justification.

First, an individual may desire to demonstrate rationality to himself or

restore consistency between the consequences of his actions and a self-

concept of rational decision making (Aronson, 1968). This may be a rather

ubiquitous phenomena as has been demonstrated by research on cognitive

4 Other studies which (indirectly) demonstra te the escalation of commitment using a

foo t in the door technique (e.g., Fre edman & Fr aser 1966) can be interpreted by

ith r

an increase in the perception of internal causality following increases in

commit ment or by an individual need to justify prior behavior.


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4 B A R R Y M . S T A W

d i s s o n a n c e a n d o th e r c o n s i s t e n c y t h e or ie s ( s e e A b e l s o n , A r o n s o n ,

M c G u i r e , N e w c o m b , R o s e n b e r g , T a n n e b a u m , 1 96 8). S e c o n d l y , t h e

i n d i v i d u a l m a y a t t e m p t t o d e m o n s t r a t e r a t i o n a l i t y t o o t h e r s o r t o p r o v e t o

o t h e r s t h a t a c o s t l y e r r o r w a s r e a l l y t h e c o r r e c t d e c i s i o n o v e r a l o n g e r

t e rm p e r s p e c t i v e . T h i s s e c o n d f o r m o f s e lf -j u st if ic a ti o n w o u l d s e e m t o b e

m o s t i m p o r t a n t i n o r g a n i z a t i o n a l c o n t e x t s w h e r e a d e c i s i o n m a k e r m a y b e

u n c e r t a in o f h i s o w n s t a tu s w i th i n a s o c i a l h i er a r ch y o r i n g o v e r n m e n t a l

p o l i c y s i tu a t io n s in w h i c h a d e c i s i o n m a k e r m a y b e a n x i o u s a b o u t h is

p o l i t i c a l s t a n d i n g a m o n g c o n s t i t u e n t s . N o d o u b t , t h e s e t w o f o r m s o f s e l f -

j u s ti f ic a t io n c o u l d b o t h b e v i e w e d a s f a c e - sa v i n g a c ti v it ie s ( G o f f m a n ,

1 95 9) , w i t h t h e d i s ti n c t i o n o f a n in t e rn a l v e r s u s e x t e r n a l o r i e n t a ti o n o n t h e

p a r t o f th e d e c i s i o n m a k e r . H o w e v e r , w h i le t h e f ir st f o r m o f se lf -

j u s ti f ic a t io n m a y b e b a s e d o n a g e n e r al h u m a n n e e d t o b e c o n s i s t e n t a n d

c o r r e c t (F e s t i n g e r , 1 95 7; W h i t e , 1 95 9) , t h e s e c o n d fo r m m a y r ela te t o

i n d i v i d u a l d e s i r e s f o r s o c i a l a p p r o v a l ( C r o w n e M a r l o w , 1 96 4) . F u t u r e

r e s e a r c h s h o u l d b e d i r e c t e d t o w a r d t h e s p e c i f i c a t i o n o f e a c h o f t h e s e

f o r m s o f s e l f - j u s t i f i c a t i o n a n d t h e d e t e r m i n a t i o n o f t h e i r r e l a t i v e i n f l u e n c e

w i t h i n i n v e s t m e n t d e c i s i o n c o n t e x t s .

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BARRY M. STAW

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RE~ EIVED: November 22, 1975

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