The escalation of commitment to a failing course of action: toward theoretical progress

Article Abstract:

Escalating commitment (or escalation) refers to the tendency for decision makers to persist with failing courses of action. The present article first reviews evidence suggesting that escalation is determined, at least in part, by decision makers' unwillingness to admit that their prior allocation of resources to the chosen course of action was in vain (the self-justification explanation). A distinction is drawn in the second part of the article between alternative (to self-justification) explanations of escalating commitment: Some are designed to replace self-justification, whereas others are intended to supplement self-justification, that is, to add explanatory power beyond that which can be accounted for by self-justification. There is little evidence that the replacement theories provide a better explanation. The article concludes by describing several research strategies that may lead to progress in explaining escalating commitment. (Reprinted by permission of the publisher.)

Decision-making, Decision making, Commitment (Psychology), Justification

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The causes and consequences of leveraged management buyouts

Article Abstract:

A growing proportion of corporate restructuring is in the form of leveraged management buyouts (LBOs), but this activity is controversial, and critics have said that it involves ethical problems and redistributional issues. This article uses the existing theoretical and empirical literature to suggest research questions about why LBOs occur and what will be their likely consequences. (Reprinted by permission of the publisher.)

Research, Corporate reorganizations, Leveraged buyouts

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