Deviation and escalation: decision-making pitfalls illustrated

Author： Hung Yishuo Huang Heh Jason Gosling Mark

ISSN： 0953-4814

Source： Journal of Organizational Change Management, Vol.24, Iss.5, 2011-08, pp. : 695-711

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Abstract

Purpose - It seems that the only constant of this rapid-changing world is the "change" itself - whether it is from the organization itself or from its outer environment. From multinational corporation managers to local franchise investors, abilities to cope with changes are definitely essential. The purpose of this paper is to provide no magic but a framework that helps decision makers watch their steps while making strategic plans. Design/methodology/approach - Working from the perspective of the resource-based view (RBV) for sustained competitive advantage, the paper looks into the decision-making process by considering constraints and illusions. The journey of deviation from the ideal goal starts when the decision maker is attracted by a maze of illusions. The paper illustrates the phenomena of escalation of commitment in static and in deterioration-in-motion. Findings - For the recovery from an errant path, awareness is of the essence and a constant awareness of the organization's chances and pitfalls would be the only way to regain competitive advantage. Originality/value - By bringing together the concept of the RBV of competitive advantages and the phenomena of escalation of commitment, the paper provides a concise framework and illustration that is easy to be reminded of for organization decision makers who are constantly facing challenges in this ever-changing world.