Banking on Commitment: Intended and Unintended Consequences of an Organization's Attempt to Attenuate Escalation of Commitment

Examining commercial lending decisions, this research found that increased monitoring of decision makers and changing decision makers attenuated escalation of commitment but also produced unintended effects. Some decision makers resisted downgrading the risk of borrowers in the face of organizationa...

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Bibliographic Details
Published in:Academy of Management journal 2002-04, Vol.45 (2), p.443-452
Main Authors: McNamara, Gerry, Moon, Henry, Bromiley, Philip
Format: Article
Language:English
Subjects:
Borrowing
Commerce
Commercial credit
Commitments
Credit policy
Decision making
Decision theory
Lending
Management
Management theory
Motivation
Organization theory
Organizational behavior
Studies
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Summary:Examining commercial lending decisions, this research found that increased monitoring of decision makers and changing decision makers attenuated escalation of commitment but also produced unintended effects. Some decision makers resisted downgrading the risk of borrowers in the face of organizational intervention, exhibiting intervention avoidance, and escalated commitment to these borrowers. Combined findings indicate that organizations need to carefully address both the intended and potential unintended consequences of systems designed to attenuate escalation of commitment.
ISSN:0001-4273
1948-0989
DOI:10.5465/3069358