Escalation of Commitment. Cognitive Escalation Factors and Counteraction through Behavioural Controlling

Bachelorarbeit , 2021 , 52 Seiten , Note: 1.3

BWL - Controlling

Escalation of commitment refers to the circumstance that a decision taken is being held on despite of negative feedback. Within this thesis, the focus is on managerial decisions about investments that are continued despite poor prospects of achieving set objectives and the possibility of abandonment. The paper addresses cognitive escalation factors as a cause of escalation of commitment and presents the state of the literature and research on countermeasures through behavioural controlling in the company context.

Table of content

Table of content

List of figures

List of tables

List of abbreviation

1 Introduction
1.1 Escalation of commitment as a problem of rationality assurance
1.2 Objective and approach of the thesis

2 Controlling, rationality and human behaviour: Theoretical foundations
2.1 Introduction to rationality in the company context
2.2 Rationality assurance and behavioural orientation in controlling
2.3 Human rational behaviour in theory

3 Escalation of commitment and cognitive biases as escalation factors
3.1 The escalation of commitment phenomenon
3.2 Cognitive biases as escalation factors
3.2.1 Cognitive biases as unconscious decision influences
3.2.2 Self-justification
3.2.3 Prospect theory and decision framing
3.2.4 Sunk cost effect and mental accounting
3.2.5 Optimism bias, overconfidence, and illusion of control
3.2.6 Confirmation and perception biases

4 Counteraction through behavioural controlling
4.1 Counteracting rationality-restricting escalation factors
4.2 Controlling-guided decision-making processes
4.3 Adapting the decision environment: Decision-making in groups
4.4 Changing the decision environment: Management reporting

5 Limitations

6 Conclusion

List of references

• Hochschule: Frankfurt University of Applied Sciences, ehem. Fachhochschule Frankfurt am Main
• Note: 1.3
• Autor: Saskia Spang (Autor:in)
• Erscheinungsjahr: 2021
• Seiten: 52
• Katalognummer: V1130806
• ISBN (eBook): 9783346495501
• ISBN (Buch): 9783346495518
• Sprache: Englisch
• Schlagworte: Behavioural Controlling, Escalation of Commitment, Groupdecisions