tailieunhanh - Lecture Judgment in managerial decision making (8e) - Chapter 7: The escalation of commitment
After studying this chapter, you should be able to: Discuss the effects of too much or too little control in an organization, describe the four basic elements of the control process and the issues involved in each, differentiate between the different levels of control and compare their implications for managers,. | Judgment in Managerial Decision Making 8e Chapter 7 The Escalation of Commitment Copyright 2013 John Wiley & Sons As noted previously, we tend to use heuristics, or rules of thumb, to reduce the complexity of our decisions. Often, these heuristics allow us to make effective decisions in a short amount of time. However, under the right set of circumstances they can also lead us into making biased decisions. Avoiding the biases that come with the use of heuristics is so difficult that even the most intelligent people are prone to error. Before introducing key biases, take a few minutes to answer the following questions. Write down your answers. 1 The Escalation of Commitment Committing to an initial decision Competition and escalation Explanations for escalation The escalation of commitment is the pervasive tendency to increasingly commit resources into the pursuit of an initial goal or decision, irrespective of evidence suggesting that it is best to abandon our initial goal or . | Judgment in Managerial Decision Making 8e Chapter 7 The Escalation of Commitment Copyright 2013 John Wiley & Sons As noted previously, we tend to use heuristics, or rules of thumb, to reduce the complexity of our decisions. Often, these heuristics allow us to make effective decisions in a short amount of time. However, under the right set of circumstances they can also lead us into making biased decisions. Avoiding the biases that come with the use of heuristics is so difficult that even the most intelligent people are prone to error. Before introducing key biases, take a few minutes to answer the following questions. Write down your answers. 1 The Escalation of Commitment Committing to an initial decision Competition and escalation Explanations for escalation The escalation of commitment is the pervasive tendency to increasingly commit resources into the pursuit of an initial goal or decision, irrespective of evidence suggesting that it is best to abandon our initial goal or decision. We will first discuss the escalation of commitment in more detail. Then, we will examine how competitive environments make people more likely to escalate their commitment to a decision. Finally, we will discuss some of the psychological mechanisms responsible for the escalation of commitment and provide recommendations on how to reduce the tendency to escalate commitment. 2 Situations Inviting Escalation Firing people that you hired Leaving a company Further investments in a start-up Sinking more money into a car Staying on hold Selling a low-performing stock A wide range of situations are likely to lead to escalatory behavior. Here are some of them: When you consider whether to fire an employee that you originally hired, you may be reluctant to give up on the employee despite a track record of poor performance. When you decide whether to leave a company that you have invested a lot of time with, you may fear that if you leave the company, you will just miss out an opportunity for
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