Doctoral Dissertations

Date of Award

12-1993

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Business Administration

Major Professor

Fay Borthick

Committee Members

James H. Scheiner, Hamparsun Bozdogan, Michael G. Johnson

Abstract

Anecdotal reports and surveys of information systems development failures appear frequently in the information industry press. Managers abandon some of these failing systems. Other failing projects result in useful systems. However, many more projects continue long after any hope of success has faded. Organizational psychologists have examined escalation behavior in decision makers that remain committed to failing plans. This research tested three theories about subjects' motivations for escalation behavior and examined their use of sunk cost information in systems development project continuation decisions. The study also assessed how subjects' level of systems development experience affected their decisions. Protocol-tracing software on a personal computer recorded subjects' decisions and rationales while tracking their viewing times and sequences. This research responds to calls for critical studies that compare competing explanations for escalation behavior in specific contexts. Two groups of subjects, information systems professionals and senior undergraduate students, made a project continuation decision while viewing case materials presented interactively on a personal computer. One-half of each group worked through a version of the case designed to induce a high level of involvement in the project. The other half worked through a version of the case designed to induce a low level of involvement. High involvement student subjects were more likely than other subjects to continue the project. Interestingly, the information systems professionals did not exhibit a similar escalation tendency. Subjects that decided to continue the project were somewhat more likely to mention sunk cost information in their decision rationales than subjects that abandoned the project. However, the proportion of pre-decision viewing time subjects devoted to sunk cost items was not related to their continuation decision. Earlier research had not considered this distinction between decision-facilitating and decision-justifying uses of sunk cost information. The practicing professionals that participated in this experiment exhibited less escalation tendency, were less likely to respond to the involvement manipulation, and were less likely to use sunk cost information to rationalize their decisions than the student subjects.

Download
Files over 3MB may be slow to open. For best results, right-click and select "save as..."

Share

COinS