Escalation of Commitment: The Effect of the Regulatory Focus of Managers and the Strategic Means on Their Commitment

In a goal pursuit, individual puts more time and effort in those activities which fit with their regulatory orientation, which make them feels right (Higgins 2000). Promotion-focused individuals are more concerned with opportunities, growth, and accomplishment; whereas prevention-focused individuals are concerned with security, safety, and responsibility. The author hypothesized that people with promotion-focused would be more inclined towards an investment decision that presents a greater opportunity for their growth and advancement; whereas people with prevention-focused would be more inclined towards investing in the departments that are related with security and safety. Escalation of commitment will be higher in the regulatory match condition, i.e. the decision maker's regulatory focus and the characteristic of the investment decision type. The study finds that managers' commitment is greater when the strategic nature of the activity fits the actor's regulatory orientation. Also, it contributes evidence to the entrapment scenario of "throwing good money after bad", concluding that managers with regulatory fit will commit more resources to the failing endeavor than those with regulatory non-fit.