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Ahiaga-Dagbui, D D and Smith, S D (2014) Exploring escalation of commitment in construction project management: Case study of the scottish parliament project. In: Raiden, A and Aboagye-Nimo, E (Eds.), Proceedings 30th Annual ARCOM Conference, 1-3 September 2014, Portsmouth, UK, Association of Researchers in Construction Management, 753–62.
- Type: Conference Proceedings
- Keywords: cost overruns; confirmation bias; escalation of commitment; self-justification; strategic misrepresentation
- ISBN/ISSN: 978-0-9552390-8-3
- URL: http://www.arcom.ac.uk/-docs/proceedings/ar2014-0753-0762_Ahiaga-Dagbui_Smith.pdf
Successfully managing large construction projects within defined budget and time constraints has always been a major challenge largely because crucial decisions about the project's ultimate fate have to be made within an environment of significant uncertainty at the beginning of the project. It is not surprising that cost and time overruns are commonplace on construction projects. Existing literature often suggests economical, technical, political or managerial roots to this phenomenon. A less explored possible cause within construction management framework is the escalation of commitment to a course of action. This theory, grounded in social psychology and organisation behaviour, suggests the tendency of people and organisations to become 'locked-in' and 'entrapped' in a particular course of action and thereby 'throw good money after bad' to make the venture succeed. This defies conventional rationality behind subjective expected utility theory. Through a critical analysis of the literature, we identify different frequently cited enablers of escalation of commitment. Using a hindsight constructivist approach, we then demonstrate references to some of these enablers on the Scottish Parliament project. We found strong evidence in support of possible strategic misrepresentation, confirmation bias, self-justification and optimism bias. We highlight the importance of setting realistic time and budget constraints to circumvent escalation and make several recommendations to attenuate unwarranted escalation of commitment, including the use of an objective outsider to evaluate responses to disconfirming information and the structuring of incentive systems that do not punish for inconsistency in order to curb the effects of self-justification and reputation management.