conditions (figure 5.4). Forrest considered the risk of the project as low which would have the effect of reducing his willingness to change course of action. Because Forrest considered Jackson to lack complete knowledge of the situation, he had a lowered opinion of his credibility as a bad news reporter. This low Credibility acted to lower the perceived Decision of the report of bad news. While Role Prescription of the bad news reporter is seen as high, given the combination of low Credibility with high Role
Prescription, we have seen that the effect size of Credibility is greater than that of Role
Prescription (chapter 3) resulting in a low Relevance of the message. The low Credibility would also act to lower the perceived risk of the project. Given this set of conditions, a low relevance and low Risk Perception, the model predicts that Forrest have continued the current course of action which is what I found.
Thus the individual model holds in predicting the decision to be made by the decision maker in this situation.
5.5.3 Examining Other Escalation Factors
In this section, I seek to expand the model to identify other factors by examining the other escalation determinants as defined in Staw’s (1997) classification of escalation. I examine each one in turn
5.5.3.1.
Illusion of Control
One of the determinants for project escalation referenced by Staw (1997) is that of optimism and illusion of control. Keil, Depledge and Rai (2007) found that when a subject perceived that they had the ability to market around software quality issues they were more likely to not recognize the software quality problems and to escalate the commitment to the project by shipping a defective software product.
In the current case, the project manager was supremely confident in his knowledge and abilities and it is therefore possible that he might consider himself able to deal with a software product with issues on implementation. In terms of the model, it can be hypothesized that when a project manager perceives that he has substantial skills and
Role Prescription
High
Decision Continue RelevanceLow
CredibilityLOW
Risk PerceptionLow
Figure 5.5: Variable Settings in the Case of Project Gamma
- - + - - +abilities that can exert control over the project outcome, it might cause him to perceive a report of bad news as less relevant. I could also hypothesize that his perceived abilities might come into play in the decision whereby he decides that he can compensate for problems in the product and thus overrule a relevant report of bad news.
I then make the following propositions about the illusion of control:
P1) Illusion of Control will reduce the relevance of the report of bad news to the decision maker.
P2) Illusion of Control will increase willingness of a decision maker to continue the current course of action.
5.5.3.2.
Highly Politicized Environment
Staw (1997) also describes a social determinant of escalation that derives from highly politicized environments. In these types of environments, to stop a project or admit error can lead to loss of power, standing or position. Once a project is bound to the manager, the manager’s identity can be linked with the project’s fate. This can lead to escalation if the manager attempts to maintain his reputation by putting more effort into retrieving a failing project.
In project Gamma, we see that in response to Jackson’s bad news reports and requests for de-escalation, Forrest responded that it was politically infeasible meaning that once started down the path, to back track is not possible, they would have to correct the problems that occur going forward.
Thus in terms of the model, a perception of a highly politicized environment may act on the decision maker by suppressing the relevance of the report of bad news in favor of defending his political position. It may also impact the decision maker by introducing the consideration during the decision process that while the report of bad news is perceived to be important, it is overruled by political aspects of the situation to continue the current course of action.
I make the following propositions about a politicized environment:
P3) A highly politicized environment will reduce the relevance of the report of bad news to the decision maker
P4) A highly politicized environment increases the willingness of a decision maker to continue the current course of action.
5.5.3.3.
Revised Model
The existence of other escalation factors shows that there are two additional areas of research that can be examined, that of illusion of control and the politicization of the environment.
5.6
CONCLUSIONS
In this chapter, we have seen that Project Gamma contained three occurrences of the Deaf Effect. In evaluating the situation, we see that the individual model of the Deaf Effect was consistent with the situation that occurred. The decision maker continued the current course of action in an environment where he perceived low risk of continuance and where the relevance of the report of bad news was reduced by the highly political situation and a perceived lack of credibility by the bad news reporter on this issue. This lack of credibility was perceived because of the lack of knowledge that the reporter had on the entire situation.
We also saw that the case supports the addition of two new constructs to the model: illusion of control and highly politicized environment which are held to potentially reduce the relevance of the bad news report and increase the willingness of the decision maker to continue the current course of action.
Separate from the occurrence of the Deaf Effect, we saw that the distortion in the report of the status of the project to the reviewing panel to be consistent with the predictions of agency theory. In this case, information asymmetries existed between the decision maker and the reviewing panel. Additionally, the perceived politically charged situation created a powerful motivation to shirk which in the presence of the information
asymmetries that existed would create the distortion of the message to the reviewing panel. Thus having made his decision in accord with our model of the Deaf Effect, the EPD of project Gamma distorted his report of project status due to a perceived political environment enabled by information asymmetries that existed.
Role Prescription Decision Relevance Credibility Risk Perception