The effect of job rotation policy in preventing managerial escalation of commitment

Vincent K. Chong and Rindah F. Suryawati

International Journal of Accounting, Auditing and Performance Evaluation, 2011, vol. 7, issue 3, 176-199

Abstract: This paper examines the effect of job rotation policy as a control mechanism in preventing managerial escalation of commitment under an agency problem setting. A total of 54 business students participated in a laboratory experiment. A 2 × 2 between-subjects ANOVA was used to test the hypotheses developed for this study. The independent variables are information availability (public and private) and job rotation policy (present and absent). The dependent variable is project managers' decision for continuing or discontinuing a failing or unprofitable investment project. The results reveal that project managers will discontinue an unprofitable project in the presence rather than absence of job rotation policy under a private information situation. This result suggests that job rotation policy can be used as an effective de-escalation strategy.

Keywords: commitment escalation; job rotation policy; public information; private information; information availability; project management; investment projects; de-escalation strategy; resource commitment; project evaluation. (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:7:y:2011:i:3:p:176-199

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