Institutionalization, Embedded Rationality, and the Escalation of Commitment to IT Projects

Information systems development projects often involve continued commitment even in the face of negative feedback - a phenomena many describe as "escalation." Existing perspectives that explain escalation decisions implicitly make an assumption of a universal "disembedded" rationality, and characterize such commitment as a sort of paradox. In this paper, we develop an alternative, institutional perspective that embraces a conception of rationality that is embedded within social contexts. Through this lens we analyze and recast three published case studies on escalation decisions and find that contextual factors such as legitimacy and momentum reinforce IT project persistence, in effect institutionalizing projects over time. Further, we find evidence of three distinct rationalities - efficiency, technical, and innovative - that each gain and lose salience for commitment decisions over time. We argue that commitment, when viewed through this institutional perspective, is not the paradoxical exception associated with failed IT projects, but rather, the norm once an IT project is institutionalized.