Stopping a project: what past spending cannot justify
In the “Management complexe” programme at SHR — Swiss Human Resources, choosing whether to continue, redirect or stop a project is a concrete decision-making issue. Under what conditions should managers maintain their commitment when results disappoint and substantial resources have already been consumed?
What the literature establishes
Barry M. Staw (1976, Organizational Behavior and Human Performance) experimentally studied successive resource allocation decisions. In this setting, people responsible for an initial decision with an unfavourable outcome committed more additional resources than those who were not responsible for it. The finding identifies a specific risk: defending an earlier decision can interfere with the evaluation of the next one.
The sunk cost mechanism
Hal R. Arkes and Catherine Blumer (1985, Organizational Behavior and Human Decision Processes) showed across several decision settings that previous investments can increase the tendency to continue an activity. Their work links this effect in particular to a concern about appearing wasteful. An irrecoverable expenditure then becomes an argument for continuing, even though the present choice can no longer change it.
The premature conclusion
Concluding that every struggling project should be stopped would be another mistake. Past expenditure may have produced knowledge, equipment or opportunities that retain genuine future value; exit costs also matter. The relevant question concerns benefits and costs that can still be influenced, rather than the need to justify what has already been spent. (our executive and employee training programmes)
What the evidence cannot settle
These experiments provide neither a universal stopping threshold nor an estimate of how common the phenomenon is in Fribourg businesses. The decisions studied simplify the technical dependencies, contractual obligations and uncertainties of a real project. Poor results alone therefore do not establish escalation: the documented reasons for continuing and the alternatives actually available need to be examined.
A practical check in Fribourg
For a programme exercise, a bilingual agri-food or industrial company in the canton of Fribourg could select a project undertaken with a partner from the local university sector. Before its next review, it would record an observable continuation criterion, avoidable future costs and an option for redirecting or stopping the project on a sheet available in French and German. The measure would be the proportion of continuation decisions supported by a documented check against that criterion, with decisions justified in this way as the numerator and all continuation decisions reviewed as the denominator. This ratio would check the traceability of the decision process, without claiming to measure the economic quality of the choice on its own. To go further: explore the Complex Management training in Fribourg in the canton of Fribourg, or browse our executive and employee training programmes in Switzerland.
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