Industrial projects: when persistence becomes escalation
In Neuchâtel's microtechnology, watchmaking and precision microelectronics industries, a development project may accumulate trials before its viability has been established. For SHR's « Management complexe » programme, one specific question deserves attention: on what basis should a manager authorise the next stage when results remain disappointing?
What the literature establishes
Barry M. Staw (1976, Organizational Behavior and Human Performance) experimentally examined successive resource allocation decisions. In this setting, participants who were personally responsible for an initial decision with an unfavourable outcome committed more additional resources than those who were not responsible. This finding shows that involvement in the initial choice can influence continuation beyond a straightforward assessment of results.
The sunk-cost mechanism
Hal R. Arkes and Catherine Blumer (1985, Organizational Behavior and Human Decision Processes) showed that past investments of money, effort or time could increase the tendency to continue an action. Their work links this effect, in particular, to a concern about appearing wasteful. Yet expenditure that has already been incurred and cannot be recovered does not, by itself, constitute a future benefit of continuing.
The premature conclusion
It would be tempting to conclude that a struggling project should be stopped quickly. These studies do not, however, provide a universal stopping threshold: an additional experiment may generate useful information, and stopping may entail genuine future costs. The relevant distinction is between consequences that the decision can still change and expenditure that neither continuing nor stopping will recover. (our executive and employee training programmes)
What the evidence cannot decide
These studies do not examine process qualification in Neuchâtel companies and do not directly measure the reliability constraints of precision manufacturing. Their designs therefore cannot determine when to stop a particular industrial development project. Nevertheless, a project review that merely displays the budget already spent remains inadequate: it documents the past without necessarily clarifying the expected value of the next stage.
A practical check in Neuchâtel
As an application exercise for the « Management complexe » programme, a Neuchâtel microtechnology, watchmaking or precision microelectronics company could examine its upcoming continuation decisions using a dated decision record. Before each authorisation, this record would distinguish sunk expenditure, expected future costs and benefits, and the technical outcome that would justify continuing or stopping. The measure would be the proportion of continuation decisions supported, before commitment, by a verifiable technical criterion and a review date, followed by a check that the criterion was used at that review. This indicator measures decision traceability, not the elimination of bias or the project's success. To go further: explore the Complex Management training in Neuchâtel in the canton of Neuchâtel, or browse our executive and employee training programmes in Switzerland.
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