Continue or stop a project: what past expenditure cannot justify
In Fribourg's agri-food sector, bilingual industry or collaborations with its university hub, stopping a project can feel like disavowing a collective investment. The management question is precise: how can additional funding be assessed without allowing irrecoverable expenditure to stand in for an argument?
What the literature establishes
Hal R. Arkes and Catherine Blumer (1985, Organizational Behavior and Human Decision Processes) show that money, time or effort already invested can increase the tendency to continue an activity. Their research links this effect notably to the desire not to appear wasteful. Yet genuinely irrecoverable expenditure does not, in itself, constitute an expected benefit of continuing.
Responsibility can reinforce commitment
Barry M. Staw (1976, Organizational Behavior and Human Performance) experimentally examines resource allocation following unfavourable results. In this setting, people responsible for the initial decision commit more additional resources than those who are not responsible for it. The finding supports a self-justification mechanism: defending the project can also serve to defend one's own judgement.
The overly hasty conclusion
One might conclude that every disappointing project should be stopped, or that its initiator should no longer make the decision. These studies justify neither general rule: continuing may remain preferable if expected future benefits outweigh the costs and risks still to be borne. Exit costs, contractual obligations and knowledge gained must therefore be distinguished from past expenditure that can no longer be recovered. (our executive and employee training programmes)
What the evidence cannot settle
These classic studies identify a risk to judgement; they do not provide a universal stopping threshold for an industrial or scientific project. Their designs do not reproduce the full complexity of a production chain, a food-safety approval process or a university partnership. In practice, observing that an expensive project continues is therefore insufficient to diagnose irrational escalation: the remaining options must be examined.
A practical check in Fribourg
Within SHR's « Prise de décision » programme, an exercise applicable in Fribourg would examine forthcoming requests for additional funding for an agri-food project, a bilingual industrial company or a university collaboration. For each request, a shared template, in French and German where necessary, would separate irrecoverable expenditure, the future costs of continuing and stopping, and the expected benefits of each option. The indicator would be the proportion of funding decisions supported, before approval, by this written, dated comparison and a criterion for reassessment. This check would verify the traceability of the reasoning, not the project's future profitability or the elimination of bias. To go further: explore the Decision-making training in Fribourg, or browse our executive and employee training programmes in Switzerland.
In pictures: Decision-making in Fribourg
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