Escalation of commitment in private family businesses: The influence of outside board members

Owner-managers of private family businesses are vulnerable to escalation of commitment, which can lead to costly failure. In an effort to help private family businesses reduce such costs and contribute to the resource dependence literature, we extend prior research on escalation of commitment (Staw, 1981). Specifically, we develop a model that examines how outside board members influence the antecedents, and moderate the processes, that lead to escalation of commitment. Our work encourages the use of outside board members, insofar as they are likely to help the owner-managers of private family businesses to avoid escalation of commitment. (C) 2012 Elsevier Ltd. All rights reserved.