How Emotions Affect Decision Making

Title: Anger, Fear, and Escalation of Commitment (Subscription or fee required.)
Authors:  Ming-Hong Tsai and Maia J. Young
Publisher:   Cognition & Emotion, forthcoming
Date Published: July 2009 (online version)

It isn’t unusual to see a manager keep plugging away at a project that isn’t producing positive results, but few would guess that anger may be at the heart of that behavior. This paper explores the role of negative emotions in decision making, revisiting the conclusions of earlier researchers. Those previous conclusions were that negative feelings typically reduce the likelihood that decision makers will increase their commitment to a project. In this study, the authors set out to prove that it is a mistake to group all negative emotions together; some negative emotions may actually increase an employee’s determination to complete a troubled project or support a questionable decision, and others may indeed minimize it. To test their theory, the authors looked specifically at two negative emotions: anger and fear.

The authors asked 57 people to trigger either anger or fear by writing about an incident that elicited one emotion or the other, depending on the group in which they were placed. Participants then assumed the role of a senior sales manager at a large technology firm and hired one of two candidates, basing their decision on a report of the candidate’s job performance over the past decade. They also were asked to disclose how risky they perceived their choice to be. The researchers then gave participants a fictional evaluation of how their candidate performed over the first five years, which criticized their selection regardless of which candidate they picked. Asked to respond to this critique, individuals in the angry group were more likely to continue supporting their initial decision than were their frightened counterparts. The researchers reasoned from this that anger augments a sense of personal control, lowers perceptions of risk, and makes people less willing to admit a mistake. As a result, angry employees are more likely to commit further resources to a failing project or choice. By contrast, fear makes people second-guess themselves and often abandon support for efforts that have gone even slightly off the tracks. A second, similar study measured employees’ financial decision making. The results were the same; angry individuals were more likely to allocate funds to a failing division than those who were afraid.

The paper offers insights for employees at either end of the corporate ladder. By paying close attention to the emotional tendencies of their subordinates, managers may be able to predict or even influence whether their employees will escalate their commitment to a problematic plan or decision, or whether they will give up too soon. In some cases, bosses may need to advocate for emotion-control training, which can reduce the amount of fear or anger specific employees demonstrate.

Bottom Line: Emotions can get in thae way of rational decision making. Anger, in particular, can make employees increase their commitment to a failing plan. Managers who understand these tendencies can help lessen their effects on the organization.