Question

A failing project becomes a black hole for money, time, and personnel as management continues to pour resources into it despite the growing expectation that it will fail miserably. This phenomenon is known in project management circles as:

A) The vanishing horizon.
B) The Pareto principle.
C) Escalation of commitment.
D) Negative outcome disposition.

Answer 1

The term for the phenomenon where management continues investing in a failing project is Escalation of commitment, which involves the sunk cost fallacy, focusing on past investments instead of future potential.

Step-by-step explanation:

The phenomenon where a failing project continues to consume more money, time, and personnel despite growing expectations of failure is known within project management as Escalation of commitment. This occurs when decision-makers invest more resources into a failing project due to sunk costs—the resources already spent that cannot be recovered. People and firms often fall into the sunk cost fallacy, valuing past investments over current realities, leading to persistent investment in the failing project. The key is to ignore sunk costs and make future-oriented decisions.