in project evaluation. Their evaluation will be framed from a holistic formulation taking into account a broader spectrum of potential economic consequences.
Sensation ST and SF individuals are concerned with specific and concrete information. These individuals are less likely than intuitive to perceives alternatives
associated with existing assets unless information on their, use are provided explicitly. Sensation individuals will tend to treat as irrelevant opportunity cost information,
used by a project, but which do not have specific links to the project. An example would be spare capacity of machine justified on an earlier project, but available for the current
investment. This decision is likely to be maintained even when the asset has potential alternative uses, and consequently has positive opportunity costs.
2.3. SPONSORSHIP BIAS
In this study sponsorship bias is identified as one aspect of the social context which may influence the way in which manager process information related to resource
allocation decisions and that this influence may modify the effect of cognitive style. The importance of sponsorship bias to the current study is that managers who
include implicit opportunity costs in non-sponsorship situations, may be motivated to exclude when they sponsor the project. This effect is based on the proposition that once a
commitment to a project has been made, managers are likely to maintain their advocacy for the project with great stability and tenacity, even when faced with negative signals.
March 1987 commented on the propensity of managers to see things that are consistent with their viewpoint and noted that responses may include selective perception and
rationalization. The phenomenon of “escalating commitment” has been suggested as a theoretical
reason why an individual may be motivated to persist with a course of action despite
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negative feedback on its likely outcome Duhaime Schwenk, 1985. Schwenk 1986, p. 304 summarized the notion of escalating commitment:
Many different personal and organizational decisions involve an initial commitment of resources time, effort, money, etc. followed by results which
suggest initial failure and a need for additional commitment which may save the venture.
Staw Ross 1978 referred to this phenomenon as “retrospective rationality”, and argued that further commitment to a failing course of action is an ego-defensive
response which will be particularly pronounced when the individual is personally responsible for the course of action. Evidence on escalating commitment can be found in
a wide variety of decisions ranging from international politics to business organizations and individuals Duhaime Schwenk, 1985; Staw, 1981.
The basic proposition being asserted is that, the absence of sponsorship bias, the treatment of implicit opportunity costs in resource allocation decisions will be associated
with an individual cognitive style to take in information. In particular, it is suggested that in situation with or without sponsorship, managers with sensationthinking ST cognitive
style will tend to include opportunity cost information although it have zero opportunity costs, whereas those with intuitionthinking IT cognitive style will exclude them. The
manner in which cognitive style is expected to influence the treatment of opportunity costs of decision makers. The effects of cognitive style and sponsorship bias before
interaction presented as the following hypothesis: H1: Before interaction, in situation with or without sponsorship, managers with
sensationthinking ST cognitive style will tend to include opportunity cost information in their resources allocation decisions although it have zero
opportunity costs, whereas those with intuitionthinking IT cognitive style will exclude them.
2.3. Potential Interaction
