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    Polaroid: Escalation of Commitment

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    Investigate Polaroid's filing for bankruptcy protection 2001. List the causes of bankruptcy. Was there an escalation of commitment?

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    Polaroid in 2001 filed for bankruptcy. There were several reasons for the bankruptcy. These include high fixed costs, heavy investment in Helios dry film technology, and financial blunders. Escalation of commitment means the tendency of decision makers to persist with failing course of action. It also means the tendency to invest additional resources in an apparently losing proposition. The term escalation of commitment is also used to describe a phenomenon where people increase investment in a decision based on cumulative prior investment, even though evidence suggests that continuing the decision outweighs the expected benefit. ...

    Solution Summary

    The solution investigates Polaroid's filing for bankruptcy protection in 2001 and the causes for their bankruptcy. The solution outlines several reasons for bankruptcy. The possibility of an escalation of commitment is discussed and includes references related to answer.