Executive Summary Decision making is a crucial activity in any business organisation. Decisions are mostly made by the managers and leaders of the organisation. In case, an organisation has invested in a certain project, it is possible for the management to reach a decision to escalate the organisational commitment to the project. The considerations that drive the organisation into reaching such a decision may include the amount of money that it has invested in the project as well as the time spent on it. As a result, the organisation may decide to escalate its commitment despite information indicating that the project is failing. Oil drilling is a project that needs a lot of capital and money to undertake. If the project fails, the managers are likely not to accept the failure and escalate commitment. This article focuses on escalation and, precisely, escalation by an oil company that has drilled oil for three years with no success yet the chief executive has decided to continue drilling. Psychological aspects of decision making Introduction Decision making involves a process whereby someone selects an action that needs to be taken to counter a given problem. The action is usually picked from among a number of alternatives. Decision making is a mental, cognitive process. It is a process that involves the mind, imagination and creativity (Drummond, 2012). When making a decision, managers should be extremely careful since the decisions they make will have an effect on the organization’s performance. It will be crucial for them to make consultations before they reach a final decision (Bazerman & Moore, 2009). This is the case for a company based in Greenland that has been drilling oil for the last three years and no oil has been found, and the CEO maintains that he has promising data. This article focuses on the dangers associated with escalation of commitment and how these can be averted. It is a report addressed to the chief executive officer of the oil company. Escalation It is important for the chief executive officer to understand the meaning of the term escalation. The term is used by decision makers to justify their reasons for arriving at a decision to invest in a certain project. The term is used in instances where the anticipated benefits are less than the losses to be incurred. The term escalation refers to an increase in number, volume, amount, scope or intensity. It has various meanings depending on the context in which it is being used (Morgan, Project Air Force (U.S.) & United States, 2008). For instance, in a business environment, escalation occurs when the cost of goods and services rises as a result of inflation (Kahn, 2010). Escalation can be driven by factors such as changes in technology as well as changes to the balance of supply and demand relating to an item or class of items or even services (Morgan, Project Air Force (U.S.) & United States, 2008). Cost escalation is likely to cause a projected cost overrun. According to Wu (2011), “Escalation of commitment refers to the phenomenon of unpromising projects that have already been invested by accepting several resources permitted to be continued. The extra investment is still chosen by the decision makers…..” (p. 37). Therefore, the CEO has the option of either escalating commitment or not to escalate. The escalation of commitment to a certain project usually increases due to considerati