In an effort to stay competitive with arch-rival, Airbus, Boeing officials made the decision to revamp its workhorse jet, the 737, with a new engine and a new name—the 737 MAX. Boeing management determined that revising an existing line of jet equipment would cost the company only 10 to 15 percent of what it would typically cost to design a completely new line of planes. After two crashes, the aircraft was grounded for a prolonged period with a cost to the company likely to exceed $18.6 billion.

Questions

Think back to the chapter discussion about the concept of escalation of commitment. Was Boeing’s decision to downplay the need for expensive pilot simulator training reflective of escalation of commitment, or was it a rational plan? Explain.