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STRATEGIC INVESTMENT DECISION‐MAKING: COMPLEXITIES, POLITICS AND PROCESSES*
Author(s) -
Butler Richard,
Davies Les,
Pike Richard,
Sharp John
Publication year - 1991
Publication title -
journal of management studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.398
H-Index - 184
eISSN - 1467-6486
pISSN - 0022-2380
DOI - 10.1111/j.1467-6486.1991.tb00288.x
Subject(s) - interview , product (mathematics) , investment (military) , quality (philosophy) , investment decisions , process (computing) , position (finance) , marketing , variance (accounting) , relation (database) , productivity , business decision mapping , decision quality , perception , decision process , politics , business , decision analysis , economics , management science , microeconomics , sociology , computer science , psychology , political science , production (economics) , accounting , finance , philosophy , mathematics , mathematical economics , database , anthropology , law , macroeconomics , operating system , geometry , epistemology , neuroscience , patient satisfaction
This article is a preliminary report on an investigation into the processes of investment decision‐making. Three case studies from three firms are presented which show disparities in a number of aspects of process, for example, the length of time taken to arrive at a decision, the number and intensity of disagreements and uncertainties encountered. Data were collected for these cases through semi‐structured interviewing from multiple informants in the three organizations, thereby permitting the use of analysis of variance techniques of the different perspectives given by informants. Perceptions of the effectiveness of the decisions were also gathered. One finding from the study is that the decisions with the lowest perceived effectiveness (in firm HE) also lost support from those involved in making the decision during the process, although the decision was eventually implemented. This decision also had the least agreement amongst informants as to the main sources of disagreements. Informants of all three decisions saw effect upon product quality and productivity, fit with business strategy and competitive position of the company as the most important factors to take into account in evaluating the decisions. In firm CG, however, there were disagreements as to how the investment should be evaluated. In the conclusions to the article a disucssion is given as to the nature of evaluation procedures in relation to the developing theory of information systems.