Strategic investment decision making: the influence of pre‐decision control mechanisms
Qualitative Research in Accounting & Management
ISSN: 1176-6093
Article publication date: 12 June 2007
Abstract
Purpose
This paper seeks to explore how aspects of pre‐decision control mechanisms impact managerial decision‐making behaviour with regard to strategic investment projects.
Design/methodology/approach
This study adopted a mixed‐method research approach. Research evidence was collected using a questionnaire survey of 320 large UK companies and eight semi‐structured follow‐up interviews with financial directors who responded to the questionnaire.
Findings
The study offers insights into the use and impact of pre‐decision control mechanisms such as: organizational strategy and operating objectives; expectations regarding the involvement of organizational personnel; formal approval procedures; financial evaluation requirements; pre‐determined hurdle rates; established authorization levels and the influence of managerial intuition.
Originality/value
This study adds to prior understandings of capital investment practice by employing mixed methods to examine how pre‐decision controls shape the outcomes of strategic investment decision making. Pre‐decision controls have received little attention within the prior literature, which focuses primarily on project financial analysis.
Keywords
Citation
Alkaraan, F. and Northcott, D. (2007), "Strategic investment decision making: the influence of pre‐decision control mechanisms", Qualitative Research in Accounting & Management, Vol. 4 No. 2, pp. 133-150. https://doi.org/10.1108/11766090710754204
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited