On the role and function of formal analysis in strategic investment decision processes: results from an empirical study in Belgium

Cauwenbergh, André Van; Durinck, Edward; Martens, Rudy; Laveren, Eddy; Bogaert, Ignace

doi:10.1006/mare.1996.0010

Cited by 40 publications

(49 citation statements)

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“…Higher levels of uncertainty may lead to more critical reactions and use of formal analysis to hedge against perceived risk. However, sometimes, higher uncertainty leads to less formal analysis due to a perception that pressure to act makes investment more likely irrespective of analysis outcomes (Cauwenbergh et al 1996).…”

Section: Formal Rational Analysismentioning

confidence: 99%

“…Formal analysis may be ritualistic, forcing participants in the decision process to be explicit in their argument, driving a decision forward, communicating information internally, engaging participation from differing hierarchical layers and disciplines, and helping to identify new information (Cauwenbergh et al 1996;Marsh et al 1988). Managing an investment is not just about measurement, but also about ensuring people deliver what they promise .…”

Section: Formal Rational Analysismentioning

confidence: 99%

“…Managing an investment is not just about measurement, but also about ensuring people deliver what they promise . Rational analytical investment appraisal techniques play a symbolic role signaling the organisation is rational, professional, and engages in well thought through projects Cauwenbergh et al 1996). The value of signaling is to persuade external stakeholders of the value of a given project , and 'sell' a proposal to others.…”

Section: Formal Rational Analysismentioning

confidence: 99%

“…First, ex-ante appraisal used to justify investment in either economic or intangible terms (Cauwenbergh et al 1996;Marsh et al 1988). Second, ex-post evaluation which is also used to justify investment (Cauwenbergh et al 1996), but may feed back into the decision process, help control IS projects, hold managers to account for promised benefits Langley 1990;Marsh et al 1988), and contribute to learning and evaluation process improvement (Farbey et al, 1992). Two principal approaches to investment appraisal and evaluation are (1) formal rational analytical, requiring measures and techniques; and (2) intuitive, based on experience.…”

Section: Introductionmentioning

confidence: 99%

“…IS investment is perceived to be different from other investment decisions due to rapid technological change, costs and benefits that are harder to identify and quantify, incomplete information (Cauwenbergh et al 1996), and uncertain and hard to assess outcomes (McRea 1970;McGrath 1997;Schwartz and Zozaya-Gorostiza 2003).…”

Section: Introductionmentioning

confidence: 99%

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Investment appraisal and evaluation: preserving tacit knowledge and competitive advantage

Sims

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2015

IJBSR

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This research asks if intuitive investment appraisal and evaluation are appropriate under conditions of rapid change, uncertain outcomes, limited information, and when competitive advantage derives from tacit knowledge. Measures and rational approaches to appraisal and evaluation require distal knowledge made explicit in documents and techniques. Converting valuable tacit knowledge, residing in individuals and organisational context, into coded distal knowledge, which is more easily replicated, risks jeopardizing the uniqueness of competencies and capabilities that underpin competitive advantage. The research investigates e-learning projects in higher education and finds little evidence of formal rational investment appraisal and evaluation in IS projects characterized by uncertainty and a lack of clear information.

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Section: Formal Rational Analysismentioning

confidence: 99%

Section: Formal Rational Analysismentioning

confidence: 99%

Section: Formal Rational Analysismentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Investment appraisal and evaluation: preserving tacit knowledge and competitive advantage

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Investment in advanced manufacturing technology: a study of practice in large U.K. companies

Abdel-Kader

Dugdale

1998

Management Accounting Research

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This paper reports the results of a survey investigation into the investment decision making practices of large UK manufacturing companies, especially in relation to investments in advanced manufacturing technologies. A 24% response rate was received in a survey of the finance directors of 466 large UK manufacturing companies. Responses were classified into three groups ranging from non-users of AMT to sophisticated users and analysis revealed that more sophisticated users do emphasise certain intangible benefits in combination with measures relating to the traditional dimensions of return and risk.

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Make it strategic! Financial investment logic is not enough

Cooremans

2011

Energy Efficiency

136

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Profitability is not the main driver of capital investment decision-making; financial evaluation tools often play a secondary role in corporate investment choices; businesses do not follow capital finance theory prescriptions, contrary to what mainstream claims; the strategic character of investments has a heavier decisional weight than profitability. These findings are based on a review of different streams of literature (mainly organizational finance and strategic decision-making) which is described in the second part of the paper, after a first part summarizing the main stances of mainstream energy economics and the main findings of the alternative literature on energy-efficiency investments. Yet, what is a strategic investment? To fill the existing conceptual gap, we propose a definition of strategic investment and a new theoretical framework to analyze investment projects. An example of applying this framework to an energy-efficiency project is described. The partial influence of financial factors and the importance of strategic factors in investment decisions entail several implications for energyefficiency practitioners, scholars, and public program developers, which are described in the last part of the paper.

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On the role and function of formal analysis in strategic investment decision processes: results from an empirical study in Belgium

Cited by 40 publications

References 0 publications

Investment appraisal and evaluation: preserving tacit knowledge and competitive advantage

Investment appraisal and evaluation: preserving tacit knowledge and competitive advantage

Investment in advanced manufacturing technology: a study of practice in large U.K. companies

Make it strategic! Financial investment logic is not enough

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