Strategic investment decision-making – scanning and screening investment opportunities: The expansion of Guinness in West Africa

Alkaraan, Fadi (2016) Strategic investment decision-making – scanning and screening investment opportunities: The expansion of Guinness in West Africa. Meditari Accountancy Research (MEDAR), 24 (4). pp. 505-526. ISSN UNSPECIFIED

Full content URL: https://doi.org/10.1108/MEDAR-01-2016-0007

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Abstract

Purpose – This study brings together cognitive and organizational aspects of the strategic investment
decision-making process. It focuses on the early stages of strategic investment decision-making. This
paper aims to augment the limitations of previous survey-based research through an archival case
study that describes pre-decision screening in detail.
Design/methodology/approach – This paper draws on archival data covering an investment
decision undertaken by a large brewing company. The data cover a period of about six years, focusing
on the decision to invest in West Africa. A rational/intuitive orientation model of the process is used as
a framework to help analyze the archival evidence.
Findings – Strategic investment decisions are non-programmed, complex and uncertain. For some
companies (e.g. those with a strategic focus on new expansions), certain non-programmed decisions
may become semi-programmed in the course of time by applying knowledge learned from having
successfully handled non-programmed decision situations in the past. However, other companies
without such a focus may not be able to programme part of their strategic decisions. Pre-decision control
mechanisms constitute a form of strategic control by detecting potential problem areas in the
investment option before formal approval.
Research limitations/implications – Given the narrow scope of this paper – a single case study – the
findings are used for theorization rather than offering generalizable results. There is a need for unified
models to enrich our understanding of the influence that contextual factors have on strategic investment
decision-making. Effective strategic pre-decision control mechanisms that maintain a good balance between
rational and intuitive approaches are matters that remain open for debate in future research.
Practical implications – Research on organizational and cognitive aspects of the strategic investment
decision-making process is inherently practical. To achieve successful strategic investment decisions, it is
essential to devote more attention to the choice and design of strategic control mechanisms.
Originality/value – The framework of this study can help practitioners to gauge the strengths and
weaknesses of their decision-making practices. It focuses on three aspects that are relatively absent in the
literature: the strategic problem, the strategic choice and the chronological relations between the five stages
of the strategic investment decision-making process. The use of historical data is suited to providing
illustrations of intuitive/heuristic-based practices that would otherwise be hard to capture.

Keywords:Strategic investment decision-making, Heuristics, Managerial judgements, Strategic control
Subjects:N Business and Administrative studies > N321 Investment
N Business and Administrative studies > N213 Project Management
N Business and Administrative studies > N411 Cost and Management Accountancy
Divisions:Lincoln International Business School
ID Code:34526
Deposited On:14 Feb 2019 12:51

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