Abstract

Purpose – This paper aims to examine the relationship between key contextual factors (type of
strategic investment decision-making (SIDM), decision uncertainty, organizational goals, financial
and non-financial corporate performance, firm size, and decision-maker background) and three
significant dimensions of SIDM processes (procedural rationality, strategy formulation and political
behaviour).
Design/methodology/approach – A survey was mailed to the financial directors of manufacturing
companies selected from the UK Financial Analysis Made Easy database. Factor analysis and multiple
regression analysis were used to analyse the survey results.
Findings – The findings reveal that SIDM is more complex and less systematic than the normative
literature suggests, with a combination of contextual factors influencing the decision-making process.
Further, the regression results suggest that SIDM is shaped by the interplay of procedural rationality,
strategy formulation and political behaviour and that none of these on its own can sufficiently explain
SIDM