Influencing capital investment decisions through issue selling: Case new business investment in the forest industry.
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School of Business |
Master's thesis
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Authors
Date
2013
Major/Subject
Accounting
Laskentatoimi
Laskentatoimi
Mcode
Degree programme
Language
en
Pages
103
Series
Abstract
Objectives of the study The general aim of this study is to apply issue selling theory into a new research area, namely capital investments. Issue selling activities especially arise when organizations face considerable changes. Hence, a more particular objective is to outline the issue selling strategies used to further new business investments supporting the redirection of an organization. Influence strategies in the capital budgeting setting have not been analyzed with issue selling theory before. As such this study adds importantly to the existing research in both fields. As a result, an issue selling framework is refined to better demonstrate the reality of attaining attention and acceptance for new business investments. Methodology The study was performed as a case study, with a case company from the forest industry. Data gathering focused especially on new business investments, one investment project being the core case. In practice, material was collected through thematic interviews with key organizational actors. Using the case study method and interviews was the key to accumulating concentrated but deep data, which was essential for gaining enough insights into the sensitive subject. Key results The key findings of this study relate to demonstrating the applicability of issue selling in relation to capital budgeting, discovering the increased importance issue selling for new business investments and gathering further evidence on the specialized nature of such investments. Furthermore, new business investments were found to require different issue selling actions than investments into existing businesses. These differences related to the importance of demonstrating a long-term vision, the central role of skilled issue sellers and a widened need for issue selling preparations. Moreover, expert use of information was found to form the basis for all issue selling efforts, especially since reliable information related to new business investments is often in short supply. Overall, this study contributes to existing theory by adapting an issue selling framework to the capital budgeting context, particularly answering to the specific needs of new business investments. In addition to creating a good basis for further research, the revised framework can be adapted into practice to enhance investment issue selling successfulness.Description
Keywords
Capital budgeting, capital investments, new business investments, issue selling, gameplaying in capital investments, behavioural investment theory, decision-making