Strategic investment decision-making practices - Evidence from Nordic, Anglo-Saxon and Polish companies

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Volume Title

School of Business | Master's thesis

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Date

2015

Department

Laskentatoimen laitos
Department of Accounting

Major/Subject

Accounting
Laskentatoimi

Mcode

Degree programme

Language

en

Pages

98

Series

Abstract

This study examines the strategic investment decision making practices in Nordic, Anglo-Saxon and Polish country contexts. The study covers key financial, risk and strategic approaches that can be applied when evaluating investments. In addition, the study assesses how much weight companies put on the strategic and financial considerations, and whether there are notable differences between the companies from different cultural backgrounds. The study is quantitative in nature, however due to low response rates only very basic descriptive statistics are presented and analyzed. The sample consists of 57 companies publicly quoted in Finland, Sweden, Norway and Denmark for the Nordic group, 15 companies quoted in the UK, Australia and New Zealand for the Anglo-Saxon group, and 6 companies quoted in Warsaw Stock Exchange for the Polish group. The results suggest that dominating financial analysis methods for strategic investment decisions include the NPV, IRR and payback in all of the country groups. Sensitivity, scenario and breakeven analysis are quite widely applied to account for project risk. Most commonly used strategic approaches include market and competitor analysis as well as benchmarking. Approaches promoted by academic literature, such as value chain analysis, technology roadmapping and real options were significantly less adopted in any of the country groups.

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Keywords

strategic investment decisions (SIDs), capital budgeting, financial analysis, risk analysis, strategic analysis, cross-country comparison

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https://urn.fi/URN:NBN:fi:aalto-201511054956

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[gradu] Kauppakorkeakoulu / BIZ