Capital Investment Decision: Impact From Extent of Environmental Scanning

Abstract

<p style="text-align: justify" class="MsoNormal"><span style="font-size: 11pt">Current thinking in corporate long-range planning tends to emphasize the need for, and value of, environmental information.<span> </span>Many scholars proposed that environmental information is crucial to modern corporate planning and for firms to remain competitive, particularly when making capital investment decision.<span> </span>Such information is generated outside the firm’s official jurisdiction.<span> </span>Unfortunately, little is known of the extent of environmental scanning done by decision makers when making capital investment decision. This paper reports on a study undertaken to determine the extent of environmental scanning in relations to the quality of investment decision made.<span> </span>This study examines the relationship between environmental scanning behavior and the quality of investment decisions made by managers.<span> </span>Result from 118 useable questionnaires by higher-level managers in Malaysia shows that; in making capital investment decision, most of the environment scan was related to competitor information, technology information and economic information.<span> </span>Out of this information, information made related to competitor and economics leads to high quality decision.</span></p><p style="text-align: justify" class="MsoNormal"><span style="font-size: 11pt"><!--[if !supportEmptyParas]--> <!--[endif]--></span></p><p style="text-align: justify" class="MsoNormal"><strong><em><span style="font-size: 11pt">Keywords: Environmental Scanning, Capital Investment, Decision-making Quality</span></em></strong></p&gt

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