Process matters – How strategic decision-making process characteristics impact capital allocation efficiency

A Literature Review of the Strategic Decision-Making Context: A Synthesis of Previous Mixed Findings and an Agenda for the Way Forward

“…Slotegraaf and Atuahene-Gima (2011) examined the antecedents and outcomes of marketing strategy comprehensiveness. Other studies have argued that comprehensiveness is positively related to allocating capital efficiently (Strauch, Pidun, & Zu Knyphausen-Aufseß, 2019) and divestiture outcomes (Thywissen, Pidun, & Zu Knyphausen-Aufsess, 2018). In the area of strategic alliances, Walter, Kellermans, and Lechner (2012) argued that rationality in alliance decision processes positively influences alliance performance.…”

Management control for sustainability : Activities and procedures for energy management in industrial companies

“…In line with the preceding discussion on the need to acknowledge the organisational levels of management control (e.g. Tessier and Otley, 2012), recent studies have made similar claims for the investment process, requiring a multilevel perspective (Strauch et al, 2019). Through its approach which focuses on the management control activities and procedures, this thesis goes beyond the otherwise common emphasis on capital budgeting practises and instead addresses the internal controls and organisational context in which investment decisions take place (Haka, 2007;Harris and El-Massri, 2011).…”

The Role of Structural Context in Making Business Sense of Investments for Sustainability–A Case Study

“…[7][8] However, the financial emphasis in the literature still remains; studies frequently focus on activities related to financial evaluation and applied capital budgeting techniques [44][45][46][47][48][49], even though it has been indicated that the importance of the financial evaluation may vary depending on, for instance, investment characteristics [50,51]. There is an emphasis on the use of different capital budgeting methods, payback periods, and hurdle rates [52], while the characteristics of the investment process remain overlooked and "black boxed" [31,53]. Financial evaluation is an important constituent of the boundary system of management control systems, i.e., it is a means to limit the opportunity set to ensure resource allocation for appropriate opportunities [28,54].…”

“…Simons [28] (p. 138) described this as "the set of formal routines and procedures designed to process and evaluate requests to acquire new assets," and denotes such formal systems as critical for guiding managers in their resource allocation decisions, providing a framework, analytical tools, and guidelines. However, Strauch et al [31] note that previous studies on the investment decision-making processes tend to focus on isolated factors and fail to address the investment process from the multilevel perspective it requires.…”

“…By examining the structural context in which investment decisions are taken [27], and the predefined and formal procedures investments are subject to [23], this paper seeks to contribute with insights for sustainability-related investments and how they may be more widely implemented. The position taken in this paper entails an inquiry where the steps of the process and the involvement of multiple managers are acknowledged [2,24,27,31,32], and the internal pre-decision controls such as manuals and policies [29,33] and management control activities such as planning, coordination, and evaluation [34] are addressed. Hence, three main concepts can be delineated that will be the focus of this paper: Activities, i.e., what takes place in the investment process; procedures, i.e., through which it is stipulated how and by whom; and information, i.e., input.…”