The Impact of Diverse National Values on Strategic Investment Decisions in the Context of Globalization

Carr, Christopher; Harris, Simon

doi:10.1177/1470595804041524

Cited by 24 publications

(21 citation statements)

References 72 publications

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“…Cross-country research suggests that these differences may be associated with the national context (Carr and Harris, 2004;Carr andTomkins, 1996, 1998;Jones et al, 1993;Shields et al, 1991). Additionally, documented differences in the emphasis on strategic versus financial considerations among companies from the same country contexts suggest that these differences may be associated with other contextual variables, as well (e.g.…”

Section: Introductionmentioning

confidence: 88%

Strategic investment decision making practices: A contextual approach

Carr

Kolehmainen

Mitchell

2010

Management Accounting Research

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a b s t r a c tThis paper proposes a contextual approach to explaining differences in strategic investment decision (SID) making practices. First, a systematic contextual framework is developed from the existing research literature. Then this framework's potential for explaining differences in SID making practices is explored through 14 case studies of U.K., U.S. and Japanese companies from both stable and dynamic business sectors. Our findings suggest substantial SID differences across our four contextual categories of market creators, value creators, refocusers and restructurers. The differences relate to the emphasis on strategic versus financial considerations, the thoroughness and rigidity of financial analysis, the attitudes towards incorporating less easily quantifiable factors and the level of hurdle rates.

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Section: Introductionmentioning

confidence: 88%

Strategic investment decision making practices: A contextual approach

Carr

Kolehmainen

Mitchell

2010

Management Accounting Research

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“…However, while investment decisions may be financial decisions, there is a growing recognition that they are also often non-financially based decisions. Nevertheless, studies have mainly considered on only the impact of national context (e.g., Carr & Harris, 2004;Carr & Tomkins, 1996, 1998Shields, Chow, Kato, & Nakagawa, 1991), with little evidence provided regarding which contextual variables, other than country 1 For the purposes of this study the relative degree of emphasis decision-makers attach to a financial and nonfinancial orientation in capital budgeting can be interpreted as either purposeful emphasis or decision-makers may unconsciously attach emphasis. 2 A substantial literature exists on the agency problem and the associated goal incongruence between principals and agents (see e.g., Baiman, 1990;Berle & Means, 1932;Fama, 1980;Jensen & Meckling, 1976).…”

Section: Introductionmentioning

confidence: 99%

Incentives and monitoring: impact on the financial and non-financial orientation of capital budgeting

Turner

Coote

2018

MEDAR

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While investment decisions may be financial decisions, there is a growing recognition that they are also often non-financially based decisions. This study reports findings focused on the project selection stage of capital budgeting, which has the objectives of exploring for: (1) the relative degree of emphasis decision-makers attach to a financial and nonfinancial orientation in capital budgeting; and (2) the role, if any, that two agency theory variables have on the relative degree of emphasis: a personal incentive for project go-ahead; and monitoring of project outcomes through a post-audit. Design/methodology/approach-Discrete choice experiments (DCEs) are used and framed in a between-subjects 2 (personal incentive) x 2 (monitoring) design. DCEs are well-suited to research questions which examine some tension between competing alternatives. For example, trade-offs involving the relative degree of emphasis decision-makers attach to a financial and non-financial orientation in capital budgeting. Findings-In the absence of a personal incentive and monitoring, decision-makers attach a significant degree of emphasis to cash inflows and cash outflows, both financial factors, and one strategic non-financial factor being improvement in the position of the firm vis-à-vis competitors in capital budgeting. However, when decision-makers receive a personal incentive from project go-ahead, they attach a lower degree of emphasis to cash outflows. Alternatively, when there is monitoring through a post-audit and a personal incentive, decision-makers attach a higher degree of emphasis to cash outflows. Practical implications-Decision-makers attach a significant degree of emphasis to only a relatively narrow band of attributes in making a capital budgeting decision, which is true in both the absence of and in the presence of the agency conditions. There is also little support for the view that there is any higher degree of emphasis attached to a financial orientation vis-àvis a non-financial orientation. A particularly important finding relates to the overarching goal of monitoring through a post-audit. One view is that it should foster more accurate forecasting by making forecasters aware that their efforts will be reviewed. However, the findings of this study appear to be more supportive of a view that post-audits might lead agents to become more conservative or even shy away from projects. Originality/value-The study makes contributions to the growing field of research which has the objective of exploring for the relative degree of emphasis decision-makers attach to a financial and non-financial orientation in capital budgeting. In particular it extends the prior research through its investigation of the role that two agency theory variables play in the relative degree of emphasis decision-makers attach to a financial and non-financial orientation: a personal incentive for project go-ahead; and monitoring of project outcomes through a postaudit.

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“…Different national cultures exhibit different approaches to decision making (Hofstede, 1994, 2001, Child 1981). Carr and Harris (2004), when comparing the strategic investment decision style of companies from Germany, Britain, Japan, and the US, in the automotive component business, concluded that divergence in national values had a significant impact on investment decision style. For example: the German emphasis on a small top professional team; the extensiveness of consultation practices in Japan; the surprisingly systematic approach in the US; and the pragmatic, shallower approach of the British.…”

Section: Introductionmentioning

confidence: 99%

A framework for strategic decision making and performance among Chinese managers

Cheng

Rhodes

Lok

2010

The International Journal of Human Resource Management

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This study develops an integrative model that explains the relationship between Chinese culture, managers' strategic decision making (SDM) processes, and organizational performance. 1200 participants were randomly selected from a business club's company register, resulting in 204 valid respondents. The results highlighted two significant SDM paths used by managers: (1) The cognitive-speed path, which suggested that Overseas Chinese managers (the Chinese who live outside of Mainland China) focus on the big picture, draw analogies from past experiences, and use extensive networks to reduce the duration of the decision process. (2)The social-political path which shows that Overseas Chinese managers focus on collective interests, strive to maintain harmony, and to save face whilst using a collaborative style to handle conflict; this approach reduces dysfunctional political behavior, while reinforcing the decision team's focus on common goals. From these results we concluded that a speedier decision making process (based on intuition, experience and networks) accompanied by the appropriate use of political behavior (that created harmony, through a hierarchical structure, during conflict management) in the Overseas Chinese managers' strategic decision making process could positively influence organizational performance.

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The Impact of Diverse National Values on Strategic Investment Decisions in the Context of Globalization

Cited by 24 publications

References 72 publications

Strategic investment decision making practices: A contextual approach

Strategic investment decision making practices: A contextual approach

Incentives and monitoring: impact on the financial and non-financial orientation of capital budgeting

A framework for strategic decision making and performance among Chinese managers

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