This book presents the findings from a cross-sectional survey funded by CIMA. The project aimed to survey senior management accountants working across a range of organisations and industries with a unique focus on the behavioural side of decision making, the use of managerial judgement. Previous capital budgeting surveys have tended to focus on the quantitative evaluation tools and techniques used for project appraisal. This study was broader in that it asked about every stage of the strategic investment decision (SID) process, from initiation to post implementation review, and how different managers were involved at different stages of the process. The focus is on how decision judgements are reached. - Explains Strategic Investment Decisions (SIDs) clearly to management accountants who are expected to be involved in decision making processes - Covers all stages of the SID process, the types of SID and how multiple managers participate in the process - Will help organisations benchmark their own SID practice

While there has been extensive research on the use of financial appraisal techniques [Pay Back (PB), Return on Capital Employed (ROCE), Internal Rate of Return (IRR) and Net Present Value (NPV)] in Strategic Investment Decisions (SIDs), little research has been conducted on the role of the Managerial Judgement factors (MJ factors) - past experience, intuition and own judgement - in the SIDs. In practice, many investments are undertaken on the basis of financial returns with little or no analysis of the growth options embedded in the proposed investments. Essential to considering these options in the SIDs is the deployment of MJ factors in the SIDs. This research draws on a 36-firm survey of finance directors in Syrian coastal region firms to set out the relative importance of the MJ factors and financial techniques in the SIDs. The findings from the survey show high usage of the MJ factors in the SIDs but not at the expense of the financial techniques usage which are used regardless of the MJ adoption in the SIDs. However, There is a tendency towards using MJ factors more than financial techniques for investments with growth options. There is no relationship between neither the ownership nor the sector with the MJ adoption. ROCE and PB are the most frequently used financial techniques.

This paper examines the extent to which the Real Options Approach (ROA) and Managerial Judgement (MJ) factors are deployed in the Investment Appraisal Process (IAP).It draws on a 73-firm survey aimed at finance directors of British Automotive Components Manufacturers (BACMs) to set out the relative importance of the strategic approach (ROA informed by MJ) and formal investment appraisal techniques: Pay back (PB), Return on Capital Employed (ROCE), Internal Rate of Return (IRR) and Net Present Value (NPV) when making Strategic Investment Decisions (SIDs) with growth options. The findings from the survey show the absence of the formal adoption of the ROA in the IAP. However, the impacts of the growth options regarding the deployment of MJ in the IAP are clearly evident. The analysis shows that MJ is considered when assessing both investments with growth options and risky projects.

The chapters published in this volume provide cutting edge ideas by leading scholars, and help to inform mergers and acquisitions research around the world.

Corporate finance and corporate strategy have long been seen as different sides of the same coin. Though both focus on the same broad problem, investment decision-making, the gap between the two sides--and between theory and practice--remains embarrassingly large. This book synthesizes cutting-edge developments in corporate finance and related fields--in particular, real options and game theory--to help bridge this gap. In clear, straightforward exposition and through numerous examples and applications from various industries, Han Smit and Lenos Trigeorgis set forth an extended valuation framework for competitive strategies. The book follows a problem-solving approach that synthesizes ideas from game theory, real options, and strategy. Thinking in terms of options-games can help managers address questions such as: When is it best to invest early to preempt competitive entry, and when to wait? Should a firm compete in R&D or adopt an accommodating stance? How does one value growth options or infrastructure investments? The authors provide a wide range of valuation examples, such as acquisition strategies, R&D investment in high-tech sectors, joint research ventures, product introductions in consumer electronics, infrastructure, and oil exploration investment. Representing a major step beyond standard real options or strategy analysis, and extending the power of real options and strategic thinking in a rigorous fashion, Strategic Investment will be an indispensable guide and resource for corporate managers, MBA students, and academics alike.

Author is a leading theorist in negotiation and decision-making.

These ten chapters explore sequential aspects of the M & A process, from the pre-combination phase, to issues that should be taken into account when considering a merger or acquisition, to post-merger integration concerning the determinants of acquisition performance.