Capital budgeting in multinational organizations: exploring the strategic context
Article Abstract:
A study of capital budgeting and strategy in 23 companies revealed three different types of capital budgeting processes. The centralized capital budgeting process involves top management in all important strategic decisions. In the decentralized process, operating managers identify and initiate projects approved by top management according to projected financial performance. The integrated process has elements of both the centralized and decentralized capital budgeting. The type of capital budgeting process used by a firm is found to be partly determined by how it competes in the international market.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
Making capital budgeting decisions in multinational corporations
Article Abstract:
The net present value (NPV) rule appears to be regarded by many corporations as a relatively poor analytical tool in capital budgeting. Despite its limited applicability, the NPV criterion is still useful for lower risk projects which do not involve significant externalities. The technique needs to be correctly implemented to achieve favorable results. Its use is seen to increase as senior executives become more sophisticated and the ability to incorporate real option values into capital budgeting grows.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
International capital budgeting, real operating options and FDI
Article Abstract:
Managers implicitly identify and internalize real operating options to keep as many options as they can. Thus, flexibility in structuring investments, as well as in many other managerial actions, is one of the ways employed to enhance corporate value. This means that the opportunity to make decisions hinges on the availability of information in the future. With an option element incorporated in structuring investment decisions, shareholder value is enhanced beyond the base case present value scenario.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Liberalisation of international insurance operations. New financial statistics. Policy issues in insurance: investment, taxation, insolvency
- Abstracts: Multinationality of U.S. corporations: the auditing implications. Materiality and audit risk modelling: financial management perspective
- Abstracts: Effects of bailout legislation: implications from the stock market for thrift shareholders. The influence on Congress by the thrift industry
- Abstracts: Market globalization and the stability of financial and credit sectors. Enhancing European competitiveness
- Abstracts: Developing decision rules to aid tax professionals in ambiguous planning situations. Promotion decisions: a rough set approach