However in reality each tool has limitations lefley

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: analysts advocate using one decision analysis technique for investment appraisal (for example, Hammond, 1966). However, in reality, each tool has limitations (Lefley and Morgan, 1999) some that are inherent, others which are caused by a lack of information or specification in the literature (see Chapter 5). As such, the knowledge that the decision-maker can gain from the output of one tool is limited (see Chapter 5 and Newendorp, 1996). Therefore, a combination of decision analysis techniques and concepts should be used to allow the decision-maker to gain maximum insight, encouraging more informed investment decision-making (this is justified in Chapter 5). Some oil industry analysts have recognised this and presented the 59 collection of decision analysis tools that they believe constitute those that decisionmakers ought to use for investment decision-making in the oil and gas industry (for example, Newendorp, 1996). However new techniques have only recently been applied to the industry (for example, Galli et al., 1999; Dixit and Pindyck, 1998 and 1994; Ross, 1997; Smith and McCardle, 1997) and as such, these previously presented approaches now require modification. Consequently, although informed through secondary data sources, the identification of the decision analysis techniques that are most appropriate for investment appraisal decision-making and the approach to investment appraisal that is presented in this thesis, are believed to be two of the main findings of the research. In exploring the second research question, the current study aimed to establish current practice in investment appraisal decision-making in the operating companies in the U.K. oil and gas industry. Two factors directly affected the choice of research method chosen to investigate this question; firstly, there is widespread recognition in social science research that the primary strength of qualitative research is that it facilitates the in-depth exploration of the perceptions and values of key organisational stakeholders. Bryman (1989 p12) identified the principal advantage of qualitative research as being that: “…it expresses commitment to viewing events, actions, norms and values from the perspective of the people being studied.” This reflects the primarily interpretive approach inherent in qualitative research involving the exploration of meanings and perceptions within a naturalistic rather than positivist framework (Hammersley and Atkinson, 1983). Such essentially intangible issues, Laing (1997) argues, cannot be explored adequately by traditional quantitative survey-based research methods. A second factor that impinged on the choice of research method was that previous empirical research had typically used quantitative survey-based research which had produced statistical results that indicated the percentage of organisations using decision analysis techniques (defined in Chapter 5) (for example see studies by Arnold and Hatzopoulous, 1999; Carr and Tomkins, 1998; Schuyler, 1997; Buckley et al., 1996; Shao and Shao, 1993; Kim, Farragher and Crick, 1984; Stanley and Block,...
View Full Document

This document was uploaded on 03/30/2014.

Ask a homework question - tutors are online