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Unformatted text preview: ndication of current capability ascertained in Chapter 5, the findings confirm the
trend observed in previous quantitative research studies that there is a gap between
current theory in investment appraisal and current practice. However, unlike these
survey-based studies, where the research methodology used prohibited further
investigation of such issues, the current study uses insights from the semi-structured
interviews, together with behavioural decision theory literature, to suggest why this
might be the case.
Chapter 7 uses the data presented in Chapters 5 and 6 to produce a ranking of the
companies according to their usage of decision analysis techniques in investment
appraisal decision-making. The assumption that any value added to the company
from using a decision analysis approach will ultimately affect the organisation’s
bottom-line is justified. This assumption is then used to investigate the relationship
between the ranking of organisations by their use of decision analysis in investment
appraisal decision-making and business success statistically by using criteria that are
indicative of organisational performance.
The final chapter, Chapter 8, brings together the information gathered for the thesis
and provides the answers to the research questions posed in Chapter 1. It sets out the
conclusions that can be drawn from the research. In particular, the implications of the
results to the theoretical debate between the decision analysts and behavioural
decision theorists are highlighted. The limitations of the research presented in this
thesis are discussed and this leads into the identification of areas for future research
that arise from the current study. 9 Chapter 2 Literature Review 10 2.1 INTRODUCTION
This chapter presents the literature review for the current study. It draws on the
existing academic literature on investment decision-making to highlight the gaps in
this literature that the research questions presented in Chapter 1 are drawn from. The
literature review is structured so that attention is focussed on the source of each of the
three research questions in turn.
2.2 RISK AND UNCERTAINTY
The first section of the literature review emphasises the centrality of risk and
uncertainty to investment decision-making by focusing on the following three
1. How does the academic investment decision-making literature conceptualise risk
2. How do investment decision-makers conceptualise risk and uncertainty?
3. How do these decision-makers cope with risk and uncertainty in investment
Investigating the methods of coping with risk and uncertainty adopted by investment
decision-makers highlights the role of quantitative techniques. This leads into identification of the need for a study that ascertains which of the tools and techniques
that are presented in the decision theory literature are most appropriate for investment
appraisal. This is the first research question that this thesis aims to answer.
Consider the first question proposed above. Risk and uncertainty are in...
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This document was uploaded on 03/30/2014.
- Summer '14
- The Land