It was argued in that chapter that use of decision

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Unformatted text preview: crucial decisions. By drawing on the literature review of Chapter 2, the following paragraphs contextualise the results of the statistical tests. Section 2.5 of Chapter 2 identified two areas of empirical literature on the relationship between the decision-making process and effectiveness. The first demonstrated relationships between features and types of strategic planning and firm performance. In particular the research to date has tended to focus on the effects of comprehensivess/rationality and formalisation of the decision-making process on the performance of the company. Chapter 2 also established that use of decision analysis implies comprehensiveness/rationality and formalisation of the decision-making 179 process. Hence, the results of the previous section appear to corroborate the stream of research that suggests that either high levels of performance produce enough resources to help organisations make more rational decisions, or that more rational decisions may lead to better performance (Jones et al., 1993; Smith et al., 1988; Dess and Origer, 1987; Grinyer and Norburn, 1977-78). By implication, then, the findings seem to refute the research that suggested that superior performance may lower the extent to which organisations engage in rational/comprehensive, formalised decisionmaking (Bourgeois, 1981; Cyert and March, 1963; March and Simon, 1958). The second area of empirical research identified in Section 2.5 of Chapter 2 related to the impact of consensus on organisational performance. It was argued in that chapter that use of decision analysis encouraged communication and helped to build consensus amongst organisational members. As such the findings of section 7.5 appear to confirm the research of Bourgeois (1981) and Dess (1987) and others (Hambrick and Snow, 1982; Child, 1974) who suggested that either business success leads to higher levels of consensus, or that high levels of consensus encourage better organisational performance. Simultaneously, the results seem to dispute those of Grinyer and Norburn (1977-78) and others (Schweiger et al., 1986; De Woot et. al., 1977-78) who found evidence of a negative correlation between consensus and performance, and those of Wooldridge and Floyd (1990) who found no statistically significant relationship at all. 7.8 CONCLUSION In conclusion, the results from the current study provide some insight into the association between performance and the use of decision analysis in investment appraisal. The analysis presented above shows strong positive correlations between the use and sophistication of decision analysis techniques and concepts used and various measures of business success in the upstream. This is consistent with the proposition that sophistication in the use of decision analysis in investment appraisal decision-making is a source of competitive advantage in organisations that operate in the oil and gas industry. The theoretical contribution of this research to the debate between behavioural decision theorists and decision analysts, the implications for practitioners especially to managerial percepti...
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