A Classification of Factors in Corporate Investment Decisions

There are wide variations in the extent to which investment decisions are taken on the basis of formal financial analysis since many factors that should mediate interpretations of “bottom‐up financial analyses” (BUFAs) do not, due to omissions or other informational deficiencies in the analyses. Organisational design influences the provision of information regarding the various factors in the investment decision. A model of investment decision making that emphasises organisational contexts may provide a useful point of departure for the design of effective and comprehensive investment decision support systems. An analysis is made of mediating factors which are then classified as to whether or not they can be accounted for in principle in an ideal BUFA.