Changing perspectives on the capital investment process

The environment within which institutions undertake commercial and industrial activity changes both as a result of decisions dependent on the institution itself and as a result of decisions independent of the institution. In recent years many of these changes have resulted in changing perspectives on the range of criteria which should be considered when determining how and where large corporations should invest their money. This paper examines these changes in corporate practice and identifies the cumulative results of these changes in the environment of corporate activity. The paper also examines some of the key elements in new approaches which corporations are adopting to capital investment decisions by utilizing data on a broadly based research project which examines in depth the capital investment/ resource allocation processes of five large, worldwide, manufacturing firms. The subject is of vital importance to large and small businesses, both because of the crucial importance of investment decisions and because of the importance for future strategic planning of identifying the environment within which corporate activities take place.