Role of Non-Financial Factors in Industrial Investment Decisions: Findings from Survey

Authors

  • Dipen Roy
  • Dhruba Charan Hota

DOI:

https://doi.org/10.33516/rb.v43i3.33-48p

Keywords:

Non-Financial Sectors, Capital Budgeting Decision, Chief Financial Officer (CFO), Corporate Houses, Organization Structure.

Abstract

Many of the project benefits and costs are of non-financial nature. Therefore, complete dependence on normative financial appraisal to arrive at long-term investment decisions may be short-sighted and may not be desirable. The paper asserts that analyzing non-financial factors for taking capital budgeting decisions is essentially an important step. The authors used questionnaire survey method to collect data and assess the importance of various non-financial factors in capital budgeting 'decision making' in corporate sector. Analysis of data reveals that CFOs assign greater importance on financial factors than non-financial factors. This is consistent with the objective of wealth maximization. Corporate houses today depend more on the strategic moves to fight non-price competition in the imperfectly competitive market. All these have rendered strategic analysis the most important step in non-financial analysis. Indeed, if a project does not fit into the organizational strategy, then the project should be rejected straightway because the major challenge is survival and growth.

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Published

2017-10-01

How to Cite

Roy, D., & Hota, D. C. (2017). Role of Non-Financial Factors in Industrial Investment Decisions: Findings from Survey. Research Bulletin, 43(3), 33–48. https://doi.org/10.33516/rb.v43i3.33-48p

Issue

Volume 43, Issue 3, October 2017

Section

Articles
Crossref
Scopus
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Europe PMC

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