How do companies decide? Emotional triggers and drivers of investment in natural gas and biogas vehicles

Abstract

Management research recognizes that companies’ investment decisions are driven not only by objective techno-economic models but also by emotion. Alternative fuel vehicle (AFV) investments offer an appealing context in which to study this interaction in energy source decisions, as they are influenced by a diverse set of analytical and emotional elements ranging from fuel costs to environmental values. This study examines companies’ vehicle investment decision making in Finland and focuses on the interaction between objective facts and subjective feelings along with the process of choosing the vehicles’ energy source.This article is based on an interventionist case study. Switching path analysis technique (SPAT) was used to investigate companies’ switches from conventional fuels to natural gas or biogas. This article contributes to the discussion of AFV adoption by unveiling companies’ decision-making triggers, investment criteria and the use of information sources in the decision-making processes. The findings regarding the decision-making dynamics between these factors are transferable to other energy investments. However, the content of the triggers and drivers varies across contexts and may change over time, because vehicles as investment objects have different meanings for different organizational actors depending on their organizational role, investment use context, and personal preferences.