Abstract
Control over capital spending and decisions on the type, timing and location of strategic investments are the key areas of decision-making that are strictly centralised in most MNCs. This does not mean that all such projects are initiated at the centre because most capital investment requests are actually first identified as a result of planning gaps or opportunities observed at the level of the local subsidiary or regional office. Further, capital investment planning in the multinational is not a wholly rational process in several ways. Firstly, companies do not usually conduct an extensive search to determine the full range of opportunities open to them, but rather they conduct only a limited search until an opportunity is identified which meets the required standards. Secondly, capital investment decisions are taken largely as a result of a behavioural and political process rather than an economic one.
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