Strategic controllership—a case study approach

Abstract

This paper examines the investment decision-making process within one British company, chosen as a pilot study in an on-going research programme looking at strategic investment decisions in British and German vehicle component companies. We then compare approaches taken in 11 other British companies and contrast those taken in 14 German vehicle component companies, on the basis of preliminary findings from research carried out over the last 12 months. Findings are discussed in the light of a completed 10-year longitudinal study of strategic developments in this industry, which additionally has involved 30 companies in Britain, and 30 companies (matched on a product basis) in Germany, the U.S.A. and Japan. The intention in this paper is to encourage further discussion, and to generate hypotheses which can be further tested through case study research. We conclude, albeit tentatively at this stage in our research, that an inappropriate balance is being struck by firms between the need for elaborate capital budgeting techniques and the need for a thorough strategic decision-making process. Senior financial staff, at least in the U.K., appear to need to take on a wide role as ‘guardians’ of an effective strategic investment-making process in order to ensure that decisions are made on cash flow projections, which are based on a penetrating understanding of relevant markets and competition and the associated order-winning criteria.