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Using calculations in the early phase of strategic capital investment projects – insights from the mining industry

Using calculations in the early phase of strategic capital investment projects – insights from... PurposeThe purpose of this paper is to identify and describe how calculations are used in the early phase of strategic capital investment projects (SCIPs) in the mining context and thereby create an understanding of what calculations do in these situations.Design/methodology/approachThe authors conducted a case study based on interviews with project managers, controllers and top-level managers, as well as documents and observations.FindingsThe empirical evidence provides key insights into the different uses of calculations in the early phase of SCIPs in the mining industry. The authors found evidence that calculations in the early phase of SCIPs are used to generate ideas, support learning and discussions, evaluate decisions and act as a mediating device.Research limitations/implicationsThe paper is based on a single organization, and therefore, the findings of the paper are limited to theoretical generalization.Practical implicationsThe study has practical implications directed toward top management, controllers and project managers working with SCIPs. This study suggests that calculations in the early phase are used to unite and create a shared view in the early phase rather than to present rational answers to different investment decision. Calculations can also be used to direct attention toward important areas, sort out and prioritize among ideas, communicate a shared view and function as a template. Thus, calculations are essential in the early phase as they help to transform activities into actions.Originality/valueThis paper contributes to the accounting literature in which it has been emphasized that we still know little of strategic capital budgeting processes, with insights into the multiple uses of calculations in the early phase of SCIPs. We also argue that calculations act as mediating devices in the early phase of SCIPs as they provide a common frame of reference and a basis for action. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Accounting & Management Emerald Publishing

Using calculations in the early phase of strategic capital investment projects – insights from the mining industry

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References (34)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1176-6093
DOI
10.1108/QRAM-09-2017-0089
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to identify and describe how calculations are used in the early phase of strategic capital investment projects (SCIPs) in the mining context and thereby create an understanding of what calculations do in these situations.Design/methodology/approachThe authors conducted a case study based on interviews with project managers, controllers and top-level managers, as well as documents and observations.FindingsThe empirical evidence provides key insights into the different uses of calculations in the early phase of SCIPs in the mining industry. The authors found evidence that calculations in the early phase of SCIPs are used to generate ideas, support learning and discussions, evaluate decisions and act as a mediating device.Research limitations/implicationsThe paper is based on a single organization, and therefore, the findings of the paper are limited to theoretical generalization.Practical implicationsThe study has practical implications directed toward top management, controllers and project managers working with SCIPs. This study suggests that calculations in the early phase are used to unite and create a shared view in the early phase rather than to present rational answers to different investment decision. Calculations can also be used to direct attention toward important areas, sort out and prioritize among ideas, communicate a shared view and function as a template. Thus, calculations are essential in the early phase as they help to transform activities into actions.Originality/valueThis paper contributes to the accounting literature in which it has been emphasized that we still know little of strategic capital budgeting processes, with insights into the multiple uses of calculations in the early phase of SCIPs. We also argue that calculations act as mediating devices in the early phase of SCIPs as they provide a common frame of reference and a basis for action.

Journal

Qualitative Research in Accounting & ManagementEmerald Publishing

Published: Oct 8, 2018

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