On the Role and Function of Formal Analysis in Strategic Investment Decision Processes : Results from an Empirical Study in Belgium

Our research group examined strategic investment processes in 50 large companies and banks located in Belgium, over a 2-year period (1992-94). This article reports one fundamental part of the research: the impact of formal analysis on strategic investment processes. Findings covering this theme concern the effect of uncertainty on the act of formal analysis, the importance of financial goals, the use of financial evaluation models and the role of intuition. This article discusses findings from a recent field study on strategic investments in Belgian business practice. From results of existing, mostly Anglo-American, studies and from own experiences in the field, we formulated 27 statements on strategic investment processes. Fifty top or middle managers in large companies and banks were asked to comment on these statements. In this report attention is focused on one specific part of the research: the degree to which formal analysis plays a part in strategic investment processes. A number of theories on strategy formation assumes that, due to their innovative character, strategic investments are difficult to manage by formalized techniques