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Investments And Corporate Strategy:

Investments and Corporate Strategy: Aligning investment decisions with overall strategy
by Mia Åberg Master’s thesis in Business Administration

School of Management Blekinge Institute of Technology Supervisor: Anders Hederstierna September 2006

ABSTRACT
Title: Investments and Corporate Strategy: aligning investment decisions with overall strategy Author: Mia Åberg Supervisor: Anders Hederstierna Department: School of Management, Blekinge Institute of Technology Course: Master’s thesis in Business Administration, 10 credits. Background and Problem Discussion: Correct usage of a firm’s resources are crucial for the firm’s survival. Companies usually have formalized procedures for calculations of the profitability of investment projects. On the other hand is the corporate strategy, directing the company activities, determining how company resources should be used. The financial calculations and the corporate strategy should work together to ensure the best possible allocation of company resources. Unfortunately, this is not always the case. Purpose: The purpose of this study is to investigate if contradictions between strategy and individual investment decisions exists in companies today, if these are acknowledged, and what is done about it. Method: Phenomenological research, using three exemplars. The first exemplar is based on primary data (a case study) and the others on secondary data (taken from published work). Theory: My starting point is the importance of aligning the investment process with the strategy process. The analysis is supported by theoretical notions of the strategy and the investment processes. These are usually treated as independent processes, although the importance of aligning is extensively acknowledged. Analysis: The analysis proceeded in the following manner: The empirical data was condensed into key descriptions, which relied on identification on Northcott’s (1995) model of the standard investment process. The key descriptions from...