The investment decision-making process in small manufacturing enterprises: the case of the printing and clothing industries in UK

This study is concerned with the investment decision making process in small manufacturing enterprises in the printing and clothing industries. The focus is on the actual decision-making behaviour of owner-managers, using 'Insider accounts' as a qualitative methodology which involves in-depth, semi-structured interviews and direct observation, conducted longitudinally in 8 case study companies. It is a research method which includes detailed accounts from the actors themselves, incorporating the actual motives and behaviour of owner-managers based on the philosophy that the 'objects' studied are in fact 'subjects', who produce accounts of their world.
The results suggest that owner-managers use 'bootstrapping' techniques for their investment appraisal instead of formal methods recommended in the financial management literature. 'Bootstrapping' represents an approach to decision making that is grounded in previous experience of key decision makers and their organisations and the largely informal routines that they develop from this. By which owner-managers rely on experiential learning when making investment decisions, rather than formalised methods. As a result, conceptualising small firm investment decision making within the context of an organisational learning approach holds promise as an explanatory framework for investment behaviour in small firms.

Access to full text restricted pending copyright check.