How Do You Make Capital Investment Decisions?  Esp. when new technology or ecological issues are involved? Dorothy Wood, Australian National University Chris Robinson, Atkinson School of Administrative Studies, York University

Theories/Factors profit legislation stakeholder pressure ethics  Bansal and Roth (2000)‏ networking (Uzzi, 1997)‏ strategy technical competence  del Rios Gonzalez (2005)‏

Method/Companies Case studies Pulp and paper Dry cleaners Why? environmental issues, different size and ownerhsip structures

What did we find in pulp and paper? very technically competent staff –innovative economics – very limited capital budget social/ethics – most capital spending was on environmental projects with low payoff economics – formal manual requires NPV and payback, but they are only some of the factors ethics – environment manager has to agree to eery project stakeholder pressure – kept marginal mills running to save communities legislation, of course – but they also had several convictions for water pollution --> conflict of old tech/keep communities alive?

Findings cont'd Networking: design the major equipment with the suppliers, not off the shelf ($100 mm a pop)‏ Strategy/economics – they decide which are the core businesses, which get the investments; also profitability Dry cleaning: Family-owned and run. Small $ business and expenditures, but big to the family extensive networking with competitors before buy a new machine protect family, employees from risk of harmful chemicals is first priority, second is $ and compliance, but our interviewees invested before laws changed.