DOES TOP MANAGEMENT ADD VALUE TO INVESTMENT DECISIONS

This paper presents the findings of a survey into investment decision-making in large divisionalized U.K. companies, as seen from the points of view of both senior head office and divisional managers. It sheds new light on the role the parent company plays in the investment decision-making process, and compares divisional perceptions of strategic investment processes with the views of those from head office, including judgements about the value added by the corporate centre. Finally, it provides suggestive evidence that the behaviour of many head offices could be leading to internally-generated short-termism, and myopic underinvestment in British industry. The paper concludes by outlining a number of ways in which such short-termist behaviour might be avoided.