Strategic investment decisions and ownership structure: An exploratory study in Egypt

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Moataz Elmassri ORCID logo, Mahmoud Abdelrahman ORCID logo


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This paper examines how strategic investment decisions (SIDs) are made in the Egyptian context. There is an increasing call to comprehensively explore how social, economic, political, cultural, and organisational influences impact managerial judgement in SID making. In doing so, this paper takes an ontological perspective to understand how SIDs are really made. Given the uncertainty of the political and social climate and the radical changes that have taken place in Egypt, this paper provides a unique opportunity to investigate how SIDs are made in a revolution space. The contextual emphasis leads to a qualitative, interpretive research methodology. Twenty-seven unstructured interviews were conducted from national-owned and multinational companies in Egypt. Twelve organisations out of the twenty-seven that were interviewed were working for multinational organisations, thirteen of them were working for nationally owned organisations and the remaining two are joint venture companies. We found that the uncertainty embedded in the contextual structures cannot be translated through abstracted technical investment appraisal methods, so the role of subjective judgments and personal intuition is emphasized in the making of SIDs. Although both national and multinational companies indicate that in the time of revolution it is more rational to rely on personal trust rather than system trust. We found that multinational organizations push their Egyptian subsidiaries to articulate technical methods as a taken-for-granted practice, whether it is deemed meaningful or not.

Keywords: Strategic Investment Decisions, Ownership Structure, Investment Appraisal, Managerial Judgement, Ownership Structure, Less Developed Countries

Authors’ individual contribution: Conceptualization – M.E. and M.A.; Methodology – M.E.; Formal Analysis – M.E.; Data Curation – M.E.; Writing – Original Draft – M.E.; Writing – Review & Editing – M.E. and M.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D70, D91, G11, G32, M41

Received: 10.07.2020
Accepted: 31.08.2020
Published online: 03.09.2020

How to cite this paper: Elmassri, M., & Abdelrahman, M. (2020). Strategic investment decisions and ownership structure: An exploratory study in Egypt [Special issue]. Corporate Ownership & Control, 17(4), 399-416.