Narratives in managers’ corporate finance decisions |
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Authors: | Les Coleman Krishnan Maheswaran Sean Pinder |
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Affiliation: | Department of Finance, The University of Melbourne, Parkville, Vic. 3010, Australia |
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Abstract: | This article uses the extended case method to explore senior executives’ corporate finance decisions. We quantified firm’s finance practices using a mail survey, and then – to resolve puzzles in managers’ decision processes – conducted face‐to‐face interviews with chief finance officers of large listed firms. The interviews identified six themes as consistent influences on finance decisions: pressures imposed by clienteles; constraints on resources; risk management; heuristics; real options; and sustainability. We conclude that managers are logical and rational in their decisions, but employ a wider range of criteria than assumed in conventional finance theories. |
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Keywords: | Corporate finance Executive decisions Extended case method Risk management Corporate social responsibility G31 G32 G34 G35 G36 |
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