Management of investment processes on Finnish farms

Structural change in agriculture means a continuous need for investing in farm production. It is essential for the sustainable operations and the economy of the farm that such investments are successful. In this research, different stages of the investment process of farms were studied as well as the use of information and the success perceived during the investment process. The study was carried out with mail surveys and telephone interviews on the Finnish Farm Accountancy Data Network (FADN) farms. The most challenging investments were in animal husbandry buildings and, as to these investments, the comparison of alternatives was the most challenging stage. For most investments, the planning phase was considered more challenging than the implementation. Before making the decision, farmers acquired information from many sources, of which the opinion of the main customer and the experiences of fellow farmers were the most valued. Some of the products considered were so new on the market that it was not easy to get adequate information and, furthermore, the information given by suppliers was not always accurate. Decision-making was supported by calculations, but qualitative factors had a dominating role. Large basic decisions were made relatively quickly, while details needed a longer time to process. In general, farm managers were satisfied with their investments. Improvements in work quality and quantity were especially mentioned and generally qualitative factors were the ones first in mind when evaluating the successfulness of the investment

Factors influencing the identification of it indirect costs: A case study

Organizations expenditure on Information technology (IT) related investments continue to rise in the face of the fierce competition in the various marketplaces. Nevertheless, the problem of evaluating such investments remains a challenge to managers due to the inability of the evaluation techniques to accommodate the indirect costs associated with IT investments. This negatively affects the accuracy of the justification process and the investment decision. According to literature, indirect cost factors are not easily identified or quantified because they human and organizational dimensions. Indirect costs, proven to be problematic to accommodate within traditional appraisal techniques, make IT managers choose to ignore them and neglect to include them in IT investment budgets. The research suggests an alternative solution to the problem of quantifying such indirect costs by calling for a more accurate identification of those costs which would enable a more robust management and finally control of such costs. Using a case study the paper highlights the investment decision making process in an international resource company and confirms the call for a more robust identification process. In addition the paper maps each indirect costs factor to the lifecycle stage(s) in which it occurs and presents the factors that influence the quality of the identification process

Prudence, Sunk Costs, and the Temporally Extended Self

Many find it reasonable to take our past actions into account when making choices for the future. In this paper, I address two important issues regarding taking past investments into account in prudential deliberation. The first is the charge that doing so commits the fallacy of honoring sunk costs. I argue that while it is indeed irrational to care about sunk costs, past investments are not sunk costs when we can change their teleological significance, roughly their contribution to our excellence as temporally extended, reasons-responsive, and goal-directed agents. I suggest some general principles for evaluating such significance. Second, it’s a live issue whether we should care about the fate of our past projects, even if we can now affect it. I reject Dale Dorsey’s recent answer, and argue that the puzzle he addresses turns out to be merely apparent, if we take seriously the fact that we are temporally extended

Financial Integration, Productivity and Capital Accumulation

Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investments. I provide empirical evidence from a sample of 93 countries observed between 1975 and 1999. The results suggest that financial integration has a positive direct effect on productivity, while it spurs capital accumulation only with some delay and indirectly, since capital follows the rise in productivity. I control for indirect effects of financial globalization through banking crises. Such episodes depress both investments and TFP, though they are triggered by financial integration only to a minor extent.Capital account liberalization, financial development, banking crises, growth, productivity, investments

Climate proofing infrastructure in Bangladesh : the incremental cost of limiting future inland monsoon flood damage

Two-thirds of Bangladesh is less than 5 meters above sea level, making it one of the most flood prone countries in the world. Severe flooding during a monsoon causes significant damage to crops and property, with severe adverse impacts on rural livelihoods. Future climate change seems likely to increase the destructive power of monsoon floods. This paper examines the potential cost of offsetting increased flooding risk from climate change, based on simulations from a climate model of extreme floods out to 2050. Using the 1998 flood as a benchmark for evaluating additional protection measures, the authors calculate conservatively that necessary capital investments out to 2050 would total US$2,671 million (at 2009 prices) to protect roads and railways, river embankments surrounding agricultural lands, and drainage systems and erosion control measures for major towns. With gradual climate change, however, required investments would be phased. Beyond these capital-intensive investments, improved policies, planning and institutions are essential to ensure that such investments are used correctly and yield the expected benefits. Particular attention is needed to the robustness of benefits from large-scale fixed capital investments. Investments in increased understanding of risk-mitigation options and in economic mobility will have especially high returns.Hazard Risk Management,Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Science of Climate Change,Climate Change Economics

Creating and Evaluating Business Cases for Complex IT Investments: Towards a New Process Theory

A business case document is an important project management decision-making tool for planning and evaluating potential investments in technology and process improvement projects. However, the effectiveness of traditional business case approaches for evaluating complex information technology (IT) investments, such as enterprise systems implementations is often questioned. A business case is a document created by an organization that outlines the expected benefits, costs, risks, and feasibility of a possible investment. Creating an effective business case for complex IT investments is difficult due to the uncertainty around the expected benefits, costs, risks, and timing for these complicated organizational projects that typically involve significant technological and organizational change throughout the lifecycle of the IT system. This paper reports on our analysis of the current challenges and outlines a framework for guiding further study

Valuation of R&D Sequential Exchange Options using Monte Carlo approach

This article describes a methodology for evaluating R&D investment projects using Monte Carlomethods. R&D projects generally involves multiple phases with or without overlapping. R&D investments are made often in a phased manner, with the commencement of subsequent phase being dependent on the successful completion of the preceding phase, it is known as sequential investment. Moreover, each stage creates an opportunity (option) for subsequent investment. Therefore, R&D projects can be considered as ‘Compound Options' in which investments present uncertainty both in the gross project value and in costs. It is possible to use exchange options to value the R&D investment opportunities. In this paper, we propose to value the European and American Real Compound Exchange options through Monte Carlo simulation. We also provide a set of numerical experiments to provide evidence for the accuracy of the proposed methodology.Pseudo Compound American Exchange option; R&D;Monte Carlo Methods.

Financial integration, productivity and capital accumulation

Understanding the mechanism through which financial globalization affect economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP)and investments. I provide empirical evidence from a sample of 93 countries observed between 1975 and 1999. The results suggest that financial integration has a positive direct effect on productivity, while it spurs capital accumulation only with some delay and indirectly, since capital follows the rise in productivity. I control for indirect effects of financial globalization through banking crises. Such episodes depress both investments and TFP, though they are triggered by financial integration only to a minor extent. The paper also provides a discussion of a simple model on the effects of financial integration, and shows additional empirical evidence supporting it.Capital account liberalization, financial development, banking crises, growth, productivity, investments

IS/IT Benefits Realisation and Management in Large Australian Organisations

Information systems and technology investments in organisations are substantial and growing. While formal methodologies and techniques for evaluating these investments are used to some extent, relatively less formality is applied to managing and realising their benefits. Part of an ongoing research programme, this study examines a number of aspects of IS/IT benefits realisation in large Australian organisations and reveals issues of identifying and structuring benefits, planning benefits realisation, delivering, evaluating and reviewing these benefits, with some success and some failure. The results show some use of formal methodologies, benefits measurement, formal reviews, and allocation of specific responsibilities, but a lack of uniformity in the formality of the activities. These results, however, are generally consistent with findings in related studies outside Australia

Learning and Applying Financial Metrics to Evaluate Human Capital Investments: The case of Return on Investment

Return on Investment (ROI) is one of several financial metrics increasingly advocated and used to evaluate expenditures on human capital initiatives. This thesis explored empirically the discrepancy between growing interest in, and uptake of, ROI for human capital investments on the one hand; and evidence to date that implementation is problematic and actual usage limited, on the other. From within a constructivist/interpretivist paradigm, ten attempts to apply ROI were identified and reconstructed using the qualitative techniques of observations, interviews and document analyses. These attempts were drawn from three different contexts - corporate, health service and international development. Concepts from seminal theories on learning and skills acquisition, knowledge, practice, context and their relationship with each other, as well as the introduction of new technical approaches, were selected to provide a framework to guide the enquiries and interpretation of data. The study found the term ROI was used as a bridging metric and understood in three ways - metaphorically, as an aspiration of value; literally, as a metric; and procedurally, as a method for planning and evaluating human capital investments. The metaphorical use of ROI was widespread as a way of expressing a common goal when dealing with key stakeholders. However, the metric was rarely utilised to measure human capital investments because applying it was difficult and time consuming; particularly linking the investment and service system performance through people performance. Methodically, ROI seemed to function as an aspirational map for planning and evaluating human capital investments. Learning and applying the method, even partially, was valued and tended to lead to changed behaviour and organisational culture. Significant variations between the three contexts were noted, and it is argued that the contingencies affecting the uptake and appropriateness of ROI in different settings would likely affect the appropriateness of other financial metrics for evaluating human capital investments