Accounting for strategic investment decision-making under extreme uncertainty

Moataz Moamen Elmassri, Elaine Pamela Harris, David Bernard Carter

Research output: Contribution to journalArticlepeer-review

41 Citations (Scopus)


This study focuses on processes employed by organisational managers making strategic investment decisions (SIDs) in an environment of extreme uncertainty in post-revolution Egypt. Our study illustrates how significant social, political and economic uncertainty impacts upon the utility of capital investment appraisal techniques employed in management accounting decision-making. To engage in this analysis, we employ strong structuration theory as a lens to examine how local Egyptian managers (agents-in-focus) respond to the impact of emergent structures that emanate from the post-revolutionary context in their strategic investment decision-making (SIDM). Our empirical evidence includes focused interviews with twenty-one local managers to understand the experience of accounting for decision-making under extreme uncertainty. Our analysis demonstrates that non-financial considerations and objectives take precedence over the technical ‘accounting’ measures, for example net present value (NPV) in post-revolution SIDM processes. In particular, recognising and responding to shifting labour power and short-term sacrifices (such as rejecting merger opportunities) become comparatively more important than the pre-supposed rationality of the NPV criteria. However, as multi-national corporations insist on the calculation of NPV by their Egyptian subsidiaries, local managers reproduce the imperfect NPV as a communication tool in relation to capital investment decisions, whilst resisting its persuasiveness in favour of more qualitative criteria.

Original languageEnglish
Pages (from-to)151-168
Number of pages18
JournalBritish Accounting Review
Issue number2
Publication statusPublished - Mar 20 2016
Externally publishedYes


  • Egypt
  • Extreme uncertainty
  • Net present value
  • Ownership structure
  • Political structure
  • Strategic investment decisions
  • Strategic management accounting
  • Strong structuration theory

ASJC Scopus subject areas

  • Accounting


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