Environmental Scanning and Investment Decision Quality

Purpose – Previous studies on scanning behavior have focused mainly on decisions relating to the choice of corporate strategies, leaving strategic investment decisions largely understudied. This paper aims to bridge the gap not just by examining strategic investment decisions but also by investigating the role of information processing capacity in enhancing the relationship between the extent of scanning behavior and the quality of the investment decision.Design/methodology/approach – Cross‐sectional data are collected through a survey and analyzed by means of factor analysis and hierarchical regression analysis.Findings – Quality of decision is positively and significantly related to the extent of economic and competition information and the formality of method used to scan competition information. However, the extent of scanning for technology is contingent upon information processing capacity in order to affect the quality of the investment decision. Similarly, the method of scanning for economy, techn...

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