Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/30926
Appears in Collections:Management, Work and Organisation Journal Articles
Peer Review Status: Refereed
Title: Bounded rationality, capital budgeting decisions and small business
Author(s): Morales Burgos, Jaime A
Kittler, Markus
Walsh, Michael
Keywords: Canada
Mexico
Small business
Decision-making
Regional
Capital budgeting
Comparative study
Entrepreneurship
Context
Issue Date: 2020
Date Deposited: 1-Apr-2020
Citation: Morales Burgos JA, Kittler M & Walsh M (2020) Bounded rationality, capital budgeting decisions and small business. Qualitative Research in Accounting and Management, 17 (2), pp. 293-318. https://doi.org/10.1108/qram-01-2019-0020
Abstract: Purpose The purpose of this paper is to provide insight into the capital budgeting decision-making of Canadian and Mexican entrepreneurs in small businesses in the food sector. The objective is to understand the capital budgeting decisions through the lens of bounded rationality and how these decisions are affected by different (national) contexts. Design/methodology/approach This is a comparative study in which the use of constructivist grounded theory allowed deep conversations about capital budgeting decisions. Data was collected from forty semi-structured interviews with entrepreneurs/managers in two regions, Mexico and Canada. Findings Insights from this study suggest that entrepreneurs’ capital budgeting decisions are not only taken under conditions of bounded rationality but also suggest a prominent role of context in how bounded rationality is applied differently towards investment decisions. Research limitations/implications While the findings cannot simply be generalized, exploring how capital budgeting decisions are made differently across two regional contexts adds to the understanding of the nexus of context, bounded rationality and capital budgeting decision-making. Practical implications Using a bounded rationality lens, this study contrasts and explains similarities and differences in the entrepreneur’s capital budgeting decision-making within small businesses. The insights add to the body of knowledge and help entrepreneurs to reflect on their approach to decision-making. Originality/value The paper uses a less commonly applied approach to understand two under-researched regional contexts. We use constructivist grounded theory to explore entrepreneurs’ capital budgeting decision-making in small businesses in two regions, Canada and Mexico. The comparative approach and the findings add to the understanding of decision-making, highlight the prominent role of context and also challenge some insights from previous research.
DOI Link: 10.1108/qram-01-2019-0020
Rights: Publisher policy allows this work to be made available in this repository. Published in Qualitative Research in Accounting & Management by Emerald. The original publication is available at: https://doi.org/10.1108/QRAM-01-2019-0020. This article is deposited under the Creative Commons Attribution Non-commercial International Licence 4.0 (CC BY-NC 4.0). Any reuse is allowed in accordance with the terms outlined by the licence (https://creativecommons.org/licenses/by-nc/4.0/). To reuse the AAM for commercial purposes, permission should be sought by contacting permissions@emeraldinsight.com.
Licence URL(s): http://creativecommons.org/licenses/by-nc/4.0/

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