Prospective control of SCI in the mining industry: A controller point of view
2013 (English)Report (Refereed)
Strategic capital investments (SCI) have a significant impact on the long term performance of companies. Yet, they are challenging, complex and involve a high degree of uncertainty. Previous studies also show that the suitability of different appraisal tools for SCIs is debatable. In the mining industry, SCI in new mining sites typically are highly capital intensive and have considerable long-term repercussions for local communities and regions. During the exploration phase it is essential to assess whether to allocate financial resources for additional exploitation of a mineral finding. The exploration phase allows companies to search for new opportunities that might lead to a competitive advantage. However, from a cost management point of view this is a decisive phase because large share of the production cost is determined here. Because the traditional functions of management accounting rely on established measurable outputs, they are less effective in this phase. Management control is demanding because money and resources cannot be traced to outcomes. This is a phase where control needs to be prospects-oriented. Knowledge is lacking when it comes to the specifics of how prospective control can be exercised and the possibilities for successful strategic control in the exploration phase. The overall purpose of this dissertation is to generate empirical knowledge of prospective control and to contribute with a more developed and dynamic theory of this concept in the context of strategic capital investments in the mining industry.The theoretical contributions of the planned papers are to generate theory about the nature and characteristics of prospective control in the context of SCIs and to create new insights about the controller perspective in this regard. The practical contributions of the proposed papers will be to identify factors and circumstances that are important to consider for practicing controllers in exploration environments.Keywords: Prospective control, strategic capital investments, controller perspective, mining industry, management accountant
Place, publisher, year, edition, pages
Luleå tekniska universitet, 2013. , 25 p.
Research subject Accounting and Control
IdentifiersURN: urn:nbn:se:ltu:diva-23979Local ID: 92d8b19a-ddb0-466e-a233-0fffa41cc598OAI: oai:DiVA.org:ltu-23979DiVA: diva2:997029
Godkänd; 2013; 20140110 (boikar)2016-09-292016-09-29Bibliographically approved