Inderscience Publishers

The role of organisational politics in foreign direct investment

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This paper aims to show that FDI decisions are largely political decisions made by organisational members and affected by contextual factors and the nature of the organisation’s power relationships. Furthermore, the study explores the uses of management accounting information in the FDI process. The current paper is a case study of the decision making process of a Greek manufacturing company which invested in the Balkans during the 1990s. The organisational control mix initially focused to explicit references to the company’s ideology but developed to one using formal, financially quantifiable information. The analysis illustrates that conflict and political behaviour emerge during strategic decision-making tasks in response to changing environmental conditions. The paper concludes that the change of the business affected by the FDI increased the influence of both the formal management control systems and those who controlled them.

Keywords: FDIs, management control systems, organisational politics

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