What nonfinancial factors, if any, should managers consider in making investment decisions?
Nonfinancial factors that managers and investors alike should consider consist of the need for projects to meet the legal obligations and requirements (Gotze et al., 2016). Additionally, businesses should ensure that good relations prevail between them and third parties. Furthermore, managers should focus on employee motivation which will promote healthy competition (Gotze et al., 2016). Moreover, the trends play a major role in the making of investment decisions (Gotze et al., 2016).
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Which of these nonfinancial factors are most important, and why?
Research suggests that the legal factor is among the most essential nonfinancial factors that managers should consider during decision making and project appraisal (Revelli et al., 2015). Additionally the company’s brand and identity are additionally important especially given the fact that these factors affect sales directly (Revelli et al., 2015). In addition to this, environmental responsibility is vital for businesses in the wake of the extensive degradation of the environment which was caused by human activities (Revelli et al., 2015).
References
Gotze, U., Northcott, D., & Schuster, P. (2016). INVESTMENT APPRAISAL . SPRINGER-VERLAG BERLIN AN.
Revelli, C., & Viviani, J. L. (2015). Financial performance of socially responsible investing (SRI): what have we learned? A meta‐analysis. Business Ethics: A European Review , 24 (2), 158-185.
