Decision making on risky innovative production investments

Abstract

Radical manufacturing technology innovations (RMTI) involve the introduction of new technologies in the firm’s production processes. They represent especially challenging production investment decisions, due to inherent high risks and uncertainties. Firms’ approaches to RMTI decision making are insufficiently understood. We explore the nature of RMTI decision making processes in nine RMTI projects from three manufacturing firms. The findings reveal slight differences compared to typical investment processes and organizations’ different approaches for guiding the decision making.