Investment decision making involves the elements of a classic cost-benefit analysis. (Adler, 2000). According to Akalu and Turner (2001, 2002) finding a reliable method of investment appraisal is not only a matter of concern for company management. Investment appraisal has now become a matter of concern to both shareholders and investors. (Turner, 2001, 2002).
Ekanmen and Smallbone (2007) argue that firms are in fact complex organizations in which information is imperfect. Managers tend to possess more information than the shareholders and often tend to maximize their own wealth rather than the wealth of shareholders. Spencer and Rutherford (2001) as cited by Ekanem and Smallbone (2007) suggests that decision makers possess varying abilities and a range of motives that cannot easily be reduced to simple profit maximisation assumptions. According to the behavioural perspective, an organization constitutes a coalition of participants including workers, customers and suppliers with disparate demands, varying degrees of power and influence, as well as competing objectives. (Cyert and March, 1963; Lumby, 1994) cited in Ekanem and Smallbone (2007).
The above evidence suggests that companies the world over undertake projects together through joint ventures and other means of joint businesses. This paper's objective therefore is to understand the different practices of capital budgeting in my department. The research focuses on AMAREX Corporation. The paper therefore aims at providing answers to the following questions. This research will basically study the Finance Management in ARAMEX, and how it affects the planning and decision taking processes in the organization.
1.1.1 Overview of AMAREX Corporation
According to the company's web page, ARAMEX is a provider of international and domestic package delivery, freight forwarding, logistics and other transportation services primarily to, from and within the Middle East and the Indian Sub-Continent (Company Report 2007). In June 2005 ARAMEX went public on the Dubai Financial Market (DFM) as Arab International Logistics (ARAMEX) with its shares traded under ARMX.
Strategically, ARAMEX objective is to transform from Regional Logistics Service Provider and Freight Forwarder to a Global Supply Chain Management Organization (Company's Report 2007). The objective of going global according to the company's management is to enable and facilitate regional and global trade and commerce
1.1.2 AMAREX Mission Statement:
Mission and vision statements are two strategic management concepts (SMCs) (Soyer & Asan 2007). These are important concepts that define organisations' values, competencies and are quite useful in the strategic planning and management of the organisation (Soyer & Asan 2007). In their work "Identifying strategic management concepts: An analytic network process approach" Soyer & Asan (2007:1) echo that, "SMCs together provide a common language and help stakeholders and other interested parties understand the business and its position in a competitive environment. This same view was earlier aired by Raynor (1988) where the researcher refers to mission and vision statement as an organisation cornerstone that guide and provide actions,