Capital expenditure budgeting & organisational change

It was argued in a previous study (Greenwell 1983a and 1983b) that capital expenditure budgeting should be studied within its environmental contexts. In this study, capital expenditure budgeting was studied in the specific setting of the Australian footwear manufacturing industry. This industry was chosen because its environment, which included one of the highest levels of protection in Australia, underwent a significant but orderly change in 1982. This current study addressed the nature of protection and outlined its history in the industry. This was followed by an argument regarding the creation of a particular corporate culture: learned helplessness. A hypothesis, that changes in capital investment were associated with changes in protection, was accepted for the period 1968/69 to 1981/82. However it was argued that the introduction of the seven year plan in 1982 would alter this relationship between capital investment and protection. It was hypothesized that the introduction of the seven year plan would stimulate organisational change, the organisational change would include a change in capital expenditure budgeting and capital investment, and that a change in the corporate culture would be an intervening variable. These hypotheses were accepted for four out of five firms on the basis of case studies undertaken in 1984. In 1986, the remaining footwear manufacturing firms were surveyed to ascertain actions taken in response to the seven year plan. The most frequent and "most important" action undertaken was capital investment in new production technology. It was argued that this action and others which did not necessarily Involve capital investment, would have been a result of a change in corporate culture.