According to Benjamin Graham (1973), “An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return” (p. 18). Mr. Graham was speaking of financial investments made by individuals when considering stocks, however the language is universal. The difference between speculation and investment is the perceived or relative risk. Business mangers should not take on excessive risk with the investment monies of shareholders. With this definition firmly in mind, it is prudent for managers to practice extreme caution when making asset acquisitions.
“According to Rainer & Turban (2009), “All companies have a limited amount of resources available to them. For this reason they must justify investing resources in some areas, including IT, rather than in others” (Sec 10.1). Managers will conduct a cost-benefit analysis when considering new investments in technological infrastructure. This analysis will determine the potential for gain as compared to costs and risks. If the determination is unequivocally favorable, than the capital asset should be pursued. In the event that the opposite eventuality is determined to be true, than management should not engage in wasteful speculation.
References
Graham, B. (1973). The Intelligent Investor – Revised Edition. New York:
HarperCollins Publishers.
Rainer, R.K., & Turban, E., (2009). Introduction to Information Systems: Supporting and
Transforming Business (2nd ed) [Electronic version]. John Wiley & Sons. Retrieved January 20, 2009, from http://edugen.wiley.com/edugen/student/mainfr.uni
“According to Rainer & Turban (2009), “All companies have a limited amount of resources available to them. For this reason they must justify investing resources in some areas, including IT, rather than in others” (Sec 10.1). Managers will conduct a cost-benefit analysis when considering new investments in technological infrastructure. This analysis will determine the potential for gain as compared to costs and risks. If the determination is unequivocally favorable, than the capital asset should be pursued. In the event that the opposite eventuality is determined to be true, than management should not engage in wasteful speculation.
References
Graham, B. (1973). The Intelligent Investor – Revised Edition. New York:
HarperCollins Publishers.
Rainer, R.K., & Turban, E., (2009). Introduction to Information Systems: Supporting and
Transforming Business (2nd ed) [Electronic version]. John Wiley & Sons. Retrieved January 20, 2009, from http://edugen.wiley.com/edugen/student/mainfr.uni
Keyword: management cadre, global economy, international business, exchange rates, economic incentive, foreign investment
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