Hotel owner / operator structures: implications for capital budgeting process
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The findings of a field study concerned with appraising capital budgeting process implications arising from different owner/operator structures employed in the hotel industry are reported. Dimensions of conflict that can arise between hotel operators and owners are examined. Consistent with expectations motivated by agency theory, data collected suggest that capital budgeting systems in hotels operating under a divorced owner/operator structure exhibit more formalisation and a greater propensity for investment proposal cash forecast biasing. These findings suggest a degree of dysfunctionalism associated with the divorced/owner operator structure widely adopted in the hotel industry.
Management Accounting Research
© 2003 Elsevier. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.