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Title: De invloed van framing bij managers op investeringsbeslissingen. Een verkennend onderzoek naar investeringen in informationsecurity.
Authors: Keeren, Erwin
Keywords: behavioral financial management
investment decisions
information security
risk perception
Issue Date: 25-Nov-2013
Publisher: Open Universiteit Nederland
Abstract: The research study is conducted within the field of Behavioral Financial Management (BFM). Behavioral Financial Management (BFM) studies the behavior of managementon financial management issues. It is particularly focused on the psychological factors that play a role in management decision-making. A behavioral aspect which affects investment decisions is framing. A manager is vulnerable to a framing effect, when decisions are easily influenced by the way and the setting in which the decision task is framed. Framing is determined by the way the problem is framed by norms, habits and expectations of the decision maker (Tversky&Kahneman, 1979, 1986). In today's information-based economy, organizations must avoid breaches on valuable information. Information security focuses on the establishment and maintenance of a coherent package of measures to ensure the reliability of the information (Overbeek, Lindgreen& Shoot, 2000). The growth of information security risks leads to an increase in investment. This research study focuses on the behavioral aspect framing and whether there is a connection and possible explanation in relation to investment decisions within the domain information security. It focuses on the banking sector and takes place in a large Dutch bank. The main research question is as follows: "How does the behavioral aspect "framing" influence the investment in information security within the banking sector?" Johnson et al. (1993) demonstrated in their study that framing influence decision-making and their economic consequences. These effects lead to inconsistent decisions and violated fundamental principles of probability and valuation. Within the literature review there is no relationship found between framing and investment,specific in the domain information security. Clear predictions cannot be made. It is an exploratory study where the characteristics and attributesare described or pointed out. This research study aims to give explanations and any relation between framing and investment-making decisions. This study uses the method multiple embedded case study (Yin , 2003). The results indicate that the characteristics and attributes of framing, risk perception and investment decisions occur within the cases.Focusing on the research question, it appears that the level of knowledge and experience plays a role in the decision-making task, in particular the developments (increase and complexity ) of attacks and threats. It is possible that this is related to the risk assessment in risk perception where a similar level of knowledge and experience plays a role. The norms in decision-making task, separate budget framework and controllability, show possible relation with the investment decision by the attitude and tolerance of managers in relation to the risks. The amount of investment is not playing a role in decision making. A possible explanation could be the lack of financial knowledge and experience. The habits and concerns about the risk, play a role in framing. The degree of concern in risk perception seems to show a possible relation explained by the risk assessment. The managers do not characterize themself as expert, but as non-expert. Non-experts use intuitive methods. It is possible that this is related to the degree of intuitive decision making. Within risk assessment based on knowledge and experience the risks are indicated that they cannot be avoided. It is possible that this is related to the attitudes and tolerances in the decision making stating that 100% information security is not possible. The conclusion of the study is that there is a possible relation between framing and investment decisions in the domain of information security and that this is possible through risk perception. The study does not explicitly explain the impact of frame type on risk perception.
Appears in Collections:MSc Management Science

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