Abstract

S. O. Akinwale* and R. O. Abiola

Asset allocation decisions in general contribute to the efficiency or otherwise of financial management, determine the wealth of investors, including pensions and insurance funds, and underpin the allocation of scarce economic resources in the economy. This area has remained under researched in the developing economies and it is argued that the results of this study reflect on the shortcomings of the orthodox rationalistic approaches to decision making in finance. The study is in the tradition of naturalistic decision-making and adopts a modified grounded theory approach to the discovery of the core concepts that guide investment managers’ decisions. The paper presents the results of a case study of the decision-making processes of investment managers in the Nigerian Insurance industry. The naturalistic setting highlights the importance of the security of the investment, social networks, consistency of returns, competency of management, stable environment and legal and regulatory controls as core investment decision making concepts. The emerging conceptual model is delineated and the results reflect in particular on those factors likely to impact upon financial decision-making in a developing economy.