DECISION THEORY: ANALYSING DECISION-MAKING PROCESSES OF BUSINESSES INVESTING IN REAL ESTATE IN UGANDA - A LITERATURE REVIEW
The decision-making processes and the factors influencing the decision that finally leads businesses to the acquisition of real estate in Uganda is at the heart of most feasibility appraisals targeting high-performing real estate portfolios. Yet, over time, we see an increasing sophistication of real estate investments decision-making as strategy formulation, analysis and decision-making in entrepreneurial settings continue to be problematic in the face of business challenges such as lack of real estate investment knowledge and skills, limited resources to finance real estate investments, inadequate availability of serviced land for development and the absence of reliable market data creating a lot of market uncertainty in-turn affecting the decision-making processes and quality of decisions. This paper reviews literature with a view of identifying the challenges to real estate decision making as well as finding the existence and use of decision theory and decision support systems therein for businesses in Uganda while navigating these challenges. The findings of the research, from the analysis of the descriptions, confirms that there is lack of credible economic and market data in practice as regards real estate operations in Uganda as well as a lack of real estate investment knowledge and skills by businesses which creates challenges for well informed decision making. It is also evident that the decision processes are usually subjective and depend, to a great extent, on the experience of the decision-maker and their intuition. Biases and heuristics are evident in these decisions. The research has based itself on analysing the extent of application of both descriptive and normative decision models lending detail to the Utility approach for decision making of businesses investing in real estate under market uncertainty as regards the real estate practice in Uganda. We conclude by proposing the development of a real estate investment framework for business in Uganda that will provide a package of implementable solutions as a plausible approach to addressing the challenge.
Decision Making, Decision Theory, Real Estate, Investment Choices, Uncertainty, Utility.