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While option-pricing models are indeed a superior valuation tool—the usual use of the theory—we believe that real options can also provide a systematic framework serving as a strategic tool and that the real power of real options lies in this strategic application. This article seeks to . This paper contributes to the debate on the role of real options theory in business strategy and organizational decision-making. It analyses and critiques the decision-making and performance implications of real options within the management theories of the (multinational) firm, reviews and categorizes the organizational, strategic and operational facets of real options management in large Cited by: Real options are applied where an investment’s behavior can be reasonably tracked by traded assets. Real options are relevant to only to “the subset of strategic options in which the exercise decision is largely triggered by market-priced risk.” (Amram and Kulatilaka, , p.

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While option-pricing models are indeed a superior valuation tool—the usual use of the theory—we believe that real options can also provide a systematic framework serving as a strategic tool and that the real power of real options lies in this strategic application. This article seeks to . landscape for the positioning of real options theory in the corporate strategy and multinational business domains, especially vis-à-vis firms’ decision-making and performance attributes. Thus, the role of real options theory in organisations is clarified, its application to business strategy and international management critically examined,Cited by: 8/13/ · The application of real options theory to international strategy has surged in recent years. However, it is still a relatively new and loosely defined field, and there are several constraints on practical applications of this powerful theory. To move forward this field, the paper first provides a systematic analysis of theoretical and empirical contributions of real options theory to three Cited by:

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4/28/ · This study reviews the research on international investment strategy from a real options lens and discusses avenues for future research. Uncertainty has been a persistent feature in international business, and multinational enterprises (MNEs) have to deal with uncertainty (e.g., market, political, technological) in strategic decisions. 8/13/ · The application of real options theory to international strategy has surged in recent years. However, it is still a relatively new and loosely defined field, and there are several constraints on practical applications of this powerful theory. To move forward this field, the paper first provides a systematic analysis of theoretical and empirical contributions of real options theory to three Cited by: 90 harvard business review September–October strategy as a portfolio of real options In Þnancial terms, a business strategy is much more like a series of options than it .

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90 harvard business review September–October strategy as a portfolio of real options In Þnancial terms, a business strategy is much more like a series of options than it . landscape for the positioning of real options theory in the corporate strategy and multinational business domains, especially vis-à-vis firms’ decision-making and performance attributes. Thus, the role of real options theory in organisations is clarified, its application to business strategy and international management critically examined,Cited by: 8/13/ · The application of real options theory to international strategy has surged in recent years. However, it is still a relatively new and loosely defined field, and there are several constraints on practical applications of this powerful theory. To move forward this field, the paper first provides a systematic analysis of theoretical and empirical contributions of real options theory to three Cited by:

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This paper contributes to the debate on the role of real options theory in business strategy and organizational decision-making. It analyses and critiques the decision-making and performance implications of real options within the management theories of the (multinational) firm, reviews and categorizes the organizational, strategic and operational facets of real options management in large Cited by: Li, J. (), ‘Real options theory and inte rnational strategy: A critical review’, Advances in Strategic Management, 24, Li, J. and Y. Li (), ‘Flexibility versus commitment. 90 harvard business review September–October strategy as a portfolio of real options In Þnancial terms, a business strategy is much more like a series of options than it .