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Real options theory in strategic management

Trigeorgis, Lenos; Reuer, Jeffrey J.


Jeffrey J. Reuer


This article provides a review of real options theory (ROT) in strategic management research. We review the fundamentals of ROT and provide a taxonomy of this research. By synthesizing and critiquing research on real options, we identify a number of important challenges as well as opportunities for ROT if it is to enhance its impact on strategic management and potentially develop into a theoretical pillar in the field. We examine how ROT can inform the key tensions that managers face between commitment versus flexibility as well as between competition versus cooperation, and we show how it can uniquely address the fundamental issues in strategy. We conclude with suggestions on future research directions that could enhance and unify the thus-far distinct main approaches to real options research.


Trigeorgis, L., & Reuer, J. J. (2017). Real options theory in strategic management. Strategic Management Journal, 38(1), 42-63.

Journal Article Type Article
Acceptance Date Mar 14, 2016
Online Publication Date Oct 7, 2016
Publication Date 2017-01
Deposit Date Feb 14, 2023
Journal Strategic Management Journal
Print ISSN 0143-2095
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 38
Issue 1
Pages 42-63
Public URL