Real options theory in strategic management

Trigeorgis, Lenos; Reuer, Jeffrey J.

Abstract

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.

Citation

Trigeorgis, L., & Reuer, J. J. (2017). Real options theory in strategic management. Strategic Management Journal, 38(1), 42-63. https://doi.org/10.1002/smj.2593

• 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
• Electronic ISSN: 1097-0266
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 38
• Issue: 1
• Pages: 42-63
• DOI: https://doi.org/10.1002/smj.2593
• Public URL: https://durham-repository.worktribe.com/output/1179458