A Real Options Logic for Initiating Technology Positioning Investments¶
McGrath, R. G. (1997). A Real Options Logic for Initiating Technology Positioning Investments. Academy of Management Review, 22(4), 974-996.
Cited by¶
2 citations across 2 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Optionality
- A responsive organization might adapt reactively to events; an organization with optionality structures choices in advance so that adaptation is preserved as a right the organization can exercise, a distinction McGrath (1997) develops as "real options reasoning" in strategic management.
This sourceDevelops "real options reasoning" for strategic management; distinguishes priced, structured optionality from generic flexibility and shows how managerial right-to-choose differs from reactive adaptation.
- A responsive organization might adapt reactively to events; an organization with optionality structures choices in advance so that adaptation is preserved as a right the organization can exercise, a distinction McGrath (1997) develops as "real options reasoning" in strategic management.
Mechanisms¶
- Exit Option Contract
- Its strength is that it caps the downside of moving first under uncertainty, which paradoxically lets you pioneer more aggressively — you can take the early shot because quitting is cheap.
This sourceTreats an initial technology-positioning investment as creating an option whose value depends on uncertainty and preserves the ability to defer further commitment.
- Its strength is that it caps the downside of moving first under uncertainty, which paradoxically lets you pioneer more aggressively — you can take the early shot because quitting is cheap.
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