Falling off the fence? A realistic appraisal of a real options approach to corporate strategy

Journal of Management Inquiry

Volumn 12, Issue 2, 2003, Pages 185-196

  Barnett, Michael L ^a  

^a NEW YORK UNIVERSITY   (United States)

Author keywords

Flexibility; Legitimacy; Real options

Indexed keywords

EID: 0037493459     PISSN: 10564926     EISSN: None     Source Type: Journal    
DOI: 10.1177/1056492603012002012     Document Type: Article

References (102)

1. Amburgey, T. L., Kelly, D., & Barnett, W. P. (1993). Resetting the clock: The dynamics of organizational change and failure. Administrative Science Quarterly, 38, 51-73.
2. Amram, M., & Kulatilaka, N. (1999). Real options: Managing strategic investment in an uncertain world. Boston, MA: Harvard Business School Press.
3. Anthes, G. H. (1998, May 18). A walk in the parc. Computerworld, pp. 73-74.
4. Arthur, W. B. (1989). Competing technologies, increasing returns, and lock-by historical events. Economic Journal, 99, 1161-1131.
5. Barnett, M. L. (1999). Paying attention to real options. Paper presented at the Academy of Management Conference, Technology & Innovation Management Division, Chicago.
6. Barney, J. B. (1986). Strategic factor markets: Expectations, luck, and the theory of business strategy. Management Science, 42, 1231-1241.
7. Barwise, P., Marsh, P., & Wensley, R. (1987). Strategic investment decisions. Research in Marketing, 9, 1-57.
8. Baum, J. A. C., & Oliver, C. (1991). Institutional linkages and organizational mortality. Administrative Science Quarterly, 36, 187-218.
9. Baum, J. A. C., & Oliver, C. (1992). Institutional embeddedness and the dynamics of organizational populations. American Sociological Review, 57, 540-559.
10. Beckett, J. (1998, June 4). No more flubs: Xerox vows to profit from technology innovations at PARC. San Francisco Chronicle, p. D1.
11. Black, F., & Scholes, M. (1973). The pricing of options and corporate liabilities. Journal of Political Economy, 81, 637-659.
12. Bowen, H. K., Clark, K. B., Holloway, C. A., & Wheelwright, S. C. (1994). Development projects: The engine of renewal. Harvard Business Review, 92(5), 110-120.
13. Bowman, E. H., & Hurry, D. (1993). Strategy through the option lens: An integrated view of resource investments and the incremental choice process. Academy of Management Review, 18(4), 760-782.
14. Brennan, M. J., & Trigeorgis, L. (Eds.). (2000). Project flexibility, agency, and competition. New York: Oxford University Press.
15. Brown, S. L., & Eisenhardt, K. M. (1998). Competing on the edge: Strategy as structured chaos. Boston, MA: Harvard Business School Press.
16. Brunsson, N. (1990). Deciding for responsibility and legitimation: Alternative interpretations of organizational decision-making. Accounting, Organizations and Society, 15(1/2), 47-59.
17. Burgelman, R. A. (1983). A process model of internal corporate venturing in the diversified major firm. Administrative Science Quarterly, 28, 223-244.
18. Burns, T., & Stalker, G. M. (1967). The management of innovation. London: Tavistock.
19. Busby, J. S., & Pitts, C. G. C. (1997). Real options in practice: An exploratory survey of how finance officers deal with flexibility in capital appraisal. Management Accounting Research, 8, 169-186.
20. Carroll, G. R., & Hannan, M. T. (1989). On using institutional theory in studying organizational populations. American Sociological Review, 54(4), 545-548.
21. Chatterjee, S., Lubatkin, M. H., & Schulze, W. S. (1999). Toward a strategic theory of risk premium: Moving beyond CAPM. Academy of Management Review, 24(3), 556-557.
22. Conner, D. R. (1993). Managing at the speed of change: How resilient managers succeed and prosper where others fail. New York: Villard Books.
23. Coy, P. (1999, June 7). Exploiting uncertainty: The "real options" revolution in decision-making. Business Week, 118-124.
24. Das, T. K., & Elango, B. (1995). Managing strategic flexibility: Key to effective performance. Journal of General Management, 20(3), 60-75.
25. D'Aveni, R. A. (1994). Hypercompetition: Managing the dynamics of strategic maneuvering. New York: Free Press.
26. David, P. (1985). Clio and the economics of QWERTY. American Economic Review, 75, 332-337.
27. Davis, S., & Meyer, C. (1998). Blur: The speed of change in the connected economy. Cambridge, MA: Perseus.
28. Deephouse, D. L. (1999). To be different, or to be the same? It's a question (and theory) of strategic balance. Strategic Management Journal, 20, 147-166.
29. Dierickx, I., & Cool, K. (1989). Asset stock accumulation and sustainability of competitive advantage. Management Science, 35(12), 1504-1511.
30. DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147-160.
31. Dixit, A. (1992). Investment and hysteresis. The Journal of Economic Perspective, 6(1), 107-132.
32. Dixit, A., & Pindyck, R. (1994). Investment under uncertainty. Princeton, NJ: Princeton University Press.
33. Dougherty, D., & Heller, T. (1994). The illegitimacy of successful new products in large firms. Organization Science, 5, 200-218.
34. Edelson, M. E. (1994). Real options: Valuing managerial flexibility (Harvard Business School Case No. 9-294-109). Boston, MA: Harvard Business School Publishing.
35. Faulkner, T. W. (1996). Applying "options thinking" to R&D valuation. Research Technology Management, 39(3), 50-56.
36. Fombrun, C. J. (1996). Reputation: Realizing value from the corporate image. Cambridge, MA: Harvard Business School Press.
37. Fombrun, C. J. (1998). Reputation. In N. Nicholson (Ed.), Blackwell encyclopedic dictionary of organizational behavior (pp. 476-478). Maiden, MA: Blackwell.
38. Fombrun, C. J., Gardberg, N. A., & Barnett, M. L. (2000). Opportunity platforms and safety nets: Corporate citizenship and reputational risk. Business and Society Review, 105(1), 85-106.
39. Fombrun, C. J., & Shanley, M. (1990). What's in a name? Reputation-building and corporate strategy. Academy of Management Journal, 33, 233-258.
40. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman.
41. Galbraith, J. (1982). Designing the innovating organization. Organizational Dynamics, 10(3), 5-25.
42. Garud, R., Kumaraswamy, A., & Nayyar, P. (1998). Real options or fool's gold? Perspective makes the difference. Academy of Management Review, 23(2), 212-217.
43. Garud, R., & Van de Ven, A. H. (1992). An empirical evaluation of the internal corporate venturing process. Strategic Management Journal, 13, 93-109.
44. Ghemawat, P. (1991). Commitment: The dynamic of strategy. New York: Free Press.
45. Granovetter, M. (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91, 481-510.
46. Grimes, C. (1998, November 16). Xerox hoping to shift image at trade show-Plans big push at Comdex to project that it is an innovative company. The Wall Street Journal, p. B7.
47. Grove, A. S. (1996). Only the paranoid survive: How to exploit the crisis points that challenge every company and career. New York: Currency/Doubleday.
48. Grubb, T. M., & Lamb, R. B. (2000). Capitalize on merger chaos: Six ways to profit from your competitors' consolidation and your own. New York: Simon & Schuster.
49. Hannan, M. T., & Freeman, J. (1977). The population ecology of organizations. American Journal of Sociology, 83, 929-984.
50. Hannan, M. T., & Freeman, J. (1984). Structural inertia and organizational change. American Sociological Review, 49, 149-164.
51. Hayes, R., & Abernathy, W. (1980). Managing our way to economic decline. Harvard Business Review, 58(4), 66-77.
52. Hayes, R., & Garvin, D. (1982). Managing as if tomorrow mattered. Harvard Business Review, 60(3), 71-79.
53. Hlavacek, J., & Thompson, V. (1973). Bureaucracy and new product innovation. Academy of Management Journal, 16, 361-372.
54. Katz, D., & Kahn, R. L. (1966). The social psychology of organizations. New York: John Wiley.
55. Kemna, A. (1993). Case studies on real options. Financial Management, 22, 259-270.
56. Kensinger, J. W. (1987). Adding the value of active management into the capital budgeting equation. Midland Corporate Finance Journal, 5(1), 31-42.
57. Kester, W. C. (1984). Today's options for tomorrow's growth. Harvard Business Review, 62, 153-160.
58. Kogut, B. (1991). Joint ventures and the option to expand and acquire. Management Science, 37, 19-33.
59. Kogut, B., & Kulatilaka, N. (1994). Options thinking and platform investments: Investing in opportunity. California Management Review, 36(2), 52-71.
60. Kogut, B., & Kulatilaka, N. (1999). Capabilities as real options. Wharton School Working Paper, Philadelphia.
61. Kumaraswamy, A. (1996). A real options perspective of firms' R&D investments. Unpublished doctoral dissertation, New York University.
62. Lawrence, P. R., & Lorsch, J. W. (1967). Organization and environment. Cambridge, MA: Harvard University Press.
63. Luehrman, T. (1998). Strategy as a portfolio of real options. Harvard Business Review, 76, 89-99.
64. Majd, S., & Pindyck, R. (1987). Time to build, option value, and investment decisions. Journal of Financial Economics, 18, 7-27.
65. McDonald, R., & Siegel, D. (1986). The value of waiting to invest. Quarterly Journal of Economics, 101(4), 707-727.
66. McGrath, R. G. (1997). Areal options logic for initiating technology positioning investments. Academy of Management Review, 22(4), 974-996.
67. McGrath, R. G. (1999). Falling forward: Real options reasoning and entrepreneurial failure. Academy of Management Review, 24(1), 13-30.
68. McGrath, R. G., & Dubini, P. (1999). Option potential and the innovator's dilemma: Resource commitment to uncertain new projects. New York: Columbia University.
69. Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83, 340-363.
70. Miller, D. (1990). The Icarus paradox. New York: HarperCollins.
71. Montgomery, C. A., Wernerfelt, B., & Balakrishnan, S. (1989). Strategy content and the research process: A critique and commentary. Strategic Management Journal, 10, 189-197.
72. Myers, S. C. (1977). Determinants of corporate borrowing. Journal of Financial Economics, 5, 147-175.
73. Myers, S. C. (1987). Finance theory and financial strategy. Midland Corporate Finance Journal, 5(1), 6-13.
74. Myers, S. C., & Majd, S. (1990). Abandonment value and project life. Advances in Futures and Options Research, 4, 1-21.
75. North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge, UK: Cambridge University Press.
76. Oliver, C. (1991). Strategic responses to institutional processes. Academy of Management Review, 16(1), 145-179.
77. Penrose, E. (1959). The theory of the growth of the firm. New York: Oxford University Press.
78. Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. New York: Harper & Row.
79. Pitta, J. (1995, September 13). Who and what made PARC an industry legend. Los Angeles Times, p. 4.
80. Port, O. (1997, September 29). Xerox won't duplicate past errors. Business Week, p. 98.
81. Porter, M. E. (1980). Competitive strategy. New York: Free Press.
82. Prahalad, C. K., & Bettis, R. A. (1986). The dominant logic: A new linkage between diversity and performance. Strategic Management Journal, 7, 485-501.
83. Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68, 79-91.
84. Reuer, J. J., & Leiblein, M. J. (2000). Downside risk implications of multinationality and international joint ventures. Academy of Management Journal, 43(2), 203-214.
85. Rumelt, R. P. (1982). Diversification strategy and profitability. Strategic Management Journal, 3, 359-369.
86. Sanchez, R. (1993). Strategic flexibility, firm organization, and managerial work in dynamic markets: A strategic-options perspective. In P. Shrivastava, A. Huff, & J. Dutton (Eds.), Advances in Strategic Management, 9, 251-291. Greenwich, CT: JAI.
87. Scott, W. R. (1981). Organizations: Rational, natural, and open systems. Englewood Cliffs, NJ: Prentice Hall.
88. Scott, W. R. (1987). The adolescence of institutional theory. Administrative Science Quarterly, 32, 493-511.
89. Sennett, R. (1998). The corrosion of character: The personal consequences of work in the new capitalism. New York: Norton.
90. Serwer, A. (1999, September 29). Xerox PARC's wizards go back to the future. Fortune, p. 317.
91. Smith, D. K., & Alexander, R. C. (1988). Fumbling the future: How Xerox invented, then ignored, the first personal computer. New York: William Morrow.
92. Stark, A. W. (1996, June). Hurdle rates, the timing of capital expenditures and organizational issues. Manchester Business School Research Newsletter, 22, 1-2.
93. Staw, B. M., Sandelands, L. E., & Dutton, J. E. (1981). Threat-rigidity effects in organizational behavior: A multilevel analysis. Administrative Science Quarterly, 26, 501-524.
94. Stinchcombe, A. L. (1965). Social structure and organizations. In J. G. March (Ed.), Handbook of organizations (pp. 142-193). Chicago: Rand McNally.
95. Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 29(3), 571-610.
96. Teece, D. (1980). Economies of scope and the scope of the enterprise. Journal of Economic Behavior and Organization, 1, 233-247.
97. Tegarden, L. F., Hatfield, D. E., & Echols, A. E. (1999). Doomed from the start: What is the value of selecting a future dominant design? Strategic Management Journal, 20, 495-518.
98. Tirole, J. (1988). The theory of industrial organization. Cambridge, MA: MIT Press.
99. Trigeorgis, L. (1996). Real options: Managerial flexibility and strategy in resource allocation. Cambridge, MA: MIT Press.
100. Trigeorgis, L., & Mason, S. P. (1987). Valuing managerial flexibility. Midland Corporate Finance Journal, 5(1), 14-21.
101. Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5, 171-180.
102. Zucker, L. G. (1987). Institutional theories of organization. Annual Review of Sociology, 13, 443-464.