An empirical investigation on the appropriateness of flexibility approach to the product portfolio selection

International Journal of Technology Management

Volumn 44, Issue 1-2, 2008, Pages 251-268

  Santiago, Leonardo P ^a  

^a FEDERAL UNIVERSITY OF MINAS GERAIS   (Brazil)

Author keywords

Flexibility; New product development; Portfolio selection; R D management; Real options

Indexed keywords

BUDGET CONTROL; PRODUCT DEVELOPMENT;

EMPIRICAL INVESTIGATION; FLEXIBILITY; NEW PRODUCT DEVELOPMENT; PORTFOLIO OF NEW PRODUCTS; PORTFOLIO SELECTION; PRODUCT DEVELOPMENT LIFE CYCLES; PRODUCT PORTFOLIOS; REAL OPTIONS;

LIFE CYCLE;

EID: 54149089268     PISSN: 02675730     EISSN: None     Source Type: Journal    
DOI: 10.1504/ijtm.2008.020707     Document Type: Article

References (45)

1. Amram, M. and Kulatilaka, N. (1999) Real Options: Managing Strategic Investment in an Uncertain World. Boston, MA: Harvard Business School Press.
2. Baker, N.R. and Freeland, J. (1975) 'Recent advances in R&D benefit measurement and project selection methods', Management Science, Vol. 21, pp.1164-1175.
3. Baldwin, C.Y. and Clark, K.B. (2000) Design Rules: The Power of Modularity, Vol. 1: The Power of Modularity. Cambridge, MA: MIT Press.
4. Barnett, M.L. (2003) 'Falling off the fence? A realistic appraisal of a real options approach to corporate strategy', Journal of Management Inquiry, Vol. 12, pp. 185-196.
5. Beaujon, G.J., Marin, S.P. and McDonald, G.C. (2001) 'Balancing and optimizing a portfolio of R&D projects', Naval Research Logistics, Vol. 48, pp.18-40.
6. Bertsimas, D. and Tsitsiklis, J.N. (1997) Introduction to Linear Optimization. Belmont, MA: Athena Scientific.
7. Blau, G.E., Pekny, J.F., Varma, V.A. and Bunch, P.R. (2004) 'Managing a portfolio of interdependent new product candidates in the pharmaceutical industry', Journal of Product Innovation Management, Vol. 21, pp.227-245.
8. Bowman, E.H. and Moskowitz, G.T. (2001) 'Real options analysis and strategic decision making', Organisational Science, Vol. 12, pp.772-777.
9. Brennan, M.J. and Trigeorgis, L. (2000) Project Flexibility, Agency, and Competition: New Developments in the Theory and Application of Real Options. New York: Oxford University Press.
10. Cetron, M.J., Martino, J. and Roepcke, L. (1967) 'The selection of R&D program content - survey of quantitative methods', IEEE Transactions on Engineering Management, Vol. EM-14, pp.4-13.
11. Childs, P.D. and Triantis, A.J. (1999) 'Dynamic R&D investment policies', Management Science, Vol. 45, pp.1359-1377.
12. Clark, K.B. and Wheelwright, S.C. (1993) Managing New Product and Process Development: Text and Cases. Boston, MA: Harvard Business School Press.
13. Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. (1999) 'New product portfolio management: practices and performance', Journal of Product Innovation Management, Vol. 16, pp.333-351.
14. Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. (1998) Portfolio Management for New Products. Reading, MA: Perseus Books.
15. Danila, N. (1989) 'Strategic evaluation and selection of R&D projects', R&D Management, Vol. 19, pp.47-62.
16. Dickinson, M.W., Thornton, A.C. and Graves, S. (2001) 'Technology portfolio management: optimizing interdependent projects over multiple time periods', IEEE Transactions on Engineering Management, Vol. 48, pp.518-527.
17. Ding, M. and Eliashberg, J. (2002) 'Structuring the new product development pipeline', Management Science, Vol. 48, pp.343-363.
18. Dixit, A.K. and Pindyck, R.S. (1994) Investment Under Uncertainty. Princeton, NJ: Princeton University Press.
19. Farrukh, C., Phaal, R., Probert, D., Gregory, M. and Wright, J. (2000) 'Developing a process for the relative valuation of R&D programmes', R&D Management, Vol. 30, pp.43-53.
20. Faulkner, T.W. (1996) 'Applying "options thinking" to R&D valuation', Research Technology Management, Vol. 39, pp.50-56.
21. Granot, D. and Zuckerman, D. (1991) 'Optimal sequencing and resource allocation in research and development projects', Management Science, Vol. 37, pp.140-156.
22. Heidenberger, K. and Stummer, C. (1999) 'Research and development project selection and resource allocation: a review of quantitative modelling approaches', Int. J. Management Review, Vol. 1, pp. 197-224.
23. Henriksen, A.D. and Traynor, A.J. (1999) 'A practical R&D project selection scoring tool', IEEE Transactions on Engineering Management, Vol. 46, pp. 158-170.
24. Hsieh, P-H., Mishra, C.S. and Gobeli, D.H. (2003) 'The return on R&D versus capital expenditures in pharmaceutical and chemical industries', IEEE Transactions on Engineering Management, Vol. 50, pp.141-150.
25. Huchzermeier, A. and Loch, C.H. (2001) 'Project management under risk: using the real options approach to evaluate flexibility in R&D', Management Science, Vol. 47, pp.85-101.
26. Jackson, B. (1983) 'Decision methods for selecting a portfolio of R&D projects', Research Management, Vol. 26, pp.21-26.
27. Kavadias, S. and Loch, C.H. (2003) 'Optimal project sequencing with recourse at a scare resource', Production and Operation Management, Vol. 12, pp.433-444.
28. Kavadias, S. and Loch, C.H. (2004) Project Selection Under Uncertainty: Dynamically Allocating Resources to Maximize Value. Boston, MA: Kluwer Academic Publishers.
29. Keisler, J. (2004) 'Value of information in portfolio decision analysis', Decision Analysis, Vol. 1, pp. 177-189.
30. Krishnan, V. and Bhattacharya, S. (2002) 'Technology selection and commitment in new product development: the role of uncertainty and design flexibility', Management Science, Vol. 48, pp.313-327.
31. Lander, D.M. and Pinches, G.E. (1998) 'Challenges to practical implementation of modeling and valuing real options', The Quarterly Review of Economics and Finance, Vol. 38, pp.537-567.
32. Loch, C.H. and Kavadias, S. (2002) 'Dynamic portfolio selection of npd programs using marginal returns', Management Science, Vol. 48, pp.1227-1241.
33. Loch, C.H., Pich, M.T., Terwiesch, C. and Urbschat, M. (2001) 'Selecting R&D projects at BMW: a case study of adopting mathematical programming models', IEEE Transactions on Engineering Management, Vol. 48, pp.70-80.
34. Luehrman, T.A. (1997) 'What's worth? a general manager's guide to valuation', Harvard Business Review, Vol. 75, pp.132-142.
35. Mangun, D. and Thurston, D.L. (2002) 'Incorporating component reuse, remanufacture, and recycle into product portfolio design', IEEE Transactions on Engineering Management, Vol. 49, pp.479-490.
36. Martello, S. and Toth, P. (1990) Knapsack Problems: Algorithms and Computer Implementations. Chichester, UK: John Wiley & Sons.
37. Matheson, D. and Matheson, J.E. (1994) 'Making excellent R&D decisions', Research and Technology Management, Vol. 37, pp.21-24.
38. McGrath, R.G. and MacMillan, I.C. (2000) 'Assessing technology projects using real options reasoning', Research Technology Management, Vol. 43, pp.35-49.
39. Meade, L.M. and Presley, A. (2002) 'R&D project selection using the analytic network process', IEEE Transactions on Engineering Management, Vol. 49, pp.59-66.
40. Phaal, R., Farrukh, C.J.P. and Probert, D.R. (2004) 'A framework for supporting the management of technological knowledge', Int. J. Technology Management, Vol. 27, pp.1-15.
41. Roussel, P.A., Saad, K.N. and Erickson, T.J. (1991) Third Generation R&D: Managing the Link to Corporate Strategy. Boston, MA: Harvard Business School Press.
42. Santiago, L.P. and Vakili, P. (2005) 'On the value of flexibility in R&D projects', Management Science, Vol. 51, pp.1206-1218.
43. Santiago, L.P. and Bifano, T.G. (2005) 'Management of R&D projects under uncertainty: a multidimensional approach to managerial flexibility', IEEE Transactions on Engineering Management, Vol. 52, pp.269-280.
44. Stummer, C. and Heidenberger, K. (2003) 'Interactive R&D portfolio analysis with project interdependencies and time profiles of multiple objectives', IEEE Transactions on Engineering Management, Vol. 50, pp. 175-183.
45. Trigeorgis, L. (1996) Real Options: Managerial Flexibility and Strategy in Resource Allocation. Cambridge, MA: MIT Press.