Preemptive learning, competency traps, and information technology adoption: A real options analysis

IEEE Transactions on Engineering Management

Volumn 56, Issue 4, 2009, Pages 650-662

  Li, Xiaotong ^a  

^a UNIVERSITY OF ALABAMA IN HUNTSVILLE   (United States)

Author keywords

Absorptive capacity; Capital budgeting; Competency traps; Information technology (IT) adoption; Organizational capabilities; Preemptive learning; Real options; Stochastic optimization

Indexed keywords

ABSORPTIVE CAPACITY; CAPITAL BUDGETING; COMPETENCY TRAPS; INFORMATION TECHNOLOGY (IT) ADOPTION; ORGANIZATIONAL CAPABILITIES; PREEMPTIVE LEARNING; REAL OPTIONS; STOCHASTIC OPTIMIZATION;

BUDGET CONTROL; EDUCATION; OPTIMIZATION; STOCHASTIC SYSTEMS;

INFORMATION TECHNOLOGY;

EID: 70350731196     PISSN: 00189391     EISSN: None     Source Type: Journal    
DOI: 10.1109/TEM.2009.2016065     Document Type: Article

References (43)

1. M. Anderson, R. Banker, and S. Ravindran, "The new productivity paradox," Commun. ACM, vol. 46, no. 3, pp. 91-94, 2003.
2. R. Adner and D. Levinthal, "What is not a real option: Considering boundaries for the application of real options to business strategy," Acad. Manage. Rev., vol. 29, no. 1, pp. 74-85, 2004.
3. M. Amram and N. Kulatilaka, Real Options: Managing Strategic Investment in an UncertainWorld. Cambridge,MA: Harvard Business School Press, 1999.
4. P. Attewell, "Technology diffusion and organizational learning: The case of business computing," Org. Sci., vol. 3, no. 1, pp. 1-19, 1992.
5. M. Benaroch, Y. Lichtenstein, and K. Robinson, "Real options in IT risk management: An empirical validation of risk-option relationships," MIS Quart., vol. 30, no. 4, pp. 827-864, 2006.
6. A. Bernardo and B. Chowdhry, "Resources, real options and corporate strategy," J. Finance. Econ., vol. 63, no. 2, pp. 211-234, 2002.
7. E. Bowman and G. Moskowitz, "Real options analysis and strategic decision making," Org. Sci., vol. 12, no. 6, pp. 772-777, 2001.
8. W. Cohen and D. Levinthal, "Absorptive capacity: A new perspective on learning and innovation," Admin. Sci. Quart., vol. 35, no. 1, pp. 128-152, 1990.
9. W. Cohen and D. Levinthal, "Fortune favors the prepared firm," Manage. Sci., vol. 40, no. 2, pp. 227-251, 1994.
10. A. Dixit and R. Pindyck, Investment Under Uncertainty. Princeton, NJ: Princeton Univ. Press, 1994.
11. M. Domine, "Moments of the first passage time of a wiener process with drift between two elastic barriers," J. Appl. Probability, vol. 32, pp. 1007-1013, 1995.
12. R. Fichman, "Real options and IT platform adoption: Implications for theory and practice," Inf. Syst. Res., vol. 15, no. 2, pp. 132-154, 2004.
13. R. Fichman and C. Kemerer, "The assimilation of software process innovations: An organizational learning perspective," Manage. Sci. vol. 43, no. 10, pp. 1345-1363, 1997.
14. R. Gibbons, "Taking coase seriously," Admin. Sci. Quart., vol. 44, no. 1, pp. 145-157, 1999.
15. R. Gibbons, Organizational Economics. Princeton, NJ: Princeton Univ. Press, 2004.
16. S. Grenadier and A. Weiss, "Investment in technological innovations: An option pricing approach," J. Finance. Econ., vol. 44, no. 3, pp. 397-416, 1997.
17. S. Grenadier, "Option exercise games: An application to the equilibrium investment strategies of firms," Rev. Finance. Stud., vol. 15, no. 3, pp. 691-721, 2002.
18. K. Huisman, Technology Investment: A Game Theoretic Real Options Approach. Dordrecht, The Netherlands: Kluwer, 2001.
19. K. Huisman and P.Kort, "Strategic investment in technology innovations," Eur. J. Oper. Res., vol. 144, no. 1, pp. 209-223, 2003.
20. K. Huisman and P. Kort, "Strategic technology adoption taking into account future technological improvements: A real options approach," Eur. J. Oper. Res., vol. 159, no. 3, pp. 705-728, 2004.
21. R. Kauffman and X. Li, "Technology competition and optimal investment timing-a real options model," IEEE Trans. Eng. Manage., vol. 52, no. 1, pp. 15-29, Feb. 2005.
22. B. Kogut and N. Kulatilaka, "Capabilities as real options," Org. Sci., vol. 12, no. 6, pp. 744-758, 2001.
23. B. Kogut and N. Kulatilaka, "Real options pricing and organizations: The contingent risks of extended theoretical domains," Acad. Manage. Rev., vol. 29, no. 1, pp. 101-110, 2004.
24. D. Levinthal and J. March, "The myopia of learning," Strateg. Manage. J., vol. 14, pp. 95-112, 1993.
25. B. Levitt and J. March, "Organizational learning," Annu. Rev. Sociol., vol. 14, pp. 319-340, 1988.
26. X. Li, "Informational cascades in IT adoption," Commun. ACM, vol. 47, no. 4, pp. 93-97, 2004.
27. X. Li, "Cheap talk and Bogus network externalities in the emerging technology market," Market. Sci., vol. 24, no. 4, pp. 531-543, 2005.
28. X. Li, "Managerial entrenchment with strategic information technology: A dynamic perspective," J. Manage. Inf. Syst., vol. 25, no. 4, pp. 183-205, 2009.
29. R. McGrath, "A real options logic for initiating technology positioning investments," Acad. Manage. Rev., vol. 22, no. 4, pp. 974-996, 1997.
30. R. McGrath, "Failing forward: Real options reasoning and entrepreneurial failure," Acad. Manage. Rev., vol. 24, no. 1, pp. 13-30, 1999.
31. R. McGrath, W. Ferrier, and A. Mendelow, "Real options as engines of choice and heterogeneity," Acad. Manage. Rev., vol. 29, no. 1, pp. 86-101, 2004.
32. R. McDonald and D. Siegel, "The value of waiting to invest," Quart. J. Econ., vol. 101, no. 4, pp. 707-727, 1986.
33. R. C. Merton, Continuous Time Finance. Cambridge,MA: Basil Blackwell, 1990.
34. E. Monk and B. Wagner, Concepts in Enterprise Resource Planning, 2nd ed. Boston, MA: Thomson Course Technology, 2006.
35. S. Ross, Introduction to Probability Models, 8th ed. New York: Academic, 2003.
36. V. Sambamurthy, A. Bharadwaj, and V. Grover, "Shaping agility through digital options: Reconceptualizing the role of IT in contemporary firms," MIS Quart., vol. 27, no. 2, pp. 237-263, 2003.
37. J. Smith and K.McCardle, "Valuing oil properties: Integrating option pricing and decision analysis approach," Oper. Res., vol. 46, no. 2, pp. 198-218, 1998.
38. J. Smith and K. McCardle, "Options in the real world: Some lessons learned in evaluating oil and gas investments," Oper. Res., vol. 47, no. 1, pp. 1-15, 1999.
39. R. Srinivasan, G. Lilien, and A. Rangaswamy, "Technological opportunism and radical technology adoption: An application to E-business," J. Market., vol. 66, pp. 47-60, 2002.
40. J. Stamper, "MySQL CEO says Sun acquisition is already paying off," Comput. Bus. Rev., Jan. 16, 2008.
41. A. Taudes, "Software growth options," J. Manage. Inf. Syst., vol. 15, no. 1, pp. 165-185, 1998.
42. A. Taudes, M. Feuerstein, and A. Mild, "Option analysis of software platform decisions: A case study," MIS Quart., vol. 24, no. 2, pp. 227-243, 2000.
43. L. Trigeorgis, Real Options. Cambridge, MA: MIT Press, 1997.