Real Options and Strategic Technology Venturing

A New Paradigm in Decision Making

  • Caroline M. Sipp
  • Elias G. Carayannis
Part of the SpringerBriefs in Business book series (BRIEFSBUSINESS, volume 31)

Table of contents

  1. Front Matter
    Pages i-xiii
  2. Caroline M. Sipp, Elias G. Carayannis
    Pages 1-14
  3. Caroline M. Sipp, Elias G. Carayannis
    Pages 15-38
  4. Caroline M. Sipp, Elias G. Carayannis
    Pages 39-52
  5. Caroline M. Sipp, Elias G. Carayannis
    Pages 53-57
  6. Back Matter
    Pages 59-124

About this book

Introduction

This book seeks to answer “why, when and how are real options used in strategic technology venturing?” This work tests for the role of real options in decision making involving three types of firms in decreasing order of technology-dependence – technology-driven (TD) (where the profit is fully dependent on new technology creation and leveraging), technology-based (TB) (where the profit is enabled and supported by technology) and technology-neutral (TN) (where the profit is almost independent of technology). It also deals with strategic and non-strategic types of decisions driven by real options.
This analysis shows that an environment presenting co-opetitive (simultaneous competition and collaboration) conditions triggers the use of real options (why), that serve to transform the position, posture and propensity of businesses to innovate and thus they co-evolve (when) into more effective and efficient forms of businesses (co-specialization) (how). The  authors demonstrate that embracing risk and uncertainty can increase levels and probability of new venture formation. However, their simulation also shows that it should be adapted to the risk profile of the firm and that timing is also a factor to be considered.  Although engaging the concepts of real options, this analysis does not focus on a specific investment valuation methodology, but highlights the relationship between knowledge and risk and rather addresses the management of mindsets, as moving towards a systematic conceptualization of real options represents a different paradigm in decision making.

Keywords

Innovation Knowledge management Real options Research and development (R&D) Risk management Strategic decision making

Authors and affiliations

  • Caroline M. Sipp
    • 1
  • Elias G. Carayannis
    • 2
  1. 1.Inter-American Development BankWashington, DCUSA
  2. 2.The George Washington UniversityWashington, DCUSA

Bibliographic information

  • DOI https://doi.org/10.1007/978-1-4614-5814-2
  • Copyright Information Springer Science+Business Media New York 2013
  • Publisher Name Springer, New York, NY
  • eBook Packages Business and Economics
  • Print ISBN 978-1-4614-5813-5
  • Online ISBN 978-1-4614-5814-2
  • Series Print ISSN 2191-5482
  • Series Online ISSN 2191-5490
  • About this book