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Decision support for firm performance by real options analytics

Research output: Research - peer-reviewArticle

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Author(s)

Bernadette Power, Gavin C. Reid

School/Research organisations

Abstract

This paper develops a real options decision support tool for raising the performance of the firm. It shows how entrepreneurs can use our intuitive tool quickly to assess the nature and type of action required for improved performance. This exploits our estimated econometric relationship between precipitators of entrepreneurial opportunities, time until exercise, and firm performance. Our 3D chromaticity plots show how staging investments, investment time, and firm performance support entrepreneurial decisions to embed, or to expedite, investments. Speedy entrepreneurial action is securely supported with this tool, without expertise in econometric estimation or in formulae for real options valuation.
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Details

Original languageEnglish
Number of pages9
JournalManagerial and Decision Economics
VolumeEarly View
Early online date23 Jul 2017
DOIs
StateE-pub ahead of print - 23 Jul 2017

    Research areas

  • Real options, Decision support, Strategic flexibility, Performance

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