The logic of real options in strategy implementation

Mouzas, Stefanos (2005) The logic of real options in strategy implementation. In: Competence Perspective on Managing Internal Process. Advances in Applied Business Strategy . Emerald, Bingley, pp. 79-90. ISBN 0762311681

Abstract

This paper deals with contemporary ways of implementing strategies using the logic of real options. Key objective of the study is to describe and explain how organisations develop and execute the strategies to achieve their objectives. The paper attempts to develop a new view of strategy implementation by utilising the recent advances in the area of real options. Based on empirical observations in manufacturer-retailer networks, the new view does not consider strategy as the ultimate concept of the company’s positioning or direction in the market but as an inventive stream of enacting what is possible for each organisation in its respective network. While organisations react to events as they unfold, implementing strategies takes the form of creating and enacting a number of real options that best reflect the organisations’ competencies and their capacities derived from network membership.