My dissertation seeks to address ambiguities in the common usage of real options as the
counterpart of financial options in management, focusing on a specific management context:
sequential acquisitions of equity stock. Despite its popularity, the metaphoric use of real options
on sequential acquisitions brings up critical ambiguities, which might not be congruent with
assumptions in the finance options literature. I seek to examine such ambiguities and align them
with the theory and practice of strategic management. The dissertation is structured as follows:
In Essay 1, I first identify key ambiguities in the metaphoric use of real options as a reflection of
finance options in several management contexts, and then focus on addressing two key
ambiguities in equity partnerships. Further, I provide the baseline framework to address the
ambiguities, leading to the view of dual latent options - dual partner roles. Finally, I propose
three future research questions worth examining. In Essay 2, I address one of the three questions
suggested in Essay 1: what conditions enable a particular equity partner in an international
equity partnership, to exercise its call by acquisition (exercise its put option by divestment) upon
favorable (unfavorable) market shock? Suggesting that the organizational capability to perceive
external environments serves as an important contingency, I argue that the partner who can more
significantly reduce its perceptual uncertainty will exercise an option aligned with the direction
of the market shock. By extending this logic to international equity partnerships, I hypothesize
about how a foreign partners equity purchase (which coincides with local partners equity
divestment) is influenced by environment shocks. I conduct a regression analysis with a
longitudinal dataset of international equity partnerships in the automotive component industry,
and obtain results supportive of the hypotheses. In conclusion, my dissertation contributes to
nudging the real options view from its current form, which is the largely metaphoric use of
finance options, toward a management theory that is more consistent with the realities of
strategic management.
| Identifer | oai:union.ndltd.org:PITT/oai:PITTETD:etd-01022009-133909 |
| Date | 29 January 2009 |
| Creators | Iriyama, Akie |
| Contributors | Kevin Kim, Jeffrey Reuer, Susan Cohen, John Prescott, Ravi Madhavan |
| Publisher | University of Pittsburgh |
| Source Sets | University of Pittsburgh |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.library.pitt.edu/ETD/available/etd-01022009-133909/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached hereto a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to University of Pittsburgh or its agents the non-exclusive license to archive and make accessible, under the conditions specified below, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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