The Impact of Power Distance and Uncertainty Avoidance on Real Options Exercise: Potential for Suboptimal Time Delays and Value Destruction
| Autor: | Matt Davison, Derek Lehmberg |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Uncertainty avoidance
Time delays 05 social sciences National culture Organizational culture 050109 social psychology Experimental and Cognitive Psychology Microeconomics Investment decisions 0502 economics and business Economics 0501 psychology and cognitive sciences Hofstede's cultural dimensions theory Operations management Investment opportunities 050203 business & management Finance Valuation (finance) |
| Zdroj: | Journal of Behavioral Finance. 19:62-72 |
| ISSN: | 1542-7579 1542-7560 |
| Popis: | Real options (RO) valuation has been promoted as a way to evaluate investment opportunities and make investment decisions that takes into account the value of managerial flexibility in the face of uncertainty. Although RO enjoys a substantial body of literature considering its application and suitability in different situations, the impact of national culture on the application of RO has received little attention. Values embedded in national culture affect the behavior of managers. In particular, these values play a role in how managers frame information, communicate, and make decisions, directly and indirectly affecting behavior through cultural layers such as organizational culture. National culture, therefore, can systematically affect the application of RO, potentially leading to suboptimal outcomes. In this article, we hypothesize how 2 particularly relevant dimensions of culture, power distance and uncertainty avoidance, affect RO exercise, and estimate the magnitude suboptimality of these e... |
| Databáze: | OpenAIRE |
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