Relative exploration orientation and real options reasoning:survey evidence from Denmark
| Autor: | Thomas Borup Kristensen, Claus Højmark Jensen |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2022 |
| Předmět: |
05 social sciences
Downside risk 050201 accounting Orientation (graph theory) Relative exploration orientation Capital budgeting Microeconomics 0502 economics and business Business Management and Accounting (miscellaneous) Real options reasoning Business and International Management Psychology 050203 business & management |
| Zdroj: | Jensen, C H & Kristensen, T B 2022, ' Relative exploration orientation and real options reasoning : survey evidence from Denmark ', European Business Review, vol. 34, no. 2, pp. 191-223 . https://doi.org/10.1108/EBR-07-2020-0172 |
| DOI: | 10.1108/EBR-07-2020-0172 |
| Popis: | PurposeThis paper aims to extend the understanding of how real options reasoning (ROR) is associated with downside risk and how a firm’s portfolio (explore and exploit) of investment activities affects managers’ ability to effectively apply ROR in relation to downside risk.Design/methodology/approachThe survey method is used. It is applied to a population of Danish firms, which in 2018 had more than 100 employees. The chief financial officer was the target respondent.FindingsThis study finds that a higher level of ROR is associated with lower levels of downside risk. ROR’s association with lower levels of the downside risk is also moderated by the level of relative exploration orientation in a negative direction.Originality/valueThe field of ROR research on downside risk and portfolio subadditivity has been dominated by research focused on multinationality. This paper extends extant literature on ROR by studying ROR as a multidimensional construct of firm action, which is associated with lower levels of downside risk, also when studied outside of a multinationality setting. This is the case when ROR is implemented as a complete system. This paper also applies a framework of exploitation and exploration to show that findings on subadditivity in options portfolios caused by asset correlations extend outside the scope of multinationality and into one of product/service innovation. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|