- The Oxford Handbook Of Organizational Decision Making
- List of Figures
- List of Tables
- Notes on Contributors
- Organizational Decision Making: Mapping Terrains on Different Planets
- Boom and Bust Behavior: On the Persistence of Strategic Decision Biases
- Information Overload Revisited
- Decision Making with Inaccurate, Unreliable Data
- Borgs in the Org? Organizational Decision Making and Technology
- Making the Decision to Monitor in the Workplace: Cybernetic Models and the Illusion of Control
- Culture and Decision Making
- Facing the Threat of Disaster: Decision Making When the Stakes are High
- The Fit Between Crisis Types and Management Attributes as a Determinant of Crisis Consequences
- Employing Adaptive Structuring as a Cognitive Decision Aid in High Reliability Organizations
- Expertise and Naturalistic Decision Making in Organizations: Mechanisms of Effective Decision Making
- Cognitively Skilled Organizational Decision Making: Making Sense of Deciding
- Linking Rationality, Politics, and Routines in Organizational Decision Making
- Superstitious Behavior as a Byproduct of Intelligent Adaptation
- On The Implications of Behavioral Decision Theory for Managerial Decision Making: Contributions and Challenges
- Intuition in Organizational Decision Making
- Affect and Information Processing
- Individual Differences And Decision Making
- Group Composition and Decision Making
- Making Sense of Real Options Reasoning: An Engine of Choice that Backfires?
- The Social Construction of Rationality in Organizational Decision Making
- When “Decision Outcomes” are not the Outcomes of Decisions
- What Lies Behind Organizational Façades and How Organizational Façades Lie: An Untold Story of Organizational Decision Making
- Teaching Decision Making
- Facilitating Serious Play
- Do Activities of Consultants and Management Scientists Affect Decision Making by Managers?
- Risk Communication in Organizations
- Structuring the Decision Process: An Evaluation of Methods
- Strategy Workshops and “Away Days” as Ritual
- Troubling Futures: Scenarios and Scenario Planning for Organizational Decision Making
- Subject Index
- Personal Name Index: Includes All Referenced Authors
Abstract and Keywords
This article traces the development of real options reasoning (ROR) and details how problems in assessing the value of real options have made ROR difficult to implement. The article then describes how in practice, instead of focusing on explicit valuation, organizations use analogous reasoning to develop, select, and implement options that enable strategic flexibility and so enhance value. An illustrative case demonstrates how financial options can help this process by buffering core operations from changing market environments. The same illustration also shows that ROR fails to simultaneously create future choices while limiting costs. Moreover, where it does generate future choices, it does not prevent decision makers from making poor choices. Thus, the engine of choice that ROR suggests organizations should create may in fact backfire on those decision makers who try to implement it.
Michael L. Barnett (PhD, New York University) is Professor of Strategy at the Saïd Business School and Fellow in Management at St. Anne’s College, University of Oxford. Mike’s research focuses on how firms interface with their stakeholders. In particular, he studies how firms individually and collectively manage their relationships with stakeholders, and how their efforts at stakeholder management, through acts of corporate social responsibility and via communal institutions such as industry trade associations, influence their reputations and financial performance.
Roger L. M. Dunbar is Professor of Management at the Stern School of Business, New York University. He is interested in sensemaking processes in organizations and in particular, how framing processes and language use determine meaning. With Bill Starbuck, he edited a special issue of Organization Science (March–April 2006) that focused on organization design. He is a senior editor of Organization Studies. He was born in Dunedin, New Zealand, and studied at the University of Otago, moving to Cornell University to do a doctorate and to Dallas, Texas, for a first academic appointment at Southern Methodist University. He then spent almost five years in Berlin, Germany, at the International Institute of Management, a part of the Science Center of Berlin before moving to New York University. He has held visiting appointments at Victoria University and Auckland University in New Zealand as well as at the Free University in Berlin.
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