Real Options and Resource Reallocation Processes

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Advances in Strategic Management

ISSN: 0742-3322
Series editor(s): Professor Brian Silverman

Subject Area: Strategy

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Document Information:
Title:	Real Options and Resource Reallocation Processes
Author(s):	Ron Adner
Volume:	24 Editor(s): Jeffrey J. Reuer, Tony W. Tong ISBN: 978-0-7623-1427-0 eISBN: 978-1-84950-494-2
Citation:	Ron Adner (2007), Real Options and Resource Reallocation Processes, in Jeffrey J. Reuer, Tony W. Tong (ed.) Real Options Theory (Advances in Strategic Management, Volume 24), Emerald Group Publishing Limited, pp.363-372
DOI:	10.1016/S0742-3322(07)24013-6 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	This article considers real options approaches through the lens of firm's resource reallocation processes. It explores some potential drivers and consequences of mismatches between initial resource allocation logics and subsequent reallocation realities, highlighting a process of rational escalation in the presence of sunk costs. It also presents a new perspective on the traditional stage-gate process, and considers some recent empirical evidence on the efficiency of resource reallocation processes in organizations.