Is real options reasoning a cause or consequence of dynamic capability?

• Date: 01 July 2018
• Author: Khaled Nawaser,Asghar Afshar Jahanshahi
• Published date: 01 July 2018
• DOI: http://doi.org/10.1002/jsc.2211

RESEARCH ARTICLE

DOI: 10.1002/jsc.2211

Strategic Change. 2018;27(4):395–402. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 395

Abstract

!eal orঞons reasonin] rroide an arrrorriate rlaorm =or Crms to chan]e incrementally. Dy-

namic carabiliঞes are the renewin] and re]eneraঞe carabiliঞes that enable Crms to chan]e their

oreraঞn] rrocesses incrementally and radically. $he two disঞnct concerts o= dynamic carability

and real orঞons reasonin] hae receied notable aenঞon =rom strate]ic mana]ement scholars

in recent years. $hese two streams o= research in strate]ic mana]ement literature are certainly

not mutually eclusie. Our concertual arঞcle discussed the similarity and di@erence between

these two concerts. !eal orঞons reasonin] are the CrmĽs rossibility and dynamic carabiliঞes are

the CrmĽs ability to resrond to enironmental challen]es.  chan]in] and dynamic enironment

is a rreretuisite to the emer]ence o= real orঞons reasonin]. eertheless, dynamic carabiliঞes

may also be used in stable enironment, because Crms obiously do inte]rate, recombine, and

reconC]ure their internal and eternal comretencies een in enironments subject to lower rates

o= chan]e. $he e@ecঞeness o= real orঞons reasonin] hi]hly derends on the CrmsĽ ability to

]ather the necessary in=ormaঞon =rom the marhet and business enironment in a ঞmely manner.

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!eal orঞons reasonin] o@er Yeibility in inesঞn]; this enables Crms

to modi=y their tan]ible and intan]ible resources in terms o= marhet,

technolo]y, and enironment chan]es (=shar Jahanshahi & rem,

2017). !eal orঞons reasonin], as a way o= thinhin] (rychowshi &

u࣐lin, 2010), concerns the CrmsĽ strate]ic choices (crath &

errier, 2004) and downside rish reducঞon (!euer & Leiblein, 2000).

leibility etracted =rom real orঞons reasonin] mahes it rossible

=or Crms to tahe a ariety o= acঞons (de=er, delay, scale ur or down,

abandon, and switch or chan]e direcঞon) (crath & errier, 2004)

rather than =ocusin] on a ]ien rath in all condiঞons. $his strate]ic

Yeibility enables Crms to seie urside orrortuniঞes oer ঞme and

rroide a Yeible condiঞon =or Crms to chan]e their oreraঞn] direc-

ঞons accordin] to the marhet and business circumstances. In sum,

real orঞons reasonin] rroides an ecellent orrortunity =or Crms to

erloit their resources arrrorriately in order to build Crm-sreciCc

carabiliঞes (Sirmon, i, & Ireland, 2007).

$here is currently a debate amon] strate]ic mana]ement research-

ers about how real orঞons reasonin] relates to other main concerts.

One o= the new concerts, which has a lot o= similariঞes with this

emer]ent rhenomenon, is dynamic carability ($eece & isano, 1994).

It seems that they are two serarate yet rarঞally related streams o=

research in the strate]ic mana]ement literature that both aemrts to

erlain how Crms mana]e and resrond to chan]es. $hese two streams

o= research in strate]ic mana]ement literature are certainly not mutu-

ally eclusie, and or]aniaঞons mi]ht simultaneously use both o=

them. It is, there=ore, imrortant to hnow to what etent real orঞons

reasonin] and dynamic carability are similar or di@erent. arঞcularly,

we want to hnow i= dynamic carability and real orঞons enhance each

otherĽs alue, or detract =rom each otherĽs alue. nswerin] this tues-

ঞon is a rreretuisite to understandin] how Crms adjust to marhet

chan]es (!ashidirad, Soltani, & Salimian, 2014).

Dynamic carabiliঞes rerresent the abiliঞes o= Crms to inte]rate,

renew, and reconC]ure their carability and resources ($eece, isano, &

Shuen, 1997) in line with the hi]hly comreঞঞe and raridly chan]in]

enironment. !eal orঞons reasonin] mahes resources and caraciঞes

more reconC]urable in order to resrond to enironmental challen]es.

reious worhs on the real orঞons and dynamic carability arrroach

hae aemrted to realie how these constructs related to]ether. In

doin] so, owman and urry (1993) ar]ued that the eistence o= real

orঞons derend on the eisঞn] arrrorriate resources and carability.

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As]_ar A=s_ar a_ams_a_b1,2Պ|Պ _aѴ;7 aas;r3

1 $!& atॕlica raduate usiness

School (S), Lima, erি

2 onঞCcia &niersidad atॕlica del erি

(&), Lima, eru

3 Derartment o= ana]ement, &niersity

o= rrlied Science and $echnolo]y (&S$),

huestan, hwa, Iran

orr;srom7;mc;

s]har =shar Jahanshahi, &rbaniaciॕn Los

ܬlamos de onterrico 33olin, Jirॕn Daniel

lomझa !obles 125, Sanঞa]o de Surco, Lima

33, eru.

mail: a=sharŠrucr.edu.re

* JL lassiCcaঞon odes: 11, 32

Strategic Change. 2018;27(4):395–402. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 395