Capabilities as Real Options

  title={Capabilities as Real Options},
  author={Bruce Kogut and Nalin Kulatilaka},
  journal={Organization Science},
Strategy research consists of a balance between positive and normative theory. Normative theories suggest particular heuristics, or cognitive representations, to find appropriate solutions. Heuristics permit faster solutions to real-time problems; they also suffer from the potential of negative transfer to inappropriate applications.The theory of real options provides the appropriate heuristic framing of competencies and exploratory search. A real options approach marries the theory of… 

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