Entrepreneurship and the art of tackling technological crises: a strategic real options framework

In this paper, we will answer the question of how companies should change their capabilities and entrepreneurial styles to survive when facing technological uncertainty. While real options analysis has largely been used for valuation purposes, we suggest that thinking in terms of real options is suitable for addressing strategic issues as well. Real options theory helps reveal how entrepreneurs are able to evaluate uncertain and complex future options when coping with drastic technological changes. We propose that our theoretical construction called strategic real options framework is a good supplement to the dynamic capability view, since it involves decision–making patterns such as creating, sensing, scanning, seizing and reconfiguring of real options. The real options connection also opens up new avenues to look at dynamic capability–based view about entrepreneurship and the role of technology intelligence within it. Finally, we provide qualitative empirical support for our framework by means of a case study.