Strategy through the Option Lens: An Integrated View of Resource Investments and the Incremental-Choice Process

This article develops an option-theoretic perspective for organizational strategic management. Grounded in the basic intuition that people seek to “keep options open” in situations that involve an unforeseeable future, and supported by theory in financial economics, this view is a recent development in strategy. The theory integrates resource allocation, sense making, organizational learning, and strategic positioning in a unified framework, and it provides a new explanation for some counterintuitive empirical findings.