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An Integrated Options‐Based Strategic Planning and Control Model

Lenos Trigeorgis (Assistant Professor of Finance)
Eero Kasanen (Associate Professor of Finance, University of Massachusetts, Boston, MA 02125)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 February 1991

Abstract

Managerial practice differs from standard capital budgeting theory in a number of respects. For example, managers often take projects that have negative NPV (e.g., R & D investments) due to their flexibility, synergy strategic positioning etc. Furthermore, managers continue to use accounting‐based measures in capital budgeting even though NPV is widely accepted as the only correct valuation measure. In fact, managers and strategists probably have always attempted to intuitively attach value to a variety of “strategic” and other concerns, even when they couldn't quantify them.

Citation

Trigeorgis, L. and Kasanen, E. (1991), "An Integrated Options‐Based Strategic Planning and Control Model", Managerial Finance, Vol. 17 No. 2/3, pp. 16-28. https://doi.org/10.1108/eb013667

Publisher

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MCB UP Ltd

Copyright © 1991, MCB UP Limited