• The Journal of Information Systems
• /
• v.22 no.3
• /
• pp.43-58
• /
• 2013

This work investigates factors that may affect the choice of real options by ERP project managers. Financial theory suggest that these factors include risk-free interest rate, time to maturity, volatility of net present value, and options exercise price. Other than these factors, we are interested in the exogenous risks related to external uncertainties about technological cost, user learning and consulting, and so forth and we argue these risks should have a significant impact upon the volatility of net present value. To validate these factors empirically, we collected survey questionnaires from ERP project managers in Korea. We find that perceived exogenous risks with regard to ERP projects influence volatility and additionally find that ERP project managers prefer contract options of the project when the volatility of the project is expected to be high. We expect that this work will not only validate theoretical propositions but help project managers consider ERP options strategically based on these factors.

• Knowledge Management Research
• /
• v.17 no.3
• /
• pp.161-179
• /
• 2016

The recent patent wars in the information technology (IT) industry demonstrate the strategic importance of IT patents in the industry. In this paper, we adopt the lens of real options to study the value of IT patents for IT firms. Specifically, we examine the relationship between IT patents and firms' market performance. We also consider the moderating effect of the innovation orientation of firms' patent portfolios (exploitative vs. explorative). Based on a large panel dataset consisting of 697 firms in US IT industries, our results suggest that the impact of IT patents on firm value (as measured by Tobin's q) is positive and significant. Further, we find that this impact varies, depending on the innovation orientation of firms' patent portfolios. IT patent portfolios with higher levels of an exploitative orientation are associated with higher firm value, compared to those with a lower exploitative orientation. This study highlights the value of employing real options theory as the underlying mechanism in understanding the impact of patents on firm valuation. Future researchers can adopt the real options lens to identify and empirically examine the role of other factors that may affect the value of patents and other investments exhibiting real option characteristics. While our paper answers some questions about the value of patents in the IT industry, it also raises a number of additional new questions. As such, we hope that it will generate more research on this important topic.

• Journal of Information Technology Applications and Management
• /
• v.24 no.4
• /
• pp.13-24
• /
• 2017

This study aims to analyze which subsidiary configuration strategy is more effective under uncertainty especially technology base multinational corporations (henceforth MNCs). In previous studies real option theory scholars argue that high breadth subsidiary configuration is most effective strategy because that provides flexibility to MNCs global network. In this study I want unveil more various types of uncertainty such as technology and learning uncertainty which are more important for technology base firm and further more examine the effect of MNCs subsidiary configuration on firm R&D performance each uncertainty case. Empirical study is performed by negative binominal model based on Japanese 108 multinational corporations. The result shows that under technology uncertainty, high breadth subsidiary configuration is better for firm R&D performance but under learning uncertainty high depth subsidiary configuration is better. Thus, the effects of MNCs subsidiary configuration on firm value can differ by types of uncertainty.

• Korean Journal of Logic
• /
• v.18 no.2
• /
• pp.243-264
• /
• 2015

Roger White raised an objection, one based on Bayesianism, to the dogmatist view of perceptual justification. In his paper, "Perceptual Dogmatism and Bayesian Favoring", Ilho Park tries to show, contra Roger White, that there is no real conflict between Perceptual dogmatism and Bayesianian theory of confirmation. For this purpose, Park brings in the notions of the degree of confirmation and the favoring relation and argues that Bayesian theory, when properly understood, can yield results that are quite favorable to dogmatism. I don't think, however, that the devices that he employes actually deliver what he promises. The conflict is yet to be resolved. Probably, Bayesian theorists may be better off if they, instead of trying to resolve the conflict, consider the option of simply rejecting dogmatism.

• 한국경영정보학회:학술대회논문집
• /
• 2008.06a
• /
• pp.454-471
• /
• 2008

This study suggests the dynamic pricing model which reveals the organic relationship between ASP (Application Service Provider) price and the related factors, using system dynamics methodology. Basically, we applied the law of supply and demand for analyzing price changes. Then, we deducted ASP price, focusing on fixed cost and variable cost. We also researched the customer's buying behavior according to version differentiation policy. In the version policy, we set up the proposition about customer's satisfaction and willingness-to-pay, using option system. As a result, this research designed the simulation model which analyzes the changes of the sales according to version differentiations and customer's willingness-to-pay. Through this research, we can find effective version differentiation strategies. This paper also found that the larger the number of package, the greater the demand and customer's willingness-to-pay. The increase of the number of package causes the increase of the sales. The increase of the sale is not exactly relative to the number of package. Drawing S-curve, the sales was increased. This dynamic pricing model suggests the ground that the ASP price changes based on the existing version differentiation theory and the demand of customers can affect the changes of the sales. We expect that this model suggests a clear standard of ASP pricing by combining real cases.

• International Commerce and Information Review
• /
• v.14 no.2
• /
• pp.249-269
• /
• 2012

The focus of our work is to identify and understand the drivers of alliance performance so that businesses can maximize their chances of a successful alliance-an area that has received little attention in empirical modeling. Although both conceptual and applied research on alliances has increased, an empirically tested comprehensive theoretical model that explains alliance performance has yet to be developed. Using five salient perspective, namely market power theory, transaction cost theory, the resource-based view, institutional theory, real option theory, this paper attempts to provide a theoretical rationale linking motives of global alliance networks on firm's capabilities, partner's capabilities, operating structures, and performances of Korean companies. The key contribution of this study is that it paints a picture of what matters in driving alliance performance. Our work shows the complex nature of driving performance and the interplay of firm's capabilities, partner's capabilities, and operating structures for understanding alliance performances. This study has given us a small but significant step forward towards understanding the intricacies of alliance performance. We are now better able to understand the respective roles played by various alliance factors and derive insights that lead to improved alliance performance.