Does Real Options Reasoning Support or Oppose Project Performance? Empirical Evidence from Electronic Commerce Projects

Abstract

There is a consensus among scholars that real options reasoning is crucial for improving project performance but there has been little empirical support thus far; hence, we explore how real options reasoning may influence project timeliness, efficiency, and effectiveness. Our longitudinal analysis of 110 electronic commerce projects, drawn from new technology ventures, indicated the differential effects of real options reasoning on project performance. We find that higher uncertainty does not always lead to a greater use of real options reasoning. Although perceived environmental state uncertainty is positively linked to real options, perceived environmental effect and response uncertainty are not.