Using Real Options In Decision-making Of The Development Of Technological Capability

In recent years, the researches of real options have been concerned increasingly, and have obtained a series of important results in management of technology. But relevant researches mainly concentrate on the strategic thoughts, the pricing models and the applications. Researches that aim at the decision-making of the development of technological capability are still weak, and neglect the applications in the paths of the development of technological capability. In the era of the knowledge economy, the value of the opportunity of the development of technological capability has uncertainty and risk, so how to manage the value of commercial opportunity has been concerned in both the theory and application. Therefore, this paper deeply identifies and researches the real options in the paths of the development of technological capability, and then applies real options pricing models to technology researching a typical path of the development of technological capability.Firstly, this paper defines the concepts and reviews foreign and domestic related researches of technological capability and real options. Secondly, this paper uses the theories of real options and technological capability to analyze the three paths of the development of technological capability, and then brings forward that technology researching is more suitable to use real options to evaluate. Thirdly, this paper applies real options pricing models to technology researching a typical path of the development of technological capability, including identifying real options, selecting pricing models, making decisions from the results. This paper makes a conclusion that the value of decision-making in management of technology is undervalued using cash flow, because there may be some options and flexible values. Lastly, this paper points out the conclusions and the advanced research orientations.This paper makes such conclusions. Firstly, we can use the real options to analyze the decision-making of the development of the technological capability. Secondly, there are real options in the paths of the development of the technological capability.