Staff View: Real-option valuation of research and development investments: Implications for performance measurement.

Real-option valuation of research and development investments: Implications for performance measurement.

Bibliographic Details
Main Authors:	Herath, Hemantha S. B., Bremser, Wayne G.
Format:	Villanova Faculty Authorship
Language:	English
Published:	2005
Online Access:	http://ezproxy.villanova.edu/login?url=https://digital.library.villanova.edu/Item/vudl:174957

Main Authors:

Herath, Hemantha S. B., Bremser, Wayne G.

Format:

Villanova Faculty Authorship

Language:

English

Published:

2005

Online Access:

http://ezproxy.villanova.edu/login?url=https://digital.library.villanova.edu/Item/vudl:174957

id	vudl:174957
record_format	vudl
institution	Villanova University
collection	Digital Library
modeltype_str_mv	vudl-system:CollectionModel vudl-system:ResourceCollection vudl-system:CoreModel
datastream_str_mv	RELS-EXT PARENT-LIST-RAW AGENTS AUDIT THUMBNAIL MEMBER-LIST-RAW LICENSE STRUCTMAP PARENT-QUERY PARENT-LIST LEGACY-METS MEMBER-QUERY DC PROCESS-MD
hierarchytype
hierarchy_all_parents_str_mv	vudl:174908 vudl:172968 vudl:641262 vudl:3 vudl:1
sequence_vudl_174908_str	0000000017
hierarchy_top_id	vudl:641262
hierarchy_top_title	Villanova Faculty Publications
fedora_parent_id_str_mv	vudl:174908
hierarchy_first_parent_id_str	vudl:174957
hierarchy_parent_id	vudl:174908
hierarchy_parent_title	Bremser Wayne
hierarchy_sequence_sort_str	0000000017
hierarchy_sequence	0000000017
spelling	Real-option valuation of research and development investments: Implications for performance measurement. Herath, Hemantha S. B. Bremser, Wayne G. Purpose – Aims to promote an integrated performance measurement system. Design/methodology/approach – The literature on R&D performance measurement identifies the need for an integrated performance measurement system for strategy implementation. Develops a theoretical framework for R&D performance measures, incorporating real options to define strategic net present value, which values the plan to make R&D investments. Findings – Real options techniques can be used to value managers' options to shelter investments from adverse effects and exploit upside potential. The shift in valuation paradigms from a naïve net present value model to active risk management implicit in real options requires performance measures that reflect real option value and defines strategic value created (SVC), which is based on residual income concepts. Since residual income is known to be superior to ROI in motivating goal congruence, infers that SVC has similar advantages. Originality/value – Illustrates how SVC would be used as a performance measure for a new drug in the commercialization stage, considers several relevant questions and discusses how SVC could be used in a firm's balanced scorecard. 2005 Villanova Faculty Authorship vudl:174957 Managerial Auditing Journal 20(1), 2005, 55-72. en
dc.title_txt_mv	Real-option valuation of research and development investments: Implications for performance measurement.
dc.creator_txt_mv	Herath, Hemantha S. B. Bremser, Wayne G.
dc.description_txt_mv	Purpose – Aims to promote an integrated performance measurement system. Design/methodology/approach – The literature on R&D performance measurement identifies the need for an integrated performance measurement system for strategy implementation. Develops a theoretical framework for R&D performance measures, incorporating real options to define strategic net present value, which values the plan to make R&D investments. Findings – Real options techniques can be used to value managers' options to shelter investments from adverse effects and exploit upside potential. The shift in valuation paradigms from a naïve net present value model to active risk management implicit in real options requires performance measures that reflect real option value and defines strategic value created (SVC), which is based on residual income concepts. Since residual income is known to be superior to ROI in motivating goal congruence, infers that SVC has similar advantages. Originality/value – Illustrates how SVC would be used as a performance measure for a new drug in the commercialization stage, considers several relevant questions and discusses how SVC could be used in a firm's balanced scorecard.
dc.date_txt_mv	2005
dc.format_txt_mv	Villanova Faculty Authorship
dc.identifier_txt_mv	vudl:174957
dc.source_txt_mv	Managerial Auditing Journal 20(1), 2005, 55-72.
dc.language_txt_mv	en
author	Herath, Hemantha S. B. Bremser, Wayne G.
spellingShingle	Herath, Hemantha S. B. Bremser, Wayne G. Real-option valuation of research and development investments: Implications for performance measurement.
author_facet	Herath, Hemantha S. B. Bremser, Wayne G.
dc_source_str_mv	Managerial Auditing Journal 20(1), 2005, 55-72.
format	Villanova Faculty Authorship
author_sort	Herath, Hemantha S. B.
dc_date_str	2005
dc_title_str	Real-option valuation of research and development investments: Implications for performance measurement.
description	Purpose – Aims to promote an integrated performance measurement system. Design/methodology/approach – The literature on R&D performance measurement identifies the need for an integrated performance measurement system for strategy implementation. Develops a theoretical framework for R&D performance measures, incorporating real options to define strategic net present value, which values the plan to make R&D investments. Findings – Real options techniques can be used to value managers' options to shelter investments from adverse effects and exploit upside potential. The shift in valuation paradigms from a naïve net present value model to active risk management implicit in real options requires performance measures that reflect real option value and defines strategic value created (SVC), which is based on residual income concepts. Since residual income is known to be superior to ROI in motivating goal congruence, infers that SVC has similar advantages. Originality/value – Illustrates how SVC would be used as a performance measure for a new drug in the commercialization stage, considers several relevant questions and discusses how SVC could be used in a firm's balanced scorecard.
title	Real-option valuation of research and development investments: Implications for performance measurement.
title_full	Real-option valuation of research and development investments: Implications for performance measurement.
title_fullStr	Real-option valuation of research and development investments: Implications for performance measurement.
title_full_unstemmed	Real-option valuation of research and development investments: Implications for performance measurement.
title_short	Real-option valuation of research and development investments: Implications for performance measurement.
title_sort	real-option valuation of research and development investments: implications for performance measurement.
publishDate	2005
normalized_sort_date	2005-01-01T00:00:00Z
language	English
collection_title_sort_str	real-option valuation of research and development investments: implications for performance measurement.
fgs.ownerId_txt_mv	diglibEditor
fgs.lastModifiedBy_txt_mv	fedoraAdmin
fgs.type_txt_mv	http://www.w3.org/ns/ldp#Container http://fedora.info/definitions/v4/repository#Resource http://fedora.info/definitions/v4/repository#Container http://www.w3.org/ns/ldp#RDFSource http://www.w3.org/ns/ldp#Resource http://www.w3.org/ns/ldp#BasicContainer
fgs.lastModifiedDate_txt_mv	2021-04-12T19:08:12.933Z
relsext.hasLegacyURL_txt_mv	http://digital.library.villanova.edu/Villanova%20Digital%20Collection/Faculty%20Fulltext/Bremser%20Wayne/BremserWayne-58c87e70-c14b-4dd1-a0ab-1759b1d1def2.xml
relsext.itemID_txt_mv	oai:digital.library.villanova.edu:vudl:174957
fgs.createdBy_txt_mv	fedoraAdmin
relsext.sortOn_txt_mv	title
relsext.hasModel_txt_mv	http://hades.library.villanova.edu:8080/rest/vudl-system:CollectionModel http://hades.library.villanova.edu:8080/rest/vudl-system:ResourceCollection http://hades.library.villanova.edu:8080/rest/vudl-system:CoreModel
fgs.createdDate_txt_mv	2013-01-22T04:14:57.325Z
fgs.label_txt_mv	Real-option valuation of research and development investments: Implications for performance measurement.
fgs.state_txt_mv	Active
relsext.isMemberOf_txt_mv	http://hades.library.villanova.edu:8080/rest/vudl:174908
relsext.sequence_txt_mv	vudl:174908#17
has_order_str	no
agent.name_txt_mv	Falvey Memorial Library, Villanova University AAD
license.mdRef_str	http://digital.library.villanova.edu/copyright.html
license_str	protected
has_thumbnail_str	true
THUMBNAIL_contentDigest_digest_str	203c69e18f4f46c81e9892448d2c07cd
first_indexed	2014-01-11T23:28:46Z
last_indexed	2021-04-12T19:32:23Z
_version_	1785892967637057537
subpages

vudl:174957

record_format

vudl

institution

Villanova University

collection

Digital Library

modeltype_str_mv

vudl-system:CollectionModel
vudl-system:ResourceCollection
vudl-system:CoreModel

datastream_str_mv

RELS-EXT
PARENT-LIST-RAW
AGENTS
AUDIT
THUMBNAIL
MEMBER-LIST-RAW
LICENSE
STRUCTMAP
PARENT-QUERY
PARENT-LIST
LEGACY-METS
MEMBER-QUERY
DC
PROCESS-MD

hierarchytype

hierarchy_all_parents_str_mv

vudl:174908
vudl:172968
vudl:641262
vudl:3
vudl:1

sequence_vudl_174908_str

0000000017

hierarchy_top_id

vudl:641262

hierarchy_top_title

Villanova Faculty Publications

fedora_parent_id_str_mv

vudl:174908

hierarchy_first_parent_id_str

vudl:174957

hierarchy_parent_id

vudl:174908

hierarchy_parent_title

Bremser Wayne

hierarchy_sequence_sort_str

0000000017

hierarchy_sequence

0000000017

spelling

Real-option valuation of research and development investments: Implications for performance measurement.
Herath, Hemantha S. B.
Bremser, Wayne G.
Purpose – Aims to promote an integrated performance measurement system. Design/methodology/approach – The literature on R&D performance measurement identifies the need for an integrated performance measurement system for strategy implementation. Develops a theoretical framework for R&D performance measures, incorporating real options to define strategic net present value, which values the plan to make R&D investments. Findings – Real options techniques can be used to value managers' options to shelter investments from adverse effects and exploit upside potential. The shift in valuation paradigms from a naïve net present value model to active risk management implicit in real options requires performance measures that reflect real option value and defines strategic value created (SVC), which is based on residual income concepts. Since residual income is known to be superior to ROI in motivating goal congruence, infers that SVC has similar advantages. Originality/value – Illustrates how SVC would be used as a performance measure for a new drug in the commercialization stage, considers several relevant questions and discusses how SVC could be used in a firm's balanced scorecard.
2005
Villanova Faculty Authorship
vudl:174957
Managerial Auditing Journal 20(1), 2005, 55-72.
en

dc.title_txt_mv

Real-option valuation of research and development investments: Implications for performance measurement.

dc.creator_txt_mv

Herath, Hemantha S. B.
Bremser, Wayne G.

dc.description_txt_mv

Purpose – Aims to promote an integrated performance measurement system. Design/methodology/approach – The literature on R&D performance measurement identifies the need for an integrated performance measurement system for strategy implementation. Develops a theoretical framework for R&D performance measures, incorporating real options to define strategic net present value, which values the plan to make R&D investments. Findings – Real options techniques can be used to value managers' options to shelter investments from adverse effects and exploit upside potential. The shift in valuation paradigms from a naïve net present value model to active risk management implicit in real options requires performance measures that reflect real option value and defines strategic value created (SVC), which is based on residual income concepts. Since residual income is known to be superior to ROI in motivating goal congruence, infers that SVC has similar advantages. Originality/value – Illustrates how SVC would be used as a performance measure for a new drug in the commercialization stage, considers several relevant questions and discusses how SVC could be used in a firm's balanced scorecard.

dc.date_txt_mv

2005

dc.format_txt_mv

Villanova Faculty Authorship

dc.identifier_txt_mv

vudl:174957

dc.source_txt_mv

Managerial Auditing Journal 20(1), 2005, 55-72.

dc.language_txt_mv

author

Herath, Hemantha S. B.
Bremser, Wayne G.

spellingShingle

Herath, Hemantha S. B.
Bremser, Wayne G.
Real-option valuation of research and development investments: Implications for performance measurement.

author_facet

Herath, Hemantha S. B.
Bremser, Wayne G.

dc_source_str_mv

Managerial Auditing Journal 20(1), 2005, 55-72.

format

Villanova Faculty Authorship

author_sort

Herath, Hemantha S. B.

dc_date_str

2005

dc_title_str

Real-option valuation of research and development investments: Implications for performance measurement.

description

title

Real-option valuation of research and development investments: Implications for performance measurement.

title_full

Real-option valuation of research and development investments: Implications for performance measurement.

title_fullStr

Real-option valuation of research and development investments: Implications for performance measurement.

title_full_unstemmed

Real-option valuation of research and development investments: Implications for performance measurement.

title_short

Real-option valuation of research and development investments: Implications for performance measurement.

title_sort

real-option valuation of research and development investments: implications for performance measurement.

publishDate

2005

normalized_sort_date

2005-01-01T00:00:00Z

language

English

collection_title_sort_str

real-option valuation of research and development investments: implications for performance measurement.

fgs.ownerId_txt_mv

diglibEditor

fgs.lastModifiedBy_txt_mv

fedoraAdmin

fgs.type_txt_mv

http://www.w3.org/ns/ldp#Container
http://fedora.info/definitions/v4/repository#Resource
http://fedora.info/definitions/v4/repository#Container
http://www.w3.org/ns/ldp#RDFSource
http://www.w3.org/ns/ldp#Resource
http://www.w3.org/ns/ldp#BasicContainer

fgs.lastModifiedDate_txt_mv

2021-04-12T19:08:12.933Z

relsext.hasLegacyURL_txt_mv

http://digital.library.villanova.edu/Villanova%20Digital%20Collection/Faculty%20Fulltext/Bremser%20Wayne/BremserWayne-58c87e70-c14b-4dd1-a0ab-1759b1d1def2.xml

relsext.itemID_txt_mv

oai:digital.library.villanova.edu:vudl:174957

fgs.createdBy_txt_mv

fedoraAdmin

relsext.sortOn_txt_mv

title

relsext.hasModel_txt_mv

http://hades.library.villanova.edu:8080/rest/vudl-system:CollectionModel
http://hades.library.villanova.edu:8080/rest/vudl-system:ResourceCollection
http://hades.library.villanova.edu:8080/rest/vudl-system:CoreModel

fgs.createdDate_txt_mv

2013-01-22T04:14:57.325Z

fgs.label_txt_mv

Real-option valuation of research and development investments: Implications for performance measurement.

fgs.state_txt_mv

Active

relsext.isMemberOf_txt_mv

http://hades.library.villanova.edu:8080/rest/vudl:174908

relsext.sequence_txt_mv

vudl:174908#17

has_order_str

agent.name_txt_mv

Falvey Memorial Library, Villanova University
AAD

license.mdRef_str

http://digital.library.villanova.edu/copyright.html

license_str

protected

has_thumbnail_str

true

THUMBNAIL_contentDigest_digest_str

203c69e18f4f46c81e9892448d2c07cd

first_indexed

2014-01-11T23:28:46Z

last_indexed

2021-04-12T19:32:23Z

_version_

1785892967637057537

subpages

The use of this material may be subject to the copyright law of the United States (Title 17, United States Code) or other third party terms and conditions. The person using the material is responsible for any use or infringement of third party rights.

Disclaimer Of Liability

Villanova University makes no warranty, express or implied, and hereby disclaims all warranties with regard to the information and materials provided, including implied warranties of merchantability, fitness for a particular purpose, or non-infringement, and assumes no legal liability or responsibility for the accuracy, completeness, currency or usefulness of any material displayed or distributed through the Digital Library. Any use or reliance upon such information and materials is at your own risk. In no event will Villanova University be liable to you or any third party for any damages or losses whatsoever resulting from or caused by the Digital Library or its contents, or your access or use thereof.

Disclaimer Of Endorsement

Reference herein to any specific opinion, viewpoint, individual, commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement or recommendation, or any assertion or evaluation as to its validity or veracity, by Villanova University. The views and opinions of authors expressed herein do not necessarily state or reflect those of Villanova University and shall not be used for advertising or product endorsement purposes.

Real-option valuation of research and development investments: Implications for performance measurement.

Rights Information

Disclaimer Of Liability

Disclaimer Of Endorsement

Accessibility Statement

Real-option valuation of research and development investments: Implications for performance measurement.

Similar Items

Rights Information

Disclaimer Of Liability

Disclaimer Of Endorsement

Accessibility Statement