Select an MIS Quarterly article from the attached articles. Post a summary of the
2. research design,
3. analysis, and
regarding the article you select.
2.) Reply for below post.(50-100 words)
The theory here is based on the Black-Scholes option model of pricing which is adjusted mainly to take care of the risk-averse investors. With the theory, the author shows how it would be important and possible to get Yankee 24â€™s reliable values even when the pricing market is absent. The Real-options analysis theory presented by the author is presented as producing a great results for the senior-managers in making analysis of decisions concerning option investments and information technology investments. He argues that the theory can be used to come up with sensitivity analysis and evaluation of the analysis results which may help in coming up with appropriate investment decisions.
The research design was that of survey. Basic assumptions scenario were develeded. Also, the parameters of these basic scenarios associated to the Black-Scholes model in this theory was involved with the production of interviews which were in a structured format. The sample used is the Yankee 24â€™s which is an Information technology investment business. With this case study, interviews that were structured and developed were used to find out the results of the effectiveness of the Real-options analysis theory that the author proposes. After the administration of the interviews and the collection of the important data, analysis was made
Analysis was done to examine the strengths claimed by the analysis approach, and balancing such claims against the methodological difficulties which the approach gets claimed to involve. The technique of analysis that was used in one of the research studies was that of real-options analysis. This analysis resulted to the obtaining of results that would facilitate the senior management in identifying the conditions necessary for the profitability of the point-of-sale market. After the analysis it was found that when formal timing option evolution is absent, traditional approaches that would be used in the evaluation of IT investments would produce the wrong recommendations.
This paper demonstrates the value and importance of applying real-options analysis to IT investees that are embedded in real-operating option. It is concluded that real-options analysis offers a great complementary approach that can be used in evaluation of real-world information technology investments such as Yankee 24â€™s. Real-options analysis proved to be sustainable for senior management in structuring the option investmentâ€™s strategic value, and enables an intuitive and logical analysis results interpretation. The approach also facilitates sensitivity analysis that would help in probing the investment nature understanding which would match the managerâ€™s thinking about the given problem.
Benaroch, M., & Kauffman, R. J. (2000). Justifying Electronic Banking Network Expansion Using Real Options Analysis. MIS Quarterly, 24(2), 197â€“225. https://doi.org/10.2307/3250936