Entrepreneurship Theory and Practice 2024

A Real Options Perspective on Entrepreneurial Orientation and Government Ties

Izuchukwu Evans Mbaraonye¹; Varkey Titus²; Jeffrey Cavanaugh²

¹ University of Missouri–Kansas City · ² University of Nebraska–Lincoln

Abstract

Firms’ strategic orientation toward entrepreneurship exposes them to regulatory uncertainties. Prior research suggests that addressing these uncertainties through corporate political activities (CPA) may require costly trade-offs, such as the loss of strategic flexibility. We argue that some of these trade-offs can be mitigated by the way firms structure their CPA. We extend the insights from real options reasoning (ROR) to offer a framework for how firms may circumvent some of these trade-offs through greater CPA breadth, which allows firms to retain their strategic flexibility while reaping some of the benefits of CPA.

DOI

10.1177/10422587241292074

Sources

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APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓