My dissertation seeks to address ambiguities in the common usage of real options as the counterpart of financial options in management, focusing on a specific management context: sequential acquisitions of equity stock. Despite its popularity, the metaphoric use of real options on sequential acquisitions brings up critical ambiguities, which might not be congruent with assumptions in the finance options literature. I seek to examine such ambiguities and align them with the theory and practice of strategic management. The dissertation is structured as follows: In Essay 1, I first identify key ambiguities in the metaphoric use of real options as a reflection of finance options in several management contexts, and then focus on addressing two key ambiguities in equity partnerships. Further, I provide the baseline framework to address the ambiguities, leading to the view of "dual latent options - dual partner roles." Finally, I propose three future research questions worth examining. In Essay 2, I address one of the three questions suggested in Essay 1: what conditions enable a particular equity partner in an international equity partnership, to exercise its call by acquisition (exercise its put option by divestment) upon favorable (unfavorable) market shock? Suggesting that the organizational capability to perceive external environments serves as an important contingency, I argue that the partner who can more significantly reduce its perceptual uncertainty will exercise an option aligned with the direction of the market shock. By extending this logic to international equity partnerships, I hypothesize about how a foreign partner's equity purchase (which coincides with local partner's equity divestment) is influenced by environment shocks. I conduct a regression analysis with a longitudinal dataset of international equity partnerships in the automotive component industry, and obtain results supportive of the hypotheses. In conclusion, my dissertation contributes to nudging the real options view from its current form, which is the largely metaphoric use of finance options, toward a "management theory" that is more consistent with the realities of strategic management.
