The role of Real option in e-business Risk management: The case of E-treasury project

Document Type: Research Paper


University of Tehran, Tehran, Iran


Implementing information technology projects requires a calculated process to prevent failure. At the same time application of information technology in organizations faces various potential risks. Exploring information technology environment in organizations reveals the potential risks and provides a structure for comprehensive risk management. There are various methods available for risk management which the purpose of all these methods is proposing the most appropriate design for removing or minimizing the risk or reducing it to an acceptable level. One of these methods is real option approach. Real option theory is a right of decision making which potentially leads to value increase, although doesn’t create any commitment to its owner. This theory, offers a new and more actual concept of opportunity evaluation and strategic risk evaluation which traditional evaluation methods usually ignore. The aim of this research, is explaining the role of real option in e-business risk management. The study is an applied research and is both qualitative and quantitative. The research method which was used is case study (e-treasury project). The target population includes managers and experts of the project which had managerial or practical experience of at least one e-business project (experience of transition from traditional mode to electronic mode). The findings suggest that a combination of various real options could be applied to financial, organizational, environmental, etc risks management. The results also indicate that real option to defer has the most application in projects’ risk management.