Dear Colleagues,

Business sustainability depends on the ability of firms to manage uncertainties embedded in investment and operating strategies. During the management of new projects, routines, and technologies, the firm’s constant objective should be to earn increasing returns by exploiting opportunities and limiting losses that could be created by uncertainty. In planning new investments and operating strategies, managers are aware that they can respond to new information over time as uncertainty resolves, and that this kind of flexibility affects not only their future decisions, but also their present ones. Traditional corporate investment and strategies evaluation is based on the discounted cash flow method (DCF) and uses the Net Present Value (NPV) as the main measure of their effectiveness. When this value is positive, the strategy or investment is approved, when negative, it is rejected, but this approach sometimes leads to the abandonment of profitable investments or strategies and the approval of non-sustainable ones. The reason for this is that traditional financial budgeting approaches, such as the DCF method, neglect the role of managerial flexibility, namely the future decisions that might need to be made over the course of investment or strategy to react to uncertainties, thus, exploiting opportunities or limiting losses caused by uncertainty, and making the business really sustainable. To support managers in their decision-making process in uncertain environments and ensure business sustainability, new techniques, and theories are sought. The real options approach has been suggested as a tool for strategic decision making because it can capture the flexibility to react to uncertainties over the course of investments and operating strategies. Providing a quantitative measurement of the flexibility value, Real Options Valuation (ROV) has thus become a cross-disciplinary area of research, with great potential to improve corporate decision-making while promoting better understanding of the role of uncertainty on investment activity in various sectors of the economy.

Despite the growing support the real option theory has been attracting in academia and its apparent relevance in business decisions, however, the application of real options to managerial practice and corporate decision making is still poor and often limited to a conceptual level.

This Special Issue aims to collect theoretical and empirical papers addressing advances on Real Option Valuation from a business sustainability perspective. In particular, we invite you to contribute to this issue by submitting comprehensive reviews, case studies or research articles, that are neither published nor currently under review by any other journals, discussing how ROV may contribute to ensuring the business sustainability under uncertainty. This will help bridge the current gap between theory and practice in ROV adoption in corporate decision making. Papers selected for this Special Issue are subject to a rigorous peer review procedure with the aim of rapid and wide dissemination of research results, developments, and applications.

Prof. Dr. Roberta Pellegrino
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

• Real options
• Managerial Flexibility
• Business sustainability
• Uncertainty
• Corporate decision-making