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Article: Hospital Executives Must Value Flexibility in Strategic Decision-Making, Says Kurt Salmon Associates; Real-Option Analysis Values Strategic Flexibility in Uncertain Environments.
- Article from:
- PR Newswire
- Article date:
- December 4, 2002
CopyrightCOPYRIGHT 2002 PR Newswire Association LLC. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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ATLANTA -- Health care executives making capital investment decisions should consider the value created by the flexibility of embedded options, according to a cover feature in the November 2002 issue of Healthcare Financial Management.
J. Patrick Smyth, of consulting firm Kurt Salmon Associates (KSA), stresses real-option analysis ability to help executives refine tactics and strategy as their market evolves. Standard methods of evaluating capital investments such as discounted cash-flow (DCF) miss the value of flexibility. They are complemented by real-options analysis.
"Real-option analysis," Mr. Smyth explained, "helps executives understand the value ...