Firms invest in exploration-oriented activities to seek competitive advantage and in response to changing environments. Real options formulations represent an emerging strand of thinking on such investments. In this paper we begin with the observation that firms often simultaneously invest in multiple exploration projects. We identify two sources of potential interactions among these real options investments. First, we investigate the effects of correlations between the outcomes in different options. Second, we analyze the effects of investments that are fungible across project options. We show that under different conditions multiple options can be subadditive (due to redundancies in outcomes) or super-additive (due to fungible inputs). We test the implications of our model with data from the biotech industry and find supporting evidence. Our model and results have some interesting implications for the exploration literature and real options lens.

Research Summary We develop a multi‐level theory of dynamic capabilities (DCs) that explains resource dynamics by giving a central role to persons and interpersonal interactions rather than to abstract, firm‐level entities. Our theory integrates the contrasting approaches to DCs in individual‐, interpersonal‐, and organization‐level scholarship. Existing organization‐level approaches portray DCs as collective endeavors but do not specify how they emerge and operate within organizations, while micro‐foundational approaches illuminate actors’ contributions but reduce a firm's DCs to the cognitions and actions of a few top managers. Our integrated theory instead explains DCs as effortful social accomplishments emerging from individual employees’ capacity to leverage interpersonal relationships conducive to productive dialogue. The framework we propose offers new ground for understanding how DCs can be sources of sustainable competitive advantage. Managerial Summary How can firms navigate the transformations that relentlessly raise new threats and opportunities in dynamic environments? We suggest that firms develop dynamic capabilities to navigate change when their employees are connected through high‐quality relationships, empowering their innovative potential. Strategic adaptation is possible when people are given the opportunity to act, think, and feel creatively while performing tasks, thus envisioning opportunities to improve how the firm operates. This ability supports sustainable, firm‐level innovation when employees are connected through interpersonal relationships founded on constructive dialogue. Dialogue allows participants to advance and accept proposals for change even in the presence of conflicting interests and viewpoints. Managers may therefore enhance their firm's capacity for change by fostering individual integration and developing contexts that facilitate dialogue and constructive opposition.

We make the case that conditions and timing are right and, despite some challenges, there are many benefits to conducting management research in Latin America. Some of these conditions include an upward trend in the productivity of Latin American researchers, increased collaboration between researchers in Latin America and those in other regions, and societal, cultural, and economic characteristics that make the region an ideal “natural laboratory” to build and test management theories. Demonstrating that our arguments are not just about potential but are founded in reality, we offer a selective summary of recent research conducted in Latin America that made important contributions to micro and macro management domains and theories. These include (a) leadership; (b) small and family businesses; (c) entrepreneurship; (d) social inclusiveness, inequity, and vulnerable populations; (e) strategy and competitive dynamics in natural resource industries; (f) strategy in unstable macroeconomic contexts; (g) public (industrial) policies and business development; (h) hybrid public-private collaborations; and (i) social enterprises and blended social and economic value creation. We also describe opportunities for future research in these domains. Finally, we offer practical and actionable advice on how to address typical challenges encountered when conducting management research in Latin America. Solutions apply to those residing inside and outside of Latin America and include, among others, identifying universities with a research-oriented career path, recognizing credible university rankings and their impact, and capitalizing on local contexts to generate high-quality research. We hope our article will serve as a catalyst for future management research in Latin America.