Applying the real options theory for identifying flexibility in project delivery of health organisations

Healthcare is influenced by many uncertainties. Uncertainties affecting health organisations also influence real estate since this facilitates the primary process. Within real estate management, decisions have to be made today while there is little knowledge about the future. Therefore, flexibility is needed in the process of designing, constructing and operating real estate. A case study has been done to gain insight about how health organisations deal with flexibility. The real options approach is used to show what types of flexibility have been used, and that uncertainty can also generate opportunities. Of the five types of flexibility, only in two types real options were identified in the case study. These were stage, abandon, defer and scale within process flexibility and the options growth and switch within product flexibility. This is partly a result of the fact that the project in the case study is not further advanced than the preliminary design phase. Nevertheless it can be concluded that project managers already act as using real options. Consciously using this concept might create even more real options to be used in project management.