- Strategic choices made by organizations invariably are driven by the organizational culture. It is simply like why do we ride on only one side of the road? This is because, we simply do not want to ride on the other side. It is the question of conditioning and belief. Intel has a culture of innovation. They encourage innovation and apply it immediately without too much of negative self-doubt. If it does not work, they simply go back to what was done prior to the application of the innovation. They do not blame anybody for any failures.
- A classic case of forward integration is that of the world’s third largest private healthcare services provider named Apollo Hospitals, based out of India with presence in three continents. They have taken diagnostics and initial treatment to the homes of patients by taking phlebotomist and physicians to the door step of the patients. This is an excellent example of forward integration, wherein, organizations take innovative methods to go closer to the customer and delivering higher value and creating more financial accruals for themselves.
- The three crucial finance functions, as stated by James Van Horne, are namely the investment, financing and the dividend decisions. The first decision pertaining to investment entails the allocation and reallocation of the various capital resources of the firm to specific projects, goods, properties and divisions. The second financing decision defines the optimal capital allocation structure for organizations and this encompasses assessment of a variety of means though which capital can be raised. The final decision is the one dealing with dividend and this entails plethora of issues like for instance, the earnings paid percentage to the stockholders, the stability of dividends paid over time and the repurchase or issuance of stock.
References
M.Coulter. (2008). Strategic Management in Action (4th Ed). Upper Saddle River: NJ: Pearson Education.
Simon, H. (1993). Strategy and Organizational Evolution. Strategic Management Journal (Vol: 14), 131-142.
