Interactions between corporate strategy and financial strategy: some propositions for practicing managers

Abstract

This paper discusses the implications of corporate strategy choices for financial strategies of the firm, and the implications of finance theory for strategic decision-making of the firm. Some propositions of potential practical use to managers are advanced here. One set of propositions relates to the kinds of financial strategies implied by a given corporate strategy, another set relates to the implications of finance theory for strategic planning and decision-making, and the third set relates to the potential use of financial policies in implementing specific corporate strategies.