On corporate strategy and financial strategy

This paper makes an attempt to systematically develop the link between corporate strategy and financial strategy. Drawing on concepts from both strategic management and financial theory, the paper develops propositions which may act as guidelines for top managers in formulating financial strategies, given the corporate strategies their companies are pursuling. A select number of corporate strategy types is considered, and the implications for capital structure, divident policy, and capital budgeting policy of each corporate strategy type are discussed.