Compare and contrast the potential advantages and disadvantages of the Essay

Compare and contrast the potential advantages and disadvantages of the formal rational approach to strategy development - Essay Example The approach is also structural with a top to down hierarchy for decision making and assumption of responsibility. While middle level managers implement decisions in the approach, full responsibility remains with the top organs of an organization’s structure. Developed strategies, from the approach, are also detailed, and cover wide scopes. One of the advantages of such a bureaucratic approach is cost effectiveness that arises from the organization because only necessary steps and necessary personnel are involved in the strategic development process. This makes it affordable and allows for utilization of saved resources in other areas of an organization’s needs. The formal approach is also associated with efficiency that could arise from focus on a few individuals in the process and continuous involvement of the individuals in the process, a factor that identifies benefits of specialization. Efficiency promises quality decisions for effective strategies towards supporti ng desired objectives. Related to the efficiency advantage is the speed with which the formal approach can yield desired strategies. with well defines structures and specific and specialized personnel, the decision making at the different stages of the approach are faster and are therefore able to respond to emergency needs. Other advantages of the bureaucratic approach are its stability and continuity. These are because the formal structure eliminates possible barriers such as internal resistance and it is easy to replace a member of decision-making team for sustainability of a strategy development process or a developed strategy. One of the disadvantages of the formal rational approach is its concentration of power in the hands of a few people, and this could be risky if the individuals lack necessary competence or have conflict of interest. The bureaucratic scope of the approach

Aspects of Corporate Financial Policy Essay Example | Topics and Well Written Essays - 3500 words

Aspects of Corporate Financial Policy - Essay Example The view that dividend does not matter as far as wealth maximization is concerned has its support in the article by Miller (n.d.) entitled â€Å" Do Dividends Really Matter?† In said paper, Miller explained his position about the few aspects of corporate financial policy where academics and practitioners differ on what really is the effect of dividend policy on stock price. He is aware that the academic consensus that dividends do not matter much and that the market should not be expected to increase prices because of â€Å"generous† dividend policies. He, however, admits that generous dividends may cause share to sell lower due to tax penalties or higher taxes on dividends as against capital gains. On the other hand, he also knows of the continued claims from corporate officials and investment bankers about the big influence of dividend on market prices because of cited instance where there were jumps in price after some announcements of resumption of regular dividends (Miller, n.d.).One may easily notice what caused the world of academicians to differ from those of practitioners. It may be asserted the academicians seem to view things from a long-term point of view while practitioners will look at it at the immediate reaction from the market which is rather a short-term point of view. This must be so since academicians would most probably believe in the result of researchers than a knee-jerk reaction to what happens in a certain stock market. Practitioners, in turn, would like to be guided by academicians but not necessarily. Indeed Miller saw what practitioners perceived as â€Å"an optical illusion† where he used as an example with his students a stick in the water to illustrate his point. He explained that of one who uses his or her eyes and look at the stick in the water, it appears bent yet if one feels it with his or her finger or if one pulls it out of the water one will realize that the stick is not really bent. It is just the loo ks of it that is bent.