On financial strategy

Purpose – The purpose of this article is to introduce the “Financial Strategy Framework”. Design/methodology/approach – During the course of the authors' ongoing financial management research, it was observed that leading academicians frequently integrate finance and strategy in interesting ways. Similarly, many top executives and firms tend to blend strategy and finance in highly productive ways. Nevertheless, the critical functions of finance and strategy are regularly practiced in isolation. This disconnect led the authors to design the framework presented here. Findings – The key insight of the approach is that the efficient management of the interactions of strategy, resource allocation and performance measurement can generate more value over time than any of these disciplines taken in isolation. The approach presented is not merely the linkage of three critically important disciplines, but rather a way of capitalizing on the interactions of each within a comprehensive framework. Practical implications – The practical implications of the approach presented are a strategy that clearly guides production, resources that are allocated to efficiently execute strategic initiatives and performance measurement that serves as a cohesive management and feedback system rather than simply a method of reward/punishment. The research implications could be significant in that they could lead to interdisciplinary case and statistical studies. Originality/value – While this article builds on earlier theoretical and practical work, it is the first to the outline the approach to financial strategy in the manner presented here.