Influence of Laws, Regulations, and Operational Risk Assessment in Strategic Planning and Risk Mitigation Principles of Organizational Financial Planning and Business Development - MBA520 June 19th, 2014
Influence of Laws, Regulations, and Operational Risk Assessment in Strategic Planning and Risk Mitigation The Role of Finance at Apple
The role of finance in the strategic planning process has become more relevant because of the introduction of the balanced scorecard. The balanced scorecard emphasizes financial performance as a key indicator of an organization’s success and helps link strategic goals to performance (Kono & Barnes, 2010). The balanced scorecard also “provides timely and useful information to facilitate strategic and operational control decisions” (Kono & Barnes, 2010). Apple is no different than other major organizations in that it relies heavily on finance in the strategic-planning and decision-making process. The following list provides financial goals and metrics based on the “best-in-industry” organizations. Free Cash Flow
Financing Decisions and Capital Structure
Risk Assessment Management
“Investment in new business strategies and acquisitions could disrupt the Company’s ongoing business and present risks not originally contemplated” so it is important that Apple does upfront work to make sure it is investing in acquisitions or projects that have a return on investment (US Securities and Exchange, 2013). It is important for Finance to be involved in the strategic planning and decision-making process because they are able to identify the return on investment as well and possible unidentified issues which may not have come up. Another role Finance plays in the strategic-planning and decision-making is evaluating equipment needed to support future growth. Finance can judge if spending capital on machinery would be a better decision than leasing the equipment. This is especially important when it comes to strategic-planning for future growth. Finance’s role in tax optimization is another important role in the strategic-planning and decision-making process. “As of September 28, 2013, Apple had deferred tax assets arising from deductible temporary differences, tax losses, and tax credits of $4.2 billion, and deferred tax liabilities of $16.5 billion” (US Securities and Exchange, 2013). Finance played the key role by managing the level of tax liability undertaken in conducting business. Finance also was able to weigh product development and new initiatives against their tax implications (US Securities and Exchange, 2013). Apple sees Finance as an equal partner in the strategic-planning and decision-making process. “Studies have shown that a vast majority of corporate strategies fail during execution” (Kono & Barnes, 2010). By Apple allowing Finance to play an important role in decisions using these metrics listed above, Apple is ensuring it creates a sustainable competitive advantage that maximizes the organizations value (Kono & Barnes, 2010).
Common Practices at Apple
The specific practices or behaviors the company routinely engages in to retain and attract new customers or to expand its geographical reach revolve around the company’s organizational strategy to keep information protected. The aversion to prerelease publicity about products and services is a constant at Apple. Phil Schiller, Apple’s powerful senior vice president of product marketing, has been known to compare an Apple product launch to a blockbuster Hollywood movie opening weekend. “There is tremendous emphasis on the product’s first few days, akin to a film’s opening weekend. Releasing details ahead of time would dampen the suspense” Lashinsky, 1). Apple fans camp out in front of Apple stores in anticipation of new Apple product releases in a way that is reminiscent of the lines that once greeted a new installment in...
References: Apple: Global Trade Compliance. (2014). Retrieved from
Forbes: Regulatory, Anti-Trust, and Disruptive Risks Threaten Apple’s Empire. (2014).
Kono, P. M., & Barnes, B. (2010). The role of finance strategic-planning and
Lashinsky, Adam. (2012, Janurary 8). The secrets apple keeps. Retrieved from
US Securities and Exchange Commission, Apple Inc. 10-K Report, Rep. No. 10-K, at
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