Essay: Independence strategy in business

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Essay: Independence strategy in business

Sample Essay

Independence strategy in business dictates that an organization must function independently in order to avoid the various problems the firm had to face such as; bureaucracy, red-tapism and lack of freedom. Therefore many firms often choose autonomy over working under a large organization and it is also deemed desirable as it has immense amount of financial gains as well.

Working with external actors such as banks and other organizations in order to take loans and equity may cause the organization to become crippled and most their decisions are hampered by these extraneous variables. Hence, every time crises break out in an organization often try to solve these problems using existing sources as opposed to taking help from external sources. (Kumar, 2008, pp 41-42)

On the other hand, grow to sell strategy is a self-explanatory term and is the exact opposite of independence strategy. This type of strategy is often adopted by organization in the technological sector because small firms can not conduct extensive R & D (Research and Development), therefore it uses a basis of external venture capital support. It involves selling out firms in the organization at a given point in the future of the organization to ensure smooth running and maximum profits. However, this strategy often leads to strong amount of dependence on other firms. (Copeland, 2000, p 682)

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