article thumbnail

Should Companies Retain "Strategic" Cash?

Harvard Business Review

Strategic cash provides more flexibility concerning the timing and pricing of potential acquisitions; having cash on hand is the best insurance that CFOs will be able to respond with alacrity to opportunities and not be subject to the vagaries of the financial markets. Barring a tax holiday, this cash is effectively "trapped" offshore.

Company 13
article thumbnail

We Can’t Study Short-Termism Without the Right Metrics

Harvard Business Review

Repaying such profits to shareholders through share repurchases is better than misinvesting that cash to diversify into unrelated businesses in which management has no expertise or overinvesting in projects that may not return cost of capital. As I said earlier, measuring a company’s short-term orientation is incredibly tricky.

EPS 8
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

How Banks Can Compete Against an Army of Fintech Startups

Harvard Business Review

banks are going to survive the coming wave in financial technology (fintech), they’ll need to finally take digital transformation seriously. Small businesses are starting to demand banking services that have engaging web and mobile user experiences, on par with the technologies they use in their personal lives.

Banking 11
article thumbnail

Why Traditional M&A Is Becoming Less Important

Harvard Business Review

Best-in-class players, such as Intel (through technology partnerships) and Tyson (through new-product incubators), have developed the tools to incorporate many different flavors of deal making. Today’s low cost of capital creates a powerful financial incentive to put money to work by investing in a portfolio of ideas and capabilities.

article thumbnail

How Blockchain Is Changing Finance

Harvard Business Review

To wit, 45% of financial intermediaries , such as payment networks, stock exchanges, and money transfer services, suffer from economic crime every year; the number is 37% for the entire economy, and only 20% and 27% for the professional services and technology sectors, respectively. Most firms cite opportunities to reduce friction and costs.