Introduction

The primary objective of management is to maximize shareholder value through strategic decision-making. This process requires an analysis of various factors within a given business and industry, which may lead to strategic partnerships in order to lower costs and maximize profits. However, mangers must analyze the benefits and costs of each decision because of potential conflicts that can arise from bureaucratic inefficiencies.

Discussion

Hill, Jones, & Chilling (2015) state that “[t]he overriding goal of managers is to maximize the value of the company for its shareholders” (p. 287). Further, the text addresses how Apple strategically chose outsourcing and vertical integration as strategies, which influenced the firm’s profitability. Specifically, the authors note that corporate-level strategy involves choices, which managers must make in (1) deciding on which industries and business sectors the company should compete; (2) selecting value creation activities within those sectors; and (3) deciding how it should enter and exit specific business sectors in order to maximize profitability (Hill, Jones, & Schilling, 2015). Hill, Jones, & Schilling (2015) reference that horizontal integration “is the process of acquiring or merging with industry competitors to achieve the competitive advantages that arise from a large size and scope of operations” (p. 290). Further, advantages of horizontal integration include a lowered cost structure, increased product differentiation, a leveraged competitive advantage, and an increased bargaining power (Hill, Jones, & Schilling, 2015). However, the primary disadvantage with horizontal integration is that the strategy is challenging for managers for a variety of reasons. For example, there may be challenges in terms of conflicting company cultures, as well as high management turnover in the