Strategy with Finance

STR452 Strategy with Finance

Spring 2023

  • Topics

    This course is a strategy course that will examine the intersection of strategy and finance. The core issues in Strategy is to understand performance differences between firms, and variation in the persistence of performance differences. A core issue in Finance is to understand how firms finance their operations and investments - including those responsible for creating superior or inferior performance. From this it follows that the complementarity between strategy and finance is potentially great.

    Unfortunately then, strategists typically have insufficient understanding of finance, and finance specialists typically have insufficient understanding of strategy. In strategy there is a tendency to brush aside finance and financial resources as strategically uninteresting, because financial markets are considered to be too efficient to have much potential to explain performance differences. Conversely, in finance, there is usually no deep understanding of how performance differences are created, maintained and destroyed.

    This course aims to exploit the complementarity between strategy and finance, seen from the strategy side. The key themes are I) the creation and erosion of competitive advantage II) boundaries of the firm (e.g. diversification, M&As, alliances, etc.) III) Competitive dynamics (selection processes, technological- and financial shocks, etc). On each of these classic strategy topics we will add relevant insights from finance to the insights from strategy, and examine interaction between the two.


    Topics include (but are not limited to):


    • Factor market imperfections
    • Capital market imperfections
    • R&D and Innovation
    • Organizational- and human capital
    • M&A's, diversification and ownership
    • Entrepreneurship
    • Corporate governance
    • Economic- and financial shocks
    • Technological shocks

  • Learning outcome

    Knowledge - the candidate

    • Is able to understand the link between imperfect factor markets and competitive advantage
    • Is able to understand the link between imperfections in financial markets and product market competition
    • Knows how different resources (R&D, human-, organizational- and physical capital) are subject to different levels of adjustment costs and financing frictions
    • Understands the link between strategy and financial markets in the face of business cycle- and technological shocks


    • Is able to analyze practical business problems (cases) where finance and strategy interacts
    • Can analyze how strategy and finance matter for determining the boundaries of the firm (M&As, diversification, vertical integration, alliances etc.)
    • Can analyze how strategy and finance interact in entrepreneurship

    General competence

    • Can identify the crucial aspects of a business problem that crosses disciplines  
    • Can convey the key tradeoffs the problem presents
    • Can formulate and recommend a sound solution

  • Teaching

    Lectures, classroom participation, case discussions

  • Credit reduction due to overlap


  • Compulsory Activity

    Two short course papers (approved/not approved). These course papers are group based, with 3-4 students per group.

    Guest lectures (approximately 3) have mandatory attendance.

  • Assessment

    Final exam, comprising of a 4-hour individual written school exam. The exam will be given in English and can be answered in either English or Norwegian.

  • Grading Scale

    A - F

  • Computer tools


  • Literature

    A compendium of articles will be made available at the start of the semester in Leganto.

  • Permitted Support Material

    One bilingual dictionary (Category I)

    All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material


ECTS Credits
Teaching language

Spring. Offered spring 2023.

Course responsible

Professor Lasse Lien, Department of Strategy and Management.