nvestment created a vertical integration of the company's music production and music distribution functions. This action was consistent with the corporate objective of seeking innovative market leadership in the entertainment industry with a strong emphasis on the music segment of the industry. This action relatively was one of the more important steps in the development of DMC as a corporate entity. The action, however, is not a critical contemporary concern because the effects of the action largely have already been absorbed.
D. Establishing a promotion and publicity agency to directly promote DMC recording and contracted artists. This action was significant in a financial management context because establishing the agency created an horizontal integration of activities associated with the marketing of the company's music products. This action was consistent with the corporate objective of seeking innovative market leadership in the entertainment industry with a strong emphasis on the music segment of the industry. This agency, however, is, in effect, a captive firm that depends entirely on DMC for its revenues, as opposed to being an independent profit center. The corporate objective of maximizing the value of returns from on going operations might have been better served through the creation of a promotion and publicity department as opposed to a separate agency. In a relative sense, this action was important. Because the operation has not worked out well, the action remains a matter of concern. In the contemporary, however, this issue may not be considered to be critical because whatever is done with respect to this action is not likely to affect the life or death of DMC.
E. A new share issue three years into the corporate life of DMC. This action was significant in a financial management context because (1) additional capital was generated without increasing corporate debt, and (2) the investment position of exi...