Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

How to assess the corporate parenting strategy? A conceptual answer

How to assess the corporate parenting strategy? A conceptual answer Purpose – The major purpose of this paper is the development of a theoretical framework that can be used by corporate practitioners to understand the implicit parenting strategy of their company, assess its performance, and adjust it for improving the net corporate value creation. Design/methodology/approach – In this paper, a three‐dimensional framework is developed that accounts for corporate‐to‐business and business‐to‐business interactions, value‐adding and value‐destroying activities, and strategic and operational levers. The framework is operationalized by assigning a broad set of individual activities to these levers. Findings – The paper delivers a robust, systematic, and operational framework to assess the net benefits to a given business of being part of a corporate portfolio, and to identify and evaluate implicit parenting strategies in corporate practice. While previous studies mainly focused on broad parenting approaches with low granularity this framework now allows earlier observations to be substantiated, finer distinctions between the applied strategies to be drawn, and the core of superior value added approaches to be investigated. Practical implications – The introduced framework can be used to analyze the origin and underlying drivers of conglomerate discounts and premia and thus enhance understanding of capital market valuation of multi‐business companies. The developed framework can also be the basis for the derivation of a typology of corporate parenting strategies. In this way, it can support practitioners in portfolio management – which was also the explicit motivation for the development of the original parenting advantage concept. Originality/value – The outlined framework will facilitate the investigation of structural, strategic, and organizational roots of superior parenting strategies in corporate practice. It may be used to analyze performance differences of multi‐business companies that go beyond the degree of diversification and may finally contribute to solving the puzzle of the conglomerate discount. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business Strategy Emerald Publishing

How to assess the corporate parenting strategy? A conceptual answer

Download PDF
14 pages

Loading next page...
 
/lp/emerald-publishing/how-to-assess-the-corporate-parenting-strategy-a-conceptual-answer-we780WnjTh

References (57)

Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
0275-6668
DOI
10.1108/02756661211242663
Publisher site
See Article on Publisher Site

Abstract

Purpose – The major purpose of this paper is the development of a theoretical framework that can be used by corporate practitioners to understand the implicit parenting strategy of their company, assess its performance, and adjust it for improving the net corporate value creation. Design/methodology/approach – In this paper, a three‐dimensional framework is developed that accounts for corporate‐to‐business and business‐to‐business interactions, value‐adding and value‐destroying activities, and strategic and operational levers. The framework is operationalized by assigning a broad set of individual activities to these levers. Findings – The paper delivers a robust, systematic, and operational framework to assess the net benefits to a given business of being part of a corporate portfolio, and to identify and evaluate implicit parenting strategies in corporate practice. While previous studies mainly focused on broad parenting approaches with low granularity this framework now allows earlier observations to be substantiated, finer distinctions between the applied strategies to be drawn, and the core of superior value added approaches to be investigated. Practical implications – The introduced framework can be used to analyze the origin and underlying drivers of conglomerate discounts and premia and thus enhance understanding of capital market valuation of multi‐business companies. The developed framework can also be the basis for the derivation of a typology of corporate parenting strategies. In this way, it can support practitioners in portfolio management – which was also the explicit motivation for the development of the original parenting advantage concept. Originality/value – The outlined framework will facilitate the investigation of structural, strategic, and organizational roots of superior parenting strategies in corporate practice. It may be used to analyze performance differences of multi‐business companies that go beyond the degree of diversification and may finally contribute to solving the puzzle of the conglomerate discount.

Journal

Journal of Business Strategy – Emerald Publishing

Published: Jul 13, 2012

Keywords: Corporate strategy; Parenting advantage; Multi‐business firm; Parent companies; Performance measures

There are no references for this article.