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Parental Value Creation |
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Parenting Advantage |
How a parent company adds value: Summary of Parental Value Creation. Abstract |
Goold Campbell Alexander |
The Parenting Advantage model is a VBM framework that describes how a parent company can (help) create value. In their article, "From Corporate Strategy to Parenting Advantage", Michael Goold and Andrew Campbell argue the parent company should not only add value to a business unit, but add more value than any other potential parent - they call this parenting advantage. In their book: "Corporate-Level Strategy : Creating Value in the Multibusiness Company" they mention four types of parental value creation:
Some authors have claimed the role of the corporate center should be minimal (Hedley: The overarching role of the corporate level is that of portfolio manager: to manage the allocation of scarce financial resources over the business units). Others have emphasized the importance of synergy (Prahalad & Hamal: The corporate center should not be just another layer of accounting, but must add value by enunciating the strategic architecture). Which type of influence is best to maximize value creation? The answer is complex but depends and can be determined upon the corporate purpose, history and culture and upon the reconciliation of multiple paradoxes of parenting advantage (control versus empowerment, responsiveness versus synergy, portfolio versus core competence).
T I P : Here you can discuss and learn a lot more about how a parent company can (help) create value. See also: Parenting Styles | Resource-Based View | Porter | Prahalad | BCG Matrix | Greiner | Kay | Bricks and Clicks | Mintzberg | 3C's | M&A |
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