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Parenting Advantage
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How can a parent company (help) create value? Explanation of Parenting Advantage of Goold and Campbell. |
What is Parenting Advantage? DescriptionThe Parenting Advantage model is a 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 that 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:
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 amongst the business units. Others, such as Hamel & Prahalad, have emphasized the importance of synergy: 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 and can be determined upon a number of factors. These factors include, but are not limited to: corporate purpose, history and culture. Furthermore the answer depends upon the reconciliation of multiple paradoxes of parenting advantage: Control versus Empowerment, Responsiveness versus Synergy, Portfolio versus Core Competence.
Book: Michael Goold
and Andrew Campbell - Corporate-Level Strategy -
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Compare with: Parenting Styles | Resource-Based View | Competitive Advantage | Core Competence | Centralization and Decentralization | BCG Matrix | Growth Phases | Distinctive Capabilities | Bricks and Clicks | Organizational Configurations | 3C's | Acquisition Integration Approaches | Office of Strategy Management
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