Parenting Advantage
(Goold, Campbell)

Knowledge Center

12manage is looking for students / contributors...


How can a parent company (help) create value? Explanation of Parenting Advantage of Goold and Campbell.


  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print

What is Parenting Advantage? Description

The 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

  1. Stand-alone influence. Each subsidiary is viewed as a separate profit center. Using basic performance targets, the businesses are controlled and monitored. Value creation is provided by making strategic decisions such as the appointment of managers and approving major capital expenditures.

  2. Linkage influence. Value is created by improved co-operation and synergy benefits.

  3. Central functions and services. Corporate value is created through the provision of administrative and managerial services to the businesses.

  4. Corporate development. Value creation through portfolio management.

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 -

Parenting Advantage Forum
  Global Managers in MNCs Should Occasionally Check Local Managers
Managing from a far, that in a nutshell is what is...
  Strategic Business Plan for a Holding Company
How can I write a strategic business plan for a ho...
  Parenting Value versus Diversification by Shareholders
Any parenting value add must be considered in the ...
  Create or Destroy Values?
In Campbell, A. 2003. The Role of the Parent Compa...
  Relationship Parent and SBU's
The choice of parental value creation also determi...

Parenting Advantage Special Interest Group

Special Interest Group

Parenting Advantage Education & Events

Find Trainings, Seminars and Events

Best Practices - Parenting Advantage Premium

Expert Tips - Parenting Advantage Premium

Checklist of Parenting PossibilitiesSign up

In their article “Corporate Strategy: The quest fo...
Usage (application): Parenting Best Practices, Corporate Strategy, Corporate Governance

Diversification PitfallsSign up

Diversification of businesses has in many cases re...
Usage (application): Things to Signal and Avoid when Diversifying

What is the Optimal Size for a Corporate Center?Sign up

In the HBR of April 2005 on the added value of cor...
Usage (application): Sizing the Corporate Center

A Corporate Theory: Long-term Handhold and Guidance in Turbulent Times?Sign up

According to Professor Todd Zenger, companies shou...
Usage (application): Inside-out Corporate Strategy, Corporate Visioning

How a Corporate Center can impact the Strategies of its SBU'sSign up

How can a Parent Company impact strategic decis...
Usage (application): Corporate Strategy, Business Unit Strategy, Corporate Governance

An important Notice about Parenting Value!Sign up

Please note that the 4 mentioned influences of a p...
Usage (application): Corporate Strategy, Parenting, Corporate Governance

What is the Best Location of a Corporate Center?Sign up

A somewhat related issue is in what country the Co...
Usage (application): Corporate Geographic Strategy, Corporate Governance

How can one Assess the Fit Between a Parent Company and its Businesses?Sign up

In HBR article named "Corporate strategy: the Ques...
Usage (application): Corporate Strategy, Parenting, Corporate Governance

Resources - Parenting Advantage Premium

Synergy EstimationSign up

Spreadsheet to estimate the value of synergy in a ...
Usage (application): M&A

Size, Structure and PerformancSign up

Paper by David J. Collis, David Young and Michael ...
Usage (application): Corporate Headquarters

Definition, Differences and Relationships between Resources, Capabilities, Competencies and Core CompetenciesSign up

Javidan (1998) has made a great contribution to an...
Usage (application): Core Competencies

Strategic and Portfolio Management and Corporate OrganizationSign up

Presentation about diversification including many ...
Usage (application): Diversification, Corporate Strategy, Portfolio Management, Corporate Center

News about Parenting AdvantageSign up


News about Corporate CenterSign up


Videos about Parenting AdvantageSign up


Videos about Corporate CenterSign up


Presentations about Parenting AdvantageSign up


Presentations about Corporate CenterSign up


Books about Parenting AdvantageSign up


Books about Corporate CenterSign up


More about Parenting AdvantageSign up


More about Corporate CenterSign up


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

Return to Management Hub: Change & Organization  |  Communication & Skills  |   Leadership  |   Strategy  |  Supply Chain & Quality

More Management Methods, Models and Theory

Special Interest Group Leader

You here

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2018 12manage - The Executive Fast Track. V14.1 - Last updated: 19-8-2018. All names ™ of their owners.