Parenting Advantage
(Goold, Campbell)

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

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

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Best Practices - Parenting Advantage Premium

Expert Tips - Parenting Advantage Premium
 

Checklist of Parenting Possibilities

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

Diversification Pitfalls

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?

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?

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's

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

An important Notice about Parenting Value!

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?

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?

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

Resources - Parenting Advantage Premium

Synergy Estimation

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

Size, Structure and Performanc

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

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

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

Strategic and Portfolio Management and Corporate Organization

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

News about Parenting Advantage


     
 

News about Corporate Center


     
 

Videos about Parenting Advantage


     
 

Videos about Corporate Center


     
 

Presentations about Parenting Advantage


     
 

Presentations about Corporate Center


     
 

Books about Parenting Advantage


     
 

Books about Corporate Center


     
 

More about Parenting Advantage


     
 

More about Corporate Center


     

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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