Corporate Strategy: The Quest for Parenting Advantage

While the core competence concept appealed powerfully to companies disillusioned with diversification, it did not offer any practical guidelines for developing corporate-level strategy. To fill the gap, the authors propose the parenting framework, with tools for answering two questions: Which business should a company own? What parenting approach will get the best performance from those businesses? To determine the fit between a parent and its businesses, corporate strategists should look at four areas: the critical success factors of the business, the parenting opportunities in the business, the characteristics of the parent, and the financial results. Next, to determine which businesses to keep and which to divest, they should rank them into five categories: those that fit well; those that fit in some ways; those that fit but have little potential; those with a p possibility of value destruction; and those that fit in parenting opportunities but not in critical success factors.

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This article is availble in full direct from Harvard Business Online [Corporate Strategy: The Quest for Parenting Advantage]

Campbell, A., Goold, M. & Alexander, M. (1995) Corporate Strategy: The Quest for Parenting Advantage, Harvard Business Review, March - April