Strategy beyond the business unit level: corporate parenting in focus. Issue 3 (9th May 2019)

• Record Type: Journal Article
• Authors: Galpin, Timothy
• Is Part Of: Journal of business strategy. Volume 40:Issue 3(2019)
• Page Start: 43
• Page End: 51
• Publication Date: 2019-05-09
• Subjects: Resource-based view -- Diversification -- Core competencies -- Corporate strategy -- VRIO; Business planning -- Periodicals; 658.4005
• DOI: 10.1108/JBS-01-2018-0011
• Languages: English
• ISSNs: 0275-6668

Abstract

Abstract : Purpose: The gap between management theory and practice has been much criticized. To help bridge the divide, a synthesis of empirical, theoretical and practice literature is offered, along with an application of the widely used VRIO framework, to contend that developing a focused corporate parenting approach as a core competence serves as a source of competitive advantage for diversified companies. Design/methodology/approach: A synthesis of empirical, theoretical and practice literature is presented, beginning with a discussion of why and how firms diversify; the relative performance of firms that pursue related and unrelated diversification; an application of the resource-based view, core competencies and the VRIO framework; a description of focused corporate parenting as a core competency; a prescription for how diversified firms can implement a focused corporate parenting approach; and implications for research. Findings: Developing a focused corporate parenting approach as a core competence serves as a source of competitive advantage for diversified companies. Research limitations/implications: The synthesis of empirical, theoretical and practice literature presented provides a foundation for future research into the impact of focused corporate parenting on diversified firm performance. Practical implications: The paper includes a prescription for how diversified firms can implement a focused corporate parenting approach. Originality/value: The application of the resource-based view and core competency theories to corporate parenting provides managers with the rationale for and methodology to focus their corporate parenting activities.