Parenting Style: Difference between revisions
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The parenting style of ABB, GE, GE where they have little technical overlap can still generate competitive advantage. Fills in the caps of Core Competences see [[Resource Based View]] by ctrating value by unserstanding the businesses, By improving the business, Accurately assessing fit. | The parenting style of ABB, GE, GE where they have little technical overlap can still generate competitive advantage. Fills in the caps of Core Competences see [[Resource Based View]] by ctrating value by unserstanding the businesses, By improving the business, Accurately assessing fit. | ||
Example | Example BTR focused managers on tight financial controls, does not believe in large centralized admin (one company had 6 working at HQ) ICI focussed on planning. If ''relatedness'' is important the bigger HQ admin is needed | ||
Not only does the Parent need to add value but add more value than any potential parent | Not only does the Parent need to add value but add more value than any potential parent | ||
1. Stand alone influence - each SBU is seen as an independent profit center, monitored using peformance indictators - appointment of strong mangers | *1. Stand alone influence - each SBU is seen as an independent profit center, monitored using peformance indictators - appointment of strong mangers | ||
2. Linkages influence - value if created through synergies | *2. Linkages influence - value if created through synergies | ||
3. Central functions and services - administrative services offered | *3. Central functions and services - administrative services offered | ||
4. Corporate development - [[Portfolio Management]] | *4. Corporate development - [[Portfolio Management]] | ||
Destroying Value | ==Destroying Value== | ||
HQ will inevitably destroy value - | HQ will inevitably destroy value - Administration costs but the costs should be outweighed by additional value. If not, then they should consider demerging | ||
Synergies | ==Synergies== | ||
Lateral synergies has been overplayed. | Lateral synergies has been overplayed. At best they net out - can be achieved thru Benchmarking , JV's alliances - Therefore just focus on improving the performance at the individual business | ||
Value Creation | ==Value Creation== | ||
Focus should be on identifying a few major opportunities and developing a few key competences to add value | Focus should be on identifying a few major opportunities and developing a few key competences to add value | ||
Hedley says Central influence should be limited | Hedley says Central influence should be limited | ||
Paradoxes of | ==Paradoxes of Parenting Advantage== | ||
Control v Empowerment | *Control v Empowerment | ||
Portfolio v Core competence | *Portfolio v Core competence | ||
*Corporate Culture - SBU culture | |||
Types of Parenting Style | ==Types of Parenting Style== | ||
Financial - BTR - Tight finacial objectives but otherwise autonomous Portfolio | *Financial - BTR - Tight finacial objectives but otherwise autonomous Portfolio | ||
Strategic Control - Co-ordinates and reviews strategies - Linkages - GE | *Strategic Control - Co-ordinates and reviews strategies - Linkages - GE | ||
Strategic Planning - Competences shared between the group - Tight control - ICI | *Strategic Planning - Competences shared between the group - Tight control - ICI | ||
==References== | |||
The question of Parenting Advantage HBR 2000 Campbell, Goold, Alexander | |||
__NOTOC__ | |||
[[Category:Strategy]] | [[Category:Strategy]] | ||
Latest revision as of 20:29, 18 September 2012
The parenting style of ABB, GE, GE where they have little technical overlap can still generate competitive advantage. Fills in the caps of Core Competences see Resource Based View by ctrating value by unserstanding the businesses, By improving the business, Accurately assessing fit. Example BTR focused managers on tight financial controls, does not believe in large centralized admin (one company had 6 working at HQ) ICI focussed on planning. If relatedness is important the bigger HQ admin is needed
Not only does the Parent need to add value but add more value than any potential parent
- 1. Stand alone influence - each SBU is seen as an independent profit center, monitored using peformance indictators - appointment of strong mangers
- 2. Linkages influence - value if created through synergies
- 3. Central functions and services - administrative services offered
- 4. Corporate development - Portfolio Management
Destroying Value
HQ will inevitably destroy value - Administration costs but the costs should be outweighed by additional value. If not, then they should consider demerging
Synergies
Lateral synergies has been overplayed. At best they net out - can be achieved thru Benchmarking , JV's alliances - Therefore just focus on improving the performance at the individual business
Value Creation
Focus should be on identifying a few major opportunities and developing a few key competences to add value Hedley says Central influence should be limited
Paradoxes of Parenting Advantage
- Control v Empowerment
- Portfolio v Core competence
- Corporate Culture - SBU culture
Types of Parenting Style
- Financial - BTR - Tight finacial objectives but otherwise autonomous Portfolio
- Strategic Control - Co-ordinates and reviews strategies - Linkages - GE
- Strategic Planning - Competences shared between the group - Tight control - ICI
References
The question of Parenting Advantage HBR 2000 Campbell, Goold, Alexander
