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.
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.
Developing a focused corporate parenting approach as a core competence serves as a source of competitive advantage for diversified companies.
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.
The paper includes a prescription for how diversified firms can implement a focused corporate parenting approach.
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.
