Corporate-Level Strategy

Creating Value in the Multibusiness Company

Andrew Campbell, Marcus Alexander, Michael Goold

Publisher: Wiley, 1994, 450 pages

ISBN: 0-471-04716-3

Keywords: Strategy

Last modified: May 21, 2007, 2:40 a.m.

This groundbreaking book on corporate-level strategy is the fruit of ten years of consulting and research with corporations in North America, Europe, and Japan. Michael Goold, Andrew Campbell, and Marcus Alexander have focused on the question of how parent companies create — or destroy — value in the businesses making up their organizations. They propose a new approach to the management of multibusiness companies, based on the goal of "parenting advantage": being the best parent for each of the businesses in the corporate portfolio.

Multibusiness corporations around the globe are grappling with fundamental questions about what businesses their companies should be in, and how they should structure and influence their businesses. For many companies, restructuring and divestitures seem to be the sensible solution. But the authors of Corporate-Level Strategy show that size and diversity are not necessarily problems. More often than not, the fatal flaw is not the range of businesses in the portfolio, but the lack of a corporate strategy that will add any value to them.

Corporate-Level Strategy arms senior managers and corporate planners with a set of proven strategic principles and clear guidelines for successfully managing a diverse, multibusiness company. Citing lessons learned from their experiences at companies such as Emerson, 3M, and GE in the USA; Canon in Japan; BTR, Shell, and Unilever in Europe; and a host of other prominent multibusiness organizations around the world, the authors demonstrate that developing a clear corporate-level strategy to achieve parenting advantage is essential to the successful management of a multibusiness corporation. They show how and why corporate strategy differs from business unit strategy, why parents often inadvertently destroy value through their influence, and what the ingredients of a successful, value-creating corporate strategy are. They uncover a number of fundamental paradoxes parents encounter in their efforts to add value, and describe ways in which these paradoxes can be overcome.

To help in the planning process, the authors provide managers with a framework for assessing and reorienting their company's corporate-level strategy, and they provide a set of planning tools, checklists, and a worked example that will help planners to apply the concepts covered throughout the book. Offering new solutions for the crucial problems confronting multibusiness companies worldwide, Corporate-Level Strategy is an indispensable guide for senior managers and corporate planners.

  • Part One: Corporate Strategy And Parenting Advantage
    1. Corporate Strategy: The Issues.
      • The issues of corporate strategy.
      • The role of the parent.
      • Why the parenting advantage concept is vital for corporate strategy.
    2. Parenting Advantage: The Framework.
      • A summary of the main conclusions of the book.
      • How and why parents create and destroy value.
      • Corporate strategies that achieve parenting advantage.
      • A framework for analyzing corporate strategy.
    3. Questions About Parenting Advantage.
      • Issues and objections concerning the parenting advantage concept raised and answered.
    4. Corporate Strategy: The Background.
      • A review of how thinking and experience has developed in the field of corporate strategy.
      • Why different ideas gained popularity and then fell into disrepute.
      • How parenting advantage casts light on this history and contrasts with previous approaches to corporate strategy.
  • Part Two: Successful Corporate Strategies
    1. How Parents Create Value.
      • Four sorts of value creation.
      • Overview of conditions for value creation, covering opportunities for performance improvement, parenting characteristics that fit the opportunities, and the avoidance of value destruction.
      • Overview of conditions for parenting advantage.
    2. Stand-Alone Influence.
      • How the parent can create (or destroy) value by influencing businesses as stand-alone entities.
      • Examples of companies with successful corporate strategies that emphasize stand-alone influence, including Dover (appointments), BTR (budgetary control), Emerson (strategy reviews), and RTZ (capital expenditure decisions).
      • Conditions under which value is created.
    3. Linkage Influence.
      • How the parent can create (or destroy) value by influencing the relationships, coordination, and linkages between businesses.
      • Example of companies with successful corporate strategies that emphasize different linkage approaches, including BTR, Banc One, Unilever, ABB, and Canon.
      • Conditions under which value is created.
    4. Functional and Services Influence.
      • How the parent can create (or destroy) value by functional and service influence.
      • Example of companies with successful corporate strategies that emphasize the role of corporate functions and services, including Cooper, 3M, and Shell.
      • Conditions under which value is created.
    5. Corporate Development.
      • How the parent can create (or destroy) value through corporate development activities, covering amalgamating or separating out business units, creating new businesses, buying businesses cheaply and aligning the portfolio with the parenting approach.
      • Illustrations from companies that succeeded in creating value through corporate development, including TI Group and Hanson.
    6. The Evolution of Corporate Strategies.
      • Ways in which corporate strategies change, including refinements to the strategy, extensions to the heartland and radical changes in the strategy.
      • Illustrations from companies that have successfully modified or changed their strategies, including GE, Canon, and Grand Metropolitan.
      • The learning challenge.
    7. Successful Corporate Strategies.
      • Conclusions and implications concerning corporate strategies that achieve parenting advantage, covering value creation insights, distinctive parenting characteristics, and heartland businesses.
  • Part Three: Developing A Corporate Strategy
    1. Developing a Corporate Strategy: Overview.
      • How managers can examine the four inputs to corporate strategy thinking, develop options, and choose a new corporate strategy.
      • Areas for analysis and methods of synthesis.
    2. Developing Corporate Strategy: An Example.
      • An example of developing a new strategy for a company in the construction industry, looking at each step of the framework for developing a corporate strategy.
      • Analyzing the four inputs, developing options, choosing a new corporate strategy, and creating a new parenting advantage statement for the company.
    3. Decisions About the Portfolio.
      • Decisions on which businesses to keep in the portfolio, which to treat cautiously, and which to sell.
      • Portfolio issues that commonly confront parents.
    4. Decisions About the Parent.
      • The difficulties in changing parenting behavior.
      • Examples of successful change.
      • Guiding principles on fitting the parent to the corporate strategy.
      • How the parent learns.
    5. Putting Parenting Advantage into Practice.
      • The principles of parenting advantage.
      • How managers can win support for the concept from the top team.
      • The benefits of adopting the concept in practice.
  • Appendices
    1. Defining Business
      • An approach to defining strategically viable businesses
      • Strategic business opportunities
    2. Definition and Structure of Parent Organizations
      • A definition of what constitutes the parent
      • A description and comparison of different types of parental structure.
      • Questions to help assess the suitability of a particular structure.
    3. Parenting Styles
      • A description of three basically different parenting styles (Strategic Planning, Strategic Control, and Financial Control)
      • How these styles add value and in what sorts of businesses they are suitable and unsuitable.
      • Mitigating the tensions in each style.
      • Company illustrations
    4. Alliances
      • Identification of different types of alliances, and the rationales behind them.
      • Examination of the parent's role in forming alliances.
      • Special considerations in parenting alliances.


Corporate-Level Strategy

Reviewed by Roland Buresund

OK ***** (5 out of 10)

Last modified: May 21, 2007, 3 a.m.

Interesting, even if Mintzberg critisize the authors conclusions.


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