Corporate parenting generates corporate strategy by focusing on
A) the core competencies of the parent corporation and on the value created from the relationship between the parent and its units.
B) the cash flow among its business units.
C) whether a business unit should be growing, stabilizing, or retrenching.
D) acquiring distinctive competencies in the marketplace.
E) differentiating its activities into separate units and integrating these activities through complex integrating mechanisms.

Question

Quizplus · Accepted Answer

Corporate parenting involves the parent corporation identifying its core competencies and leveraging these competencies to add value to its business units. This generates corporate strategy by focusing on the relationship between the parent and its units. Choice B focuses only on cash flow, while choice C focuses on growth/stabilization/retrenchment of business units without considering the parent corporation's core competencies. Choice D focuses on acquiring distinctive competencies, which is a potential outcome of corporate parenting, but corporate parenting itself is more focused on leveraging existing competencies. Choice E suggests complex integration mechanisms, which may be one way of implementing a corporate strategy but does not necessarily reflect the strategy itself.

Corporate Parenting Generates Corporate Strategy by Focusing on