Organizations Parenting Styles Impact on the Business Unit Performance

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Corporate Centre1

SBU1

Parenting Style Theory1

Research Aims and Objectives3

Aims3

Objectives3

Organizations Selected3

Strategic Planning Companies3

Strategic Control Companies4

Financial Control Companies4

Research Questions4

Layout of the Dissertation4

CHAPTER 2: LITERATURE REVIEW6

Corporate Centre6

Parenting Styles Characteristics:8

Role of parent8

Business role8

Organizational structure8

Planning process9

Control process9

Corporate value creation mechanism9

Activities of Corporate Centre10

CHAPTER 3: METHODOLOGY11

Research Design11

Secondary Research Methods11

Qualitative Research Method12

Reliability and validity13

Literature Search13

Keywords Used14

REFERENCES15

CHAPTER 1: INTRODUCTION

Corporate Centre

The role and functions of the corporate centre performs in relation to operating units, is relevant today to the same extent as 10-15 years ago (Porter 1987, 59). Corporate centre helps the managers for determining the role, place and objectives of the head offices of their organizations (Pearson 1999, 65). All head offices usually perform four basic functions that are associated with the peculiarities of their activities within the value creation for shareholders:

Formation of the corporate business portfolio;

Increase the efficiency and effectiveness of corporate portfolio;

Management costs and funding sources;

Forming relationships with the external environment (government, partners, customers, etc.).

SBU

The strategic business unit is a subsidiary, division or even a separate product line which is large enough to have its own strategy (goals and objectives from the Parent Company or companies in general). Strategic business units are the object of study in the portfolio analysis (Nilsson 2000, 112).

Parenting Style Theory

In the corporation the part of corporate centre was introduced by Michael Goold and Andrew Campbell, in their parenting style theory (Johnson Whittingham, 2008, 45). Following are the three parenting styles according to Goold and cambell:

Strategic Planning

It includes that the corporate headquarters formulate strategies, plans and budgets for the businesses. The parents i.e. headquarters are involved directly in formulating plans and decisions (Goold Alexander 1998, 314). The headquarters provide the crystal clear picture and a direction to the businesses fro the formulation of strategies and take the initiative decisions towards the corporate development. SBU has involved in numerous key activities and these activities are either centralized or either standardized. In the coordination of cross business and sharing of the resources, corporate headquarters are also directly involved. This type of control style is implemented in those firms which are focused and have limited extent of diversification.

Strategic control

These parents retain the checking and evaluating of businesses role and involve in the decentralization of the businesses'' planning. The SBU completely rely on the different central services which includes standardization systems and activities (Goold Campbell, 1998, 143). The SBUs has a close relationship with the corporate centre i.e. headquarter of the business. This type of control is implemented by the companies which are diversified firms and have portfolios of pertinent businesses.

Financial control

These parents are completely involved in the decentralization of the planning, as stand alone units these parents structure their businesses, and have autonomy as much as possible. These parents have complete responsibility of formulating own plans and strategies. The businesses which have financial control are having less centralized and standardized activities. One of the centralizations activities involve in these types of businesses includes financial reporting ...