Corporate parenting advantage: Conceptual, methodological, and empirical considerations

Abstract

The pioneering work of Campbell et al. (1995a) presented four ways a corporate parent either creates or destroys value for the companies it owns. They are (a) stand alone, (b) linkage, (c) central functions and services, and (d) corporate development. Despite widespread acceptance of the concept of parenting advantage, empirical research remains scarce. Examining the methodological issues, this research describes the development of an instrument to measure the four strategies. An exploratory factor analysis yielded six distinct factors, accounting for 74.11% of the variance. The results partially validated the a priori classification scheme. A few factors partly reflected the measurement items (variables) gleaned from the four basic strategies. The factors are represented by a hybrid of items from different strategies. The paper concluded that the original conceptualizations of the strategies need to be better scrutinized and that further refinement of the operational definitions is also necessary.