Question

Make sure the answer is correct, well explained, thoughtful, and have no grammar mistakes. DO NOT COPY answer from Chegg or other websites. The answer should be unique and original work. Do not exceed 250 words and no less than 225 words. Thanks in advance.

How does the parenting advantage framework explain value creation by multi-business operations? How is it fundamentally different from the logic of the multi-business model?

Answer 1

Parenting Advantage Framework is a model which supports value based management. It helps to identify how a main/ head organisation can create value to its branch or subsidies and then in return increases its own value. Ideally there are 4 strategies that can be adopted by an Organisation.

1. Individual effect (Branches are viewed as distinct revenue centre.)

2. Linkage impact (Enhanced support and co-operation benefits)

3. Principal functions and services

4. Business growth (Trough Portfolio Administration)

Whereas Multiple-Business Model is concerned with Strategies or plans which from which a particular Business Model will be executed after its adoption. Example: A firm creates 4 Business Model as per the current business environment, such as Business Model A, Business Model B, Business Model C and Business Model D. Company can accept any model out of the following Business Model proposed.   

Fundamentally the difference is Parenting Advantage Framework talk about value creation through value based management whereas Multi-business model are the options or strategy which a firm may accept to achieve its set goals.