IDEAS home Printed from https://ideas.repec.org/p/ebg/heccah/0822.html
   My bibliography  Save this paper

What does it take to be good parent ? Opening the black-box of value creation in the unrealated multibusiness firm

Author

Listed:
  • Olivier, Gottschalg
  • Meier, Degenhard

Abstract

This paper develops and tests new theory about the determinants of value creation in unrelated multibusiness firms from a resource-based perspective. The authors argue that the availability of "headquarter resources", which are at the basis of headquarter services provided to the business units, is the driving force behind unrelated diversification.

Suggested Citation

  • Olivier, Gottschalg & Meier, Degenhard, 2006. "What does it take to be good parent ? Opening the black-box of value creation in the unrealated multibusiness firm," HEC Research Papers Series 822, HEC Paris.
    • Handle: RePEc:ebg:heccah:0822
    as

    Download full text from publisher

    File URL: http://www.hec.fr/var/fre/storage/original/application/4c1b667c0dab434a70346a39f61bd949.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Oliver Gottschalg & Achim Berg, 2005. "Understanding value generation in buyouts," Post-Print hal-00458714, HAL.
    2. Michael C. Jensen, 2010. "Active Investors, LBOs, and the Privatization of Bankruptcy," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 77-85, January.
    3. J. L. Stimpert & Irene M. Duhaime, 1997. "In The Eyes Of The Beholder: Conceptualizations Of Relatedness Held By The Managers Of Large Diversified Firms," Strategic Management Journal, Wiley Blackwell, vol. 18(2), pages 111-125, February.
    4. Gottschalg, Oliver & Berg, Achim, 2005. "Understanding value generation in buyouts," HEC Research Papers Series 824, HEC Paris.
    5. Bull, Ivan, 1989. "Financial performance of leveraged buyouts: An empirical analysis," Journal of Business Venturing, Elsevier, vol. 4(4), pages 263-279, July.
    6. Robbie, K & Wright, M & Thompson, S, 1992. "Management buy-ins in the UK," Omega, Elsevier, vol. 20(4), pages 445-456, July.
    7. John Easterwood & Anju Seth, 1993. "Strategic Restructuring In Large Management Buyouts," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(1), pages 25-37, March.
    8. Baker, George P. & Wruck, Karen H., 1989. "Organizational changes and value creation in leveraged buyouts : The case of the O.M. Scott & Sons Company," Journal of Financial Economics, Elsevier, vol. 25(2), pages 163-190, December.
    9. Jaideep Anand & Harbir Singh, 1997. "Asset Redeployment, Acquisitions And Corporate Strategy In Declining Industries," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 99-118, July.
    10. Cotter, James F. & Peck, Sarah W., 2001. "The structure of debt and active equity investors: The case of the buyout specialist," Journal of Financial Economics, Elsevier, vol. 59(1), pages 101-147, January.
    11. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    12. Brush, Candida G. & Vanderwerf, Pieter A., 1992. "A comparison of methods and sources for obtaining estimates of new venture performance," Journal of Business Venturing, Elsevier, vol. 7(2), pages 157-170, March.
    13. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
    14. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    15. Richard P. Rumelt, 1982. "Diversification strategy and profitability," Strategic Management Journal, Wiley Blackwell, vol. 3(4), pages 359-369, October.
    16. Hans Bruining & Mike Wright, 2002. "Entrepreneurial orientation in management buy-outs and the contribution of venture capital," Venture Capital, Taylor & Francis Journals, vol. 4(2), pages 147-168, April.
    17. Cynthia A. Montgomery & Birger Wernerfelt, 1988. "Diversification, Ricardian Rents, and Tobin's q," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 623-632, Winter.
    18. John B. Kusewitt, 1985. "An exploratory study of strategic acquisition factors relating to performance," Strategic Management Journal, Wiley Blackwell, vol. 6(2), pages 151-169, April.
    19. Chandler, Gaylen N. & Hanks, Steven H., 1993. "Measuring the performance of emerging businesses: A validation study," Journal of Business Venturing, Elsevier, vol. 8(5), pages 391-408, September.
    20. Harbir Singh & Cynthia A. Montgomery, 1987. "Corporate acquisition strategies and economic performance," Strategic Management Journal, Wiley Blackwell, vol. 8(4), pages 377-386, July.
    21. Krishna Palepu, 1985. "Diversification strategy, profit performance and the entropy measure," Strategic Management Journal, Wiley Blackwell, vol. 6(3), pages 239-255, July.
    22. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(2), pages 110-110.
    23. Constantinos C. Markides & Peter J. Williamson, 1994. "Related diversification, core competences and corporate performance," Strategic Management Journal, Wiley Blackwell, vol. 15(S2), pages 149-165, June.
    24. Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
    25. Macmillan, Ian C. & Kulow, David M. & Khoylian, Roubina, 1989. "Venture capitalists' involvement in their investments: Extent and performance," Journal of Business Venturing, Elsevier, vol. 4(1), pages 27-47, January.
    26. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(4), pages 351-351.
    27. Smith, Abbie J., 1990. "Corporate ownership structure and performance *1: The case of management buyouts," Journal of Financial Economics, Elsevier, vol. 27(1), pages 143-164, September.
    28. Pennings, J.M. & Barkema, H.G. & Douma, S.W., 1994. "Organizational learning and diversification," Other publications TiSEM 2cabb122-340f-4729-afb3-9, Tilburg University, School of Economics and Management.
    29. Vasudevan Ramanujam & P. Varadarajan, 1989. "Research on corporate diversification: A synthesis," Strategic Management Journal, Wiley Blackwell, vol. 10(6), pages 523-551, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesco Castellaneta & Oliver Gottschalg, 2016. "Does ownership matter in private equity? The sources of variance in buyouts' performance," Strategic Management Journal, Wiley Blackwell, vol. 37(2), pages 330-348, February.
    2. Lin, Hsing-Er & Hsu, I-Chieh & Hsu, Audrey Wenhsin & Chung, Hsi-Mei, 2020. "Creating competitive advantages: Interactions between ambidextrous diversification strategy and contextual factors from a dynamic capability perspective," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    3. Harbir Singh & Maurizio Zollo, 1998. "The Impact of Knowledge Codification, Experience Trajectories and Integration Strategies on the Performance of Corporate Acquisitions," Center for Financial Institutions Working Papers 98-24, Wharton School Center for Financial Institutions, University of Pennsylvania.
    4. Gottschalg, Oliver & Berg, Achim, 2005. "Understanding value generation in buyouts," HEC Research Papers Series 824, HEC Paris.
    5. Fabian Homberg & Katja Rost & Margit Osterloh, 2009. "Do synergies exist in related acquisitions? A meta-analysis of acquisition studies," Review of Managerial Science, Springer, vol. 3(2), pages 75-116, July.
    6. Adrian Lüthge, 2020. "The concept of relatedness in diversification research: review and synthesis," Review of Managerial Science, Springer, vol. 14(1), pages 1-35, February.
    7. Alex Edmans & Itay Goldstein & Wei Jiang, 2012. "The Real Effects of Financial Markets: The Impact of Prices on Takeovers," Journal of Finance, American Finance Association, vol. 67(3), pages 933-971, June.
    8. Shelton, Lois M., 2000. "Merger market dynamics: insights into the behavior of target and bidder firms," Journal of Economic Behavior & Organization, Elsevier, vol. 41(4), pages 363-383, April.
    9. Gottschalg, Oliver & Meier, Degenhard, 2005. "Interest alignment and firm performance," HEC Research Papers Series 825, HEC Paris.
    10. Villasalero, Manuel, 2017. "A resource-based analysis of realized knowledge relatedness in diversified firms," Journal of Business Research, Elsevier, vol. 71(C), pages 114-124.
    11. Thomas Hutzschenreuter & Julian Horstkotte, 2013. "Performance effects of top management team demographic faultlines in the process of product diversification," Strategic Management Journal, Wiley Blackwell, vol. 34(6), pages 704-726, June.
    12. Samia Belaounia, 2000. "Liens inter-métiers et synergies opérationnelles:application à un échantillon de quinze groupes bancaires français," Revue Finance Contrôle Stratégie, revues.org, vol. 3(4), pages 5-35, December.
    13. Alfredo Jiménez & Diana Benito-Osorio & Carmen Palmero-Cámara, 2015. "Learning from Risky Environments: Global Diversification Strategies of Spanish MNEs," Management International Review, Springer, vol. 55(4), pages 485-509, August.
    14. Frantz Maurer, 1999. "L'influence des fluctuations boursières sur la performance financière de la firme diversifiée," Revue Finance Contrôle Stratégie, revues.org, vol. 2(4), pages 105-134, December.
    15. Fabio Buttignon & Marco Vedovato & Paolo Bortoluzzi, 2005. "Family business investor byouts: the Italian case," "Marco Fanno" Working Papers 0004, Dipartimento di Scienze Economiche "Marco Fanno".
    16. Roland Bel, 2018. "A property rights theory of competitive advantage," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1678-1703, June.
    17. Renneboog, L.D.R. & Simons, T., 2005. "Public-to-Private Transactions : LBOs, MBOs, MBIs and IBOs," Other publications TiSEM 3b76799c-591c-4d22-b126-a, Tilburg University, School of Economics and Management.
    18. Maurizio Zollo, 1998. "Strategies or Routines ? Knowledge Codification, Path-Dependence and the Evolution of Post-Acquisition Integration Practices in the U.S. Banking Industry," Center for Financial Institutions Working Papers 97-10, Wharton School Center for Financial Institutions, University of Pennsylvania.
    19. R. Abdul Rahman & R.J. Limmack, 2004. "Corporate Acquisitions and the Operating Performance of Malaysian Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(3‐4), pages 359-400, April.
    20. Valérie Moatti & Pierre Dussauge, 2005. "L’influence du mode de développement sur les avantages liés à la taille : une étude empirique dans le secteur de la grande distribution au niveau mondial," Revue Finance Contrôle Stratégie, revues.org, vol. 8(3), pages 145-176, September.

    More about this item

    Keywords

    diversification; private equity; management buyout; leveraged buyout; resource-based view; parenting effect; conglomerate;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebg:heccah:0822. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Antoine Haldemann (email available below). General contact details of provider: https://edirc.repec.org/data/hecpafr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.