One question that many branch officials ask is "Do all corporate centres add value to the underlying group businesses? If they have been set up just for coordinating & controlling the group's businesses, they may not be adding much value though they are perceived to be adding value."
Worldwide large corporate groups have spent considerable time, effort and money in seeking to justify their continued existence by developing group-wide vision or mission statements. Unfortunately, many of these do not indicate how remaining as a `group' will create more value compared to the value generated by the component businesses comprising the group. As such, the corporate center influences the value creation process. How
do corporate centers differ both in what they try to
do and how they try to do it
The
`how' dimension refers to the nature of the involvement
of the center and the type and degree of intervention
that the corporate center makes in the operations of
the group's businesses. Similarly,
the `what' dimension seeks to find out what is the source
of competitive advantage by justifying its own central
cost levels. Basically, the two underlying factors that
can justify the role of a corporate center in its efforts
to identify sources of competitive advantage are
|
