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This chapter examined how managers make strategic decisions in multibusiness companies. One of the earliest approaches was to look at the company as a portfolio of businesses. This portfolio was then examined and evaluated based on each business' growth potential, market position, and need for and ability to generate cash. Corporate strategists then allocated resources, divested, and acquired businesses based on the balance across this portfolio of businesses or possible businesses.

The notion of synergy across business units, sharing capabilities, and leveraging core competencies, has been another very widely adopted approach to making strategic decisions in multibusiness companies. Sharing capabilities allows for greater efficiencies, enhanced expertise, and competitive advantage. Core competencies that generate competitive advantage can often be leveraged across multiple businesses, thereby expanding the impact and value added from that competitive advantage.

Globalization, rapid change, outsourcing, and other major forces shaping today's economic landscape have ushered in multibusiness strategic decision making that also focuses on the role and value-added contributions, if any, of the parent company itself. Does the parent company add or could it add value beyond the sum of the businesses it owns? Two perspectives that have gained popularity in multibusiness companies' strategic decision making are the parenting framework and the patching approach. The parenting framework focuses on ten areas of opportunity managers should carefully explore to find ways the parent organization might add value to one or more businesses and the overall company. The patching approach concentrates on multibusiness companies in turbulent markets of the twenty-first century where managers need to make quick, small shifts and adjustments in processes, markets, and products and offers five types of "simple rules" which managers use as guidelines to structure quick decisions throughout a multibusiness company on a continuous basis.








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