Using consistent corporate strategies to maximise value addition by the parent organisation of diversified company Online publication date: Sat, 15-Jul-2006
by Heike Proff
International Journal of Learning and Intellectual Capital (IJLIC), Vol. 3, No. 2, 2006
Abstract: Corporate strategies should facilitate the coordination of organisational action, since a key function of strategy is to provide coherence to organisational action. However, so far there have been no theoretical guidelines on decisions regarding the combination of the desired corporate advantages. The concept of the complementarity provides a theoretical starting point. In relation to organisational strategies, one also speaks of (internal) consistence. Consistency is ensured if conflicts, especially conflicts between the aspired advantages are avoided. This paper develops a concept to assess the consistency of corporate strategies and formulates the research hypothesis that Return On Equity (ROE) increases with an increase in consistency. The research hypothesis can be significantly confirmed by an empirical investigation of the corporate strategies of the 35 largest German diversified firms.
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