Parenting Advantage in Business Groups of Emerging Markets

The concept of parenting was originally proposed by Campbell et al. (1995) in the context of conglomerates in developed economies. In contrast to the divisional structure of conglomerates in developed countries, business groups as found in most emerging consist of a network of affiliated yet independent firms. This difference in the structure of multi-business firms in developed and emerging markets solicits a revisiting the concept of parenting as originally proposed by Campbell et al. (1995). Does 'parenting advantage' exist in emerging markets? If so, what are the sources of 'parenting advantage'? Given the multi-firm, multibusiness group affiliated setup how does 'parenting' differ in emerging markets when compared to conglomerates of developed economies? How does the business group structure and associated managerial practices impact 'parenting advantage' of firms affiliated to a business group in emerging market? This paper examines some of these critical yet unanswered questions. The contribution made in this work is threefold. One, we redefine the concept of 'parenting' as relevant to business group structure found in emerging markets like India. Two, we articulate the drivers of parenting value for affiliate firms bound in a business group structure. Three, the paper discusses the nuances of parenting and its advantages in an emerging market, in contrast to its conceptualization in developed economies. Finally, extending the parenting literature to a wider context of an emerging market is an important outcome of this work.