Corporate commons: sustaining competitiveness through public goods in multidivisional firms Online publication date: Mon, 24-Oct-2005
by Jetta Frost, Michele Morner
International Journal of Learning and Change (IJLC), Vol. 1, No. 1, 2005
Abstract: Corporate parenting strategies refer to the management's ability to sustain the competitiveness of multidivisional firms. During the last decade, infusing elements of market governance and control, thus fostering internal entrepreneurship, became the most popular corporate parenting strategy. We argue that this corporate parenting initiative leads to market failures within multidivisional firms. Internal market failures hinder the creation and transfer of resources with firm-specific public good character. We label those resources corporate commons. The aim of our paper is, firstly to identify the spectrum of such firm-specific public goods according to their degree of non-excludability and of non-rivalry. Secondly, we uncover the role of corporate commons in the competitiveness of multidivisional firms. Using a case example from the telecommunication industry, we argue that successful corporate parenting strategies are those that encourage the provision of corporate commons across business units to sustain a firm's competitiveness.
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