Title: Corporate commons: sustaining competitiveness through public goods in multidivisional firms

Authors: Jetta Frost, Michele Morner

Addresses: Zeppelin University, Am Seemoser Horn 20, D–88045 Friedrichshafen, Germany. ' University of Eichstaett-Ingolstadt, Auf der Schanz 49, D–85049 Ingolstadt, Germany

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.

Keywords: competitiveness; multidivisional firms; corporate commons; corporate parenting; internal market failure; public goods; telecommunications; internal entrepreneurship; business units; internal markets; knowledge transfer; competitive advantage.

DOI: 10.1504/IJLC.2005.007996

International Journal of Learning and Change, 2005 Vol.1 No.1, pp.28 - 45

Published online: 24 Oct 2005 *

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