The Parenting Fit Matrix related to Strategy Formulation was proposed by -

Correct option is B

The Parenting Fit Matrix was developed by Michael Goold, Andrew Campbell, and Marcus Alexander as a strategic tool for corporate-level strategy formulation. This model helps organizations determine the extent to which a parent company (corporate headquarters) adds value to its subsidiaries.

The matrix classifies business units based on how well they fit with the corporate parent’s capabilities and how much value the parent can add. The two key dimensions are:

1. "Benefit Opportunities" – The potential for the corporate parent to add value to the business unit.

2. "Feel" or "Fit" – How well the business unit aligns with the corporate parent’s skills and knowledge.

The four quadrants of the Parenting Fit Matrix:

• Heartland Businesses – Strong fit and high value-adding potential.

• Edge of Heartland – Moderate fit; may require adjustments.

• Ballast Businesses – Limited fit; contribute steady returns but lack growth potential.

• Alien Businesses – Poor fit; should be divested.

This model helps corporations prioritize investment and divestment decisions for their business units, ensuring strategic alignment and effective resource allocation.

Information Booster:

• The Parenting Fit Matrix is a corporate portfolio management tool designed to assess the role of a corporate parent in its subsidiaries.

• It helps large multi-business organizations identify which business units they should invest in, modify, or sell.

• The model focuses on corporate-level strategy rather than competitive strategy.

• It is useful for diversified companies managing multiple business units under a corporate umbrella.

• The matrix builds on the concept of strategic fit, ensuring that corporate resources align well with business unit needs.

• It is widely used in strategy formulation, business restructuring, and mergers & acquisitions.

• Companies use this model to evaluate whether their corporate headquarters is adding value or creating inefficiencies in their business units.

Additional Knowledge:

1. (1) T.L. Wheelan, T.D. Hunger & K. Ranganjan

   • T.L. Wheelan and T.D. Hunger are well-known for their work on strategic management but did not propose the Parenting Fit Matrix.

   • They focused on SWOT analysis, corporate strategy, and competitive positioning.

   • Their work primarily revolves around business-level and corporate-level strategic analysis rather than corporate parenting.

2. (3) G.D. Harrell, R.O. Kieper & A. Campbell

   • A. Campbell was indeed involved in developing the Parenting Fit Matrix, but Harrell and Kieper were not.

   • This combination of authors is incorrect in the context of corporate strategy formulation.

   • Harrell and Kieper are known for their work in consumer behavior and marketing strategy, not corporate portfolio management.

3. (4) G. Hamel, L. Segel & A.C. Inkpen

   • Gary Hamel is a well-known strategic thinker, famous for Core Competencies theory (developed with C.K. Prahalad).

   • A.C. Inkpen is recognized for his contributions to strategic alliances and international business strategy.

   • L. Segel is not associated with the development of the Parenting Fit Matrix.

   • While Hamel contributed significantly to strategy literature, he was not involved in the Parenting Fit Matrix model.​