| Summary: | <p><strong>Purpose</strong> The gap between management theory and practice has been much criticized. To help bridge the divide, a synthesis of empirical, theoretical and practice literature is offered, along with an application of the widely used VRIO framework, to contend that developing a focused corporate parenting approach as a core competence serves as a source of competitive advantage for diversified companies.</p> <p><strong>Design/methodology/approach</strong> A synthesis of empirical, theoretical and practice literature is presented, beginning with a discussion of why and how firms diversify; the relative performance of firms that pursue related and unrelated diversification; an application of the resource-based view, core competencies and the VRIO framework; a description of focused corporate parenting as a core competency; a prescription for how diversified firms can implement a focused corporate parenting approach; and implications for research.</p> <p><strong>Findings</strong> Developing a focused corporate parenting approach as a core competence serves as a source of competitive advantage for diversified companies.</p> <p><strong>Research limitations/implications</strong> The synthesis of empirical, theoretical and practice literature presented provides a foundation for future research into the impact of focused corporate parenting on diversified firm performance.</p> <p><strong>Practical implications</strong> The paper includes a prescription for how diversified firms can implement a focused corporate parenting approach.</p> <p><strong>Originality/value</strong> The application of the resource-based view and core competency theories to corporate parenting provides managers with the rationale for and methodology to focus their corporate parenting activities.</p>
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