Department of Business Development and Technology

Sven Kunisch

Why Corporate Functions Stumble

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperComment/debateResearchpeer-review

  • Sven Kunisch
  • Günter Müller-Stewens, Universitat St. Gallen
  • ,
  • Andrew Campbell, Ashridge Strategic Management Centre
A survey of 761 of the largest corporations in North America and Europe showed that the number of corporate functions had increased at about a third from 2007 to 2010. Leaders at three out of four companies believed that their functions' influence had grown. At the same time, complaints about the performance of those functions were increasing. The authors combined their survey data with insights from structured interviews at large European multibusiness organizations to understand why corporate functions so often underperform and what might be done about it. They learned that the performance of these functions may well be related to how they respond to the varying management challenges they face at different life-cycle stages. In "youth," for example, the function may not be seen as valuable by all the businesses. Its mandate may be unclear, its staffing problematic, and its efforts to get up and running overhasty. In "adolescence," the function may have a tendency to expand its activities without due regard for how that affects its relationships with the business divisions. In "maturity," when it is well established and its mandate is fairly stable, it may spend too much time benchmarking and searching for best practices, diverting attention from the needs of its internal clients. In the fourth stage, which calls for change, the function's managers may fall into the trap of looking for opportunities to redeploy their skills rather than acquiring new ones. The authors discuss these and other challenges and offer remedies.
Original languageEnglish
JournalHarvard Business Review
Volume92
Issue12
ISSN0017-8012
Publication statusPublished - 1 Jan 2014
Externally publishedYes

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