The Value Traps Facing Corporate Functions

Corporate functions are the headquarters functions in a divisionalised company. These functions, such as corporate Finance, HR, IT, Marketing, and Strategy, have been increasing in their numbers, size and influence. While they can add significant value as part of the ‘corporate parent', they also often subtract value, interfering in unhelpful ways and imposing bureaucracy and delays. Our research, with 30 European companies, exposed four typical value traps that are the root causes of subtracted value. These value traps appear to occur because of the different challenges that corporate functions face at different stages in their life cycle.