Corporate-Level Functional Strategies

In many companies there is a continuing discussion about the relationship between the corporate-level and the business divisions. The discussion often focuses on whether the corporate level adds value, what activities should be centralised, the size of the staff at the corporate level and how to avoid bureaucracy and interference. Since most of the staff at the corporate-level is part of corporate functions, it is through the development of functional strategies that these issues are resolved. We are interested in finding out how functional leaders make these strategic choices.
The theory of corporate groups states that the group levels must add value (ideally more value than other groups) in order to justify their existence. However, research (e.g. by the Ashridge Strategic Management Centre) suggests that many groups fail to add value (the break-up value of many groups is greater than their market value) and fail to define clearly the main sources of corporate added value. Moreover, many managers in business divisions complain that group functions are more of a hindrance than a help. How, then do heads of functions develop functional strategies? How do they link their functional strategy to group strategy? How do they avoid bureaucracy, empire building and interference? How do they measure added value? How do they decide what skills are needed at the group level?
To address these issues we will focus on recent changes that the leader of the function has made to corporate-level activities or role. We will try to understand how these decisions were made.