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The major purpose of this paper is to investigate antecedents, outcomes and processes of business portfolio transformations, including diversifying, refocusing and repositioning portfolio restructurings.

The paper conducts a longitudinal study on the process of business portfolio transformations among the largest 100 European and 100 North American firms during the period of 1998-2010. A newly developed metric is applied that allows a business portfolio transformation to be identified and quantified and process-related research to be conducted.

The study confirms and expands prior literature that postulates that poor performance and over-diversification are key motivations for portfolio restructuring. However, the majority of transformations were not successful, with firm performance further deteriorating in the course of the transformation. The analysis of the transformation process itself reveals that the average transformation took 2.6 years and changed the portfolio composition by 42 per cent. Most transformations are conducted rather continuously over the transformation period and rely heavily on divestitures and acquisitions.

Managers should not to be too optimistic when they consider a major business portfolio restructuring. In particular, diversifying or repositioning transformations have a low success rate, while refocusing transformations are most successful on average. The study of the process of portfolio transformations offers some advice to increase the odds of a successful restructuring.

This longitudinal analysis represents the first study of the process of portfolio transformation by applying a newly developed transformation metric. By uncovering the process characteristics of portfolio transformations among the largest European and North American firms, it provides insights on the occurrence, typical magnitude, duration and order of acquisitions and divestitures of large portfolio transformations.

The major purpose of this paper is the development of a theoretical framework that can be used by corporate practitioners to understand the implicit parenting strategy of their company, assess its performance, and adjust it for improving the net corporate value creation.

In this paper, a three‐dimensional framework is developed that accounts for corporate‐to‐business and business‐to‐business interactions, value‐adding and value‐destroying activities, and strategic and operational levers. The framework is operationalized by assigning a broad set of individual activities to these levers.

The paper delivers a robust, systematic, and operational framework to assess the net benefits to a given business of being part of a corporate portfolio, and to identify and evaluate implicit parenting strategies in corporate practice. While previous studies mainly focused on broad parenting approaches with low granularity this framework now allows earlier observations to be substantiated, finer distinctions between the applied strategies to be drawn, and the core of superior value added approaches to be investigated.

The introduced framework can be used to analyze the origin and underlying drivers of conglomerate discounts and premia and thus enhance understanding of capital market valuation of multi‐business companies. The developed framework can also be the basis for the derivation of a typology of corporate parenting strategies. In this way, it can support practitioners in portfolio management – which was also the explicit motivation for the development of the original parenting advantage concept.

The outlined framework will facilitate the investigation of structural, strategic, and organizational roots of superior parenting strategies in corporate practice. It may be used to analyze performance differences of multi‐business companies that go beyond the degree of diversification and may finally contribute to solving the puzzle of the conglomerate discount.