Effect of a Holding Company's Organizational Context on the Corporate Entrepreneurship within Strategic Business Units

Holding companies or Industrial Groups are organizations made up of diverse businesses and sometimes conglomerate which often have different characteristics.The purpose of this research paper is to measure the effect of organizational context of parent companies on corporate entrepreneurship within strategic business units. Organizational context as an independent variable is divided into two parts: internal context (resource nature, parent company portfolio, coordinating mechanism, control systems and parent company size) and external context (pressure of industry competitiveness and technology intensity). Corporate entrepreneurship as a dependent variable has three dimensions; innovation, new business development and strategic renewal.Structural Equation Modeling (SEM) was used to test the hypothesis. The research sample consisted of 285 top, middle and operational managers in 22 different holding companies with 7 SBUs on average.Research findings illustrate that the external context of parent company has the most effect on corporate entrepreneurship within business units and the internal context of parent company has the least effect on strategic renewal in strategic business units.The paper suggests reinforcing the parent company position and its improvement role to create value for its business units.