You are here


Does break up lead to break down? Effects of parent and industry influences on spinoff firms

Kristin Anne Stucker, 2001
Faculty Advisor: Donald C. Hambrick


Founding research in the strategic management literature supports the argument that firm success is predicated upon fit between firm and environment (Lawrence & Lorsch, 1967; Ansoff, 1965). Likelihood of firm success increases when firms are able to match their own strengths and weaknesses to industry opportunities and threats (Porter, 1980). In addition, subunits within multibusiness organizations often face pressure to conform to parental norms and expectations. This duality often creates conflict, whereby subunits may be at odds with their industry peers.

Spinoff firms serve as an ideal laboratory in which to analyze the impact of parent and industry pressures on subunits towards strategic conformity. As wholly divested entities absolved of parental ties, spinoffs may adjust their strategic profiles to conform more closely to industry peers. The impetus, implications, and impact of such adjustment are the focus of this study.

Using a sample of 119 American spinoffs which took place from 1990-1995, we analyze questions regarding changes in spinoff strategy as a reflection of parent and industry requirements, as well as the implications of such change. Results show that at the time of the spinoff, spinoff firms had strategic profiles which were much more divergent from their industry than a set of match firms. Additionally, subunits which were strong relative to their parent conformed less to their parent and more to their industry prior to the spinoff. Strong performance also lowers the tendency to increase levels of conformity with the industry post-spinoff. We also find evidence that a third relationship, parent proximity to industry, is an important predictor of spinoff's tendency to increase levels of conformity after the spinoff. In addition, results show that continuity of the management team leads to greatest increases in conformity after the spinoff.

Taken together, these results suggest that multi-divisional firms often hamper subunit ability to adapt to industry requirements. Then, once the unit is released from the firm, its strategic actions to conform to industry norms are insufficient to ensure superior performance.

Application Deadlines

Master of Science in Marketing >

For Fall 2016 Entry:

Available: August 1st, 2015
Deadline: January 4th, 2016


Master of Science in Financial Economics >

For Fall 2016 Entry:

Available: August 1st, 2015
Deadline: January 4th, 2016


Master of Science in Management Science and Engineering >

For Fall 2016 Entry:
To be determined


Available 8/1/15
Sept 2016

Deadline: 01/05/16

MS Marketing
Deadline: 01/04/16

MS Financial Economics
Deadline: 01/04/16


Doctoral Program News

Young Alumni Balseiro wins George B. Dantzig Dissertation Award

At the 2014 Informs national meeting, Santiago Balseiro was honored for his work in "Competition and Yield Optimization in Ad Exchanges". We congratulate Santiago on his accomplishment.

Read More Here

Ethan Rouen wins Deloitte Doctoral Fellowship in Accounting

The Deloitte Foundation has awarded $25,000 grants to 10 top accounting Ph.D. candidates through the Deloitte Foundation’s annual Doctoral Fellowship program. Given to students who plan to pursue academic careers upon graduation, the award will support the 2015 recipients’ final year of coursework and the subsequent year to complete their doctoral dissertation.

Read More Here

Honigsberg featured in Ideas at Work

The August issue of Ideas at Work features research that doctoral candidate Colleen Honigsberg led in conjunction with Sharon Katz.

Read More about Colleen

Wazlawek featured in Ideas at Work

Abbie Wazlawek's joint research with Professor Daniel Ames is featured in the June 24th, 2014 edition of Ideas at Work

Read More about Abbie

Ethan Rouen featured in Ideas at Work

Ethan Rouen's joint research with Professor Dan Amiram is featured in the May 15th, 2014 edition of Ideas at Work

Read More about Abbie

Rivas Wins Fellowship

The PhD program is proud to congratulate Miguel Duro Rivas, who was awarded the Nasdaq Educational Foundation Doctoral Dissertation Fellowship.

Read More about Miguel

Wong wins Deloitte Fellowship

We are proud to announce that Yu Ting (Forester) Wong is one of the recipients of the 2014 Deloitte Foundation Doctoral Fellowship in Accounting.

Read More About Yu Ting >

The PhD Program Congratulates John Yao

PhD student John Yao was a finalist in the 2013 M&SOM (Manufacturing & Service Operations Management) student paper competition.

Read More About John >

Honigsberg Named Postdoctoral Fellow

The PhD program is proud to congratulate Colleen Honigsberg, who was named the Postdoctoral Fellow in Corporate Governance at the Millstein Center at Columbia Law School in October 2013

Read More about Colleen >


Check Application Status

Students listening to classroom lecture

Once you've submitted your application, you can login and track your status by using the link below.

Check Status