The functions of the HQ unit in the multibusiness firm

Abstract

The basic functions of the corporate headquarters (HQ) multibusiness firms are both entrepreneurial (value‐creation) and administrative (loss prevention). The development and implementation of these HQ functions reflect the industries in which the firms operate. Historically, the ability of the headquarters to carry out these functions has determined both the successful paths to growth for a multibusiness enterprise and the limits to that growth.

Why do some multinational corporations relocate their headquarters overseas?

“…There is a well-established distinction in the strategic management literature between Keywords: multinational corporation; headquarters; corporate strategy; internationalization * Correspondence to: Julian Birkinshaw, London Business School, Regent's Park, London NW1 4SA, U.K. E-mail: jbirkinshaw@london.edu business unit strategy (concerned with the competitive positioning of a business within its chosen industry domain) and corporate strategy (which defines the scope of businesses in which the firm participates, and the ways in which value is added across those businesses; Bourgeois, 1980;Chandler, 1991;Hofer and Schendel, 1978). Research has examined the differences between these two levels of analysis, in terms of the content of strategy and the process of strategy-making.…”

“…This externally facing role is potentially an important addition to our understanding of the role of the corporate HQ in the multi-business firm (cf. Chandler, 1991;Foss 1997;Goold, Campbell, and Alexander, 1994).…”

“…This externally facing role is potentially an important addition to our understanding of the role of the corporate HQ in the multi-business firm (cf. Chandler, 1991;Foss 1997;Goold, Campbell, and Alexander, 1994).Second, geographical location affects firm competitiveness, so any decision to relocate specific activities overseas is potentially very important to the future success of the MNC. There are wellestablished theories of agglomeration in the literature, and it is now accepted that proximity to specialized labor, complementary suppliers and customers, and access to knowledge spillovers are all important benefits to the firm (Marshall, 1890;Porter, 1990).…”

Beyond Simple Configurations: The Dual Involvement of Divisional and Corporate Headquarters in Subsidiary Innovation Activities in Multibusiness Firms

“…The M-form organization usually goes hand in hand with the establishment of different types of headquarters such as corporate, divisional, and regional headquarters (Stopford and Wells 1972). These headquarters co-exist and it has traditionally been argued that they are responsible for a differentiated set of tasks and activities (Chandler 1991;Foss 1997). The reasoning is based on theories of information processing and transaction costs (Martin and Eisenhardt 2010).…”

“…Birkinshaw et al 2006;Foss et al 2012;Galbraith 2009;Kostova et al 2016;Poppo 2003). This literature predicts that dual headquarters involvement is unlikely to occur since it is costly and draws on the scarce resources and attention of headquarters staff Nell et al 2011;Poppo 2003), since it runs counter the traditional M-form logic (Chandler 1991;Verbeke and Kenworthy 2008;Williamson 1975), and because it increases the likelihood of conflicts and coordination problems (Goold and Campbell 2002;Gong et al 2007). Yet, we highlight circumstances under which we can expect to observe overlapping headquarters' involvement.…”