Explaining Mandate Loss of Regional Headquarters: The Difference between Full and Partial Loss

Perttu Kähäri*, Iiris Saittakari, Rebecca Piekkari, Wilhelm Barner-Rasmussen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

13 Citations (Scopus)


The fluidity of regional headquarters (RHQ) mandates is a core aspect of disaggregating HQ activities in MNCs. While ‘slicing’ of global value chains has received attention in previous research, the parallel disaggregation of management activities has not. Our longitudinal study of 374 RHQ between 1998 and 2010 redresses this omission by asking why RHQ lose their mandates. We apply the concept of absorptive capacity and find two different explanatory mechanisms for full and partial mandate loss driven by RHQ-specific capabilities and location-specific capabilities. Full mandate loss is associated with deficient RHQ-specific capabilities and realised absorptive capacity. By contrast, partial mandate loss is driven by an RHQ's lack of the location-specific capabilities to respond to local changes, leading to removal of mandates for some subunits only. The distinction between full and partial loss offers a more nuanced and granular explanation of how geographic regions of MNCs are composed.

Original languageEnglish
Pages (from-to)1206-1240
Number of pages35
JournalJournal of Management Studies
Issue number8
Publication statusPublished - 1 Dec 2017
MoE publication typeA1 Journal article-refereed


  • absorptive capacity
  • headquarters (HQ)
  • longitudinal study
  • mandate loss
  • regional headquarters (RHQ)


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