Regional headquarters can be defined as an intermediate organizational unit with a mandated role, geographic scope and location. Regional headquarters represents a dynamic phenomenon within multinational companies. Guided by the research question - why do regional headquarters live and die - the purpose of this thesis is to understand and explain why RHQ exist and why they sometimes cease to exist. The thesis builds on four essays examining the dynamism of regional headquarters with various methods and applying different perspectives. The first essay presents regional headquarters in their dynamic context of corporate headquarters, subsidiaries and local environment. The second essay explains the processes that regional headquarters apply to add parenting value and presents evolutionary patterns that the value follows. The third essay investigates the effects of trust and distance on the retention and loss of the regional headquarters mandate. The final essay explores an entire population of regional headquarters in relation with its three environments. The empirical studies use a longitudinal approach in line with the dynamic research question. This thesis argues that regional headquarters are inherently dynamic, because they are embedded in three environments, terminable and sensitive to change. Their role, location, and geographic scope are interdependent, and change in one attribute will affect other attributes. Regional headquarters exist because they add value to their parents and subsidiaries at a lower agency cost than other alternatives. However, regional headquarters will die if they stop adding value, if they lose their parent's trust, or if an abrupt change in the corporate or external environment affects their position within the organizational structure of the multinational company.
|Translated title of the contribution||Miksi aluepääkonttorit elävät ja kuolevat?|
|Publication status||Published - 2014|
|MoE publication type||G5 Doctoral dissertation (article)|
- regional headquarters
- multinational companies
- regional management
- mandate loss