The bridging role of regional headquarters. Multinational companies in the Asia-Pacific region
Language
EN
Article de revue
This item was published in
Multinational Business Review. 2020-10-26, vol. 29, n° 1, p. 116-142
English Abstract
Purpose Large multinational companies (MNCs) are strongly formalized, often standardized and complex with multiple hierarchical levels. Over the past few decades, MNCs have strengthened their coordination and control systems ...Read more >
Purpose Large multinational companies (MNCs) are strongly formalized, often standardized and complex with multiple hierarchical levels. Over the past few decades, MNCs have strengthened their coordination and control systems by creating regional headquarters (RHQs). This study aims to investigate how MNCs rearticulate control dimensions at RHQs, to coordinate and exert control over subsidiaries in the Asia-Pacific region. Design/methodology/approach Based on a survey of 86 French MNCs in the Asia-Pacific region, this study applies a structural equation model to determine RHQs’ roles in the field of regional decision-making, coordination and control. Findings Large MNCs, with a significant presence in Asia, transfer coordination and control to RHQs, in a way that leads us to propose the use of the expression “regio-centralization.” RHQs become socialization hubs, where most regional decisions are taken and where international managers meet. MNCs mobilize at the same time expatriates, short-term assignees and local managers who intensively interact at RHQs. Thus, informal control at RHQs increases, partly substituting formal control by HQs. Smaller MNCs, without RHQs, on the contrary, base their control and coordination on the formalization of HQs-subsidiary relations, especially through strong reporting, in combination with centralized decision-making at HQs. Research limitations/implications This study is based on MNCs from one specific country, France, and focuses only on the dynamic Asia-Pacific host region. Coordination and control in less dynamic regions may reveal different results. Originality/value This study leads to a better understanding of how large MNCs reorganize dispersed activities in the Asia-Pacific region by creating RHQs, where important control and coordination functions are relocated.Read less <
English Keywords
Centralization-formalization-socialization
Control
Multinational companies
Regional headquarters
Asia-Pacific region