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The bridging role of regional headquarters. Multinational companies in the Asia-Pacific region

Bruno Amann (LGCO, University of Toulouse III, Toulouse, France)
Jacques Jaussaud (CATT, Collège Sciences Sociales et Humanités, University of Pau, e2s-UPPA, Pau, France)
Johannes Schaaper (University of Bordeaux, Bordeaux, France)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 23 October 2020

Issue publication date: 7 January 2021

406

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 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.

Keywords

Citation

Amann, B., Jaussaud, J. and Schaaper, J. (2021), "The bridging role of regional headquarters. Multinational companies in the Asia-Pacific region", Multinational Business Review, Vol. 29 No. 1, pp. 116-142. https://doi.org/10.1108/MBR-11-2019-0144

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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