The size, structure and performance of corporate headquarters
The size, structure and performance of corporate headquarters
Collis D., Young D., Gould M. Strategic Management Journal, April 2007, Vol. 28 No. 4, Start page: 383, No. of pages: 23
Purpose – To evaluate the role of the corporate headquarters in the multi-business firm. Design/methodology/approach – Notes a remarkable variation in the size of corporate headquarters and a general lack of empirical evidence on some widely held beliefs. Reviews the literature on corporate headquarters, defines its unique roles and develops a theoretical view of the determinants of its size. Tests this using data from a survey of over 600 corporations in France, Germany, The Netherlands, the UK, the US, Japan and Chile. It states that they were surveyed between 1997 and 1999, covering the four established corporate governance systems. Assesses the impact of corporate strategy in terms of portfolio, policies and governance system. Findings –Discusses the extent to which tasks carried out at corporate headquarters are discretionary choices. Suggests that there are three principal determinants of the size and role of headquarters in multibusiness corporations: organization size, governance system and corporate strategy. Finds that the ownership structure of the firm and the institutional structures in its home country lead to systematic differences in headquarters size. Confirms that the size of corporate headquarters varies with industry sector and that firms with more related portfolios tend to have larger headquarters. Finds that the proportion of employees working in corporate headquarters is positively correlated with the extent of functional influence and of linkages between divisions. Originality/value – Highlights the need to ask how corporate strategy adds value to multi-business firms and what policies and staff are needed to exploit those specific sources of value.ISSN: 0143-2095Reference: 36AJ043
Keywords: Corporate strategy, Multinationals, Organizational structure
