REGIONAL HEADQUARTERS
REGIONAL HEADQUARTERS
REGIONAL HEADQUARTERS
Regional Headquarters
Definition
Divisional office that has been delegated authority from a company head office (headquarter) to carry out a number of tasks within a specific region
Regiocentric orientation
• Regiocentric = mix between polycentric and geocentric
• Regions > individual countries
(Polycentric: Host Country Orientation; Geocentric: World/Global Orientation)
How do the Regional Headquarters help in the relationship between the susbidiary and HQ?
- “Knowledge Brokers”
- RHQs help fill knowledge gap between HQ and Subsidiaries by transferring knowledge to enhance efficiency
- Information-related Roles
- Acquiring and generating information for subsidiaries or the HQ
What is the goal of regional Headquarters? And how are they doing that?
- Minimization of information cost (Information cost = Observation Costs + Communication Costs)
- Locating firm in a strategic geographic area close enough to local market to reduce observation costs, but also close enough to HQ to reduce communication costs
Entrepreneurial VS. Integrative RHQs
- Entrepreneurial:
- Scouting: seek new opportunities
- Strategic Simulation: helps business understand local environment and changes to it
- Signaling Commitment: demonstrate commitment to region
- Integrative
- Coordination: sensibly fitting pieces of the value chain together
- Pooling of Resources: make best use of regional resources
Advantages of Regional Headquarters
- Economies of Scale:
- Increased operational efficiency by avoiding duplicate word
- Social Improvement:
- Training and development of local human resources
- Exchange of Information:
- Manage the communication flow of information between HQ and Subsidiaries
- Improved Control & Coordination:
How can the regional Headquarters influence the strategy decisions? And when is their influence the highest?
- RHQs operate under a charter from HQ
- Administrative: distribute corporate knowledge to regional subunits
- Entrepreneurial: develop new knowledge and business
- Regional HQs gain more influence if they send the appropriate “signals” to HQs
RHQs influence is highest when those HQs operate with an entrepreneurial charter while being integrated into a relatively centralized organization
What are the five main criterias for location selection?
- Level of business-friendly policies
- Established infrastructure
- Availability of local skilled workforce
- Tax policies
- Standard of living
Why are RHQs needed for an MNC?
- Growing need for local adaption
Why are Companies developing Sub-RHQs?
- Coordination between RHQs, subsidiaries and HQs is sometimes problematic
Examples for RHQs in Switzerland?
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Cartes-fiches
Regional Headquarters
Definition
Divisional office that has been delegated authority from a company head office (headquarter) to carry out a number of tasks within a specific region
Regiocentric orientation
• Regiocentric = mix between polycentric and geocentric
• Regions > individual countries
(Polycentric: Host Country Orientation; Geocentric: World/Global Orientation)
How do the Regional Headquarters help in the relationship between the susbidiary and HQ?
- “Knowledge Brokers”
- RHQs help fill knowledge gap between HQ and Subsidiaries by transferring knowledge to enhance efficiency
- Information-related Roles
- Acquiring and generating information for subsidiaries or the HQ
What is the goal of regional Headquarters? And how are they doing that?
- Minimization of information cost (Information cost = Observation Costs + Communication Costs)
- Locating firm in a strategic geographic area close enough to local market to reduce observation costs, but also close enough to HQ to reduce communication costs
Entrepreneurial VS. Integrative RHQs
- Entrepreneurial:
- Scouting: seek new opportunities
- Strategic Simulation: helps business understand local environment and changes to it
- Signaling Commitment: demonstrate commitment to region
- Integrative
- Coordination: sensibly fitting pieces of the value chain together
- Pooling of Resources: make best use of regional resources
Advantages of Regional Headquarters
- Economies of Scale:
- Increased operational efficiency by avoiding duplicate word
- Social Improvement:
- Training and development of local human resources
- Exchange of Information:
- Manage the communication flow of information between HQ and Subsidiaries
- Improved Control & Coordination:
How can the regional Headquarters influence the strategy decisions? And when is their influence the highest?
- RHQs operate under a charter from HQ
- Administrative: distribute corporate knowledge to regional subunits
- Entrepreneurial: develop new knowledge and business
- Regional HQs gain more influence if they send the appropriate “signals” to HQs
RHQs influence is highest when those HQs operate with an entrepreneurial charter while being integrated into a relatively centralized organization
What are the five main criterias for location selection?
- Level of business-friendly policies
- Established infrastructure
- Availability of local skilled workforce
- Tax policies
- Standard of living
Why are RHQs needed for an MNC?
- Growing need for local adaption
Why are Companies developing Sub-RHQs?
- Coordination between RHQs, subsidiaries and HQs is sometimes problematic
Examples for RHQs in Switzerland?
