Regional Headquarters as Mode of Control for TNC Subsidiaries: A Network‐Oriented Perspective
17 Pages Posted: 22 Dec 2012
Date Written: December 20, 2012
Our conceptual paper sheds light on the role of regional headquarters in coordinating the information and knowledge transfer within the transnational company (TNC) understood as globally dispersed network. We presume that organizational units are embedded in an internal network which is mainly dominated by the TNC headquarters (HQ) and at least one external network that is determined by relationships to the host government, suppliers, customers, (competing) firms, other organizational units, universities, and research labs. We regard the importance of local conditions that may lead to local‐based subsidiary knowledge creation which is not triggered off and controlled by the HQ. This forces the HQ to recapture control over the subsidiary initiative to be able to govern it in an adequate and from a superior TNC point of view beneficial way. We believe that RHQ can be employed as organizational tools in this context to ensure an internal flow of information of adequate quality and quantity which resolves the problem of lacking information and shows how RHQ can fulfil this task.
The paper contributes to business research by giving a distinct and widely new insight into the mode of operation of RHQ within TNC based on a network‐oriented, information‐focused perspective.
Keywords: Transnational companies, headquarters‐subsidiary relationship, coordination, governance, regional headquarters, network perspective, information cost approach
JEL Classification: D23, F23, L22, L29, M19
Suggested Citation: Suggested Citation