Rethinking Corporate Headquarters: Innovative Approaches for Managing the Multi-Divisional Firm
Once treated as almost synonymous with the place where strategies are made, corporate headquarters and the multi-divisional firms they steer, have given way to other research phenomena. With this special conference we want to redirect scholarly attention on the “elephant in the room.” Large, multi-divisional corporations form the backbone of well over half of the global economic output. Their attractiveness is not only confined to the US and Europe, but also developing economies are increasingly embracing them. With this special conference we want to summarize and advance our knowledge on these large firms and their corporate management.
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Once treated as almost synonymous with the place where strategies are made, corporate headquarters and the multi-divisional firms they steer have given way to other research phenomena. With this special conference, we want to redirect scholarly attention to the elephant in the room. Large, multi-divisional corporations form the backbone of well over half of the global economic output. Their attractiveness is not confined to the US and Europe—developing economies are increasingly embracing them. We want to summarize and advance our knowledge on these large firms and their corporate management.
Central to the notion of multi-divisional corporations is the creation of value through a central headquarter unit. This requires not only control and guidance, but also the coordination of dispersed activities through multiple means. Activities conducted by the central headquarter range from setting of corporate strategy, resource allocation, staffing key divisional managers, dealing with shareholders, analysts, investors or governments to centralizing functions, installing cross-divisional structures for creating and sharing knowledge, replicating business models, or nurturing core competencies.
Simultaneously managing across multiple industries, markets, technologies, countries, and cultures is posing significant challenges for executives around the world. Their world has changed significantly since Chandler`s influential study on the Mform in 1962, which raises the question if our theories and empirical results of these firms are still valid. Prior work has concluded that related multi-business firms often outperform other forms of diversification because they provide superior control over opportunism, better decision making, and enhanced value creation through cross-SBU coordination. But
research has also established that these benefits come at substantial bureaucratic costs. Conceptually, the corporate level moderates the relationship between SBUs and outcome variables, by directly or indirectly facilitating or inhibiting the evolution and performance of SBUs. Empirically, multi-divisional firms delegate operating responsibilities to SBUs that function as organizational entities under the financial control and ownership of corporate management. Corporate management is vital for providing goals, directions, guidelines, structures, and control systems to SBU managers that facilitate the performance of their assigned tasks and responsibilities.
Switzerland is not only a country of beautiful mountains, clear lakes, and lovely cities, but also a country of high competitiveness and homeland for more than 500 corporate and regional headquarters. As such, it offers a well-suited place for a conference on multi-divisional firms and their corporate management.