Sverre Tomassen

Distant Encounters of the Third Kind: Multinational Companies Locating Divisional Headquarters Abroad

We examine the location and relocation abroad of divisional headquarters of companies originating in a small country on the periphery of Europe. While the internationalization of business activities has been extensively studied for more than four decades, there is limited research on the strategic decision to locate divisional headquarters outside the home country. Our study shows a massive movement of headquarters functions between 2000 and 2006. Building on agency, resource based, and institutional perspectives, we propose that such moves are driven by efficiency/effectiveness as well as legitimacy factors. We find that state ownership and ownership concentration discourage MNCs from moving headquarters activities abroad, but national ownership does not. We also find that while MNCs may move their divisional headquarters to gain efficiency by co-locating with foreign subsidiaries, they keep them at home when the company becomes large, highly diversified and complex to manage.

Exploring Subsidiaries’ Perceptions of Corporate Headquarters: Subsidiary Initiatives and Organizing Costs

Abstract The chapter examines how distance, integration mechanisms, and atmosphere influence the level of organizing costs and subsidiary initiatives in headquarter–subsidiary relationships. Survey data were collected at the subsidiary level in one major Norwegian multinational company. Empirical analyses were based on regression and partial correlation analyses. Organizing costs are driven by distance to headquarters as well as the integration mechanisms and the atmosphere that exists in subsidiary–headquarter relationships. Another important insight gained by this study is that integration mechanisms influence subsidiary initiatives.

The Virtue of in-between Pragmatism – A Balancing Act between Responsiveness and Integration in a Multinational Company

Abstract In this paper, we offer insights that combine a network perspective of the multinational company (MNC) with an analysis of different types of interdependencies. We develop and illustrate our arguments with a company case (LIMO) and argue that types of interdependencies have consequences for the orchestration of MNC activities. The experience from LIMO suggests that extreme organizational designs, where orchestration is either purely local or mostly global, fail to capture the nuances necessary to ensure efficiency and profitability. The main theoretical contribution in this paper is to show that the search for orchestration through an organizational design must involve the combination of several perspectives of activity combinations and their interdependencies. Simply optimizing through a tight network or looking at the firm as a loose federation is too simple to understand the complex trade-off facing modern MNCs.