Explaining Mandate Loss of Regional Headquarters: The Difference between Full and Partial Loss

A1 Journal article (refereed)


Internal Authors/Editors


Publication Details

List of Authors: Perttu Kähäri, Iiris Saittakari, Rebecca Piekkari, Wilhelm Barner-Rasmussen
Publisher: WILEY
Publication year: 2017
Journal: Journal of Management Studies
Journal acronym: J MANAGE STUD
Volume number: 54
Issue number: 8
Start page: 1206
End page: 1240
Number of pages: 35
ISSN: 0022-2380


Abstract

The fluidity of regional headquarters (RHQ) mandates is a core aspect of disaggregating HQ activities in MNCs. While slicing' of global value chains has received attention in previous research, the parallel disaggregation of management activities has not. Our longitudinal study of 374 RHQ between 1998 and 2010 redresses this omission by asking why RHQ lose their mandates. We apply the concept of absorptive capacity and find two different explanatory mechanisms for full and partial mandate loss driven by RHQ-specific capabilities and location-specific capabilities. Full mandate loss is associated with deficient RHQ-specific capabilities and realised absorptive capacity. By contrast, partial mandate loss is driven by an RHQ's lack of the location-specific capabilities to respond to local changes, leading to removal of mandates for some subunits only. The distinction between full and partial loss offers a more nuanced and granular explanation of how geographic regions of MNCs are composed.


Keywords

absorptive capacity, headquarters (HQ), mandate loss, regional headquarters (RHQ)

Last updated on 2019-21-10 at 02:43