The Benefits of Hierarchy? - Exploring the Effects of Regional Headquarters in Multinational Corporations

This paper investigates the role Regional Headquarters (RHQs) play in large multinationals. It investigates if the establishment of a RHQ creates “hierarchy benefits” to the firm that are in line with eh M-form principles. Based on rich qualitative data that we collected for nine different firms (MNCs) in three different industries, we find evidence for benefits of hierarchy when RHQs are introduced very much along the lines of the classic M-form organization with product divisions. However, M-form principles are taken ad absurdum by the fact that there seems to be constant re-organization regarding the mandates and the geographic scope of the regions. This calls into question the effectiveness of RHQs