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Abstract
Survey responses from 1,100 multinational companies are analyzed to determine the roles played by regional headquarters, regional offices, and local offices in the Asia-Pacific.
Key results
Regional headquarters, regional offices, and local offices are shown to play distinctive roles in the strategies of multinationals. The prominence of regional management centers calls into question the traditional global headquarters-national subsidiary paradigm.
Introduction
Among the fundamental questions in international business research is how multinational companies manage their far-flung operations. Rugman and Verbeke (2001) point out that the prevailing paradigm in the international strategy and international business literature has been one that has focused on global headquarters and national subsidiaries (Stopford/Wells 1972, Otterback 1981, Rugman/Bennett 1982, Hedlund 1986, Paterson/Brock 2002).
Preoccupation with this paradigm has caused many international business researchers to ignore one of the most important trends in the world economy, the rise of (cross-national) regional economies, strategies, and organizations. Regional strategies have resulted from the development of regional trading blocs, advances in information and management systems, limits to global economies of scale, regional differences in markets and employees, physical and psychic distances between regions and the corporate headquarters, regional variations in business rules and social behavior, the heterogeneity of the economies of some regions, and the "tyranny of time zones" that require some decision making in a region to be responsive to customers (Lasserre 1996, Schütte 1997, Lasserre/Probert 1998, Lehrer/Asakawa 1999, Rugman 2000, Enright 2002). Despite their prominence, only a few researchers seem to have concluded that regional strategies might be optimal for the firm (Ohmae 1985, Rugman 2000, Rugman/Hodgetts 2001, Enright 2002).
Given the relative lack of attention on regional strategies and organizations, it is not surprising that only a few authors have focused on regional management centers (Heenan 1979, Grosse 1981, Daniels 1987, Sullivan 1992, Aoki/Tachiki 1992, Lasserre 1996, Schütte 1997, Lasserre/Probert 1998). The literature posits two basic sets of functions for regional management centers. The first involves corporate management, coordination, and support activities. The second involves the aggregation of scale sensitive support activities to a regional level. However, much of the existing work on regional management centers is impressionistic rather than analytical and relies on very small samples of very large firms. There is a need for large sample work that elucidates...