Regional Management in Multinational Service Operations: Do Services Drive Regional Management Structures?

Due to the dispersion of headquarters’ activities across organizational and geographical boundaries, intermediate units (IUs) are emerging as a key actor in international business. These units are intermediate structural layers between headquarters (HQ) and local subsidiaries with specific HQ responsibilities. Through a systematic review of 68 studies published between 1996 and 2020, we develop a conceptual framework that integrates complementary streams of theoretical and empirical research with IUs as the focal unit of analysis. Our aims are to disentangle how the main theories in this field address the antecedents of IU creation, and explain the dynamism in the roles and functions of IUs and their outcomes. We also propose a conceptualization of IUs as co‐parents in a dynamic system in which parenting functions are shared by IUs and headquarters. Finally, we highlight avenues for future research, emphasizing opportunities to advance the understanding of IUs using different theoretical lenses that may help scholars position their work within the broader stream of literature.

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“…They also reduce distances and enhance operational efficiency (Freilin et al . 2016; Li et al . 2010).…”

Section: Thematic Analysis and Synthesis Of The Literaturementioning

confidence: 99%

Intermediate Units in Multinational Corporations: Advancing Theory on their Co‐parenting Role, Dynamics and Outcomes

Barber

Botella-Andreu

Villar

2020

Int J Management Reviews

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“…Second, we contribute to the stream of research focusing specifically on RHQ (Ambos and Schlegelmilch, ; Enright, ; Freiling et al, ; Hoenen et al, ; Perry et al, ). We unbundle the factors influencing the relationship between RHQ and their mandated markets and add new insights into the explanatory mechanisms behind the fluidity of RHQ mandates, which has recently received increasing attention (Edgington and Hayter, ; Kähäri and Piekkari, ; Laamanen et al, ; Piekkari et al, ).…”

Section: Introductionmentioning

confidence: 99%

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

Kähäri

Saittakari

Piekkari

et al. 2017

J Management Studies

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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.

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“…Despite the increasing prevalence of servitization as a strategy, researchers in international management have neglected cross-border perspectives on the provision of product-related services (e.g. Vendrell-Herrero et al, 2018;Freiling et al, 2016). Hereby, the configuration decision (Porter, 1986a), i.e.…”

Section: Introductionmentioning

confidence: 99%

“…Service operations traditionally required a local presence and decentralized resources in host countries (Kowalkowski et al, 2011;Gr€ onroos, 1999). However, by making remote delivery possible (Porter and Heppelmann, 2015) and lowering the relevance of geographical distance (Freiling et al, 2016), digitalization has enabled the centralization of resources for many services. To make this possible, the host country must be digitally ready, meaning that a robust infrastructure as well as the willingness of the foreign customers to use remotely delivered services is required (W€ underlich et al, 2013).…”

Section: Introductionmentioning

confidence: 99%

“…This study makes several contributions to the existing literature on international management and servitization research: First, it sheds light on how manufacturing companies configure resources as they become service providers and examines the impact of specific service characteristics on the decision to centralize or decentralize resources. Second, following Freiling et al (2016) and Hakanen et al's (2017) calls for more research on the implications of digitalization for organizations and global distribution, this study examines the impact of both services' extent of digitalization and host countries' digital readiness on configuration decisions. Third, this quantitative study aims to give a broader picture by testing previous qualitative findings and identifying research gaps and future research paths.…”

Section: Introductionmentioning

confidence: 99%

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International resource configuration of product-related services in the digital age – An analysis of its antecedents

Jovanović

Morschett

2021

JOSM

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PurposeAlthough many manufacturers depend on international sales, and product-related services continue to increase in importance, little is known about how manufacturers should deliver their product-related services across borders. This paper examines the international configuration decision of industrial service offerings across borders by investigating the impact of different service characteristics and the servitization strategy on this decision. Additionally, the paper sheds light on how digitalization and administrative heritage impact this decision.Design/methodology/approach116 industrial goods manufacturers from Switzerland and Germany were surveyed.FindingsServitization leads companies to centralize their service resources in their home countries. However, most service characteristics do not impact decisions regarding centralization, except for knowledge intensity, which leads to more centralization of resources. This implies that the resource configuration does not depend on each service individually but on the overall service strategy. Furthermore, the digital readiness of the host country directly and positively impacts resource centralization. Notwithstanding other variables, larger companies tend to decentralize service resources more than smaller companies.Originality/valueThis paper is among the first to study the international configuration impact of servitization and of individual service characteristics, thereby adding important knowledge regarding the provision of product-related services in the international context. Additionally, different aspects of digitalization are included to analyze its impact on companies and host countries.

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Regional Management in Multinational Service Operations: Do Services Drive Regional Management Structures?

Cited by 3 publications

References 49 publications

Intermediate Units in Multinational Corporations: Advancing Theory on their Co‐parenting Role, Dynamics and Outcomes

Intermediate Units in Multinational Corporations: Advancing Theory on their Co‐parenting Role, Dynamics and Outcomes

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

International resource configuration of product-related services in the digital age – An analysis of its antecedents

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