Spatially dispersed corporate headquarters: a historical analysis of their prevalence, antecedents, and consequences

Kunisch, S, Menz, M and Birkinshaw, J (2019) Spatially dispersed corporate headquarters: a historical analysis of their prevalence, antecedents, and consequences. International Business Review, 28 (1). pp. 148-161. ISSN 0969-5931

Abstract

Our study, which complements recent works challenging the traditional conceptualization of the CHQ as a single organizational unit, has a dual purpose. First, in descriptive terms, we set out to explore the prevalence of spatially dispersed CHQs in a historical context. Second, we aim to shed additional light on the CHQ’s spatial design by exploring internal antecedents and potential consequences. Building on arguments from information-processing theory, we propose that the strategic complexity facing the CHQ (affecting its information-processing demands) is associated with the likelihood of a spatially dispersed CHQ (affecting its information-processing capacity). In line with our dual purpose, we conduct a historical study drawing on survey and archival data covering 156 public firms domiciled in four countries (Germany, the Netherlands, the UK, and the US) in the late 1990s. Our results provide empirical support for the hypothesized associations between strategic complexity and the CHQ’s spatial design. Moreover, although we find no empirical support for the expected contingency effects, the results suggest that a spatially dispersed CHQ can have negative effects on CHQ and firm performance. Overall, our theoretical arguments and empirical results advance our knowledge about complex CHQ configurations.