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Toward a Theory of Regional Organization

Author

Listed:
  • Guey-Huey Li

    (Shih-Hsin University)

  • Chwo-Ming Yu

    (National Chengchi University)

  • Dah-Hsian Seetoo

    (National Chengchi University)

Abstract

This paper explores the organizational adjustment in host regions when MNCs switch from their original strategy to a regional strategy. MNCs set up sub-regional headquarters (e.g., Greater China sub-regional headquarters) under a regional headquarters (e.g., Asia regional headquarters). A sub-regional headquarters replaces a regional headquarters directly managing subsidiaries within the sub-region. The emergence of sub-regional headquarters is in response to the need for a balance between global integration and local responsiveness. An increasing number of decisions are made by sub-regional headquarters, instead of by subsidiaries, a parent, or regional headquarters. Industry characteristics and firm’s specific advantages (FSAs) affect the delegation of authority from a parent to regional and sub-regional headquarters.

Suggested Citation

  • Guey-Huey Li & Chwo-Ming Yu & Dah-Hsian Seetoo, 2010. "Toward a Theory of Regional Organization," Management International Review, Springer, vol. 50(1), pages 5-33, February.
    • Handle: RePEc:spr:manint:v:50:y:2010:i:1:d:10.1007_s11575-009-0021-8
    DOI: 10.1007/s11575-009-0021-8
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