How does digitalization affect headquarters and what does it mean for CEE-focused headquarters in Austria?

Headquarters (HQs) represent central units within corporationsi and their goal is to add value to the firm and its respective subunits. They do so by taking over various responsibilities, such as allocating resources within the firm, coordinating and monitoring subunits, and identifying and realizing synergies, among others. HQs are also important for the economy of the countries they are located in, as they offer for example high-value employment, increased demand for related business services (e.g., legal and financial services), and represent a non-trivial source of tax income. Additionally, there is scientific evidence suggesting that the location of the HQ influences its investment decisions and consequently adjacent economies (e.g., investments that are in regions close to the HQ are favoured). Thus, many countries consider it important to attract and maintain HQsii. In this article, we will focus on a topic that has not received much attention yet. Specifically, we discuss how digitalization (i.e., recent advancements in areas such as big data analytics, automation, artificial intelligence, the internet of things, etc.) influences HQs in Austria, most of which have a strong focus on CEE countries. Companies are dealing with a variety of issues stemming from digitalization, which results in changes to business models, firm processes, and company culturesiii. Yet, digitalization also affects the role and value added of the HQs but we still lack a clear understanding of thativ. In the following, we first discuss Austria as a location for HQs, then the impact of digitalization on HQs, and finally, we explore how the digitalization might influence the attractiveness of Austria for CEE-oriented HQs. Thereby, we refer to recent empirical material that we have collected

How senior managers use name-based heuristics to allocate financial resources in multinational corporations

Funding Information: We thank the Guest Editors and three anonymous reviewers for detailed and constructive comments. We are grateful to Owen Powell for his help with the experiment. This paper greatly benefited from discussions with and comments of Fernando Anjos, Olivier Bertrand, Ben Greiner, Alison E. Holm, and Randi Lunnan. We are thankful to seminar participants at IESE, University of Valencia, and WU Vienna as well as reviewers and participants of the Academy of Management Annual Meeting and of the Academy of International Business Annual Meeting for their valuable inputs. This study received funding from WU Vienna, the Fundação para a Ciência e a Tecnologia (UID/ECO/00124/2019, UIDB/00124/2020 and Social Sciences DataLab, PINFRA/22209/2016), POR Lisboa and POR Norte (Social Sciences DataLab, PINFRA/22209/2016). Publisher Copyright: © 2022 The Authors. Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd.The allocation of financial resources to entrepreneurial initiatives in subsidiaries of multinational corporations is crucial to their realization. When allocating resources to these initiatives, senior headquarters managers face uncertainty that they attempt to address using various heuristics, which may bias allocation. Name-based heuristics – cognitive shortcuts based on names associated with a decision-making situation – have been shown to influence financial decisions ranging from food purchase to stock investment. Yet little is known about name-based heuristics in the allocation of financial resources to entrepreneurial initiatives. We analyse 1308 resource allocation decisions made by 109 senior managers in an experiment in which we vary subsidiary country and subsidiary manager names. We find that psychic distance to the subsidiary country is negatively related to resource allocation when subsidiary managers' names express a potential expatriate status. In contrast, this relationship is positive when subsidiary managers' names express a potential local status. We contextualize our results by interviewing senior managers and discuss how reliance on name-based heuristics to infer the context of an initiative or the interests and competences of subsidiary managers can lead to biased decisions.publishersversionpublishe

Headquarters involvement, socialization, and entrepreneurial behaviors in MNC subsidiaries

Headquarters of multinational corporations can be involved in their subsidiaries and help with the development and transfer of innovative ideas. However, headquarters involvement might not always be desired or needed, and it can thus be perceived as interference with local activities, potentially reducing local willingness to go the extra mile. We address the lack of knowledge about subsidiary manager behavior by answering the following question: How does headquarters involvement influence the proactive behavior of subsidiary managers to push for new and innovative ideas? Using data from 120 top managers in subsidiaries of multinational corporations, we find that the negative relationship between headquarters involvement and their subsidiary managers' support for initiatives can be reduced when socialization mechanisms such as a common corporate culture or rotation programs are put in place

How corporate headquarters add value in the digital age

How will digitalization influence the role of corporate headquarters (CHQs) and their relationships with their operating units? We recently asked 67 senior CHQ managers this question. The results suggest that CHQs expect to become more powerful and more involved in their operating units. These conclusions seem to be driven by perceptions that the ongoing digitalization will provide CHQ managers with more timely and better information. In this "Point of View", we discuss the potential pitfalls of such a narrative. We also offer ideas for how to avoid mistakes and ensure that CHQs increase their value-added in times of digitalization. In particular, we suggest that CHQs place emphasis on social interactions for data to be effectively collected and analyzed, for decision-making power to be adequately allocated, and for CHQ involvement to be informed and necessary

More effective solutions? Senior managers and non-routine problem solving

Research Summary Solving non-routine problems—problems for which current organizational, recurrent action patterns do not offer a predetermined, effective solution—can be an important source of value creation. When these problems occur in subsidiaries of multinational corporations, senior headquarters managers can potentially help solve them. However, whether their involvement is beneficial rests upon the assumptions that they know which knowledge is appropriate and that their involvement does not negatively influence the problem solving process. We challenge these assumptions and theorize that the involvement of senior headquarters managers is negatively related to solution effectiveness, unless senior subsidiary managers are also involved, and especially if problems have an external locus (i.e., primarily relate to the firm's products and services). Our robust results are consistent with our theory. Managerial Summary Companies are often faced with new problems, which represent an opportunity for organizational improvements. But how different types of senior managers influence problem solving effectiveness has remained unclear. Studying problems occurring in foreign subsidiaries of multinational corporations, we find that the involvement of senior headquarters managers is negatively related to problem solving effectiveness. Two reasons explain this result: senior headquarters managers often lack necessary understanding of their subsidiaries' contexts; and their involvement diminishes active participation of subsidiary employees. The negative relationship is especially strong when problems relate to products and services (as opposed to internal processes). Furthermore, we find that senior subsidiary managers can mitigate the negative consequences related to senior headquarters managers' involvement

The dynamic response process to conflicting institutional demands in MNC subsidiaries - An inductive study in the Sub-Saharan African e-commerce sector

In this paper, we examine responses to the conflicting institutional demands faced by an e-commerce subsidiary located in Sub-Saharan Africa and headquartered in Europe. Following an inductive approach, we gathered data from a 6-month participant-observation study and interviews with local managers. Our findings show that the subsidiary managers responded to conflicting institutional demands in a dynamic way, taking one response after the other. In some cases, the subsidiary managers responded in a way that they thought would be satisfactory but subsequent pressures from their headquarters or their local environment pushed them to adopt a new response. In other cases, the subsidiary managers intentionally adopted responses knowing that they would (have to) adopt another response later in the process

Beyond Simple Configurations : The Dual Involvement of Divisional and Corporate Headquarters in Subsidiary Innovation Activities in Multibusiness Firms

We investigate “dual headquarters involvement”, i.e., corporate and divisional headquarters’ simultaneous involvement in innovation development projects hosted by subsidiaries of multibusiness firms. Drawing on selective hierarchical involvement theory and the literature on subsidiary network embeddedness, we analyze 83 innovation projects in 22 multibusiness firms and find that the number of partners in the projects, rather than subsidiary intra- and inter-divisional embeddedness acts as a driver of dual headquarters involvement. We do however find that intra- and inter-divisional embeddedness is positively related to dual headquarters involvement when the number of partners in the innovation project is relatively large. These results lend support to the idea that parenting in complex organizations entail complex headquarters structures. Our results suggest that we need to go beyond simple conceptualizations of headquarters and that considering different dimensions of the innovating subsidiary’s network helps in explaining dual headquarters involvement

Preliminary results on high total dose testing of semiconductor photonic sources : a comparison of VCSELs and resonant-cavity LEDs

Low-power consumption, high efficiency and high bandwidth surface emitting semiconductor optical sources are critical elements in the development of future photonic systems for space and civil nuclear applications. In this paper, we report on preliminary high total dose experiments performed on two types of recently developed microcavity emitters : VCSELs and microcavity (or resonant cavity) LEDs. We gamma irradiated a total of twelve commercially available packaged VCSELs and two home-made flip-chipped 2x2 microcavity LED arrays. For doses between 5.10(6) Gy and 1.310(7) Gy the VCSELs show a threshold current increase lower than 20 % and an output power decrease lower than 10%. These values are even smaller if the VCSEL is operated at a higher temperature. At a dose of 3.14.10(7) Gy, one VCSEL still showed satisfactory operation. The microcavity LEDs suffered from a burn-in after radiation but recovered quickly when biased. Their output power decrease is comparable to that of the VCSELs, while their quantum efficiency is not much affected. The specifications of both types of devices are not substantially altered by high gamma doses and can therefore be considered for application in enhanced radiation environments