The Emergence of a Transnational Elite In and Around Foreign-based Headquarters of MNCs

Abstract

Within international management it has become somewhat of an aspirational ideal that a truly global corporation should have no national home base (Ghemawat 2011). MNCs should transcend their national administrative heritage and become ‘placeless’ and stateless transnationals by moving their main global headquarters to neutral and strategically relevant locations (Birkinshaw, Braunerhjelm, Holm & Terjesen 2006). In practice, most MNCs and their main headquarters still remain firmly rooted in their home countries (Ghemawat, 2011; Strauss-Kahn & Xavier, 2009). However, there are indications that many MNCs are moving in the direction of a growing dispersion of headquarter activities with the use of foreign-based divisional and regional headquarters (Barner-Rasmussen, Piekkari & Björkman 2007; Benito, Lunnan & Tomassen 2011; Birkinshaw et al. 2006, Forsgren, Holm & Johanson 1995). The number of European Regional Headquarters for instance has increased by 76% over the past decade alone and a similar rise can be observed in the Asia-Pacific region (Nell et al. 2011). Today most headquarters are located in developed countries but going forward the number being placed in emerging countries is predicted to increase (McKinsey Global Institute, 2013). Regional or divisional headquarters are organizational units with a formal mandate to manage a region or a division within the MNC’s global structure, here termed foreign-based headquarters. They are often located in central, technologically advanced, internationallyoriented, metropolitan hubs where other MNC headquarters are similarly located, where there is easy access to major airports with direct flights across the globe and an international work force. In this paper we explore how the transnational professionals who manage and staff such foreign-based headquarters, develop a sense of community and identity based on an idea of being non-national which is closely linked with the ‘placelessness’ of the organizations in which they work. As such the paper aims to contribute to new perspectives on global elites in the context of MNCs addressing the sub-theme call for submissions exploring the emergence of transnational communities