The size, structure and performance of corporate headquarters

Abstract

This paper examines the unique functions of corporate headquarters in diversified firms and reports on a survey of the structure and staffing of more than 600 headquarters in Europe, the United States, Japan, and Chile. It explores the extent to which corporate headquarters are contingent on size of the company, corporate strategy (corporate portfolio and corporate structure and policies), and governance system (ownership and regulation, and country of origin). The results confirm that factors in each of these areas are important determinants of the size and structure of headquarters. Performance data suggest that these findings are not merely descriptive but that corporate headquarters should be designed to fit the corporate strategy. Although the results are capable of alternative interpretations, analysis provides no support for the view that 'lean and mean* headquarters lead to better performance. Copyright ? 2007 John Wiley & Sons, Ltd.