The Traveling Headquarters: The New Phenomenon of Temporary Headquarters Relocations

Abstract

Many headquarters (HQs) of multinational corporations (MNCs) that have substantial growth outside their home country or region face the problem that they have a limited understanding of their distant business and thus struggle in their value-adding parenting role. The existing solutions to this wide-spread problem, such as building up sophisticated control methods with expatriates, creating additional organizational layers with intermediary HQs, or creating a more diverse top management team, often give rise to new challenges that impair firm performance. In this study, I provide a new perspective on how HQs can deal with shifting market growth to distant host regions and also fulfil their value-adding parenting role to those subsidiaries. By drawing on the unique case of Starwood Hotels Inc., I elaborate a process analysis of how this specific organization temporarily relocated the HQ from the US to Shanghai and Dubai to improve its HQ’s value-added and contribute to the firm’s success in those new growth markets. In particular, I shed light on the process and the multi-level outcomes of this highly innovative undertaking. With my findings, I contribute to literature on HQs and their location choices, new organizational design approaches in MNCs, and strategic organizational change.