ISM week 3

Question 1

Types of organizational structures (in terms of the HQs relocations)

Answer 1

Functional (engineering, manufacturing, marketing); Divisional (divisions=products); Geographically divisional structure (divisions are based on the locations)

Question 2

What are the functions (the role) of the headquarters?

Answer 2

Entrepreneurial function (value creating; exploratory function)
Administrative function (loss preventing; exploiting function)

Question 3

When do companies locate divisional headquarters abroad (determinants of DHQ)?

Answer 3

• Degree of internationalization
• Number of different divisions
• Size
• The type of orientation the division has (R&D vs manufacturing-based)
• Foreign ownership
• The state ownership (if the state is a shareholder, the move is highly hard)

Question 4

What are the functions of the regional headquarters?

Answer 4

• Scouting
• Strategic stimulation
• Coordination/integrative function
• Signaling commitment
• Pooling/attracting resources

Question 5

What a RHQ might be like (typologies)

Answer 5

Initiator, coordinator, facilitator, administrator

Question 6

Incentives to short-distance HQ relocations (within EU f.e.)

Answer 6

• High taxation
• High emplyment rate (labor costs)
• Proportion of foreign sales

Question 7

Target country characteristics

Answer 7

Taxations, remoteness, foreign shareholders, ownership concentration (firms with high ownership are less likely to relocate. These are often family firms with strong national attachment).

Question 8

Tax regimes

Answer 8

Worldwide system, territorial system

Question 9

Types of tax inversions

Answer 9

Naked inversion, cross-border mergers