eThesis - Kauppakorkeakoulun sähköiset gradut

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Regional headquarters can be defined as an intermediate organisational unit that is hierarchically situated between headquarters and subsidiaries. The corporate headquarters has given a certain mandated role for regional headquarters with a high decision making autonomy concerning the subsidiaries under its management in a definite geographical area.

This thesis focuses on the Finnish subsidiaries with regional headquarters mandate that foreign multinational companies have established over time. The purpose of this research is to find out how many regional headquarters identified in 1999 in Finland still continue operations in 2010 and whether the regional headquarters mandate still exits. The study seeks to find out if some of the subsidiaries have lost the regional headquarters mandate, have discontinued operations or have relocated the regional headquarters out of Finland.

The study analyses the ways in which the regional headquarters mandate can be lost and possible reasons and motives behind the decision for the subsidiary to lose its mandate or relocate out of Finland. In addition, the study examines the decision making level of the organisation hierarchy in the multinational company when making the decision for the subsidiary to lose the regional headquarters' mandate or relocate out of Finland. The lifespan of regional headquarters mandate is examined in the research, as well as, the relocation target countries.

The empirical research is qualitative and longitudinal in its approach based on the large sample of regional headquarters population in Finland. The data collection method is structured survey interviews for the managers of the Finnish subsidiaries.

The study recognizes three ways in which the regional headquarters mandate can be lost: regional headquarters' responsibility transfer to the parent, termination and relocation. Regional headquarters' relocations out of Finland to some other country are found to be common. The study finds that the most common motives behind the regional headquarters' mandate loss are parent multinational company's reorganisation, regionalisation, growth of markets and acquisitions. The decision of the regional headquarters' mandate loss is made most often in the company headquarters, but the Finnish subsidiaries also participate in the decision making. The thesis argues that when the subsidiary loses the regional headquarters' mandate, in many cases it can be considered as a more neutral phenomenon than failure and finds evidence that sometimes it is a relief from the subsidiary's point of view.