Operating in the middle-power position: Conceptualising the role of regional headquarters through loaned and owned power

Abstract

This conceptual paper argues that the role and development of regional headquarters (RHQ) is dependent on and determined by intense power relations and political interactions with interdependent actors in the multinational enterprise (MNE). We demonstrate how studies to date on the RHQ have focused on exploring its bridging function as either administrative or entrepreneurial in managing trade-offs between global and local contexts. Equally, we suggest that research on MNE power and politics has concentrated on understanding the power dynamics that exist in the corporate headquarters (CHQ)-subsidiary relationship. By combining and enriching these disparate works of literature, we conceptualise how the RHQ role shapes, and in turn is shaped by, political struggles, diverging interests, and conflictual tensions at critical interfaces across the MNE. A novel contribution from our paper is the development of a typology that conceptualises how RHQ role variations are defined by the RHQ’s loaned power over subsidiaries as well as its owned power over CHQ.