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Clusters and Regional Management Structures by Western MNCs in Asia: Overcoming the Distance Challenge

Author

Listed:
  • Bruno Amann

    (University of Toulouse)

  • Jacques Jaussaud

    (University of Pau et des Pays de l’Adour (UPPA))

  • Johannes Schaaper

    () (Kedge Business School
    University of Pau et des Pays de l’Adour (UPPA))

Abstract

Abstract Recent literature suggests that multinational companies pursue regional rather than global strategies. Therefore, this study investigates regional management structures, using French multinational companies (MNCs) in the Asia–Pacific region as an empirical context, to address two research questions: first, do MNCs split Asia into subregions and, if so, what are the resulting clusters of countries and clustering criteria? Second, what kind of regional management structures do MNCs establish in Asia, and what are their roles and functions? Factors, such as MNC size, the size of host markets, or the nature of their activities, might explain some differences. The authors conducted 77 face-to-face interviews with expatriated managers in charge of the subsidiaries or regional management structures of 47 French MNCs located in 11 countries in Asia, then crossed these data with secondary sources of information. Nearly half the MNCs subdivide the Asia–Pacific region into clusters of countries, where they locate regional management centres (regional headquarters, regional offices, distribution centres, local offices) with substantial functions and roles. The main drivers of a regional Asian strategy and organisation are the overall size of the MNC and its sales in Asia; the presence of manufacturing activities does not exert any influence. This research identifies ten clusters of countries in Asia, determined by the French MNCs in our sample, on the basis of four main criteria: market orientation/economic logic, geographical and institutional proximity, cultural differences, and the MNC’s own characteristics. Smaller MNCs do not slice Asia into clusters but rather centralise regional decisions and control procedures, implementing few regional management centres in Asia and giving them limited roles and functions.

Suggested Citation

  • Bruno Amann & Jacques Jaussaud & Johannes Schaaper, 2014. "Clusters and Regional Management Structures by Western MNCs in Asia: Overcoming the Distance Challenge," Management International Review, Springer, vol. 54(6), pages 879-906, December.
  • Handle: RePEc:spr:manint:v:54:y:2014:i:6:d:10.1007_s11575-014-0222-7
    DOI: 10.1007/s11575-014-0222-7
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    References listed on IDEAS

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    1. Jörg Freiling & Sven M. Laudien, 2012. "Regional Headquarters Capabilities as Key Facilitator of the Coordination of Transnational Business Activities," ZenTra Working Papers in Transnational Studies 02 / 2012, ZenTra - Center for Transnational Studies, revised Oct 2012.
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    4. Mori, Tatsuo, 2002. "THE ROLE AND FUNCTION OF EUROPEAN REGIONAL HEADQUARTERS IN JAPANESE MNCs," EIJS Working Paper Series 141, Stockholm School of Economics, The European Institute of Japanese Studies.
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    Cited by:

    1. Rodolfo Metulini & Massimo Riccaboni & Paolo Sgrignoli & Zhen Zhu, 2017. "The Indirect Effects of FDI on Trade: A Network Perspective," Working Papers 04/2017, IMT Institute for Advanced Studies Lucca, revised Mar 2017.
    2. repec:bla:jomstd:v:54:y:2017:i:8:p:1144-1169 is not listed on IDEAS
    3. repec:bla:worlde:v:40:y:2017:i:10:p:2193-2225 is not listed on IDEAS

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