Division Headquarters Go Abroad — A Step in the Internationalization of the Multinational Corporation

In 1986, SKF, the Swedish ball-bearing company was reorganized into a multi-divisional structure (M-form) and a speciality bearing division was formed. At the same time the US ball-bearing company MRC with a strong position in some speciality bearing lines was acquired. The headquarters (HQ) of the speciality bearing division were placed in the USA with the executive manager of the former North American regional HQ as division executive. Also in 1986, Alfa Laval, the old Swedish multinational corporation (MNC) with roots in separator technology, was divided into 12 divisions. The German subsidiary Bran+Luebbe GmbH became a division of its own headed by the former subsidiary executive with HQ in Germany. Further, in the 1980s the packaging division of SCA, one of the leading Swedish pulp and paper corporations, expanded rapidly in the European market through a number of foreign acquisitions. In 1989, division HQ were moved from Sundsvall in Sweden, where corporate HQ were situated, to Brussels in the new centre of their European market. The top management was unsatisfied with earlier attempts of managing at a distance. Thus, when foreign operations increased and became a larger part of the division’s total operations it was decided to move division HQ abroad.