ABSTRACT
Introduction Intensive competition forces multinational enterprises (MNEs) to constantly scrutinise every subsidiary’s performance. However, for the creation of truly global competitive advantages, MNEs need a growth and innovation strategy that effectively utilises and channels the interplay between subsidiaries, divisions, corporate headquarters and holdings. Such a strategy must be flexible and open enough for local excellence without losing too much of its global reach and sustainability. While previous approaches, such as the core competence framework, emphasise commonalities between business units, contemporary concepts in strategic management explicitly focus on an MNE’s centre of global coordination and analyse how well its strategies and skills fit the needs and opportunities of various subsidiaries and divisions. Successful headquarters (Hqs), irrespective of whether they coordinate a specific division or the whole corporation, do not only create more value than they cost, they also create a competitive advantage and more stakeholder value than any of their rivals. To accomplish this, four ways are identified: direct influence on each subsidiary as an entity; promotion of lateral linkages within the MNE; provision of functional leadership; and corporate (portfolio) development. The more productivity pressures force MNEs to disperse their activities throughout the world and the more competitive pressures impel close coordination of these operations, the more global growth strategies play a pivotal role in the success of the whole company.
