What Are Corporate Headquarters?

The company headquarters is the production and operation management center and economic accounting center of construction and service enterprises. The headquarters is generally composed of general manager, deputy general manager and several functional departments. According to the conclusions of British scholars Gerry Johnson and Kevan Scholes, the company headquarters generally assumes four roles: portfolio manager, reconstructuer, synergy manager, and parental developer.

headquarter

The company headquarters is the production and operation management center and economic accounting center of construction and service enterprises. The headquarters is generally composed of general manager, deputy general manager and several functional departments. According to the conclusions of British scholars Gerry Johnson and Kevan Scholes, the company headquarters generally assumes four roles: portfolio manager, reconstructuer, synergy manager, and parental developer.

Chinese name

headquarter

Foreign name

Gerry & Kevan, 2004: 176

Solid

Management Center and Economic Accounting Center

On behalf of

Reorganizer

Portfolio manager

The headquarter of the portfolio manager type refers to "the company's headquarters that represents the financial markets and shareholders and increases the value created by each business unit through financial markets or more efficient means" (Gerry & Kevan, 2004: 176). This form of headquarters is mainly responsible for identifying good assets for acquisition, selling assets that no longer have development prospects, and at the same time selling those business units that have been integrated and significantly increased in value. Under this management mode, the number of managers at the headquarters is small, and the management of business units is more achieved through the determination and assessment of financial indicators, and rarely interferes with specific business activities, and business units have relatively large Self-management space.

Reorganizer

The headquarters of the reorganizer and the portfolio manager are basically similar, except that it is more involved in the operation of the business unit, and improves the value of the business unit by improving performance, and then obtains by selling the business unit that has created performance value.

Synergy manager

The headquarters of the type of synergy manager means that the business units it manages can directly share the resources of the headquarters, and the business units under management have common management skills or abilities, and have the willingness and mechanism to cooperate with each other. The company headquarters also has this The ability to add value through synergy. For example, a company such as Lenovo Computer not only manufactures computers, but also produces other products such as mobile phones and servers. Computers, mobile phones or servers are business units managed by the headquarters. They share regional platforms (such as the Shanghai platform) and distribution channels. In addition, they have many experiences and skills that can be shared in production, sales, and marketing. They can be shared between different business units through coordination at the headquarters.

Ability nurture

The headquarter management of the capacity fosterer type refers to: the business unit uses the core capabilities of the headquarters to tap its own resources (people, finance, etc.), and cultivate new capabilities (technology, brand, etc.). Specifically, the public relations capabilities, strong financial capabilities, the ability to use a unified brand, and the ability to cultivate international managers in the communication between the headquarters and government departments are all examples of such capabilities.

The above four forms of headquarters are, to some extent, the first two are not actually our traditional headquarters, but a form of business model, or a very loose headquarters. In the latter two forms, we should pay attention to it, because most group companies have adopted the headquarters form of synergy effect managers and capacity cultivators.

After understanding the form of the headquarters, which is why the headquarters exists, one question that needs to be answered is the role that the headquarters should play. The core point is that the headquarters needs to add value. Still Gerry Johnson and Kevan Scholes, clearly stated that the headquarters should increase the overall value of the enterprise in at least 10 ways.

First, it should "improve efficiency." Group headquarters can often produce scale effects, especially in terms of internal infrastructure construction, such as unified marketing channels, unified corporate planning, and unified strategic image, which can enable their business units to directly adopt without investment in this area. . In addition, the headquarters' efficiency and cost advantages in unified procurement can also be fully utilized by business units.

Second, the corporate headquarters should have "expertise" that branches or business units do not have. For example, the headquarters' capabilities in cost analysis and market analysis; in the use of IT means, they have some advantages that business units do not have, which can provide support for business units and create value.

Third, "financing and investment capabilities." Because of its unified brand and asset management capabilities, the headquarters has stronger negotiating advantages and negotiating capabilities in the docking process with governments and financial institutions, which can provide policy and financial support for the development of business units, especially Investment support.

Fourth, "cultivate the spirit of innovation through training and learning." The strength and value of the headquarters should also be reflected in the ability of the headquarters to provide timely training and learning opportunities, including the establishment of a group training system and the sharing of a unified training platform, thereby creating an atmosphere of learning and innovation and forming an innovative corporate culture.

Fifth, "reducing risk." Taking advantage of the group's advantages, the headquarters can often enter new markets relatively easily. At the same time, in market analysis and cooperation negotiation, it can consider issues in a longer-term perspective, thereby avoiding the risks brought by the implementation of business units on their own.

Sixth, "Build a strong organizational image." For example, GM, Panasonic, Microsoft and other companies, although their products are very diverse, but the brands are very uniform, which makes new products (business units) have greater brand competitiveness.

Seventh, "coordination and cooperation", a strong headquarters can make the most advantageous and efficient allocation and combination of resources between different business units. The headquarters can provide opportunities for cooperation between internal business units and between enterprises and the outside. .

Eighth, "establish standards and determine performance." The company's headquarters can use performance management to determine goals and evaluate standards to improve overall corporate performance.

Ninth, "strategic and tactical decisions." As the headquarters of a group of companies, it is necessary to establish clear strategic goals, which is what we often call vision and mission. At the same time, the headquarters should and must be involved in corporate restructuring, mergers, acquisitions, and transfers.

Tenth, "the ability to do things in the long run." As mentioned in the ninth above, only when a company has established a long-term strategic goal that is recognized by the whole company, can the company develop cohesion and the sense of mission of the employees will be enhanced. Therefore, the headquarters must stand at a high level and have the mind and ability to plan for the future. It is especially important that this mind and ability can be recognized by various business units.

Although most people will not deny the above 10 aspects of the role that the headquarters should have, according to the survey results of the ConferenceBoard Company in the United States, 44% of the company headquarters are not very clear about their positioning. The conflict between headquarters and business units has a long history and will continue. It is difficult to create value for the company if you do not know the headquarters you are positioning. On the contrary, it will reduce the value. All kinds of chaos are manifested in the following: for example, the company lacks a vision or the goals set by the company do not conform to business rules, and the headquarters has become increasingly bureaucratic and corporate politics because of its departure from the market. The headquarters cannot provide effective support to its subordinate enterprises, but it increases unnecessary workload. and many more. In the long run, the trust of the headquarters and branches will gradually decrease, the contradictions will intensify, the centripetal force of the company will gradually shrink, and the company will be surrounded by mountains, which will result in low efficiency, increased costs, and reduced performance.

Therefore, the company's headquarters must reflect the clear positioning of the corporate headquarters from the organizational structure, which is actually determining the rights and responsibilities between the headquarters and business units, the way of resource allocation, and the management and reporting relationship.

As Chandler mentioned, "Enterprise management decisions are reflected in two aspects. One is strategic decision-making, that is, the long-term allocation of existing resources and the development of new resources to ensure that the company can continue to develop healthily in the future; the other This is a tactical decision, that is, to ensure that the existing resources that have been configured are used efficiently and stably. " In this sense, headquarters should focus more on "strategic decision-making," while business units should focus more on "tactical decision-making."

Therefore, adopting an organizational structure suitable for the reality and future development of the enterprise is not only a manifestation of the clear positioning of the headquarters and business units, but also a good coordination of the relationship between the headquarters and business units, which is conducive to the coordinated development of the enterprise.

Finally, one point for business units to consider is how to face the centralized management of the company's headquarters. In fact, everyone is like this. Within their own jurisdiction, they hope that they have a high degree of decision-making and resource deployment power, and support and emphasize centralized management. However, in the face of the centralized management of one's own superiors, there will be many reasons to resist to varying degrees. There are negative effects of the insurmountable disadvantages of centralized management of the headquarters here, but there are also many business units that have negatively resisted the benefits of centralized management of the headquarters.

According to the Most Admired Companies survey completed by Hay Group and Fortune magazine, The most admired companies pay more attention to the goals of the entire company than to local plans, and they do better in centralized management. OK. 90% of 'Global Leaders' say they have successfully placed their subsidiaries around a common strategic vision, compared to 78% of the average company. "

The chief executive officer of BHP Billiton Australia said that the deployment of head office control senior management personnel is a good thing for all departments. Subsidiaries may think this is too bureaucratic, but companies can face a talent pool of 100,000 people. Now that human resources have become the first resource, the management, deployment and appointment of human resources by the headquarters are very important and necessary.

Regarding those claims that the headquarters authority limited the creative play of business units, Emun Kelly, president of the Global Enterprise Network, said: "The centralized management method actually gives the local business greater power. The company's goals set out a clear definition for overseas managers. Performance targets, creating space for local innovation capabilities and flexibility. "

Novartis Chairman and CEO Wei Sile said more directly: "If you have established organizational discipline, then all frameworks, processes and standards will not make leaders difficult, but let them have freedom of movement. Freedom only It only makes sense within the scope of the license. "

Therefore, the key question is not whether to manage the headquarters, but how to manage the headquarters. The headquarters has a clear positioning, and then according to the business layout of the enterprise, to find the appropriate organizational structure, and through reasonable management measures, centralized management in strategic and important resources, while authorizing tactical decisions and management to business units. If so, it can free the corporate decision-making layer from daily affairs, have time, information, and a sense of responsibility to formulate and evaluate long-term plans, allocate important resources in a timely manner, and at the same time, those who have undertaken daily management responsibilities and enjoyed the necessary For power business unit managers, the management efficiency will be greatly improved, the management responsibility will be greatly enhanced, and the overall efficiency of the enterprise will be improved accordingly.

I'm afraid this is the result that all managers in headquarters and business units expect.