The corporate headquarters in organization design theory: an organizational economics perspective

Abstract

The corporate headquarters (CHQ) is an important part of the organization of large firms; yet, it is neglected in organization design theory. In this brief essay, I argue that we need a better understanding of the CHQ to further our understanding of the link between the top-management team and the rest of the organization, and to improve our understanding of the costs and benefits of hierarchical organization in general. I outline a number of organizational economics ideas that may help addressing these challenges.