Does corporate headquarters location still add value in the digital age?
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School of Business |
Master's thesis
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Authors
Date
2021
Department
Major/Subject
Mcode
Degree programme
Global Management
Language
en
Pages
124
Series
Abstract
Digital transaction platforms have transformed the way companies work in the value chain by fostering certain relationships that were not possible before. They use technology to connect various stakeholders into an online platform; therefore, their business model is not physically bound. The digital nature of platform companies calls for further studies on the value of their corporate headquarters (CHQ) location. With that, this study aims to understand the value-adding activities of CHQ’s location and how they are perceived in digital transaction platform companies. The study considers both geographical and physical aspects of CHQ’s location, denoting that both the geographical location and the office building of CHQ are researched. A qualitative methodology is applied using multiple case studies. Five case companies are selected with diverse operating industries and corporate headquarters locations. Data is collected solely from secondary sources through media content. 115 pieces of online content were collected for the study. The findings are mapped onto a theoretical framework using thematic analysis. The study findings indicate that platform companies purposefully choose CHQ’s location to increase innovation capability and maximize profitability. Innovation capabilities are fostered through three means: CHQ’s geographical location enables proximity to clusters of other technology headquarters, provides the availability of supporting resources, and taps into the availability of technical talents. Besides increasing innovation capabilities, CHQ’s location can maximize a company's bottom-line profitability if the area has an attractive tax structure and business-friendly government policies. Regarding the value-adding activities of CHQ’s office building, the results indicate that the platform companies perceive the home base office as a medium to increase innovation capability and do external branding. The home base office can enhance innovation capability by creating a knowledge-sharing environment that encourages employees to collaborate and share ideas. The home base office is also an effective medium to express the company's identity to the public. Since transaction platforms require the network effect to scale up and operate, a positive impression from the crowd is crucial to the company’s image. The CHQ office can add value to platforms by serving as a promotional channel to external stakeholders.Description
Thesis advisor
Piekkari, RebeccaKeywords
platforms, corporate headquarters, geographical location, office building, innovation capability, knowledge management