Entries RSS · The truth about headquarter locations
One of the first thesis topics that was proposed to me, as part of my strategic management master, was to research why companies are located where they are. Turned out that this is some super-secret thing and there hardly is any data on it. Our assumption was that this must hence be strategically significant.
I abandoned the project, after making this super-complex mindmap about it. I decided, I just wasn’t interested enough in the topic and that the reason was probably a very boring thing, like taxes.
(click on pic to see full pdf in Scribd)
Yesterday, I had a pretty cool meeting with a software-company that has been running successfully for about 10 years. Only it was in the middle of nowhere, close to some Dutch village that you will never have heard of. After the meeting, I asked why on earth they had located there (no thesis-related motive at all)!? Turns out that when you start a company and start hiring locally, your loyal employees won’t be so loyal anymore if you decide to move to e.g. Amsterdam (about 2 hours away).
Sometimes the simplest answer can be hidden under a lot of complexity…
Vincent
Like
Related posts:
- Vincent van Wylick joining as a guest blogger
- My call: software companies can't take off well in financial centers
- The mystery of "ambition" and how it correlates with success
- Software, in short
- Raphaël Encaoua now an author on Tech IT Easy!
Tags: complexity, corporate headquarters, geography, simplicity, strategy, thesis
Business intelligence, Business strategy, Consulting, Education, Europe, Globalization, MNC, SME, Silicon Valley
I seem to recall a seminar by economic geographer Olav Sorenson (http://www.rotman.utoronto.ca/facbios/viewFac.asp?facultyID=Olav.Sorenson) where he made mention of some data to the effect that entrepreneuars will often have a bias towards starting businesses in their home towns (or where they went to college), and this might relfect built-up social capital or networks. This would be a precursor to the resultant dispersion of headquarters once industries became more established. Staff would not be the only ones reluctant to leave, so might the founders (who viewed networks etc as quite location-specific).
Unfortunately I can’t find which paper Olav was speaking about when he mentioned this finding.
Any way, I do think you’re on to an interesting topic (and one that International Business scholars have also spent a fair bit of time on – especially with the corssborder mergers and acquaitions literature).
Cheers,
Andre