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Map of Asia-Pacific region showing the Association of Southeast Asian Nations–10 countries, Greater China, and Japan.
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For Japanese multinational corporations (MNCs), glocalization (dochakuka) refers to the challenge of balancing the need to adapt foreign subsidiaries to local circumstances and to integrate corporate operations as a whole. This article addresses the regional headquarters (RHQ) strategies of electronics MNCs in the Association of Southeast Asian Nat...
Contexts in source publication
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... business operations in Asia, North America and Europe independent of the head office in Japan. What this means is the ability to manage the complete product cycle: design and research, engineering, manufacturing and sales and marketing.” We address this claim for the RHQs of Japanese electronic MNCs in the Association of Southeast Asian Nations (ASEAN). ASEAN was formed in 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand and more recently expanded to include Myanmar, Cambodia, Laos, and Vietnam (Sekiguchi and Noda 1999; see Figure 1). Within economic geography, there is a long- standing interest in the location dynamics of firms and an appreciation for the spatial separation of control functions such as headquarters (HQs), RHQs, and research and development laboratories from operating units and of the implications for the spatial division of labor (de Smidt and Wever 1990; Pellenbarg and Wever 2008; Rice and Lyons 2010). In the last two decades, studies of Japanese business organizations have become an important segment of this literature (Florida and Kenney 1994; Dicken and Miyamachi 1998; Edgington and Hayter 2000). Especially in the auto and electronics industries, it is recognized that the emer- gence of globally competitive Japanese firms has been predicated on distinctive ways of organizing production within factories and among firm–supplier networks (Sheard 1983; Patchell 1993; see also Friedman ...
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... head-office decision makers and operations in Japanese corporations reinforce these concerns. Further, for Japanese firms, ASEAN is culturally as well as geographically closer than the European Union (EU) or North America, implying less pressure to decentralize functions from head offices (A. Aoki and Tachiki 1992; Hasegawa 1998). On the other hand, as the production backyard of Japan, Japanese subsidiary operations have been established there for a long time, are of a substantial size, and, if originally perceived as a source of low-cost labor for export operations, the market potential of the region has expanded rapidly. In addition, cultural proximity is relative. ASEAN and the Asia-Pacific region as a whole is huge and diverse and simply cannot be treated as if it were like Japan itself as a business environment. Moreover, ASEAN’s position within Asia has rapidly changed over the last ten years or so. Nonetheless, it would seem reasonable to assume that Japanese MNCs would at least first pursue glocalization to its further extent in Asia, not least ASEAN. The remainder of the article tests this hypothesis. The analysis draws on fifty personal interviews conducted between 2005 and 2008 with managers of seventeen Japanese electronics MNCs in Tokyo, Osaka, Singapore, Kuala Lumpur, and Bangkok and with Japanese Embassy offices in ASEAN, together with various offices of the JETRO. The sample of firms surveyed in this research is similar to those included in our previous research (see Edgington and Hayter 2000). Corporate interviews were semistructured and identified the functions, size, and geographic scope of their ASEAN-based RHQs; links with Japanese head offices; and changes over time. Secondary data were gathered from official corporate reports and the Toyo Keizai Shimpo database of overseas subsidiaries of Japanese MNCs (Toyo Keizai Shinpo 2006–2008). The seventeen companies surveyed are in closely related electronics industries, specifically, the final goods industries that produce either consumer electronics (e.g., TV sets and washing machines) or commer- cial electronics (e.g., telecommunications equipment and computers) and the component industries that produce basic building blocks for electronic products (e.g., microprocessors, transistors, or integrated circuits; Table 1). Some firms, such as Matsushita Electric Industries (Panasonic), Sony, and Pioneer, are focused on audiovisual and household items. Others, such as Toshiba and Hitachi, have a history of general electric power operations; and in the case of NEC and Fuji Electric, their background also includes telecommunications. Oki, Omron, and Alps are very large parts supply firms. These companies have operations in Greater China, comprising (Mainland) China, Hong Kong, and Taiwan (Figure 1), as well as in ASEAN. Although there are more subsidiaries recorded in Table 1 for Greater China, Japanese electronics firms such as Hitachi, Mitsubishi Electric, Sony, and Panasonic have had more than thirty-five years of experience manufacturing within ASEAN, whereas they only commenced production in China since the 1990s. Nonetheless, many Japanese electronics firms have already located separate RHQs for China in Hong Kong, Shanghai, or Bei- jing (Edgington and Hayter 2006). Indeed, by the time China entered the World Trade Organization in 2001, all Japanese electronics firms had established holding companies and production and sales strategies for China that were organized quite separately from their operations in Southeast Asia (Edgington and Hayter 2005). The questions asked concerned the range of functions performed at each ASEAN location, the relationships between the regional office and other units of the corporation (both corporate HQ and other ASEAN subsidiaries), and important trends over the past decade or so, especially since the Asian financial crisis in 1997–1998. Interviews held at parent company HQs in Japan provided additional information on ASEAN RHQs and RHQs elsewhere. Each ASEAN RHQ was assessed in terms of four categories of activities: logistics, sales support, corporate services, and production support (Table 2). Consistent with trends in other industries and the behavior of MNCs based elsewhere, most Japanese electronics MNCs chose Singapore as their RHQ location for ASEAN (Table 3). When interviewed, only three firms reported that they had no RHQ in ASEAN, and only one had chosen a location other than Singapore; two others had located substantial RHQ functions in Malaysia and Thailand (these exceptional cases are discussed later). According to a 2005 survey carried out by the Japanese Chamber of Commerce, around 18 percent of all 880 Japanese companies in Singapore (including trading companies and banks) recorded some kind of RHQ activity, but those in the ...
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... address this claim for the RHQs of Japanese electronic MNCs in the Association of Southeast Asian Nations (ASEAN). ASEAN was formed in 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand and more re- cently expanded to include Myanmar, Cambodia, Laos, and Vietnam (Sekiguchi and Noda 1999; see Figure 1). ...
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... companies have operations in Greater China, comprising (Mainland) China, Hong Kong, and Tai- wan (Figure 1), as well as in ASEAN. Although there are more subsidiaries recorded in Table 1 for Greater China, Japanese electronics firms such as Hitachi, Mitsubishi Electric, Sony, and Panasonic have had more than thirty-five years of experience manufacturing within ASEAN, whereas they only commenced pro- duction in China since the 1990s. ...
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... In Japan, the notion of 'global localization' is often attributed to Sony Corporation's CEO Akio Morita. Sony employed it in corporate advertising and branding strategies in the 1980s and 1990s (Edgington and Hayter, 2013). However, global localization predates the emergence of the very term 'glocalization' (see US News and World Report, 1990). ...
The article explores the relationship between globalization and the information and communications technology (ICT) revolution. The impact of ICTs does not conform to the globalization paradigm’s suggestions. To address this issue, this article argues that glocalization and localization should be viewed as autonomous processes. Glocalization offers a means for the interpretation of the ICT revolution in techno-social relationships. It leads to the reconstruction of places through digital means or newfound third spaces of glocality. In the first instance, ICTs often lead to a reconstruction of local places, whereas in the second instance, ICTs lead to glocalities.
... The second is their role as nodes or hubs for knowledge and information, essentially as knowledge brokers in multinational networks (Lunnan & Zhao, 2014). As a result of coordinating operations in distant locations, foreign headquarters usually pick up and transfer information between the host and home regions (Asakawa & Lherer, 2003;Li et al., 2010;Budhwar, 2012;Edgington and Hayter, 2013;Amman et al., 2014). This intermediate position in terms of knowledge management permits the improvement of information flow and connections between MNC locations. ...
In this study, we argue that European countries’ extensive relationships with former colonies represent a location factor that attracts foreign headquarter investments. The strategic role of foreign headquarters as coordinators, opportunity detectors, and global bridgeheads makes the location choice of headquarter activities sensitive to historical-based institutional connections. Drawing on a sample of 2230 foreign headquarter investments in Europe, we find that the stronger the combined effect of historical connections and current economic relationships with former colonies, the higher the probability of attracting headquarter investment projects. We refer to this combined characteristic as colonial-based connectivity . The study findings support the hypothesis that past colonial relationships and historical context influence FDI decisions and location preferences. We contribute to the literature by advancing the understanding of foreign headquarter location choices, and by demonstrating the importance of historical context in international business research. We emphasize how the former colonial influence continues to confer advantages upon some countries, including the attraction of FDI.
... By all accounts, the term came into existence around the late 1980s or early 1990s (Words to Watch, 1990;Roudometof, 2015a). The Japanese precursor idea of 'global localization' is conventionally cited as the central idea behind the notion of 'glocal' (Edgington & Hayter, 2012). By way of prefacing the following overview, it is important to point out that the survey of the literature does not vindicate the popular academic mythology that glocalization emerged within the context of management or business studies. ...
This Introduction aims to sum up the current state of affairs in intellectual conversations about glocalization and to situate this handbook within the context of the ongoing scholarly production on this topic. In order to accomplish these objectives, the chapter is structured into three parts. In the first section, the discussion tracks the contours of
the intellectual discussions on culture and globalization, and situates the terms ‘glocal’ and ‘glocalization’ in scholarly discourse. The discussion then moves on to locate glocalization within academia’s current division of labour. In this regard, special attention is placed on the different disciplinary perspectives on the theme of glocalization and culture. The acknowledgement of different interpretations constrains the temptation to engage in some sort of disciplinary imperialism. In this chapter’s final part, the discussion shifts to the description of this volume’s objectives, the scope of restrictions with regard to coverage of different subtopics and fields, and the organizational structure of this collection. In addition to brief descriptions of individual chapters, there is a further effort to situate the different parts of the volume within broader scholarly preoccupations
... The future of Japanese manufacturing is linked to developments in Asia. As with the semiconductor industry, electromechanical companies are highly relevant to Asian industrialisation (Encarnation, 1999;Edgington and Hayter, 2012). These changes and the historical context are changing Japan's position in the spatial division of labour in Asia. ...
This study evaluates the current situation and challenges of reshoring in the Japanese manufacturing industry, focusing on the semiconductor industry, which once dominated the world. After a recent document analysis and qualitative interviews with firms’ representatives and policymakers, it is apparent that the globalised semiconductor industry is unlikely to reshore to Japan even amid supply chain disruptions due to the coronavirus disease 2019 pandemic. A review of Japan’s semiconductor-related industries, such as semiconductor manufacturing materials, validated that they are embedded in Asian production networks and need to be optimised within a regionalised production system.
... Specifically, Heenan and Perlmutter (1979) note that a key function of regional headquarters is to supervise multiple operations in "geographic blocks". In a study on Japanese MNCs, Edgington and Hayter (2013) claim that the primary responsibility of the regional headquarters is to devolve power and control geographically. Overall, these studies imply that an MNC may have a stronger motivation to establish regional headquarters when its operations are concentrated in certain countries or regions. ...
This article introduces a new concept of international spatial distribution to study the international diversification behaviors of multinational corporations (MNCs). Drawing upon spatial research, this new approach measures and analyzes the geographic diversification patterns of MNCs based on two important spatial dimensions: distance and concentration. By leveraging a sample of the largest U.S. MNCs, we propose a new typology of MNCs based on their international spatial distribution. As a complement of existing approaches to the research on international diversification strategies, we suggest that our concept sheds new light on the location behaviors of MNCs.
... The role of IUs as co-parents seems to be crucial for certain processes, such as innovation (Decreton et al. 2017;Dellestrand 2011), firm upgrading (Pananond 2013) and cross-regional expansion (Edgington and Hayter 2013;Pla Barber et al. 2018). In this sense, questions like 'How should parenting functions be distributed and changed among co-parents?' and 'How can IUs leverage parenting capabilities to improve internal legitimacy? are still under-researched. ...
Due to the dispersion of headquarters’ activities across organizational and geographical boundaries, intermediate units (IUs) are emerging as a key actor in international business. These units are intermediate structural layers between headquarters (HQ) and local subsidiaries with specific HQ responsibilities. Through a systematic review of 68 studies published between 1996 and 2020, we develop a conceptual framework that integrates complementary streams of theoretical and empirical research with IUs as the focal unit of analysis. Our aims are to disentangle how the main theories in this field address the antecedents of IU creation, and explain the dynamism in the roles and functions of IUs and their outcomes. We also propose a conceptualization of IUs as co‐parents in a dynamic system in which parenting functions are shared by IUs and headquarters. Finally, we highlight avenues for future research, emphasizing opportunities to advance the understanding of IUs using different theoretical lenses that may help scholars position their work within the broader stream of literature.
... Furthermore, some studies on Japanese firms clearly indicate the unique aspects of their regionalization in the Asia region. Edgington and Hayter (2013) elaborated the globalization of Japanese firms particularly in Asia. Adopting a comparative case study of Japanese electronics manufacturers, they concluded that these firms' Asian regional headquarters in Singapore were more integrated with the corporate network than other regional headquarters in the EU and North American, revealing the unique nature of regionality in Asia. ...
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... Singapore's strong relation with the JMA, for the most part, is due to its highly strategic position as the main "regional hub" in Southeast Asia and, to a wider extent, in East Asia and the Pacific (Yeung and Olds 1998). Apart from its geographic proximity to the neighboring countries in Southeast Asia, Singapore provides state-of-the-art transportation and telecommunication infrastructures and a broad range of producer services, mainly financial services, that attract many large TNCs to locate their regional HQs therein (Edgington and Hayter 2013;Perry 1992). Among other sectors, the regional HQs in Singapore are mainly dominated by manufacturing firms due to the presence of a large number of production centers across selected Southeast Asian countries, including Indonesia (Holt et al. 2006;Yeung and Olds 1998). ...
... Nonetheless, the specific activities being performed by these regional HQs greatly depend on each firm's strategy and regional organizational structure. For instance, with a large manufacturing and sales presence of Sony and Panasonic in Southeast Asia, the coordination role played by their regional HQs in Singapore is composed of four main functions, that is, logistics, sales and marketing, corporate services, and engineering and manufacturing (Edgington and Hayter 2013). In comparison, the Singaporean-based regional HQs of Ricola, a Swiss pharmaceutical and confection firm, only focuses on marketing and distribution, given that all manufacturing activities are carried out in Switzerland (Grünig and Morschett 2017, 200; see also Yeung, Poon, and Perry 2001, 176). ...
... Since Thailand has been strategically positioned as the "Detroit of the East" (Busser 2008), Bangkok has undisputedly become the nation's center of gravity in the automotive industry and beyond. One important pull factor driving the establishment of Bangkok-based regional HQs is the presence of a large amount of manufacturing centers in Bangkok metropolitan area and its neighboring regions, such as Chonburi and Rayong (Edgington and Hayter 2013). Thailand is indeed the largest automotive producers in Southeast Asia and the twelfth largest in the world (Natsuda and Thoburn 2013). ...
This paper presents an analysis of the position of the Jakarta metropolitan area (JMA) in global inter-urban networks. Our starting point is our aim to provide a more nuanced understanding of the JMA’s connectivity in world city networks (WCNs). To this end, we steer clear of top-down approaches, which tend to analyze cities in singular taxonomies of global prominence, and instead propose a framework that is attuned to the JMA’s contexts to provide an alternative and complementary reading of how the JMA has been inserted into the WCN. To this end, by drawing on the interlocking network model, which helps to proxy inter-urban networks based on the multi-locational operations of manufacturing firms, we examine the JMA’s network positionality on the global and national scales. The results provide evidence of the JMA’s global inter-city relations being strongly geared toward East Asian cities. In addition, the results suggest that the JMA cannot be detached from its national geography, as evidenced by its strong connections with cities located on the island of Java.
... which has recently received increasing attention (Edgington and Hayter, 2013;Kähäri and Piekkari, 2015;Laamanen et al., 2012;Piekkari et al., 2010). Furthermore, as much of the previous work on RHQ is conceptual, qualitative and cross-sectional in nature, our large-sample quantitative study contributes to this body of research with empirical stability, generalisability and longitudinal evidence on the reasons for RHQ mandate loss. ...
The fluidity of regional headquarters (RHQ) mandates is a core aspect of disaggregating HQ activities in MNCs. While ‘slicing' of global value chains has received attention in previous research, the parallel disaggregation of management activities has not. Our longitudinal study of 374 RHQ between 1998 and 2010 redresses this omission by asking why RHQ lose their mandates. We apply the concept of absorptive capacity and find two different explanatory mechanisms for full and partial mandate loss driven by RHQ-specific capabilities and location-specific capabilities. Full mandate loss is associated with deficient RHQ-specific capabilities and realised absorptive capacity. By contrast, partial mandate loss is driven by an RHQ's lack of the location-specific capabilities to respond to local changes, leading to removal of mandates for some subunits only. The distinction between full and partial loss offers a more nuanced and granular explanation of how geographic regions of MNCs are composed. This article is protected by copyright. All rights reserved.
... Our finding that RHQs are established far more frequently for financial risk mitigation relative to RMMs (23%-8%) underscores this point. This is particularly salient for Japanese MNEs, which have traditionally operated in a largely centralized manner (e.g., R&D in subsidiaries coordinated with HQ through expatriate engineers), with most RHQs functioning as administra- tive units with little autonomy (Edgington & Hayter, 2013;Lehrer & Asakawa, 1999). Consequently, we find far fewer RHQs established for R&D purposes relative to RMMs (11%-18%). ...
... Hobdari (2012) Survey RHQs' influence on corporate strategy is positively related to their autonomy and signalling behaviour. In addition, the specific characteristics and extent of a RHQ mandate moderates this relationship Edgington and Hayter (2013) Interviews Singapore is the dominant RHQ centre for Japanese firms operating in the Asian market. While several decision- making functions have been devolved to RHQ, R&D remains centralized and involves HQ engineers working with subsidiaries Survey RHQs by being embedded across local, regional, and global markets occupy an important intermediate position, since HQ is weakly embedded in local markets, while subsidiaries are strongly embedded locally, but less so regionally and globally K?h?ri (2015) Survey and interviews ...
In multinational enterprises (MNEs), regional management centres (RMCs) most frequently take the form of either dedicated regional headquarters (RHQs) or regional management mandates (RMMs) assigned to operating subsidiaries. We identify a series of critical differences in characteristics and performance between RHQs and RMMs, using a longitudinal sample of 855 Japanese RMCs across 41 countries. We also investigate parent-level differences between MNEs with distinct RMC configurations. We propose a structural complement to regional strategy extensions of the integration-responsiveness framework, and provide an important large sample baseline, aiding new theoretical and empirical research into MNE regional management strategy and structure.
