Abstract: Aside from emphasizing target setting, high-level monitoring, and aligning incentives, the strategy literature provides very little guidance on how headquarters of a large multi-business corporation should interact with its business units to create and capture value. We examine Wesfarmers Ltd. (Australia) because the long-term high performance of this unrelated conglomerate is unexpected by much of the strategy literature. Our investigation promises to shed light on effective management practices. Our preliminary research indicates, contrary to what the literature expects, the Wesfarmers CEO and headquarters (HQ) staff are deeply involved in defining, monitoring, and redefining the operational goals at the business unit level and the means (strategies and initiatives) to accomplish them. Furthermore, HQ adjusts its management practices to respond to particular needs of each business unit.

Abstract: The purpose of this paper is to review literature on regional headquarters (RHQ), its evolution over time and assess whether it will constitute a new, emerging field. Using systematic literature review, over 40 academic journal articles, book chapters and working papers were analyzed, covering a period from 1967 to 2013. Three focus areas were identified: the RHQ roles and reasons for establishing them, location and relocation issues, and RHQ life cycles and evolution. Finally, the arguments for performing research specifically on RHQ are discussed, with three characteristic attributes distinguishing them from other organizational forms, namely simultaneous principal-agent role, terminability and change-sensitive nature, leading to their inherent dynamism. Following these findings from the literature, suggestions are made for gaps in the current literature.

Abstract: Capital allocation has important implications for both firm performance and for firm risk. Despite this, we do not know all that much about the allocation process, including what determines the size and patterns of allocations. This study therefore takes a more holistic approach in examining the internal capital allocation process by focusing on determinants at three broad level of organization: industry, firm, and business unit levels. This provides direction for future research by showing what determines or drives the allocation decision and also where potential misallocation may be most likely.

Abstract: Extant theory and empirical evidence suggest that diversification strategy carries benefits and costs. Similarly, structural choices within the organization also involve trade-offs. However, the joint performance effects of strategic and structural choices are largely under-researched. We investigate these effects in the setting of professional service firms (PSFs). Our theory development suggests an inverted U-shaped relationship between service line diversification and leverage (defined as the ratio between junior and senior professionals) on the one hand, and PSF performance on the other. We test these relationships using fixed-effects panel regression and polynomial response surface analysis (RSA) on data from 75 law firms from 2003 to 2012. We find inverted U-shaped performance effects of diversification and leverage, as well as evidence of a complementarity between diversification and leverage.