Boundary Spanning Activities of Corporate HQ Executives Insights from a Longitudinal Study

• Author: Tina C. Ambos,Julian Birkinshaw,Cyril Bouquet
• Published date: 01 June 2017
• DOI: http://doi.org/10.1111/joms.12260
• Date: 01 June 2017

Boundary Spanning Activities of Corporate HQ

Executives Insights from a Longitudinal Study

Julian Birkinshaw, Tina C. Ambos and Cyril Bouquet

London Business School; University of Geneva; IMD

ABSTRACT What are the boundary spanning activities undertaken by the Corporate

Headquarters (HQ) executives of a Multinational Corporation? We address this question through

a five-year longitudinal case study of one company as it shifted from a traditional HQ in one

location, to a dual HQ in two locations, to a virtual HQ split across multiple locations. By

observing how HQ executives prioritized their time over the course of this transition, we

identified four generic boundary spanning activities: two (spearheading and facilitating) focused on

making connections across boundaries, two (reconciling and lubricating) focused on overcoming

differences in worldview across boundaries. By considering these activities together, and how they

vary in importance over time, we show how each boundary spanning activity adds value to the

MNC and improves the effectiveness of the internal and external network. An important feature

of our study is that we operationalize boundary spanning at the activity level, i.e., in terms of the

specific actions taken by corporate HQ executives, to provide a more granular understanding of

how boundary spanning works in practice.

Keywords: boundary spanning, corporate HQ, HQ manager, HQ-subsidiary relations,

multinational corporation, subsidiary manager

INTRODUCTION

Boundary spanning is central to the raison d’^etre of the Multinational Corporation (MNC),

in that the MNC seeks to achieve competitive advantage through its capacity to bridge

geographical boundaries, internalize difficult trans actions, and tap into knowledge from

overseas locations. As MNCs mature, and their subsidiaries develop distinctive capabilities

of their own, the challenges in getting a complex set of geographically-dispersed activities

to work effectively together increases significantly – making the importance of boundary

spanning even greater. However, even though boundary spanning is intuitively a key

activity in the MNC, and the literature on boundary spanning has been in existence for

Address for reprints: Tina C. Ambos, University of Geneva, 40 Blvd. du Pont-d’Arve, Geneva, 1211,

Switzerland (tina.ambos@unige.ch).

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Journal of Management Studies 54:4 June 2017

doi: 10.1111/joms.12260

many years (e.g., Thompson, 1967; Tushman, 1977), we do not have a clear understand-

ing of how it works or what its consequences are (for partial exceptions see Kostova and

Roth, 2003 and Schotter and Beamish, 2011). In this paper, we address part of this g ap in

our knowledge by examining how the boundary spanning activities of corporate head-

quarters (HQ) executives add value to the MNC as a whole.

A common perspective is to view boundary spanners as specific individuals or units

who mediate between the external task environment and the focal organization (Thomp-

son, 1967; Tushman and Katz, 1980). In the networked MNC where organizational

units take on differentiated roles and responsibilities (Bartlett and Ghoshal, 1989; Noh-

ria and Ghoshal, 1997), these boundary spanners are likely to be specialized units on the

periphery of the organization, such as scouts located in technologically sophisticated

locations, corporate relations teams working with foreign governments, or business

development teams seeking to build partnerships with universities, customers, competi-

tors or suppliers. A considerable amount of research has been based on this perspective,

and has provided valuable insights into the mechanisms that individuals or organiza-

tional units in the MNCs use to tap into and leverage information that lies beyond their

formal boundaries (Doz et al., 2001; Klueter and Monteiro, 2017; Monteiro and Birkin-

shaw, 2016; von Zedtwitz and Gassmann, 2002; Yang et al., 2008).

A complementary view is that boundary spanners are the individuals or units who

mediate the flow of information within the MNC (e.g., between subsidiary units and cor-

porate headquarters). Based on this perspective, most senior subsidiary managers are

likely to act as boundary spanners as they have contacts with their counterparts in other

units, and they often spend significant amounts of their time reporting back to HQ or

working in cross-national teams to enable coordination (Schotter and Beamish, 2011). It

is also likely that managers in the corporate HQ act as boundary spanners, making

connections between internal subsidiary units and linking up with external actors such

as government bodies and prospective customers, with a view to increasing the effective-

ness of the networked MNC as a whole. While the discussion on the roles and value

added functions of HQ has recently gained momentum (Baaij and Slangen, 2013; Baaij

et al., 2012; Campbell et al., 2014; Kunisch et al., 2014; Menz et al., 2015; Nell and

Ambos, 2013), there has not yet been explicit attention given to what specific boundary

spanning activities HQ executives might undertake.

This paper seeks to address these gaps by focusing on the boundary spanning activities of corpo-

rate HQ executives in the differentiated network MNC. While acknowledging all the required

facets of the HQ’s role in terms of formal governance and oversight, the purpose of our

study is to explore the different ways HQ executives seek to add value and improve the effec-

tiveness of the internal and external network through boundary spanning activities.

We take an inductive approach in our study, because the literatures on boundary

spanning and on HQ roles have mostly remained separated and we need to investigate

if and how boundary spanning is relevant to HQ activities. We review the relevant

bodies of literature to distinguish the various value-adding activities corporate HQ exec-

utives can undertake, including those that involve boundary spanning. We then draw on

an in-depth longitudinal case study of one MNC – Softcorp – that went through an

unusual transition from a traditional (HQ-dominated) to a networked (multi-centre)

organizational model over a five-year period. Based on a definition of boundary

423Boundary Spanning Activities of Executives

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spanning as a specialized function that seeks opportunities to mediate the flow of infor-

mation between relevant actors in a focal organizational unit and its task environment,

we identify four boundary spanning activities undertaken by corporate HQ in Softcorp.

Two are well-known in that they involve making connections across boundaries: spear-

heading is about opening up relationships with external actors, facilitating involves linking

actors within the MNC. The other two are more surprising, in that they involve over-

coming differences: reconciling is about helping external actors and MNC managers to

understand each other’s point of view, while lubricating focuses on helping individuals

within the MNC to overcome biases and misperceptions about how they might work

together. By looking at all four activities together, and considering how they vary in

importance over time, we develop a novel integrative framework demonstrating how

HQ boundary spanning activities contribute to the effectiveness of a networked MNC,

and we consider the implications of this framework for future research.

THEORETICAL BACKGROUND

The notion of boundary spanning is well established, and it is a cornerstone of the open-

system perspective that sees organisations accessing information from their task environ-

ment through specialised individuals or units (March and Simon, 1958; Perrow, 1970;

Thompson, 1967; Tushman and Katz, 1980). There have been many prior studies of

boundary spanning in very different settings. For example, one strand focused on

boundary spanning individuals in R&D departments (Mudambi and Swift, 2009;

Tushman, 1977; Tushman and Katz, 1983; Tushman and Scanlan, 1981), another

looked at boundary spanning in teams (Ancona and Caldwell, 1988, 1992) and the

informational and representational roles boundary spanners play, and a third focused

on boundary spanning as a specific organizational function such as investor relations,

public relations or union lobbying (Aldrich and Herker, 1977; Friedman and Podolny,

1992; Rao and Sivakumar, 1999), where these units act as ‘buffers’ as well as ‘bridges’

(Meznar and Nigh, 1995). More recently, boundary spanning has also been studied in

the context of HQ-subsidiary relationships (Schotter and Beamish, 2011), with a focus

on the conflict-solving capacity of subsidiary managers.

While these studies have all taken somewhat different perspectives, they are consistent

with a definition of a boundary spanning as a specialized function that seeks opportunities to

mediate the flow of information between relevant actors in a focal organizational unit and its task environ-

ment. There are several important components to this definition. First, boundary span-

ning builds on a combination of expert knowledge, personal power and trust (Fleming

and Waguespack, 2007; Schotter and Beamish, 2011). Second, boundary spanning has

an entrepreneurial quality, in that it involves individuals undertaking action in response

to mediation opportunities (Kirzner, 1973; Shane and Venkataraman, 2000). In some

cases, actors inside and outside the organization are in a position to talk to one another

directly and there is no role for the boundary spanner; in other cases, they may not

know one another or may be unable to communicate effectively, in which case there is a

boundary spanning opportunity. Third, boundary spanning transpires at different levels

of analysis – sometimes it involves mediating between a team and the rest of the organi-

zation (Ancona and Caldwell, 1992), at other times it is about mediating between the

424 J. Birkinshaw et al.

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