In this report, we examine how digitalization influences the roles, structures and responsibilities of headquarters (HQs). We draw on 67 survey responses from top managers in corporate, divisional, and regional HQs located in Denmark and find that digitalization is expected to fundamentally change how HQs will operate. The vast majority of study participants spot a wide variety of opportunities arising from HQ digitalization and particularly highlight the potential for increased value creation as compared to cost savings. Enabled by better and timelier information for decision-making, HQs will improve their value-creating activities and will simultaneously involve themselves more in their subunits' businesses. At the same time, HQ managers see potential for efficiency gains through digitalization resulting in slightly smaller HQs and reduced overhead costs. Additionally, HQ managers will also be affected by digitalization through a rise in data-driven decision-making (as opposed to intuition) and personal accountability. Nonetheless, digitalization also entails a multitude of challenges. In this vein, over half of the HQs recognize that they lack not only a clear understanding of how digitalization will affect their HQ, but also crucial resources and capabilities for the digital future, such as digital talent and know-how. Overall, we show that the expectations towards and preparedness to adapt to digitalization differ across HQ types, industries, and organizational levels.
|Series||Study Report. Institute for International Business. Vienna University of Economics and Business (WU)|