Tuesday, April 05, 2005

The optimal size of the Corporate Center

An interesting short article for the topic of this forum can be found in the HBR of April 2005 on the added value of corporate headquarters. Michael Goold and David Young have investigated whether lean headquarters perform better, as many people think.
Surprisingly, they found that there is no evidence that a lean and mean headquarters is associated with superior financial performance.
Because corporate centers add value in different ways, depending on a firm's strategy and the businesses in which it competes, the appropriate size and nture of staff functions are bound to differ, too.
The bottom line is: There is no standard or ideal model or size for a succesful headquarters and the Corporate Center should simply reflect the chosen corporate strategy.