EU Regional Headquarters: Implications for Host Countries and Skills of Domestic Labor Force

Diplomarbeit von Angelika Werth

Abstract:

The diploma thesis concentrates on regional headquarters and the effect they have on a host country's labor market and the skill level of its labor force. The first part of the thesis deals with the available literature giving an overview of the evolution of the topic and the most prominent issues and countries researched regarding regional headquarters. Moreover, definitions of transnational corporations, regional headquarters and the region of interest here are given in order to determine the scope of this thesis. The second part is empirical in nature. Based on the results of the literature review, a quantitative survey was conducted in order to examine the current situation of Austrian regional headquarters. Therefore, a questionnare was sent to all regional headquarters located in Austria. Furthermore, qualitative research appears in the form of two case studies. At the end of the thesis the results are summarized and recommendations are given for policy makers. The key results of the work are: RHQs actually have a positive effect on the domestic labor market, that is on the employment rate as well as on the level of skill.

Structure of the Diploma Thesis:

Each chapter is opened by a general introduction and closed by a sub-section which includes a summary and further research implications.

The reader is introduced to the topic at hand by a literature review in chapter 3. This section contains two main parts: the analysis of studies and articles published in academic journals; and the description of books and other types of publication. All authors quoted in the course of my work are already included in the review which implies that it provides the foundation of the upcoming chapters.

Chapter 4 builds the basis for the topic at hand. It defines the object of investigation, namely RHQs by using definitions provided by pervious authors. Of course, it takes a closer look at transnational companies which are the superior organization. Finally, sub-section 4.4. determines the scope of the region I chose to examine.

Section 5 identifies the most important skills RHQs demand from potential employees. In order to be able to do that, I first took a look at the different responsibilities an Austrian RHQ may assume. For this purpose, sub-section 5.2. deals with the tasks a RHQ undertakes in order to fulfill HQ's requirements and with the services a RHQ provides for its subsidiaries.

Chapters 6 and 7 present the empirical work of my thesis. Both analyze the RHQs currently located in Austria by using quantitative and qualitative research, respectively.

The former provides a list of all Austrian RHQs, including the nationality of the parent company, the industry type they are operating in, the number of staff employed worldwide and in Austria, the location, the geographic scope of their responsibilities, the tasks they assumed and the skills demanded by their employees. Chapter 7 contains case studies of the two most prominent Austrian RHQs in terms of number of employees.

Section 8 gives recommendations for Austria and its policy makers. First, it deals with economic development in general. For this purpose, I chose Vienna as an example because most Austrian RHQs are located in the capital city. Second, it elaborates the effect RHQs have on the Austrian labor market. Based on my literature review, I provide the reader with a list of positive impacts RHQs may have. Furthermore, the topics of direct and indirect employment are dealt with under separate headings.

The final chapter contains an overall conclusion, followed by acknowledgements, appendices and a comprehensive bibliography.

Table of Contents:

1.	ABSTRACT	1
2.	PREFACE	2
2.1	Problem Statement	2
2.2	Research Questions	3
2.3	Structure of the Diploma Thesis	3
3.	LITERATURE REVIEW	6
3.1	Introduction	6
3.2	Studies in Academic Journals	6
3.3	Other Publications	14
3.4	Lessons Learned	15
4.	DEFINITIONS	16
4.1	Introduction	16
4.2	Transnational Corporations	16
4.3	Regional Headquarters	20
4.4	Regional Focus	23
5.	SKILLS FOLLOW RESPONSIBILITIES	26
5.1	Introduction	26
5.2	Responsibilities of Regional Headquarters	26
5.2.1	U.S. Companies and Their European RHQs	26
5.2.2	Austrian RHQs and Their Subsidiaries in the CEEC	28
5.3	Skills	29
5.3.1	Introduction	29
5.3.2	Administration	30
5.3.3	Corporate Communications	30
5.3.4	International Experience	31
5.3.5	International Human Resource Management	32
5.3.6	Making and Implementing Decisions	34
5.3.7	International Marketing	36
5.3.8	Meetings	36
5.3.9	Purchasing, Logistics and Production	37
5.3.10	Thirst for Knowledge	37
5.3.11	View of the Company as a Whole	38
5.4	Lessons Learned	39
6.	RHQS IN AUSTRIA – QUANTITATIVE RESEARCH	41
6.1	Introduction	41
6.2	Methodology	41
6.2.1	The Study	41
6.2.2	Sample	42
6.2.3	Survey Design	43
6.3	Results	43
6.3.1	Section A	44
6.3.2	Section B	51
6.4	Discussion and Research Implications	53
7.	RHQS IN AUSTRIA – QUALITATIVE RESEARCH	54
7.1	Introduction	54
7.2	Siemens Group Austria	54
7.2.1	Corporate Social Responsibility	56
7.3	Generali Holding Vienna Group	56
7.3.1	Training and Development	58
7.3.2	Corporate Social Responsibility	59
7.4	Discussion and Research Implications	59
8.	RECOMMENDATIONS FOR AUSTRIA	60
8.1	Introduction	60
8.2	Regional Headquarters and the Economic Development	60
8.2.1	Vienna	60
8.2.2	Current Situation	61
8.2.3	Outlook	62
8.3	Regional Headquarters and the Labor Market	63
8.3.1	Positive Effects	63
8.3.2	Direct employment	66
8.3.3	Indirect Employment	67
8.4	Lessons Learned	68
9.	CONCLUSION	70
10.	ACKNOWLEDGEMENTS	73
11.	APPENDICES	74
12.	BIBLIOGRAPHY	77