Headquarters disaggregation by SMEs: taking advantage of multinationality

Abstract

This study examines disaggregation of headquarters’ activities and executive management teams (EMTs) in the context of small- and medium-sized enterprises (SMEs), by analysing four cases of firms originating from the small and open economies of Finland and New Zealand. Based on these illustrative cases, we contribute to existing theory by showing that disaggregation in SMEs is different from characterizations of MNE disaggregation. SMEs have more complex configurations of activities, disaggregate more activities, and do so more quickly than MNEs. Their reasons for disaggregating are different from those of MNEs: in SMEs, HQ activities follow the EMT location and are a response to the challenges of internationalisation. Our results provide guidance to owners and managers of internationalizing SMEs about what to consider and how to configure activities when utilizing high-commitment international market entry modes.