![]() ![]() In a survey of 761 of the largest corporations in North America and Europe, which we conducted in collaboration with the Harvard Business School professor David Collis, almost a third of companies reported an increase in the number of corporate functions-and fewer than 10% reported a reduction-from 2007 to 2010. Meanwhile, new functions, in areas such as risk management and compliance, are emerging. The authors discuss these and other challenges and offer remedies.Īs companies with business units or divisions have become better able to standardize and centralize their operations, traditional headquarters functions such as finance, HR, IT, marketing, and strategy have increased in size and influence. ![]() In the fourth stage, which calls for change, the function’s managers may fall into the trap of looking for opportunities to redeploy their skills rather than acquiring new ones. In maturity, when it is well established and its mandate is fairly stable, it may spend too much time benchmarking and searching for best practices, diverting attention from the needs of its internal clients. In adolescence, the function may have a tendency to expand its activities without due regard for how that affects its relationships with the business divisions. Its mandate may be unclear, its staffing problematic, and its efforts to get up and running overhasty. In youth, for example, the function may not be seen as valuable by all the businesses. They learned that the performance of these functions may well be related to how they respond to the varying management challenges they face at different life-cycle stages. The authors combined their survey data with insights from structured interviews at large European multibusiness organizations to understand why corporate functions so often underperform and what might be done about it. At the same time, complaints about the performance of those functions were increasing. Leaders at three out of four companies believed that their functions’ influence had grown. A survey of 761 of the largest corporations in North America and Europe showed that the number of corporate functions had increased by about a third from 2007 to 2010. ![]()
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