Managing internal competition in multinational corporations: the role of home bases

This paper investigates the role of home bases in the management of internal competition. Prior research has not focussed on the possibility that the headquarters of multinational corporations can encourage internal competition and cooperation by making home bases participate in both or either of these activities. To verify this possibility, this paper first classifies home bases into three categories: home competitor, home coordinator, and home coopetitor. Next, case studies were conducted to clarify the role of home bases in each category. As a result, this paper finds that home bases can encourage internal competition by serving as competitors who have accumulated unique knowledge of improving their performance. This paper also finds that home bases can encourage knowledge sharing among subunits by serving as coordinators who exploit knowledge about activities of foreign units and trusting relationships with foreign units. Lastly, the characteristics of each category are examined.