Inside business: The perils of planet HQ

NOT SO long ago, the corporate centre was the place to be. Even if you were not the chief executive or a senior lieutenant, if you were at headquarters you were where the action was.

This is not to say that all corporate centres were alike back in the 1980s. Oil companies and other large organisations still had substantial staffs, reflecting their spread in terms of not just geography but range of operations.

In fact, in some cases, the bureaucracy became so immense that those working there lost sight of the fact that they were supposed to be supporting their colleagues out in the field and almost became ends in themselves.

To many people, the antithesis of such a bloated approach was the style associated with such companies as Hanson and Williams, where a lean corporate centre kept a close eye on operations by means of teams of single-minded managers charged with keeping the business units on the straight and narrow.

However, different as the two methods were, they were also alike in one regard: they did not entrust managers of the individual parts of the business with much power.

Of course, it is possible to argue that, in the former example, an executive in a far-flung part of the organisation could get on with things pretty much as he saw fit because the people at headquarters were too concerned with their own manoeuvrings to notice. But when it came down to it, he would still have to have initiatives approved by them, often via a labyrinthine process. In the latter example, of course, there was little room for individual decision-making; those running various parts of the organisation were often doing not much more than obeying orders.

With the recession of the early 1990s the distrust of initiative only intensified. Senior executives battened down the hatches, conglomerates went out of fashion and tight budgets and other cost controls became the order of the day.

Then, gurus and consultants started to notice that just as the big companies seemed unable to stem the flow of job losses, a new breed of entrepreneurial companies was springing up, seemingly oblivious of an economic downturn. Flexibility, adaptability and speed became the order of the day.

ABB, the Swiss-Swedish engineering colossus created by the indefatigable Percy Barnevik, became a popular model. Its tiny Zurich head office and the constant globe-trotting of Mr Barnevik became legendary, even if few people could quite identify what it was that the company's various far- flung operations did.

Although the odd company has gone so far down this route that calls to the head office can sometimes go straight to the chief executive, few have really embraced the idea with such fervour.

Nevertheless, coalface cynics who feel that they always bear the brunt of cutbacks will be pleased to see there is a definite trend towards smaller headquarters. According to a study by Towers Perrin, a management consultancy, there has been a dramatic fall in the size of head-office staff. Where once a centre that was actively involved in running the company housed more than 1,600 people, it would now have 600. Centres less directly involved in operational matters are smaller still.

However, encouragingly efficient as all this sounds, it is not all good news. The study published last week finds that there is a great deal of confusion about the role of corporate centres.

This obviously affects those who work at the centre, but the consultants also find that those in the operating units are often unclear about what head office is doing for them. One of the most obvious problem areas is human resources. Executives are often unsure whether central staff are setting mandatory corporate policy, offering guidelines, or providing services.

The solution appears clear: it matters less what style of corporate centre a company goes for than how it communicates that style. Even a small and lean corporate centre is a drain on resources if it does not know what it is supposed to be doing.

Start your day with The Independent, sign up for daily news emails
Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
PROMOTED VIDEO
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
News
ebooksNow available in paperback
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Sport
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Life and Style
tech
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Carlton Senior Appointments: Sr Wealth Manager - San Francisco - Inv AdvisoryFirm

$125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager – In...

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum