Sustainable location policy ¿ a view from inside of the corporation

The “war for new locations” has recently gained wide attention. Mostly overlooked is however the question whether these establishments are sustainable in the sense of lasting for a longer period. Furthermore, most of the literature seems to define the corporation as a black-box. But concentrating on the long-term effects requires a closer look at the internal side of the company. A sustainable location policy depends on a long-term internationalisation strategy of and organisational set-up within the multinational organisation. Internationalisation motifs of companies now entering Europe are connected to strategic assets (or knowledge)-seeking strategies. The regional or local unit’s chances to exist in the long run depends on the distribution of internal control and responsibilities. Both the effects of internationalisation strategy and configuration are ultimately connected to the (power of) respective managers and units. Thus, the contributions of micro-political actions and power games on the location’s stability are discussed. This article argues that hard-fact location incentives will attract the settlement of new (regional) headquarters in the short-term, but will not be sufficient to maintain a branch; rather, fulfilling these requirements is merely the ticket to enter the game. Consequently, soft location factors are becoming increasingly important when choosing a location policy. The final considerations are devoted to the integration of previous deliberations to answer the question from inside of the corporation: What can help a regional policy to boost sustainable locations in addition to well-known advice? My recommendations comprise: choosing carefully whom to attract; staying attractive with always new specials offers; raising sunk cost; and using micro-politics and networks.