Headquarters of tomorrow: Structures, value-added, and processes in the digital future

Digitalization, driven by big data analytics, automation, the internet of things, and Artificial Intelligence (AI), is reshaping company structures and processes. This transition is particularly impactful for headquarters (HQs), as digitalization affects, for instance, their roles, relationships with subunits, and value-adding capacities. While existing research has explored traditional HQ functions like subunit coordination and resource allocation, the impact of digitalization on HQ roles remains less understood. Our study, based on a survey with 220 managers from Austrian firms across various industries, addresses this gap by analyzing how digitalization is transforming HQs in terms of their structure, value creation, operational efficiency, and strategic decision-making. Our findings reveal a shift in HQ functions due to digitalization, with an emphasis on enhancing value creation over solely driving cost efficiency. Strikingly, more than half of the firms are not well prepared for these changes, which might also limit their expectations of potential benefits. Moreover, digitalization is expected to increase the strategic power and decision-making capacity of HQs, despite different perspectives on the future size and structure of HQs in this digital age. By depicting the transformative effect of digitalization on HQs, this study serves as a vital guide for policymakers and corporate decision-makers navigating this digital shift.