Overcoming the Liability of Outsidership—The Challenge of HQ of the Global Firm

We conceptualize the global firm as being a loosely coupled network of far-flung subsidiaries with hierarchically acting headquarters (HQ) that design a global organization to ensure support of its global strategic agenda. We argue that the process of HQ management in the global firm is a process characterized by uncertainty. Drawing on the Uppsala model for managing under uncertainty, we suggest that the source of uncertainty is a liability of outsidership derived from the fact that HQ is often not knowledgeable about the networks and actions of its subsidiaries. We then offer various actions that need to be taken by HQs to resolve that liability to improve on the efficiency of the coordination and management of the global firm.