Regionalization strategy and performance: The moderating role of industry dynamism and top management team diversity

This paper contributes to the debate about the performance implications of adopting a regional as opposed to a global strategic posture. The aim of this paper is to argue that the performance effects of a regionalization strategy vary based on the characteristics of the industry in which the MNE operates and the composition of its top management team (TMT).

This analysis is based on a cross‐sectional dataset of 211 large European MNEs headquartered in four Western European economies at the end of 2005.

Results show that firms adopting a regional orientation outperform MNEs with global strategic positioning. This positive relationship is less pronounced under conditions of industry dynamism and inter‐regional TMT diversity.

The study contributes to our understanding of whether and under what conditions MNEs benefit from adopting a regional as opposed to a global strategic posture.