“If Indonesia is the only G20 country in ASEAN then why are all major activities of our business being remote controlled managed from the corporate HQ in Singapore?” asked a senior Indonesian manager to his visiting functional superior during an employee engagement focus group we had facilitated.

The expatriate from the corporate HQ could offer no convincing answer beyond trite comments about standardization, best practice, coordination etc.

It was clear the staff wasn’t buying it but as typically happens “in the interests of time” the MC moved the discussion along and helped the HQ visitor move to less complicated things such as handing over long service awards and the buffet dinner.

But the unspoken observation of the majority was palpable in the atmosphere — what was the real value being created by the corporate HQ?

Large business groups and multinational corporations invariably end by creating a big corporate HQ. Clearly, there are merits in having a central point often close to the promoter, CEO and other functional directors.

Regulatory reporting, access to financial centers, tax friendly jurisdictions, geographic convenience, historical and legacy issues — all these often determine the location and structure of the corporate HQ.

However, in times of rapid globalization, technology powered information flow and access, instant connectivity and the irreversible surge of emerging markets dominance the need for having complex, overbearing and rigid HQs requires renewed examination.

In the contemporary management context an excessively bossy and controlling corporate HQ creates four damaging impacts. First, it hurts pride. It is funny to see visitors from corporate HQ gushing about the greatness about the markets and potential of China, India, Indonesia, Vietnam, Uganda, Poland or Chile only to catch the next flight and rush to their “safe and comfortable” environments in Singapore, Hong Kong, Dubai, London, Paris, New York or the like.

It would be OK if only the visitor was to decamp but often he takes back all the decision making authority, functional budgets, control over headcount numbers and programs to launch new products, campaigns or alliances.

Promising emerging countries, certainly those that figure within the G20 but also those on the periphery, can no longer be remote controlled managed.

They have their own distinct economic cycles, business practices, consumer buying behaviors, regulatory requirements, logistical constraints and HR issues.

The result can be serious strategic missteps. For example, if a HQ bureaucrat decides to “queue” countries for the launch of a major product category or technology platform then the decision is being driven by criteria and priorities determined offshore rather than customer centric needs on the ground.

ABN Amro, Motorola, KLM, Krispy Kreme, Electrolux and Pepsi are some famous brands that at some point had the potential to penetrate further in Indonesia but after some flashes of promise they have been sidelined by more country focused rivals both international and domestic.

Each of the referenced sectors — banking, telecommunications, airlines, snacks, home appliances and beverages — has seen a boom driven by consumption and market expansion.

While there might be a variety of reasons for inconsistent business development there can be little doubt that somewhere the Indonesia market opportunity got frittered in the layers of HQ bureaucracy.

The second casualty of top heavy corporate HQs is a lack of implementation focus. Too many generals cooking up individualistic strategies in their unaligned fiefdoms are a sure recipe for confusion.

The “silo disease” can be most symptomatic at head office with unnecessary duplication, over analysis and whimsical decision making.

When cronies of HQ bosses are thrust in senior positions in subsidiaries then these silo cracks can worsen.

Worse is when companies waste time in slicing the same pie further instead of expanding the pie. For example, over the last decade some foreign banks have been seen to be preoccupied with HQ driven value destroying exercises trying to classify and reclassify their existing clients into large, corporate, wholesale, commercial, MNC, domestic, SME, emerging, business banking or other “theme of the year” categories.

In the meantime local banks have swooped in on customers who are more interested in product, service and relationship delight rather than segmentation or nomenclature.

Unconnected or under-connected HQs also fail to deliver on an increasingly vital determinant of success in emerging markets — speed. The market and its choosy customer have no time to wait and even less time to give second chances to floundering companies.

Slow and tardy responses imply that the corporate HQ is taking the market for granted including investment opportunities.

While many foreign investors conveniently blame regulations for missing the mining sector bus the fact is that their corporate HQs were excessively picky in developing workable business models.

Now they fret on the sidelines as a new generation of entrepreneurs profitably exploits opportunities in coal and other commodities.

Finally, a bloated corporate HQ is something like a flabby beer belly — certainly not good for the morale and what is worse difficult to get back into shape. Once big HQ bureaucracies are set up then they find ways to expand their work and sphere of influence.

Reporting requirements are created, review meetings get scheduled, justifications need to be provided and there is extended and forced hand holding where none is required.

What is required instead is a more lean and agile HQ that acts as a facilitator rather than a blocker, that empowers rather than directs and that is driven by the subsidiary fully versed by ground realities rather than the other way round.

Lean and agile HQs can be the vital missing link between the potential many emerging market subsidiaries see but appear internally constrained to realize.

The columnist is CEO of international strategic consulting company IndonesiaWISE and a senior guest faculty at leading management institutions in the region.

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