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Amazon's surprise plan for HQ2 is a bold experiment

The online retailer surprised the business world, and its Seattle hometown, on Thursday with the announcement that it would set up a second home base somewhere in North America, and staff the new campus with up to 50,000 employees.

Dividing teams, management experts say, can lead to costly duplication of efforts, create rival power centers and add layers of bureaucracy that slow down decision making.

CEO Jeff Bezos codified some of this thinking 15 years ago with an edict that has become equal parts corporate lore and business-school cliché: Teams should be broken up into self-directed units, clusters small enough that they could be fed with two pizzas.

Distinct manufacturing and research and development outposts are common for large global businesses, but corporations tend to prioritize having command and control centralized in a single location.

Tom Murphy, who advises retailers on corporate Strategy at North Highland, a consulting firm, said that given Amazon’s projections for its own growth, the company has no choice but to grow in multiple cities.

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Amazon's surprise plan for HQ2 is a bold experiment


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