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Japan–US differences and R&D investments in response to performance feedback

Author

Listed:
  • K. Skylar Powell

    (Western Washington University)

  • Eunah Lim

    (Western Washington University)

  • Valerie Alexandra

    (San Diego State University)

  • Mooweon Rhee

    (Yonsei University)

Abstract

We investigate effects of culturally situated differences in cognition on Japanese and US firms’ responses to performance feedback through R&D investments. Performance feedback research has mostly assumed a universal nature of decision makers’ cognition and responses. We posit firms from Japan should have a more holistic cognitive orientation than US firms, making them less responsive to problemistic and slack search mechanisms of performance feedback when making R&D investments. These expectations are largely supported in the context of 37 Japanese and 19 US automotive firms (546 firm-year-observations) from 2003 to 2019. We find further support using data on 106 global automotive firms (902 firm-year-observations), from 14 holistic or analytic oriented countries. This study establishes the culturally situated cognitive-orientation theoretical construct as a moderator of problemistic and slack search. Additionally, managers could adopt decision-making processes reflecting both holistic and analytic cognitive orientations while responding to performance feedback, to avoid biases.

Suggested Citation

  • K. Skylar Powell & Eunah Lim & Valerie Alexandra & Mooweon Rhee, 2025. "Japan–US differences and R&D investments in response to performance feedback," Asian Business & Management, Palgrave Macmillan, vol. 24(2), pages 218-248, April.
    • Handle: RePEc:pal:abaman:v:24:y:2025:i:2:d:10.1057_s41291-024-00286-1
    DOI: 10.1057/s41291-024-00286-1
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