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The attention stimulus of cultural differences in global services sourcing

Author

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  • Carine Peeters

    (1] Solvay Brussels School of Economics and Management, Université libre de Bruxelles, Brussels, Belgium[2] Vlerick Business School, Gent, Belgium)

  • Catherine Dehon

    (Solvay Brussels School of Economics and Management, Université libre de Bruxelles, Brussels, Belgium)

  • Patricia Garcia-Prieto

    (Solvay Brussels School of Economics and Management, Université libre de Bruxelles, Brussels, Belgium)

Abstract

Contrasting with extant research centred on the organizational challenges of sourcing services in culturally distant countries, we show that cultural differences between home and host countries do not prevent firms from achieving their cost savings targets. Instead, the effect is positive, both for the captive and outsourcing governance models. Using insight from social psychology research and the theory of organizations, we build the argument that the positive effect is due to cultural differences providing an attention stimulus for decision-makers to thoroughly gather and process information on the costs and benefits of global sourcing, thereby reducing the risk of cost estimation errors. The empirical validation uses a data set of 624 global services sourcing initiatives obtained from the Offshoring Research Network, complemented with multiple external sources of cross-country data on cultural differences, languages, geographic distance and education levels. The main contribution of the article is to add much needed nuance to the otherwise monotonic negative view of cultural differences in extant global sourcing literature. Moreover, the original theoretical framework and resulting attention stimulus argument we develop open new avenues for research on the consequences of cultural differences in international business operations more broadly.

Suggested Citation

  • Carine Peeters & Catherine Dehon & Patricia Garcia-Prieto, 2015. "The attention stimulus of cultural differences in global services sourcing," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(2), pages 241-251, February.
  • Handle: RePEc:pal:jintbs:v:46:y:2015:i:2:p:241-251
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    Cited by:

    1. Ruey‐Jer “Bryan” Jean & Daekwan Kim, 2021. "Signalling Strategies of Exporters on Internet Business‐to‐Business Platforms," Journal of Management Studies, Wiley Blackwell, vol. 58(7), pages 1869-1898, November.
    2. Lorentz, Harri & Kumar, Mukesh & Srai, Jagjit Singh, 2018. "Managing distance in international purchasing and supply: a systematic review of literature from the resource-based view perspective," International Business Review, Elsevier, vol. 27(2), pages 339-354.
    3. Lilac Nachum & Peter J. Buckley, 2023. "Spatial and temporal distances in a virtual global world: Lessons from the COVID-19 pandemic," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(6), pages 1121-1133, August.
    4. Knein, Ernesto & Greven, Andrea & Bendig, David & Brettel, Malte, 2020. "Culture and cross-functional coopetition: The interplay of organizational and national culture," Journal of International Management, Elsevier, vol. 26(2).
    5. Mol, Michael J. & Brandl, Kristin, 2018. "Bridging what we know: The effect of cognitive distance on knowledge-intensive business services produced offshore," International Business Review, Elsevier, vol. 27(3), pages 669-677.
    6. Niccolò Pisani & Joan Enric Ricart, 2018. "Offshoring Innovation to Emerging Countries: The Effects of IP Protection and Cultural Differences on Firms’ Decision to Augment Versus Exploit Home-Base-Knowledge," Management International Review, Springer, vol. 58(6), pages 871-909, December.
    7. Thakur-Wernz, Pooja & Bruyaka, Olga & Contractor, Farok, 2020. "Antecedents and relative performance of sourcing choices for new product development projects," Technovation, Elsevier, vol. 90.
    8. Srivastava, Saurabh & Singh, Shiwangi & Dhir, Sanjay, 2020. "Culture and International business research: A review and research agenda," International Business Review, Elsevier, vol. 29(4).
    9. Andrews, Daniel S. & Fainshmidt, Stav & Ambos, Tina & Haensel, Kira, 2022. "The attention-based view and the multinational corporation: Review and research agenda," Journal of World Business, Elsevier, vol. 57(2).
    10. Vendrell-Herrero, Ferran & Gomes, Emanuel & Bustinza, Oscar F. & Mellahi, Kamel, 2018. "Uncovering the role of cross-border strategic alliances and expertise decision centralization in enhancing product-service innovation in MMNEs," International Business Review, Elsevier, vol. 27(4), pages 814-825.
    11. Jingyu Li & Yigang Pan & Yi Yang & Caleb H. Tse, 2022. "Digital platform attention and international sales: An attention-based view," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(8), pages 1817-1835, October.
    12. Martina Musteen & Mujtaba Ahsan & Taekyung Park, 2017. "SMEs, Intellectual Capital, and Offshoring of Service Activities: An Empirical Investigation," Management International Review, Springer, vol. 57(4), pages 603-630, August.
    13. Bryan Jean, Ruey-Jer & Kim, Daekwan & Sinkovics, Rudolf R. & Cavusgil, Erin, 2024. "The effect of business model innovation on SMEs’ international performance: The contingent roles of foreign institutional voids and entrepreneurial orientation," Journal of Business Research, Elsevier, vol. 175(C).
    14. Stephan Manning & Silvia Massini & Carine Peeters & Arie Y. Lewin, 2018. "The changing rationale for governance choices: Early vs. late adopters of global services sourcing," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2303-2334, August.
    15. Pisani, Niccolò & Muller, Alan & Bogăţan, Paula, 2018. "Top Management Team Internationalization and Firm-level Internationalization: The Moderating Effects of Home-region Institutional Diversity and Firm Global Focus," Journal of International Management, Elsevier, vol. 24(3), pages 239-256.
    16. Ruey-Jer “Bryan” Jean & Daekwan Kim & Kevin Zheng Zhou & S. Tamer Cavusgil, 2021. "E-platform use and exporting in the context of Alibaba: A signaling theory perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(8), pages 1501-1528, October.

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