• Absorptive capacity, socially enabling mechanisms, and the role of learning from trial and error experiments: A tribute to Dan Levinthal’s contribution to international business research

      Lewin, Arie Y.; Massini, Silvia; Peeters, Carine (Journal of International Business Studies, 2020)
      The concept of absorptive capacity (AC) of firms (Cohen and Levinthal 1989 and 1990) is a foundational feature of organizational learning and adaptation that has had enormous influence in international business (IB), and innovation studies and management research in general. In this tribute to Dan Levinthal, we discuss the close connection between AC and learning – two areas central to Dan Levinthal’s research – in relation to different contexts where AC comes into play in extant IB research. We discuss four specific aspects of the nexus of AC and learning in the context of IB: (1) bridging between intra- and inter-firm learning; (2) a routine-based framing of AC that emphasizes processes and capabilities underlying seeking, assimilating, and innovation in a global setting; (3) the role of socially enabling mechanisms, and (4) the logic of learning through trial and error experiments within firms and countries.
    • Fragmenting global business processes: A protection for proprietary information

      Gooris, Julien; Peeters, Carine (Journal of International Business Studies, 2016)
      This study shows that, when sourcing business services in foreign countries, the fragmentation of processes across production units acts as an operational-level adjustment variable for firms to adapt their information protection approach to the regulative environment of the host country they have selected and to the possibility to use internal controls over the activities performed abroad. We hypothesize that, when the above mechanisms are not available, firms are more likely to fragment processes across multiple foreign production units instead of collocating all process tasks in the same unit. Thanks to IT-enabled integration capabilities, firms can exploit the complementarities between the dispersed fragments of a process while reducing the misappropriation hazard of individual fragments. Empirical results and robustness tests are strongly congruent with these hypotheses. We find also that the propensity to turn to the process fragmentation protection mechanism increases with firm host-country-specific experience and with the alternative value of the proprietary information involved in the activity sourced abroad.
    • Home-host country distance in offshore governance choices

      Gooris, Julien; Peeters, Carine (Journal of International Management, 2014)
      This paper studies the effect of home–host country distance on the choice of governance mode in service offshoring. Using a Transaction Cost Economics approach, we explore the comparative costs of the hierarchical and contractual models to show that different dimensions of distance (geographic, cultural and institutional), because they generate different types of uncertainties, impact offshore governance choices in different ways. Empirical results confirm that, on the one hand, firms are more likely to respond to internal uncertainties resulting from geographic and cultural distance by leveraging the internal controls and collaboration mechanisms of a captive offshore service center. On the other hand, they tend to respond to external uncertainties resulting from institutional distance by limiting their foreign commitment and leveraging the resources and local experience of third party service providers. Finally, we find that the temporal distance component (time zone difference) of geographical dispersion between onshore and offshore countries plays a dominant role over the spatial distance component.
    • Innovation strategy and the patenting behavior of firms

      Peeters, Carine; Van Pottelsberghe, B. (Journal of Evolutionary Economics, 2006)
      This paper investigates whether firms’ innovation strategies affect their patenting behavior, as measured by both the probability of having a patent portfolio and the number of active patents held. Three main dimensions of an innovation strategy are taken into account: the relative importance of basic research, applied research and development work in total R&D activities, the product or process orientation of innovation efforts, and the extent to which firms enter into collaborative R&D with other institutions. The major findings can be summarized as follows: (1) taking into account the various dimensions of an innovation strategy turns out to approximate the patenting behavior of firms better than the traditional Schumpeterian hypotheses related to firm size and market power; (2) there is a positive relationship between the patent portfolio of firms and an outward-oriented innovation strategy characterized by R&D partnerships with external organizations - scientific institutions and competitors in particular; (3) process-oriented innovators patent less than product-oriented innovators; (4) a stronger focus on basic and applied research is associated with a more active patenting behavior; (5) firms that perceive high barriers to innovation (internal, risk-related or external barriers) have smaller patent portfolios; (6) the perceived limitations of the patent system do not significantly influence the patenting behavior, suggesting that firms patent for other strategic reasons than merely protecting innovation rents.
    • La diversité culturelle dans les délocalisations : apports nuancés de deux littératures

      Peeters, Carine; Point, S.; Garcia-Prieto, Patricia; Davilla, A. (Management International, 2014)
    • Microfoundations of internal and external absorptive capacity routines

      Lewin, Arie Y.; Massini, Silvia; Peeters, Carine (Organization Science, 2011)
    • Not all international assignments are created equal: HQ-subsidiary knowledge transfer patterns across types of assignments and types of knowledge

      Duvivier, Florence; Peeters, Carine; Harzing, Anne-Wil (Journal of World Business, 2019)
      Drawing on 50 semi-structured interviews in a case study of a Belgian multinational and its foreign subsidiary in Poland, we develop new insights into how using different types of international assignments (long-term expatriation, short-term expatriation, short-term inpatriation) allows a HQ-subsidiary dyad to transfer different types of knowledge (declarative, procedural, axiomatic, relational), both from and to HQ, during and after the assignment. We show how each type of assignment acts as a unique knowledge transfer channel, and why it is critical that HQ-subsidiary dyads use an appropriate combination and sequence of international assignments reflecting their specific knowledge transfer needs.
    • Sources of variation in the efficiency of management innovation processes: The role of absorptive capacity routines, managerial attention and organizational legitimacy

      Peeters, Carine; Massini, Silvia; Lewin, Arie Y. (Organization Studies, 2014)
      Drawing on two in-depth case studies, this paper develops a conceptual model of how absorptive capacity routines and their underlying processes of evolution influence the efficiency of management innovation adaptation processes. The model highlights three important relations. First, although different configurations of absorptive capacity routines can lead to the successful implementation of the same management innovation – namely the reconfiguration of firms’ value chains through sourcing of business services from offshore countries – the sequence of developing routines, their adequacy, and the interdependencies fit between routines partly explain how rapidly and seamlessly a firm is able to implement a management innovation. Second, we identify managerial attention and organizational legitimacy as two critical and interrelated sources of variation of the efficiency in the process of adopting and adapting management innovations. Finally, attention direction by a top-level internal change agent is more effective than local problemistic search to foster managerial attention and organizational legitimacy to both the management innovation to be adopted, and the need to develop and put into practice an appropriate set of absorptive capacity routines.
    • The attention stimulus of cultural differences in global services sourcing

      Peeters, Carine; Dehon, Catherine; Garcia-Prieto, Patricia (Journal of International Business Studies, 2015)
      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.
    • The changing rationale for governance choices: Early vs. late adopters of global services sourcing

      Manning, Stephan; Massini, Silvia; Peeters, Carine; Lewin, Arie (Strategic Management Journal, 2018)
      This paper studies how the logic of firm governance choices varies as a function of the time of adoption of particular sourcing practices. Using data on the diffusion of global business services sourcing as a management practice from early experiments in the 1980s through 2011, we show that the extent to which governance choices are affected by process commoditization, availability of external service capabilities, and past governance choices depends on whether firms are early or late adopters. Findings inform research on governance choice dynamics specifically in highly diverse and evolving firm populations.
    • The top-line allure of off-shoring

      Lewin, Arie Y.; Peeters, Carine (Harvard Business Review, 2006)
    • The underexplored role of managing interdependencies fit in organization design and performance

      Caspin-Wagner, Keren; Lewin, Arie Y.; Massini, Silvia; Peeters, Carine (Journal of Organizational Design, 2013)
      We argue that research on interdependence fit is an underexplored variable in strategy and organization research and is the missing variable that differentiates the performance of “built to last” organizations from the rest. Interdependence fit relates to how well activities and processes within the organization or between the organization and its environment mutually reinforce one another. We suggest that the major reason underlying variation in firm performance may be rooted in differences of whether and how firms manage interdependencies within and across an organization’s strategic activities. Progress on researching interdependence fit could be realized by focusing on strategically important activities, and the research challenge is to identify the unobservable processes and routines that underlie interdependence fit.
    • Why are companies offshoring innovation? The emerging global race for talent

      Lewin, Arie Y.; Massini, Silvia; Peeters, Carine (Journal of International Business Studies, 2009)
      This paper empirically studies determinants of decision by companies to offshore innovation activities. It uses survey data from the international Offshoring Research Network project to estimate the impact of managerial intentionality, past experience, and environmental factors on the probability of offshoring innovation projects. The results show that the emerging shortage of highly skilled science and engineering talent in the US and, more generally, the need to access qualified personnel are important explanatory factors for offshoring innovation decisions. Moreover, contrary to drivers of many other functions, labor arbitrage is less important than other forms of cost savings. The paper concludes with a discussion of the changing dynamics underlying offshoring of innovation activities, suggesting that companies are entering a global race for talent.