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    The attention stimulus of cultural differences in global services sourcing

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    Publication type
    FT ranked journal article  
    Author
    Peeters, Carine
    Dehon, Catherine
    Garcia-Prieto, Patricia
    Publication Year
    2015
    Journal
    Journal of International Business Studies
    Publication Volume
    46
    Publication Issue
    2
    Publication Begin page
    241
    Publication End page
    251
    
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    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.
    Keyword
    Cultural Differences, Global Sourcing, Attention Stimulus, Cost Estimations, Survey Method, Econometrics
    Knowledge Domain/Industry
    Strategy
    DOI
    10.1057/jibs.2014.30
    URI
    http://hdl.handle.net/20.500.12127/5032
    ae974a485f413a2113503eed53cd6c53
    10.1057/jibs.2014.30
    Scopus Count
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