The attention stimulus of cultural differences in global services sourcing
Publication type
Journal article with impact factorPublication Year
2015Journal
Journal of International Business StudiesPublication Volume
46Publication Issue
2Publication Begin page
241Publication End page
251
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Show full item recordAbstract
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, EconometricsKnowledge Domain/Industry
Strategyae974a485f413a2113503eed53cd6c53
10.1057/jibs.2014.30