Monday, April 15, 2013

Selective Attention and the Initiation of the External Knowledge Sourcing Process in Multinational Corporations

Read the working paper
INSEAD Working Paper 2013/47/ST

Multinational corporations (MNCs) frequently use their subsidiaries around the globe to identify new opportunities to access external knowledge. However, decision makers at headquarters are selective about which issues they attend to at any time, and hence some opportunities to transfer external knowledge are bound to be passed over. This study seeks to explain why some opportunities are more likely to be screened out, as well as the role played by subsidiary managers in capturing the selective attention of decision makers. I posit that behavioral and cognitive influences determine that decision makers are more likely to screen out those opportunities which have not been proven and run counter to what the MNC already knows. Conversely, I suggest that subsidiary managers‘ internal search, matching and selling endeavours significantly affect the likelihood that an opportunity to transfer external knowledge will get decision makers‘ attention. My hypotheses are tested using a proprietary database on 137 external knowledge-sourcing opportunities presented by subsidiary managers to decision makers in one of the largest MNCs in the telecommunications sector. After the addition of survey and publicly available data, regression analyses are performed on this enhanced database. The results support my hypotheses.