Turning Liabilities of Global Operations into Assets: IT-Enabled Social Integration Capacity and Exploratory Innovation

Terence J. V. Saldanha (), Arvin Sahaym (), Sunil Mithas (), Mariana Giovanna Andrade-Rojas (), Abhishek Kathuria () and Hsiao-Hui Lee ()
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Terence J. V. Saldanha: Terry College of Business, University of Georgia, Athens, Georgia 30602;
Arvin Sahaym: Carson College of Business, Washington State University, Pullman, Washington 99164;
Sunil Mithas: Muma College of Business, University of South Florida, Tampa, Florida 33620;
Mariana Giovanna Andrade-Rojas: Nanyang Business School, Nanyang Technological University, Singapore 639798;
Abhishek Kathuria: Indian School of Business, Gachibowli, Hyderabad 500011, India;
Hsiao-Hui Lee: Department of Management Information Systems, National Chengchi University, Taipei 116, Taiwan

Information Systems Research, 2020, vol. 31, issue 2, 361-382

Abstract: Although the ability to produce exploratory innovations is important for firm performance, firms face difficulties in producing exploratory innovations because knowledge is often distributed across cultures and geographies. In this study, we examine whether information technology (IT) helps firms to overcome the liabilities of global operations particularly when it comes to creation of exploratory innovations. We argue that information technologies that promote social integration facilitate more novel knowledge recombinations that help to overcome the difficulties arising from global operations. We draw on the knowledge-based view of the firm and hypothesize that IT-enabled social integration capacity influences exploratory innovation by enabling firms to leverage global cultural diversity and global geographical dispersion. Our empirical analyses using archival panel data from 120 public U.S. manufacturing firms from 2003 to 2014 support these hypotheses. A key implication of our results is that IT helps firms to achieve greater exploratory innovation by turning the potential liabilities of cultural diversity and geographical dispersion associated with global operations into assets.

Keywords: exploratory innovation; information technology; social integration capacity; globalization; liabilities of globalization; capabilities; globalization; global cultural diversity; global geographical dispersion; Hofstede; cultural distance (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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