Week8_Mani et al. Yiran

Captive centers are wholly-owned by the multinational corporations (MNCs) to conduct the R&D and new product development offshore, which also refers to captive offshoring.  Previous research indicates that the performance of distributed work is adversely impacted by failures of cooperation, i.e., misaligned incentives, as well as failures of coordination. The authors analyzed survey data from 132 R&D CCs established by foreign multinational companies in India to understand how firms execute distributed innovative work.

There are two generic categories of coordinating mechanisms for building and maintaining common ground, namely, information sharing and modularization. The information sharing strategy involves ongoing communication between interdependent agents to dynamically update common ground. A modularization strategy involves limited ongoing interaction between the agents. The author aim to examine the moderation role of three task attribution: task routineness; task analyzability and task familiarity. The hypothesis are listed below:

Hypothesis 1A (H1A). With high interdependence,
higher levels of modularization will increase performance
only when task routineness is high; when task routineness is low, higher levels of modularization will decrease
performance.

Hypothesis 1B (H1B). With high interdependence,
higher levels of modularization will increase performance
only when task analyzability is high; when analyzability is low, higher levels of modularization will decrease
performance.

Hypothesis 1C (H1C). With high interdependence,
higher levels of modularization will increase performance
only when task familiarity is high; when task familiarity is low, higher levels of modularization will decrease
performance.

Hypothesis 2A (H2A). With high interdependence,
information sharing as a coordination mechanism will
increase performance only when routineness is low; when
routineness is high, higher levels of information sharing
will decrease performance.

Hypothesis 2B (H2B). With high interdependence,
information sharing as a coordination mechanism will
increase performance only when analyzability is low; when
analyzability is high, higher levels of information sharing
will decrease performance.

Hypothesis 2C (H2C). With high interdependence,
information sharing as a coordination mechanism will
increase performance only when task familiarity is low;
when task familiarity is high, higher levels of information
sharing will decrease performance.

Regarding the first set of Hypothesis.  Hypothesis 1A and 1b are supported, showing that Modularization improves performance only when routineness and analyzability are high. In terms of the second set of hypothesis, results are consistent with the interaction plots, which show that on average, information sharing improves performance for R&D work. However, a significant difference in slopes between high and low levels of task attributes is observed only in comparing projects of low versus high familiarity. The difference in slopes for the other
task variables is insignificant. Only Hypothesis 2C is supported.

The key contribution of this study lies in the careful explication of the conditions under which choice of investments in modularization versus information sharing yield different performance outcomes.It shows that the success of this strategy has to be evaluated based on the nature of the underlying work.