How Does Performance Feedback Affect Boundary Spanning in Multinational Corporations? Insights from Technology Scouts

• Date: 01 June 2017
• DOI: http://doi.org/10.1111/joms.12252
• Published date: 01 June 2017

How Does Performance Feedback Affect Boundary

Spanning in Multinational Corporations? Insights

from Technology Scouts

Thomas Klueter and Felipe Monteiro

IESE Business School; INSEAD, Fontainebleau

ABSTRACT As much as prior research has shed light on the boundary-spanning processes of

global organizations and their (positive) impact on an MNC’s performance, whether, when

and how past performance ultimately shapes an MNC’s boundary-spanning activities remains

an open question in management research. To tackle these questions, we examine the

behaviour of technology scouts in global organizations who span organizational and national

boundaries to tap into novel knowledge and span internal boundaries to present this

knowledge to constituents inside the MNC. Drawing on the behavioural theory of the firm,

we propose that the intensity of organizational boundary spanning, the likelihood of spanning

national boundaries and the way technology scouts span internal boundaries to engage with

members inside the organization are sensitive to how the MNC has performed relative to its

aspirations. We support our theoretical expositions with insights gained from interviewing

senior industry professionals with direct experience in technology scouting in MNCs.

Keywords: global boundary-spanning process, managing knowledge boundaries, multina-

tional corporations, performance feedback, technology scouts

INTRODUCTION

The ability to tap into knowledge and technologies from outside an MNC’s boundary

has become a critical organizational activity to compete in environments characterized

by rapid technological change (Doz et al., 2001; Gupta and Govindarajan, 2000). The

focus of this paper is on the process by which managers in multinational corporations

(MNCs) span organizational and national boundaries to tap into external knowledge

and span internal boundaries to mobilize such knowledge within the organization (Mon-

teiro, 2015; Monteiro and Birkinshaw, 2017). While this process holds substantial

opportunities, it also poses immense challenges. MNCs have to overcome initial

Address for reprints: Thomas Klueter, IESE Business School, Avinguda de Pearson, 21, Barcelona 08034,

Spain (TMKlueter@iese.edu).

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C2016 John Wiley & Sons Ltd and Society for the Advancement of Management Studies

Journal of Management Studies 54:4 June 2017

doi: 10.1111/joms.12252

resistance based on ‘not invented here’ attitudes and prevent their ‘corporate immune

system’ from rejecting the knowledge they are trying to bring into the organization (Bir-

kinshaw and Ridderstråle, 1999; Carlile, 2002; Katz and Allen, 1982; Meyer et al.,

2011). Moreover, knowledge in rapidly changing environments is characterized by high

novelty, which makes managing knowledge across boundaries extremely challenging

(Carlile, 2004; Carlile and Rebentisch, 2003; Schotter et al., 2017).

In responding to these challenges, MNCs in a variety of industries have begun to

establish dedicated boundary-spanning units, often referred to as technology scouting

units, with the mandate to tap into novel external knowledge from other firms around

the globe and to present such external opportunities to other parts of the MNC (Birkin-

shaw and Hood, 2000; Gassmann and Gaso, 2004; Monteiro, 2015). We argue that

technology scouts, i.e., the typical title of those working in technology scouting units, are

representative of generic boundary spanners in MNCs that are found at a myriad of

boundaries between organizational functions, business units, or subsidiaries and the

MNC’s headquarters (Carlile, 2002, 2004; Katz and Tushman, 1981; Mudambi and

Swift, 2009; Schotter and Beamish, 2011). However, technology scouts are unique in

that they are not involved in other day-to-day operations – that is, spanning organiza-

tional and national boundaries to seek out external knowledge and spanning internal

boundaries to make knowledge available within the organization ‘is the only thing they

do’ (Monteiro and Birkinshaw, 2017).

[1]

Hence, theorizing about the behaviour of tech-

nology scouts can provide unique insights into our broad understanding of boundary

spanners in global organizations.

It has long been argued that tapping into knowledge from outside the organization

(i.e., spanning organizational boundaries) and from foreign locations (i.e., spanning

national boundaries) is associated with significant benefits in the form of innovation and

financial performance. Spanning organizational boundaries, for example, allows the

addition of distinct new knowledge to an MNC’s knowledge pool and, by adding such

global knowledge, an MNC is able to innovate more effectively than its domestic rivals

(e.g., Asakawa et al., 2014; Doz et al., 2001; Tushman and Katz, 1980; Tushman and

Scanlan, 1981). Prior research has also emphasized the general benefits of spanning

boundaries inside MNCs, leading to superior product development (Carlile, 2002,

2004), knowledge management between scientists and managers (Mudambi and Swift,

2009; Tushman, 1977), and initiatives between subsidiaries and their headquarters

(Schotter and Beamish, 2011). In a similar vein, prior work has shown that benefits

brought by technology scouts stem from both their ability to access new knowledge and

their mediating role between the MNC’s external environment and relevant actors (e.g.,

business managers or R&D units) inside the organization (Monteiro, 2015; Monteiro

and Birkinshaw, 2017). Yet, as much as recent research has started to shed light on the

boundary-spanning processes performed by technology scouts and their (positive) impact

on the MNC’s performance, whether and how the prior performance of an MNC

affects boundary spanning activities of technology scouts remains an open question in

international management research.

To tackle these questions, we draw upon the behavioural theory of the firm (BTF)

and propose that the boundary-spanning behaviours of technology scouts are sensitive

to how the MNC has performed relative to its aspirations – that is, the expected levels of

484 T. Klueter and L. F. Monteiro

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C2016 John Wiley & Sons Ltd and Society for the Advancement of Management Studies