Background: 

Information asymmetry significantly contributes to breakdowns in communication, leadership challenges, and relational dynamics, impacting the organisation’s performance. Despite its relevance, there is limited research on the causes of intra-firm information asymmetry, particularly from a people-driven perspective. Existing literature tends to focus on structural processes or adopts an economic lens, rather than exploring human factors in the organisation. 

Purpose:

Our study aims to understand the people-driven cause of intra-firm information asymmetry. These factors include cognitive abilities, communication flow, and other human-related aspects influencing how information is shared and withheld. By identifying these root causes, we seek to provide a foundation for future research and support the development of effective strategies to mitigate information asymmetry within organisations. 

Research question:

How do people-driven factors within a global organisation perpetuate information asymmetry?

Method: 

Our study adopts a qualitative grounded theory approach, applying the Gioia methodology. We conducted 15 semi-structured interviews across two global organisations, one of which includes two affiliate branches. Participants were selected from various roles, including both management and non-management employees, to ensure varied perspectives were taken into account.  

Conclusion: 

Our findings suggest that the key people-driven causes of information asymmetry fall into our four interrelated dimensions: (1) leadership & communication climate, (2) social integration & personality traits, (3) cultural orientation & lack of incentives, (4) discretionary control & gatekeeping. These dimensions not only contribute independently to intra-firm information asymmetry but also reinforce one another in complex ways. Their interplay is illustrated in the model, Figure 2, that we developed, offering insights into how information asymmetry is sustained within global firms.