Cultural Distance and Firm Internationalization: A Meta-Analytical Review and Theoretical Implications

The influence of cultural friction on foreign divestment of multinational enterprises--the moderating role of formal institutional distance and political connections

Multinational enterprises frequently divest their foreign assets in the current economic environment. Existing research, based on friction theory, has mainly focused on the impacts of political and economic disparities on foreign divestment while neglecting the nuanced influence of cultural factors. To address this gap, this paper draws on the cultural friction perspective to capture the diverse cultural resistance faced by each enterprise and explore the relationship between cultural friction and foreign divestment. Data from Chinese publicly listed enterprises engaged in foreign investment are leveraged, and a dual-level analysis is conducted using Logit panel regression and Cox survival analysis to examine the relationship between cultural friction and foreign divestment from both the viewpoints of the parent company and the overseas subsidiary. Additionally, the paper examines the marginal factors that affect the relationship between them from an institutional perspective. The findings reveal that cultural friction has a positive influence on the propensity of multinational enterprises to divest from foreign markets. Interestingly, a "formal institutional distance paradox" is demonstrated in our study, and politically connected enterprises are found to be more vulnerable to foreign divestment due to the "curse of political affiliations".

When and how scientists influence technological performance: A moderated mediation model

Previous studies have primarily investigated scientists' direct impact on technological performance. Expanding on this, the study explores the nuanced ways and timing through which scientists influence team-level technological performance. By integrating knowledge-based and network dynamics theories, the study establishes and assesses membership turnover as a significant mediator of the science-technological performance process. Furthermore, it investigates the moderating effects of team internationalization and coreness on the mediation effects. Employing an unbalanced panel dataset from Huawei and Intel from 2000 to 2022, the study applied the Tobit and Negative Binomial models and conducted robustness tests for data analysis. The findings support the indirect influence of scientists within an invention team on the quantity and quality of inventions through membership turnover. Moreover, team internationalization diminishes the relationship between membership turnover and the quantity and quality of inventions, thereby impairing scientists' indirect effects on technological performance through membership turnover. Team coreness enhances the relationship between membership turnover and the quantity and quality of inventions, strengthening the indirect impact of scientists on these dimensions through membership turnover.

Social trust and the location choices of foreign firms in China-The moderating role of formal institution and cultural distance

The institutional environment has a significant impact on the location of overseas investments by multinational enterprises (MNEs). However, there remain two research gaps. First, fewer studies focused on the impact of subnational regional institutions on the location choices of MNEs. Second, study on informal institutions has been more limited. This study investigates the effect of the informal institution (social trust) in the Chinese subnational region on the location choices of foreign firms and the mechanism of its role. Using the sample of foreign firms' location choices in China from 2008 to 2020 in Orbis Global Enterprise Database, this study finds that social trust positively related to the location choices of foreign firms in subnational regions. Our results also show that this positive effect is contingent on the formal institution and the cultural distance between home and host country. When the formal institution is strong and the cultural distance between home and host country is high, social trust has a more significant positive impact on the location choices of foreign firms in subnational regions. Besides, the results show that cost advantage, information advantage and innovation advantage are important mechanisms for social trust to influence foreign firms' location choices in subnational regions. This study is important for understanding the role of subnational regional informal institutions in influencing strategic decisions of MNEs. At the same time, it has certain guiding significance for governments in attracting foreign direct investment and for multinational enterprises in selecting suitable overseas investment locations.

Coolly provocative: a microfoundational framework of interorganizational cultural distance and exploratory innovation

Purpose

Interorganizational collaboration has been a major source of exploratory innovation. Despite much research, the authors’ understanding about how partner cultural distance is harnessed for exploratory innovation is limited. The authors’ conceptual framework aims to address this gap by explaining the social-psychological processes between perceived partner cultural distance and exploratory innovation.

Design/methodology/approach

Drawing on research in organizational learning and culture mixing, the authors propose a multilevel model with two parallel processes – cultural brokering and cultural defense. If managers are engaged in the former and are protected from the latter, then the partnership will produce more exploratory innovation. Cultural brokering is encouraged by prompting a learning mindset, while cultural defense is preempted by dampening social categorization across organizational boundaries.

Findings

Cultural brokering can be encouraged by building operational-level managers' (OLMs') collaborative strength through developing a learning orientation, allowing them delivery for exploration, cultivating mutual trust with partners. Cultural defense can be preempted by protecting OLMs from intergroup anxieties through providing organizational support to the OLMs, bridging social categorization faultlines and setting shared collaborative goals. Whether an alliance can unleash its potential depends on not just how cultural brokering is enabled but also how cultural defense is curtailed.

Originality/value

This paper takes a microfoundational approach and considers micro-level processes in a partnership. Furthermore, the model takes the operational managers' perspective and defines culture at the organizational level. All these differences allow us to provide a nuanced picture of how diverse partnerships can be harnessed for exploratory innovation through a few easily-implementable measures.

Entry Mode Choice: A Meta-Analysis of Antecedents and Outcomes

The entry mode decision is a critical topic in international business. Several studies have tested the antecedents of entry mode choices and compared the outcomes after entry. However, the results reported in these studies are contradictory and difficult to explain. Furthermore, the reviews using qualitative approaches cannot statistically combine empirical results and fail to fully discuss these relationships. Additionally, the mediating effects remain unexamined in the existing studies. Drawing upon transaction cost economics and the resource-based view, this paper presents a meta-analysis that combines entry mode choices, antecedents and post-entry outcomes to address these issues. This meta-analysis is based on 1499 effect sizes from 230 published empirical studies. This study focuses on 15 antecedents as well as post-entry performance and survival of entry mode choices. In addition to bivariate relationships (i.e. how a single antecedent affects entry mode choices), the paper uses meta-analytic structural equation modelling to analyse the mediating effects of entry mode choices on the antecedent - outcome relationship.

Distinct leadership styles and differential effectiveness across culture: An analysis of South African business leaders

Orientation: While some deem business leadership practices as universal, others judge them to be specific to a cultural context, arguing that certain leadership styles are specific to, for example, those from an African or a Western cultural background.Research purpose: The goal of the research was to assess whether the leadership styles of South African leaders differ based on cultural background and whether the effectiveness of these leadership styles is judged differently by subordinates.Motivation for the study: South Africa is sometimes presented as country divided across cultural lines. This research was motivated by the need to assess the extent of this divide and the impact thereof on perceived effectiveness.Research approach and method: A cross-sectional survey was collected from 1140 respondents across 19 organisations. Leadership styles and leader effectiveness was measured, and race was used as a proxy to cultural background. Mean scores on leadership styles and leadership effectiveness were calculated per race and mean score differences were tested.Main findings: The result of this study suggest that leaders in South Africa are perceived to behave similarly in terms of their leadership styles and the effectiveness thereof. Thus, those African and Western cultural backgrounds act similarly, and the outcomes (effectiveness) was comparable.Managerial implications and value add: The cultural divide within the context of leadership styles and effectiveness is small in South Africa, and the results supports the notion that organisations and leaders should set aside culturally based stereotypes when engaging in leadership issues.

Capitalizing on the uniqueness of international business: Towards a theory of place, space, and organization

The field of international business (IB) has been successful in developing a unique body of knowledge on the multinational corporation and on country-level contexts. A recurring debate concerns its claim to uniqueness, and to associated scholarly characteristics that distinguish IB from other fields of research. I discuss what makes IB research unique by looking at what IB theory can explain and predict. To that end, I leverage key theoretical arguments and empirical insights to advance an understanding of IB centered around a firm's ability to create added value in more than one location. I introduce a stylized model of the multi-locational firm embedded in multiple business systems characterized by equifinality. As a result of the qualitative disjunctures that separate one place from another, multi-locational firms are confronted with additional managerial and organizational challenges. These challenges are rooted in the process of "othering". Theorizing on the critical constructs of place, space, and organization, I argue that IB offers the most generalizable approach to understanding firms doing business in more than one location. IB's ultimate uniqueness lies in the potential of advancing a general theory of the firm in space.

Formal vs. Informal Institutional Distances and the Competitive Advantage of Foreign Subsidiaries in Latin America

By focusing on the tacit and explicit characteristics of informal and formal institutional distances, this study investigates the competitive advantage of foreign subsidiary firms from developed countries and emerging markets operating in Latin America. Following recent research on distances in international management, this study measured the size and direction of distances and computed formal institutional distances based on the world governance indicators from the World Bank, whereas informal institutional distances are calculated using the four original dimensions of Hofstede. Considering that culture is tacit, whereas formal institutions are explicit, it is argued that these differences affect the ability to convert experience dealing with cultural and formal institutional conditions in the home country into firm specific advantages (FSAs) in a foreign host country. These assumptions are tested quantitatively using data from the Orbis database, a sample that includes over 4200 firm-year observations covering 10 of the largest economies in Latin America. In a departure from previous studies investigating the implications of FID direction, it is shown that the effects in specific directions are different for foreign subsidiaries from developed countries and from emerging markets. The results reveal that emerging market firms are at an advantage when operating in less developed host countries, whereas foreign subsidiaries from developed countries can adjust more positively when operating in host countries with strong formal institutions. On the other hand, the effects of the different CD dimensions depend on the direction towards host countries with specific cultural profiles. These findings indicate that foreign subsidiaries from emerging markets have a clear advantage in dealing with institutional voids in Latin America (i.e., FID towards less developed host countries), whereas the effects of CD are the same for all firms. This suggests that the cultural profile of the host country is what really matters.

A review of the internationalization of state-owned firms and sovereign wealth funds: Governments' nonbusiness objectives and discreet power

We review and bridge the literature on the internationalization of state-owned firms and sovereign wealth funds to provide a novel understanding of how government ownership affects foreign investments in three ways. First, we explain how state-owned firms and funds behave differently from private ones because they need to balance governments' nonbusiness objectives and firms' business goals. This results in competing predictions on whether government ownership helps or hinders internationalization due to particular nonbusiness objectives. Second, building on the review, we provide suggestions on how to extend research topics and theories of the firm by incorporating these nonbusiness objectives in the internationalization decisions in four areas: home government's endowments, characteristics, and attitudes; host-country expansion's support, influence, and impact; home- and host-country relationship conflicts, mediation, and disguising; and management's orientation, opacity, and arbitrage. Third, we capture how governments may use state-owned multinationals and sovereign wealth funds to nudge host-country governments by introducing the concept of discreet power and the use of four strategies (recognition, values, development, and supremacy) to achieve it. This helps to outline the beginning of a unified approach to how governments use their foreign investments to achieve nonbusiness goals.

SUPPLEMENTARY INFORMATION

The online version contains supplementary material available at 10.1057/s41267-022-00522-w.

The Moderating Effects of Host Country Governance and Trade Openness on the Relationship between Cultural Distance and Financial Performance of Foreign Subsidiaries in Latin America

Cultural distance (CD) is an important driver of foreign expansion strategy at the firm level. However, its effects can be more or less significant depending on the contextual characteristics of the host country, such as the quality of formal institutions and the openness to international trade. Therefore, it is argued that strong formal institutions in the host country can effectively reduce the adverse impact of CD. Additionally, due to the more frequent interactions with foreign cultures, countries open to foreign trade can positively accommodate the effects of CD. The study tests these assumptions using data from the Orbis database and the World Bank and finds a reduction in the adverse impact of CD on the financial performance of foreign subsidiary firms with robust formal institutions in the host country. Moreover, the negative effects of CD increase with higher degrees of trade openness. Thus, the results indicate that foreign subsidiary firms operating in host countries that are more open to foreign trade will have to conform to the higher expectations from the local culture.

Innovation through internationalization: A systematic review and research agenda

In this paper we perform a systematic literature review of the diverse and somewhat fragmented current state of research on firms’ internationalization and innovation. We analyze 207 key works from 1989 through 2020 and synthesize them into an internationalization process framework that conceptually maps key internationalization-related antecedents and moderators that influence innovation behaviors and outcomes. Through an internationalization process framework, we categorize existing relevant studies into three key stages: (a) the pre-internationalization stage, (b) the internationalization entry stage, and (c) the post-internationalization stage. Furthermore, we review how firms’ various strategic decisions and operations in different stages influence their innovations by elaborating the moderating role of external country/region institutions and firm internal characteristics. Building on this review, we provide suggestions for future research to advance the developments of this domain.

Toward a more in-depth measurement of cultural distance: A re-evaluation of the underlying assumptions

Some 20 years ago, Shenkar (2001) criticized several of the underlying assumptions of the cultural distance (CD) construct. Despite this, researchers continue to use the same metric which fails to address many of the underlying problems. As a result, CD studies seem to generate results which are often contradictory. Rather than rejecting the distance metaphor, the main objective of this study is to provide a more in-depth measure of CD that addresses the assumptions of linearity, symmetry, equivalence, and discordance. We propose that, while the size of the cultural distance between home and host countries may be relevant for some dimensions, it is incomplete, as it does not account for the distinct characteristics of the cultural dimensions, the direction toward countries with different profiles and the contextual settings of the study. We test our hypotheses on a sample from the Orbis database consisting of foreign subsidiary firms from Latin America, other emerging markets from outside the region, and from developed countries operating in 10 of the largest economies in Latin America. Our dataset includes 4226 firm-year observations and a combination of 168 home and host countries. Latin America provides a suitable context for this study, not only because of the diversity of firms from different contexts operating in the region, but also because the region allows us to investigate the influence of home country history and tradition on firms’ ability to conduct business in different cultural contexts. Our assessment of CD shows in a precise manner that size together with direction might be adequate for describing the effects of some dimensions of CD on firm performance, while for other dimensions, it is clearly a matter of country profile. By combining our metric with different national culture frameworks, future studies would be able to complement and strengthen our findings and conclusions.

Major Barriers and Best Solutions to the Adoption of Ethics and Compliance Program in Chinese International Construction Companies: A Sustainable Development Perspective

Unethical behavior is one of the grand challenges facing international construction companies (ICCs) to move toward sustainable development when operating on an international basis. The ethics and compliance program (ECP) has played a significant role in addressing illegal and unethical behavior and avoiding liability in multinational companies. However, there have been few studies on the current status, major barriers, and best solutions to ECP adoption in ICCs. To fill this gap, an international questionnaire was conducted; 87 valid samples of Chinese ICCs located in 44 countries were filtered out for in-depth analysis. The survey results showed that only 36.8% of responding ICCs exercised compliance functions through the compliance department. The top five recognized barriers hampering ECP adoption were “lack of related laws and regulations”, “insufficient support from the government”, “lack of authorization to the compliance department”, “shortage of compliance professionals”, and “lack of case studies”. There was no disagreement about the barriers’ rankings among organizations of different firm ownerships, sizes, and locations, except the variable “great institutional distance”. Results also revealed the top five best solutions to help ICCs overcome the identified barriers. The findings would enhance the understanding of industry practitioners and policymakers, hence helping them address corresponding solutions to boost ECP adoption and promote the sustainable development of ICCs.

Accelerating Cultural Dimensions at International Companies in the Evidence of Internationalisation

The research goal is to investigate whether several cross-cultural dimensions proposed in the Hofstede cultural model link international companies and their affiliations operating in Scandinavia and Baltic countries. Although cultural aspects have got much more attention in internationalisation studies over the last decade, there is still room for research focusing on such study areas. The authors start with the analysis of the literature review. Presenting the holistic approach affecting internationalisation and a list of factors necessary for internationalisation, later on, the authors present the cultural dimension of Hofstede, and then give various qualitative methods applied for studies on internationalisation. Design/Methodology/Approach: To complete the research, the authors selected the database from Nasdaq (2021), listed MNE companies from six countries: Denmark, Norway, Sweden, Estonia, Latvia and Lithuania. The mother company is located in Scandinavia, and the daughter company is in the Baltics based on FDI flows. The author’s research included 56 MNE companies from Nasdaq Baltic stock exchange. We used the correlation matrix to support the research and present the direction of identified connections to proceed with it. Findings: Obtained results revealed that there are strong links among several cultural dimensions. The results show seven positives and four negative links when discussing cross-cultural links. This finding shows that talking about intercultural relations, only four out of six Hofstede cultural dimensions have at least one strong connection operating business internationally. Originality/Value/Practical implications: The authors identified that some cross-cultural dimensions could not be analysed further because they do not have significant links. The limitations of the study and further research directions are also provided.

Social Environment and Healthy Investment Behavior: Joint Influence of Culture and Institution on China

The influence of the social environment on healthy investment behavior is a vital research topic. This paper focuses on foreign direct investment (FDI) as an important part of its broad impact in improving the level of capital circulation and diversifying the non-systemic risk of a single country portfolio. Using data from 35 countries on direct investment in China, we find that the impact of the social environment on healthy investment behavior is mainly reflected in investors’ resistance to cultural distance and their benefit compensation across institutional distance. In addition, their joint influence is still negative, dominated by cultural distance, which can still verify that institutional distance mitigates the negative effect of cultural distance on FDI. Therefore, in order to promote international healthy investment behavior, it is feasible to improve both the mitigation effect of the institution in the short term and promote the level of cultural exchange in the long term, according to the research results of this paper.

Is Internationalization Beneficial to Innovation? Evidence from a Meta-analysis

This paper conducts a meta-analytical review to examine the impact of internationalization on innovation, with particular attention to the role of research design factors that may confound causal inferences. The existing literature is examined (1) to determine the average effect of internationalization on innovation and (2) to assess how variations in key aspects of research design has affected results. Analysis of 99 studies reveals that the effects of internationalization on innovation are diverse but are generally positive, albeit the effect sizes are mostly small to moderate. The inferred magnitude of such effects is influenced by research design factors and that country-context matters. The results suggest that internationalization measurements, data characteristics and statistical artifacts affect the variations in effect sizes. We conclude with a discussion of opportunities and challenges in future research on the internationalization-innovation nexus.

A meta-analysis of the impact of open innovation on performance

Using the meta-analysis technique, this research comprehensively reviews the existing open innovation (OI) literature, systematically aggregates empirical findings on the impact of OI on performance to identify key moderators and statistically tests the significance of these moderators in influencing the OI–performance relationship. Based on a comprehensive dataset of 2,377,123 firms and sub-firm units in 171 studies published from 2003 to 2018, this research demonstrates that the OI–performance relationship is significantly moderated by three key factors: performance measure, OI approach, and level of analysis. This research helps explain the conflicting findings regarding the OI–performance relationship in the existing literature, and contributes to the understanding of the effectiveness of OI practice.

Cultural distance and customer orientation strategy of Chinese service MNEs under the belt and road initiative

Purpose

The purpose of this paper is to explore mechanisms of cultural distance in the base of Chinese Service Multi-National Enterprise (MNE) settings. When attempting to enter overseas markets, many service MNEs face challenges caused by the cultural distance between the home and host countries. Culture distance attracts much attention in academia and industry. However, there are few empirical works to examine how cultural distance affects customer orientation strategies in a global supply chain. This paper aims to answer the following research question: How is the effect of cultural distance on customer acquisition and customer retention strategies, and the effect of customer orientation strategies on the performance of service-oriented MNEs controlled by Chinese capital along the Belt and Road Initiative?

Design/methodology/approach

This paper examines the effect of cultural distance on the customer acquisition strategy and customer retention strategy, and the effect of customer orientation strategies on the performance of Chinese Service MNEs. A large-scale empirical study of Chinese Service MNEs operating in overseas markets is performed and questionnaires were distributed and collected. This paper uses Hofstede's method (Hofstede, 2010), Schwartz's method (Schwartz, 2003) and House et al.'s method (House et al., 2004) to calculate cultural distance. By using each kind of method, this study calculates the absolute culture distance and relative culture distance respectively.

Findings

The results suggest that cultural distance negatively affects customer orientation strategy, customer acquisition strategy positively affects performance and the interaction of customer acquisition and customer retention positively affects performance.

Research limitations/implications

This study aims to contribute to the existing literature with a more fine-grained understanding of the inclusion of customer orientation strategy of Chinese Service MNEs in global supply chains.

Practical implications

The findings outline several important implications that Chinese Service MNEs seeking to expand to overseas markets.

Originality/value

This paper contributes a novel, combined perspective of culture distance and customer orientation strategy.

Hofstede’s Cultural Dimensions as a Moderator of the Relationship between Ambidextrous Learning and Corporate Sustainability in Born Global Firms

This research analyzes the moderation effects of Hofstede’s Cultural Dimensions (Power Distance, Uncertainty Avoidance and Indulgence) in the relationship between Ambidextrous learning and corporate sustainability in born global firms. The data were collected from exporting firms characterized by beginning international operations in the first three years and were thus classified as Born Global. A panel Dynamic Structural Equation Model (DSEM) was used to test the research hypothesis. One of the methodological contributions is the exploration of dynamic social behaviors that are difficult to study, specifically over time. Here, DSEM becomes in a data analysis technique that allows us to analyze this type of phenomena. The research results show that the relationship between Ambidextrous learning (AL) and Corporate Sustainability (CS) is positive in the short- and long-term. The cultural dimension’s Power Distance and Uncertainty Avoidance moderates the relation between (AL) and (CS) and this dimension can predict their inertia. However, while Uncertainty Avoidance has a moderating effect, it does not predict future behaviors. Published literature on the Born Global company. that includes the moderation of Hofstede’s dimensions (Power distance, Avoidance of uncertainty, and Indulgence) from a company perspective that study the relationship between Ambidextrous Learning and Corporate Sustainability is scarce.

The configurations of HRM bundles in MNCs by their contributions to subsidiaries’ performance and cultural dimensions

The main goal of the paper is to determine whether the HQs of MNCs evaluate the significances of particular HRM subfunctions to their foreign subsidiaries’ performance differently depending on a specific cultural context and—as a consequence—various configurations of HRM subfunctions may be identified in different cultural contexts. The theoretical assumptions are based on a combination of the configurational and contextual perspectives through a cross-cultural lens. In the empirical research an abductive reasoning process is applied. The research sample covers 200 headquarters of MNCs. To analyze the collected data both descriptive and correlational statistical methods are used. Two patterns of configurational bundle of HRM have been identified: A and B. Pattern A tends to be more system oriented and Pattern B more centralization oriented. Pattern A covers the subsidiaries which, with comparison to their HQ, are of lower power distance, higher individualism, higher masculinity, lower uncertainty avoidance, longer time orientation, and higher indulgence. Pattern B is composed of the subsidiaries with the opposite signs of the cultural distance index. The originality of the study consists in the application of the abductive research model. Thanks to it, we were able to search and find the simplest and most probable explanations for our observations. And the value of the research itself lies in the evidence that the contextual perspective with its configurational implications in the HRM research field is useful in identifying the phenomena that are difficult to identify or unidentifiable otherwise. The findings of the present study provide some knowledge on how cultural distance (external variable) and the significance of HRM to the subsidiary’s performance results (internal variable) interact in impacting on different configurational bundles of HRM subfunctions, their centralization practices and knowledge flows in MNCs.

Unraveling the effects of cultural diversity in teams: A retrospective of research on multicultural work groups and an agenda for future research

Our 2010 Journal of International Business Studies article, "Unraveling the Effects of Cultural Diversity in Teams: A Meta-analysis of Research on Multicultural Work Groups," attempted to take stock of existing research on cultural diversity in teams, to reconcile conflicting perspectives and past results, and provide a better understanding of the mechanisms and boundary conditions under which diversity affects team outcomes. To guide our analysis, we developed a theoretical framework outlining how cultural diversity leads to both process gains and losses in teams, and specifying the contextual conditions under which diversity contributes to effective team outcomes. We tested our hypotheses in a meta-analysis of research on cultural diversity in teams, encompassing 108 primary studies with a combined sample size of 10,632 work groups. The results suggested that cultural diversity does not have a direct impact on team performance but rather that the effect is indirect, mediated by process variables such as creativity, cohesion, and conflict; and is moderated by contextual influences such as team tenure, the complexity of the task, and whether the team is co-located or geographically dispersed. Unexpected findings raised important questions about the dynamics of diverse teams and underscored the need for further examination. In this Retrospective, we reflect on progress made in research on culturally diverse teams over the last decade, highlight remaining gaps and open questions, and propose an agenda for future research.

The influence of intercultural management factors as elements of management innovation

In the current globalization conditions, companies operate in an open environment and constant contact with foreign managers and other interest groups. Intercultural management is an integral and important part of any international company employing and cooperating with employees from different cultures. The proper implementation of intercultural management enables the innovation of employee relations and thus supports achieving the company's goals. This paper aims to examine the influences and relations between local and foreign employees and/or managers. Research on intercultural communication and management was conducted in IT companies by collecting questionnaire data from respondents, formulating hypotheses, and examining them through the Kruskal-Wallis test. Hypotheses verification stated that statistically significant differences are in the relation between the knowledge of the company's cultural differences and the employees' years of experience. The calculated value of p = 0.04728 proved that the longer the employees work in a company interconnecting different cultures, the greater their knowledge of its cultural differences. The research verified the hypothesis on statistically significant differences in the acceptance of cultural differences in the company concerning employee training. The result of the hypothesis verification was the value of p = 0.6539, which did not confirm the hypothesis. The research showed that the employee training did not affect the acceptance of cultural differences. In companies with a labor force from diverse countries and cultures, disputes often arise in communication. The last formulated hypothesis concerning the issue focused on examining the relationship between the acceptance of disputes based on cultural differences in the company and the employee training. The calculated value of p = 0.1 did not confirm this relationship. Therefore, the employee training does not affect the acceptance of disputes in the examined companies. The present research on intercultural management could expand knowledge and innovate relationships to prevent disputes in international companies.

Past, ongoing, and future debate on the interplay between internationalization and digitalization

The interplay between internationalization and digitalization (IDI) is a relatively young research domain that is finding its way into numerous academic journals, which motivates us to systematically portray the proceedings and evolutions of this interplay over time, analyze its methodological and theoretical background and, more importantly, provide insights to guide future research on these phenomena. Combining qualitative and quantitative approaches, we analyze 68 peer-reviewed international business and management papers to explore the structure of knowledge production and identify the emerging trends. Our research reveals four key stages of the debate: (a) how IDI influences interorganizational aspects (1996–2004), (b) how digitalization influences the balance between perceived risk and returns in internationalization (2005–2009), (c) how digital advances and available internationalization channel alternatives influence IDI (2010–2014), and (d) how IDI influences intraorganizational aspects (2015–2019). Moreover, our analysis reveals heterogeneity across theoretical perspectives, methods, and research themes over the years. Finally, we identify theoretical and methodological challenges related to IDI research.

Homesickness in developing world expatriates and coping strategies

This article examines the developing world expatriates’ experience of homesickness when they are deployed to western countries. The research considers the consequences of being homesick on the expatriates and their organisations; the paper then clarifies the strategies used by the expatriates to cope with the condition. The research employed qualitative research built on unstructured interviews with expatriates from the developing world who have been deployed in western countries by their employing multinational. The findings revealed that homesickness has consequences for both expatriates and organisations. These consequences include psycho-social disorder, deterioration of physical health which damagingly affect individual wellbeing, work outcomes and organisational commitment. The practical implications centre on the opportunity for policy and strategy formulation by international HRM within organisations to improve the mental health of developing world expatriates, thus seeding the ingredients for better performance and job satisfaction. Our study makes significant additions to the expatriate literature in exposing the homesickness experiences of expatriates from the developing world in advanced economies. We identify two main coping strategies used by expatriates. The research explicates how developing world expatriates use these strategies in practices.

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

Practice and Policy Abstract:

Global South expatriates, homesickness and adjustment approaches

Purpose

The research examines homesickness in organisationally assigned expatriates from developing countries or Global South serving in Western contexts. It investigates the extent to which homesickness has personal and organisational consequences and explores the coping mechanisms used by expatriates.

Design/methodology/approach

This is a qualitative research built on unstructured interviews with organisationally assigned expatriates from the Global South.

Findings

The research found that homesickness has consequences for both expatriates and organisations. These consequences include psycho-social disorder, deterioration of physical health which damagingly affects individual well-being, work outcomes and organisational commitment.

Practical implications

The practical implications centre on the opportunity for policy and strategy formulation by international human resource management (HRM) within organisations to improve the mental health of Global South expatriates, thus seeding the ingredients for better performance and job satisfaction.

Originality

This research makes significant additions to the expatriate literature in exposing the homesickness experiences of expatriates from the Global South in advanced economies. Two main coping frameworks used by expatriates are proposed. These copying frameworks centre on positive practices and negative practices which, in turn, encapsulate five adjustment approaches. The research explains how Global South expatriates use these models in practice.

Added cultural distance and ownership in cross-border acquisitions

Purpose

As multinational companies enter different countries, the extent of cultural unfamiliarity they face depends on their most recent entry. We examine this pattern of added cultural distance between a newly entered target country and the closest previous one and its effect on ownership decisions in each cross-border acquisition (CBA). We also examine the combined effect of added cultural distance and time between successive acquisitions on such decisions.

Design/methodology/approach

The sample came from the Thomson Financial Securities Data Corporation (SDC) Platinum database, which spans different source and target countries for a 25-year period (1980–2014). We collected firm- (acquirer and target), industry-, country-, and transaction-level variables from SDC. After merging information from the different sources, the final sample comprised 10,423 CBA observations from 138 target countries.

Findings

Our findings reveal that the ownership share decision is affected negatively by added cultural distance but positively by the time between two successive acquisitions. In addition, prior ownership and geographic distance moderate the relationship between added cultural distance and ownership in CBAs.

Practical implications

Our findings suggest that MNCs' managers who consider CBAs need to carefully examine closest previous target information and CBA experience, rather than focusing on direct cultural distance between the focal firm and target firm. Additionally, they should also consider the relevance of key contingency factors.

Originality/value

We disentangle the effects of added cultural distance on CBA ownership decisions and explore the boundary conditions of this relationship.

The Influence of Risk Culture on the Performance of International Joint-Venture Securities

With the development of economic globalization, culture is a key factor supporting the sustainability of foreign direct investment (FDI), especially for multinational enterprises. This paper takes the Chinese capital market as a sample and, combined with interviews with managers of international joint-venture securities (IJVS), finds that the culture of participants formed in developed and emerging capital market has a significant impact on the performance of IJVS. Using the degree of price fluctuation to measure the risk culture of each capital market, this paper observes that the risk culture in the Chinese capital market is significantly stronger than that of developed countries. This paper also finds that the stronger the risk culture IJVS shareholders have, the better they can adapt to the environment of the Chinese capital market and the better the performance they can achieve. Furthermore, risk culture distance, calculated by the risk culture differences between foreign shareholders and Chinese capital market, are significantly negatively correlated with IJVS performance and efficiency.

The role of reciprocity in the internationalization of social enterprises

Purpose

The paper enhances our understanding of how small businesses with a strong social mission undergo international expansion. Building on the theoretical arguments on social exchange theory (SET), specifically on the literature on reciprocity, the purpose of this paper is to investigate the applicability of the Uppsala Internationalization Model to the context of a social enterprise (SE). The propositions argue that the strong social orientation of SEs encourages a reciprocal exchange with the stakeholders of the host country that limits the number of obstacles they may face during the internationalizing process.

Design/methodology/approach

The conceptual development bridges SET with bodies of knowledge on SE, Uppsala Internationalization Model and organizational embeddedness.

Findings

The theoretical arguments provide evidence of how the socially oriented mission of a small business aids it with overcoming obstacles presented by internationalization. Specifically, the authors show that socially oriented enterprises are uniquely equipped to conquer the lack of adequate information about a foreign market and a lack of adequate public support in a host country. A social mission, which ignites positive reciprocity with the local stakeholders, serves as a valuable asset in the process of internationalization. Moreover, since the propositions recognize that the norms of reciprocity differ from one national culture to another, they unfold how reciprocal exchanges may be altered because of the nuances of national culture.

Originality/value

This work makes three important contributions. First, it extends our understanding of why SEs can potentially internationalize more rapidly than organizations without a strongly pronounced social mission. Second, the investigation on the applicability of the U-Model to the context of SE answers scholars’ recent call for continuous work on advancing the U-Model. Third, the authors equip practitioners with a thorough understanding of how they can capitalize on the social aspect of a SE in the unique setting of a specific national culture.

Job satisfaction in the global MNE: does distance matter?

Purpose

The purpose of this paper is to investigate how the relative institutional distance of the subsidiary from the multinational enterprise (MNE) headquarters influences job satisfaction in the subsidiary. The authors argue that job satisfaction in the MNE subsidiary will be influenced by the institutional distance between the firm’s home (headquarter) and host (subsidiary) countries, such that the greater the institutional distance, the less satisfied the subsidiary employees. The authors also argue that the degree of function interdependence (global vs local roles) will moderate this relationship, such that high interdependence will result in lower job satisfaction as distance increases.

Design/methodology/approach

Using data from a global high-tech Canadian MNE, consisting of over 15,000 employees located in 19 subsidiaries, the research undertakes an empirical investigation that identifies if and how job satisfaction varies between countries and tests the influence of subsidiary-level institutional distance from the headquarters on subsidiary-level job satisfaction, using a multilevel model.

Findings

The results demonstrate that subsidiary distance from the headquarters has a complex effect on subsidiary-level job satisfaction; in some distances, no effect is found, while in others, either some or all job satisfaction facets are affected (depending on the distance and facet) in both positive and negative ways. Unlike much of the past research on distance, which has treated distance as a barrier to be overcome or reduce (Stahl et al., 2016), the paper’s finding demonstrate that “negative” distance operates independently (and at varying strengths and significance) than “positive” distance, due to underlying mechanisms.

Research limitations/implications

There is a real opportunity to push ahead on linking international business strategy research with organizational theory and organizational behavior research. To do so, it requires not only a positive organizational scholarship approach (Stahl et al., 2016) but also methods that will allow researchers to study the influence of distance on mechanisms and processes, as opposed to stand-alone variables. The authors therefore suggest that future work in this area pursue qualitative methods as called for by Chapman et al. (2008).

Practical implications

Findings are surprising, in that results vary across job facets and distances. Practitioners need to therefore focus on the mechanisms that influence job satisfaction, not just differences and their potential negative impact.

Originality/value

The firm-level study provides a rich perspective on the complex way in which country-level differences influence subsidiary-level job satisfaction.

Dimensions and Dynamics of National Culture: Synthesizing Hofstede With Inglehart

Cross-national research on cultural differences across space and time intersects multiple disciplines but the prominence of concepts varies by academic fields. Hofstede's dimensional concept of culture, to begin with, dominates in cross-cultural psychology and international management. Inglehart's dynamic concept of culture, by contrast, prevails in sociology and political science. We argue that this disciplinary division is unfortunate because the two concepts are complementary, for which reason a synthesis rectifies their mutual weaknesses. Indeed, while Hofstede's dimensional concept neglects cultural dynamics, Inglehart's dynamic concept is dimensionally reductionist. We demonstrate empirically that combining these two concepts leads to an improved understanding of cultural differences. Inspired by Hofstede's cultural dimensions, we use data from the European Value Studies and World Values Surveys for 495,011 individuals born between 1900 and 1999 in 110 countries and then show that change on these dimensions proceeds as Inglehart and his collaborators suggest. Most notably, younger generations have become more individualistic and more joyous. But even though economic development and generational replacement drive this cultural change, roughly half of the variation in national cultural orientations is unique to each country, due to lasting intercept differences in developmental trajectories that trace back to remote historic drivers. We discuss the implications for cross-national cultural research.

Where have all the countries of origin gone? A note on the neglect of firm nationality in family business studies

Purpose

The purpose of this paper is to present arguments for the inclusion of greater sampling detail in comparative studies of family business that includes country of origin/ownership.

Design/methodology/approach

This paper is a commentary piece from a scholar focused on family business studies.

Findings

This commentary paper challenges several past family business studies and argues that mixing small family firms with foreign-owned family firms (subsidiaries of foreign companies) into one research sample of “family firms” can represent a significant source of bias. The authors assume that this bias is likely to be more pronounced in samples of privately-held family firms.

Originality/value

While most of the author’sknowledge on family firms is based on analyses of publicly-held firms, current editors of scholarly journals call for more research on privately-held firms since they represent the vast majority of firms worldwide. The development of the knowledge about private family firms crucially depends on the reliability of results. This paper emphasizes the need for research samples of comparable firms and more comments on the sampling process.