Cultural Distance Revisited: Towards a More Rigorous Conceptualization and Measurement of Cultural Differences

Abstract

Cultural distance is a widely used construct in international business, where it has been applied to foreign investment expansion, entry mode choice, and the performance of foreign invested affiliates, among others. The present paper presents a critical review of the cultural disew constructshave gained broader acceptance in the international business literaturethan cultural distance (CD). Presumablymeasuring the extent to whichdifferentculturesaresimilaror different, the constructhasbeen applied to most business administrationdisciplines, i.e., management, marketing, finance and accounting. In management, CDhas been used as a key variablein strategy,management, organization behavior and human resource management.Theconstructhasbeen applied to a multitudeof research questions, from innovationand organizational transformation to foreignexpansion and technology transfer (Gomez-Mejia and Palich, 1997) and from affiliate performance to expatriateadjustment(Black and Mendenhall,1991).It is in the area of foreign directinvestment (FDI), howtance construct, outlining its hidden assumptions and challenging its theoretical and methodological properties. A comprehensiveframework for the treatment of the construct is developed and concrete steps aimed at enhancing rigor are delineated.ever,thatthe construct hashadits greatest impact.To understandthe appeal of the CD construct, it is usefulto recallthenature of the phenomenon it is set to capture. Complex,intangible and subtle, culture hasbeen notoriously difficultto conceptualize and scale (Boyacigiller, Kleinberg, Phillips and Sackmann, 1996). Establishing a measure gauging the "distance"betweencultureshasunderstandablypresented aneven greater challenge. Byoffering a seeminglysimple andstandardizedmeasureofcultural differences, the CDconstructoffereda tangible and convenienttool with which to bypass the complexities and intricacies of culture, yielding a quantitative measure to be employed in combinationwith other"hard" data (see Kogut and Singh, 1988).

Um estudo bibliométrico dos modelos culturais na pesquisa em negócios internacionais

“…However, it is the work by Kogut and Singh (1988) that has captured more citations, because they advance a manner to quantify those differences using Hofstede's (1980) cultural dimensions. Thus, cultural differences across countries have been the focus of IB research in explaining an array of firms' actions such as foreign investment location (Loree and Guisinger, 1995;Hutzschenreuter et al, 2011), entry mode choice (Kogut and Singh, 1988;Brouthers and Brouthers, 2000), international diversification (Tihanyi et al, 2005), subsidiary performance (Shenkar, 2001;Tihanyi et al, 2005) and affiliates' performance (Shenkar, 2001;Hutzschenreuter et al, 2011).…”

“…Moreover, Kogut and Singh (1988) are frequently co-cited with Johanson and Vahlne (1977), probably to ascertain or to demonstrate the effect of culture on the foreign markets entry mode. In IBR, Kogut and Singh (1988) are also frequently co-cited with Shenkar (2001), an article that critically reviews and challenges the assumptions of the culture distance construct.…”

The Role of Cultural Factors on Intra-Firm Technology Transfer Performance and Corporate Sustainability: A Conceptual Study

“…Shenkar (2001) defined national cultural distance as the fundamental differences in national cultures between the home and the host country. Culture as we know of is distinct in different people, class, or society, making basic cultural differences between countries throughout the world obvious.…”

Abordagem Conceitual às Estratégias de Internacionalização sob Pressões Institucionais Duais para Legitimidade e Conformidade

“…Além da distância institucional entre o país de origem e de destino, é importante considerar como a diferença é estruturada (Shenkar, 2001;Xu & Shenkar, 2002). O país receptor e o de origem podem estar em diferentes estágios de desenvolvimento institucional.…”