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).