2 management - School of International Business and ...

Günter S. Heiduk
ies with a large power distance are characterized by formal hierarchies and by subordinates who
are reluctant to challenge their superiors. In individualistic societies work and personal life are
strictly separated. Identity, autonomy, variety are crucial features. In collectivist societies the indi-
vidual is subordinated to the organization. Masculine societies value assertiveness, competitive-
ness and materialism as opposed to the ‘feminine’ values of relationships and the quality of life.
Empirical findings suggest that uncertainty avoidance and individuality are significant predictors
of suppliers per input whereas power distance and masculinity are significant predictors of out-
sourcing activities.
The most recent literature is questioning Hofstede’s concept of national culture by analyzing the
impact of globalization or regional integration on the convergence of different cultures. On the one
side there seems to be a fragmentation of national cultures resulting from internal developments
such as education, democratization, opening-up. On the other side globalization puts external
pressure on national cultures via the emergence of global communication tools such as the En-
glish language, the internet and globally acting mass media.
Without further deepening the discussion on the characterization, differentiation and measure-
ment of cultures, the economic relevance of cultural distances seems to be undisputed [Pagan,
2009]. An increasing number of studies on cross-cultural communication identify barriers of ef-
ficient communication, especially in MNCs, analyze their impact on decision making processes
and aim to present creative communication concepts. MNCs usually embrace different nation-
al cultures and respectively employ a workforce with different ethnographic profiles that hinder
the development of an internal culture. The latter is an important factor when it comes to the
transfer of information and tacit knowledge. Most obvious barrier are different languages [e.g.
Harzing, 201]. Miscommunication is by far the most stated cultural barrier [Pagan, 2009, p 41].
In Western cultures organizational procedures follow a low context, task-and-deadline-orient-
ed model whereas Eastern cultures rely on a high context, people-oriented model. Conflicts,
time-consuming decision making processes with sub-optimal results and decreasing work ethic
may negatively affect the economic performance in MNCs. Communication, openness, patience,
self control and cooperation are considered the behaviours that minimize the negative impact of
cultural barriers. Globally acting MNCs have developed a formal diversity policy that incorporates
cross-cultural training (Parkinson/Morley, 2006).
Besides the cultural barriers within MNCs a second dimension of these barriers results from the
cultural diversity on international markets. Even in economically highly integrated markets, such as
the European Union, there is no evidence of converging value systems [Beugelsdijk, et al., 2006].
The number of global standardized products is still very low [De Mooij, 2010]. Even supposedly
global products such as the »Big Mac«, are often adapted to the local cultural environment. The
well-known strategy of »think globally – act locally«shows evidence in the increasing search of
SMEs and MNCs to access foreign markets, expertise and technology. Market-seeking, strategic
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