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International Journal of Contemporary Business StudiesVol: 4, No: 2. February, 2013 ISSN 2156-7506Available online at http://www.akpinsight.webs.comobserved that more favorable the environment in which cross border affiliate is operating the better willbe its performance.Performance of multinational organizations is the MNE performance has been aleading research subject, and many studies has considered cultural distance is an important forecaster ofperformance (Luo and Peng, 1999; Palich and Gomez-Mejia, 1999). For performance improvement ininternational diversification multinationals must reduce the production cost, increase sales and shareoverall risk of business. Some scholars found that higher diversity in cultures tend to decreaseperformance of multinationals. (e.g., Li and Guisinger, 1992; Chang, 1995).Luo and Peng (1999) argue that differences in national culture tend to lower performance when MNEsenter new markets. Cultural assumptions create environment and the nature of impacts within theorganization outcomes in control and strategy formulation. Scholars are in agreement about influence ofnational culture on performance in international diversification. But studies regarding cultural differencesand acquisition performance found disagreement in their findings (Weber, Shenkar, & Raveh, 1996). )Foreign entry road maps of alternatives by MNEs are explainable by cultural distance. (Harzing, 2003).culture distance between countries can be classified in accordance with their national culture.(Søndergaard,1994),.A way of thinking in between cultures the similar most important the matching ofscores among cultural dimensions. (Schwartz, 1994).More cultural differences are linked with more diversity in decision making (Jemison & Sitkin, 1986).We can conclude from these findings that higher costs due difference in culture in integration phase is thereason for low performance of firms. This conclusion provides strong support for placement of nationalculture dimension as a moderator in our model of this study. Morosini, Shane, and Singh (1998) found asignificant positive relationship between cultural distance and performance.Harrison, McKinnon,Panchapakesan, and Leung (1995) propose that nations with similar cultural characteristics should begrouped together and compared with other bunch not similar in characteristics. Calori et al. (1994) andHarrison et al. (1995) all express culture to have a computable impact on a variety of facet of theorganization (including structure, creativity, and entrepreneurship). Mayrhofer (2004) explains theinfluence of cultural on merger-acquisition choices is noteworthy even among adjacent France andGermany.MODEL OF THE STUDYIndependent Variable Moderator Dependant VariableIDS=International Diversification strategyNCD=National Culture DimensionNCDI DSPerformanceUncertainty Avoidance has defined as the “extent to which members of an organization or society striveto avoid uncertainty by reliance on social norms, rituals, and bureaucratic practices to alleviate theunpredictability of future events.” (James.B.Hunt,2000) Extending Hofstede's (1980) arguments, Shane(1992, 1993) found that nations with , weak uncertainty avoidance, had higher rates of innovation.2013©Academy of Knowledge Process91