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International Journal of Contemporary Business StudiesVol: 4, No: 2. February, 2013 ISSN 2156-7506Available online at http://www.akpinsight.webs.comIt was Found that partner differences in two of the dimensions (uncertainty avoidance ) had a strongnegative relationship with the survival of the collaboration over several different periods . Differencesin uncertainty avoidance and long-term orientation could represent differences in how partners perceiveand adapt to opportunities and threats in their environment (Schneider, 1991; Schneider and De Meyer,1991). Uncertainty avoiding societies have very low degree to adapt to social and environmental demandsand practices, low innovative are likely to risk averse societies (Shane, 1993; 1995). Uncertaintyavoidance and control reassertion is a outcome of strategic responsiveness.(Dutton and Jackson ,1987).The level of power examines and analyzes that French who have the great necessity of uncertaintyavoidance; the British are risk averse Laurent (1983) and Horovitz (1978).Luo and Peng (1999) argue that differences in national culture tend to lower performance when MNEsenter new markets. Cultural clash can happen in case of different national cultural of parent andsubsidiary company (Brock, Barry, & Thomas, 2000). Very, Lubatkin, and Calori (1996) observed theinfluence of national culture in merger and post acquisition performance of cross national firms. NorthAmerican and Anglo cultures are risk averse or pessimistic more careful in taking quick action, expandactivities and dogmatic vision (Frenkel- Brunswick, 1949). so on basis of this literary support we canpropose the following propositions.Proposition 1:National culture dimension of (uncertainty avoidance) moderates the relationship between internationaldiversification and performance.1 (a) If the national culture of the parent and subsidiary company is low in uncertainty avoidance, it willenhance the performance in case of international diversification.1(b) If the national culture of the parent and subsidiary company is high in uncertainty avoidance, it willnegatively affect the performance of the firm.Power Distance is defined as the level to which members of an organization or society perceive and be inagreement on unequal distribution of power. In a high power distance culture, the ideal leader is a kindtyrant, but in a low power distance culture, the ideal leader would be imaginative democrat (Hofstede andBond, 1988). Extending Hofstede's (1980) arguments, Shane (1992, 1993) found that nations with lowpower distance had higher rates of innovation.Additionally, Kedia et al. (1992) found that R&Dlaboratory productivity was positively associated with low power distance in both academic and industrialresearch settings. Luo and Peng (1999) argue that differences in national culture tend to lowerperformance when MNEs enter new markets. Cultural clash can happen in case of different nationalcultural of parent and subsidiary company(Brock, Barry, & Thomas, 2000). Very, Lubatkin, and Calori(1996) observed the influence of national culture in merger and post acquisition performance of crossnational firms.Pothukuchi et al.'s (2002) suggested that associates’ cultural differences may have more influence oninternational alliance performance as those differences become more directly related to the alliance'sprimary value-creating activities.There found more integration related problems when both parent andsubsidery mismatch in their culture scores on power distance ,as compared to the companies which havesame national culture scores on power distance, same is with resource sharing.( Barkema and Vermeulen,1997) Low power distance should have a positive impact on the social and environmental risks. A highpower-distance culture is question mark as code of conduct.(Cohen,Pant and Sharp,1996).Now we canpropose the following proposition by this literary support.PROPOSITION: 2National culture dimension of Power distance moderates the relationship between internationaldiversification strategy and performance.2013©Academy of Knowledge Process92