global alliances in tourism and hospitality management 0789008181

32 GLOBAL ALLIANCES IN TOURISM AND HOSPITALITY MANAGEMENT
couraged (Tse et al. 1994). Higher context cultures tend to communicate
more verbally, which behavior might lend itself to more WOM activity.
These cultural characteristics manifest themselves in a wide variety of business
practices differences between the U.S. and Japan: The Japanese emphasize
long-term growth and stability over market share (Anterasian et al.
1996), conduct business with common keiretsu (such as Mitsui or Sumitomo)
industrial group companies before giving business to outsiders (Czinkota and
Woronoff 1986), and spend six times the amount of per capita GNP as
Americans on business entertainment (Sakaiya 1993) to develop proper context
in business relationships. In the current study, Japanese companies are
generally expected to engage in more intense social network WOM activity
and use referral sources that are more collectivist and higher context in nature
than Americans.
Location of Operation: Foreign vs. Domestic
In addition to a main effect for national culture, the current research
examines the effect of relative location. That is, will the influence of national
culture vary between situations where companies operate in environments of
their home culture versus a foreign culture? Assuming that Japanese buyers
behave exactly the same both inside and outside of Japan would be a mistake.
For example, acculturation theory examines the results of two different cultures
coming in direct contact with one another and how patterns in both
groups change (Beals 1953). In the current study, acculturation theory would
generate the following questions: Will purchasers of travel services take their
business culture and practices with them when setting up a company in a
foreign location? Or, is there something about the business environment in
the foreign country that forces the new entrant to behave like others in that
country? Previous literature has shown that a company's behavior in a foreign
country is determined by two factors: its home culture and the culture of
the foreign country (Tse et al. 1988). The current research theorizes that a
company's WOM activity in a foreign market would differ from the pattern
in its home-country culture because the company would tend to use informed
intermediaries to locate the services that it uses. Such is consistent with
research in cognitive psychology, which has shown that unfamiliar situations
require two types of knowledge (Anderson 1983): procedural knowledge
(how to), and contextual knowledge (relationships). In addition, March and
Simon's (1958) bounded rationality concept asserts that organizations begin
with the known to proceed to the unknown. A trusted intermediary (known)
in a foreign market (unknown) would fit such a description. Finally, transaction
cost analysis (Williamson 1975) infers that firms will seek to reduce their
expense of either buying or building expertise in a foreign market. A company
representative who asks key market informants for their help in forming