A Conceptual Model and Study of

Cross-Cultural Business Relationships

Jerome D. Williams
PENNSYLVANIA STATE UNIVERSITY

Sang-Lin Han
CHUNGNAM NATIONAL UNIVERSITY

William J. Qualls
MIT-SLOAN SCHOOL OF MANAGEMENT

Business-to-business marketing relationships have taken on a variety of

names, ranging from long-term relationships, buyer-seller partnerships,
strategic alliances, joint ventures, network organizations, to fully integrated hierarchical firms, cross-marketing agreements, etc. (Oliver, 1990,
Gross and Neuman, 1989; Webster, 1992). Despite the plethora of terms
used to describe business relationships, we know little about what determines a successful business relationship. This article develops a conceptual
model of cross-cultural business relationships. An exploratory study was
conducted to examine the impact of social and structural bonding as
determinants of business relationship performance. The study found that
knowledge of cultural orientation and its relationship to the social and
structural bond that exists between partners is a key predictor of longterm commitment in cross-national business relationships. J BUSN RES
1998. 42.135143. 1998 Elsevier Science Inc.

enichi Ohmae once said that, Companies are beginning to learn what nations have always known: in a
complex, uncertain world filled with dangerous opponents, it is best not to go it alone. Ententethe striking of
an allianceis a responsible part of every good strategists
repertoire. In todays competitive environment, this is also
true for corporate managers Ohmae (1989, p. 143). In an
attempt to gain greater competitive advantage through relationships, firms have been shifting away from adversarial interactions, typical of the arms-length, traditional buyer-seller
transaction, and seeking longer-term relationships based on
mutual advantage and mutual survival (Wheatley, 1991).
Webster (1992) notes that these new organizational forms are
replacing simple market-based transactions, and in the future

Address correspondence to Jerome D. Williams, College of Business Administration, Pennsylvania State University, 701 Business Administration Building,
University Park, PA 16802-3007.
Journal of Business Research 42, 135143 (1998)
1998 Elsevier Science Inc. All rights reserved.
655 Avenue of the Americas, New York, NY 10010

business relationships will be increasingly perceived as a strategic resource much like other resources as products and
technology.
This trend is particularly evident in the formation of business relationships between firms from different countries
(Hergert and Morris, 1988; Harrigan, 1988). Fortune magazine
recently reported that U.S. corporations formed over 2,000
alliances in the 1980s with European companies alone (Kraar,
1989). There are many reasons for this growth. For one,
the dynamics of the world business environment are forcing
companies to cooperate in order to compete, and in some
cases, in order to survive. Consequently, companies are finding that the sharing of risk and resources is an increasingly
desirable strategy (Business International Corporation, 1987).
The primary thesis of the present study was to determine
and understand the antecedent variables that contributed to
the performance of cross-national business relationships, as
manifested by commitment. From a theoretical standpoint,
the answer to the above concerns provides researchers with
a more established framework for explaining and estimating
the success of cross-national business relationships. From a
managerial point of view, it suggests that the chances of success of cross-national business relationships are determined
partially by the appreciation and understanding that each
country partner has of the others social as well as structural
bonding requirements and expectations. Where American
firms are more likely to rush into a business relationship as
it is defined in the contractual arrangement, firms from the
Asian-Pacific Rim are more likely to focus on establishing
the social requirements of the relationship between the two
organizations as a prerequisite for establishing and maintaining a business relationship.
This article will analyze the role of culture, focusing on
interpersonal orientation as manifested by the individualistic/
collectivistic national characteristic, in affecting business-toISSN 0148-2963/98/$19.00
PII S0148-2963(97)00109-4

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1998:42:135143

business relationships. A conceptual model will be developed

based on social and structural bonding as antecedents to relationship performance, measured by commitment. We will
then report on an exploratory study to test hypotheses developed from the model.

Culture in Business Relationships:

Interpersonal Aspects
Central to the research premise underlying the concept of
interpersonal orientation in business relationships and the
role that culture plays in influencing these relationships is the
definition of culture. As such, culture is an important force
determining managerial attitudes and practices; it influences
the practice of management and is considered an essential
tool for understanding the process of doing business (Allen,
Miller, and Nath, 1988). Despite numerous areas in which
culture can influence business relationships (Sheth, 1981),
most of the research has centered on only one domain, namely
bargaining negotiations (e.g., Graham, 1983, 1984, Harnett
and Cunningham, 1980). In this article, we attempt to move
beyond merely treating culture as a descriptive variable in
business relationships. Emphasis is placed on establishing
prepositional statements and testable hypotheses that could
serve as the foundation of a theoretical framework to explain
cultures impact on business relationships (Williams et al.,
1989; Wilson and Moller, 1988).

Culture as an Obstacle in
Cross-National Business Relationships
Since the mid 1980s, firms have accelerated the pace at which
business relationships are being formed, despite the fact that
success rates for interfirm ventures and cooperative strategies
are reported to be low (Harrigan, 1985; Levine and Byrne,
1986). Previous research has shown that developed country
joint ventures tend to have an instability rate of around 30%
with developing countries between 45% to 50% (Beamish,
1984, 1985; Killing, 1983; Reynolds, 1984).
One possible explanation that has been identified by researchers as one of the major obstacles in successful performance in cross-national business relationships is the degree
of culture distance (i.e., the extent to which the norms and
values of the two firms differ because of their separate national
characteristics) that exist between partners (Geringer and Hebert, 1990; Lewis, 1990; Ford, 1984). For example, Park
(1991) notes that although a large number of cross-national
relationships are structurally and contractually sound, they
have been reported to be organizationally unstable and performing poorly.
Therefore, it is critical to understand the role of culture in
business marketing and especially in establishing and maintaining cross-national relationships (Samli, Grewal, and Ma-

J. D. Williams et al.

thur, 1988; Clark, 1990) if we are ever going to be able to

predict their success.

Defining Culture: Focus on

Individualism/Collectivism
Researchers have identified several dimensions of national
character and proposed numerous definitions of culture. In
the present study, we use the definition proposed by Hofstede
(1980), which defines culture not as a characteristics of an
individual but of a group of people that are conditioned by
the same education and life experience, (i.e., the collective
mental programming that people have in common.) Hofstede
determined empirically four key criteria by which national
cultures differed, which includes the dimensions of power
distance, uncertainty avoidance, individualism-collectivism,
and masculinity-femininity.
Kale and Barnes (1992) detailed how each of Hofstedes
four dimensions could shape aspects of the content and style
of participants from different countries in a buying-selling
situation, (e.g., preferences for certain product attributes, selling approaches, etc.) Of the four, individualism-collectivism
seems to be most pervasive difference associated with the
cultures of various countries. Basically it relates to the status
of the individual and his/her role in society and is closely
related to a number of similar concepts referred to by many
different terms, e.g., situation centeredness, social orientation,
etc. (Wheeler, Reis, and Bond, 1989).
Individualism and collectivism both characterize how individuals interact with one another on an interpersonal level,
or what other researchers have called the interpersonal orientation (IO) continuum (Rubin and Brown, 1975). A society
that values individualism is one in which the ties between
individuals are very loose. A society that values collectivism
is one in which individuals are expected to look after each
other, and thus are more people oriented. Similarly, high
IO societies are highly responsive to interpersonal aspects of
relationships with others, whereas low IO societies are just
the opposite.

Interpersonal Orientation and

Bonding in Business Relationships
In previous research examining interpersonal influence in
marketing, most of the studies have focused on consumer
situations, such as the study of the market maven (Feick and
Price, 1987), relationship quality in selling consumer whole
life insurance (Crosby, Evans, and Cowles, 1990), and attributional sensitivity (Netemeyer, Bearden, and Teel, 1992). Fewer
studies have focused on the role of interpersonal influence in
business marketing settings and even fewer studies examine
the problem in a cross-national context. The one exception
is the Henthorne, LaTour, and Williams (1990) study on risk
reduction.
In business marketing, the process of interpersonal orienta-

Cross-Cultural Business Relationships

tion is closely related to what has been termed bonding. This

concept, bonding, has been successful in explaining withincountry buyer-seller relationships (IMP Group, 1982; Wilson
and Moller, 1988) and has been identified as an important
concept for examining the performance of business relationships between countries. Bonding is typically concepturalized
as a dichotomy between structural and social bonding. Spitzberg and Lane (1983) reviewed many approaches to conceptualizing IO constructs and in synthesizing all the similarities
and approaches. They identified four dimensions, of which
two (social relations, task orientation) are directly associated
with the structural and social aspects of bonding. They found
a social relations area (affiliation, cooperation, socialability,
etc.), and a task orientation area, which are similar to the
constructs of social and structural bonding.
Social bonding is similar to what Turner (1970) has called
personal bonding. During social bonding, individuals are
bonded together via the organizational members personal and
social relationships with their counterparts in a particular
firm. Personal factors such as trust or satisfaction with the
relationship partner play an important role in developing social bonding. Other researchers have noted the importance
of personal and noneconomic satisfaction in a business relationship and have suggested that as relationships continue
members in each organization become more and more enmeshed in the social networks of the other and their relationship becomes more binding, stable, and predictable (Dwyer
et al., 1987; Pfeffer and Salancik, 1978). Jackson (1985) suggests that the buyer may rely on personal representatives of
the seller to provide important business values, and that the
personal relationship may be the best available evidence that
the representative is interested and committed enough to provide that value.
On the other hand, structural bonding is similar to what
Turner (1970) called task bonding, but in a much broader
sense. In this article, structural bonding is defined as the
degree to which certain ties link and hold a buyer and seller
together in a relationship as the result of some mutually beneficial economic, strategic, technological, and/or organizational
objective, etc. For example, organization A could be involved
in a business relationship and closely tied to organization B
because: (1) organization B provides A with a high level of
technological expertise, e.g. computerized delivery system),
(2) B supplies better priced products (economic benefit), (3)
B supplies most of the parts needed (the component is central
to the product of A), (4) A has already invested considerably
in the relationship with B and will incur a high switching
cost, and (5) A wants to have a business relationship with B
to secure future business opportunities.
Both social and structural bonding have been identified in
previous research as antecedents to commitment, a critical
variable indicating performance of business relationships.
Similar to other researchers, we operationalize commitment to
serve as a surrogate measure of the performance of a business

J Busn Res
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137

relationship. For example, Wilson and Mummalaneni (1988)

argue that the greater the commitment of the organization to
a specific relationship, the greater the stability of that relationship and the greater the chance that the duration of the relationship will be longer. Whereas there actually can be different
types of commitment, Jackson (1985), we concentrate on two:
commitment to an organization (through structural bonding)
and commitment to a person (through high interpersonal
orientation and social bonding).

A Conceptual Model
Using the Hofstede framework as a foundation, a conceptual
model of the effects of culture and interpersonal orientation
on business-to-business relationships is presented in Figure
1. Briefly, the model suggests national culture as defined by
Hofstedes four dimensions impacts an individuals behavior
both directly and indirectly (through organizational culture).
We are primarily interested in the influence of Hofstedes
individualism/collectivism dimension because of its connection with interpersonal interactions as explained above. When
national culture has a direct effect (Figure 1, right-hand side),
the dimension of individualism/collectivism (which is highly
correlated with interpersonal orientation) leads to an emphasis
on social bonding as a determinant of commitment in the
business relationship (i.e., commitment based on the people
involved). Because individualistic countries tend to have people who rank low in IO and collectivistic countries tend to have
people who are high in IO, the corresponding IO behavior in
turn determines the relative importance of social bonding in
impacting commitment in a business relationship.
When assessing the indirect effect of national culture (Figure 1, left-hand side), Hofstedes dimensions are filtered
through organizational culture, and hence, more emphasis is
placed on the individuals relationship with the other firm or
organization, rather than just interpersonal interaction with
the people in the organization. Therefore, structural bonding
takes on greater importance and leads to commitment in the
business relationship based on the organization involved and
its structural aspects, such as the other firms technology, etc.
In filtering the effects of national culture and the influence
on interpersonal interactions, organizational culture encompasses the pattern of shared values and beliefs that enables
people within the organization to understand its functioning.
As such, it furnishes them with behavioral norms and influences the way members of the organization think, behave,
and manage in their relationship with other organizations and
includes aspects such as structure, technology, organization
philosophy, and organizational policy and decision-making
(Deshpande and Parasuraman, 1986; Deshpande and Webster, 1989; Allen, Miller, and Nath, 1988). These aspects tend
to put more emphasis on the structural aspects of business
relationships, i.e., structural bonding, as opposed to the interpersonal aspects, i.e., social bonding.

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J. D. Williams et al.

Figure 1. Effects of National Culture, Interpersonal Orientation, and Bonding on Business Relationships.

Even if one looks at an organizational culture that emphasizes a people orientation, relationship performance will still
be based on the structural aspects, i.e., commitment to another
people-oriented organization, as opposed to commitment
to individuals through social and interpersonal interactions,
as influenced by the direct effects of national culture. For
example, one aspect of organizational culture identified by
Reynolds (1986) is task versus social focus, which contrasts
the relative priorities of an organization between organizational work versus concern for the personal and social needs
of its members. Firms with a purely task-driven focus will
strive toward almost robotic efficiency in the attainment of
their financial and growth objectives, whereas social-focus
firms attempt to accommodate the social needs of its members.
Our model suggests that individuals in a task-focus organizational culture, or for that matter a social-focus organization,
will be more likely to commit to a relationship with another
organization with similar structural aspects, i.e., structural
bonding. At the same time, though, individual will be more
likely to commit to a relationship with another individual by
interacting on an interpersonal level, i.e., social bonding.

Hypotheses
This conceptual model now allows us to develop hypotheses
about the performance of business relationships between firms
from different national cultures. Structural and social bonding
are the antecedents to commitment in business relationships.
The importance an individual will place on social bonding,

which focuses on commitment to people, will be determined

by national culture (i.e., IO as reflected by the individuals
individualist/collectivistic background).
In the context of the framework presented in Figure 1,
social and structural bonding impact the degree of commitment in a business relationship. For example, Turnbull and
Wilson (1989) analyzed how a specific firm could build a
strong bond between itself and its customer and found that
bonding between the specific firm they analyzed and its customer was mostly at the social level. However there also was
some structural bonding, particularly with medium-sized accounts. Therefore, both social and structural bonds should
contribute in committing firms from different cultural backgrounds to a relationship. As such it is hypothesized:
H1a: Structural bonding is positively related to commitment for different national cultures.
H1b: Social bonding is positively related to commitment
for different national cultures.
Wilson and Mummalaneni (1986, 1988) have posited that
structural aspects of the relationship should be more dominant
in the bonding process. Similarly, Dant and Wilson (1989)
found that structural commitment to be the key explanatory
variable of relational continuity, i.e., long-term relationship.
Typically, two firms are likely to get involved initially in a
relationship because of some structural aspects of the relationship (e.g., technical relevance, economic advantage, future
opportunity) and such factors are critical to the establishment

Cross-Cultural Business Relationships

of the relationship. In this sense, organizational decision-making may be influenced more by the structurally bonded situation than the socially bonded situation. Therefore, structural
bonds should be more dominant in the establishment and
maintenance of a long-term relationship than social bonds.
As such, the second hypothesis suggests:
H2: Structural bonding has a greater influence than social
bonding on commitment for different national cultures.
Wilson and Mummalaneni (1988) allowed for variation in
commitment based on the relative importance of social and
structural bonding in business relationships. They posit that
commitment is greater in business relationships where there
are strong social relationships compared to those that are pure
structural business relationships. Given the importance of high
IO in collectivistic countries, social bonds should be more
dominant in business relationships among collectivistic countries than among individualist countries. Similarly, given the
importance of task focus in organizational culture, structural
bonds should be more dominant in business relationships
among individualist countries than among collectivistic countries.
This is similar to what the literature suggests in organizational commitment. Randall (1993) notes that one would anticipate greater affective attachment (a sense of loyalty) to
institutions in collectivistic cultures and greater calculative
involvement (a cost-benefit approach) with institutions in individualistic cultures. Boyacigiller and Adler (1991) argue that
the commitment of employees with collectivistic values may
arise from ties with managers, owners, and co-workers,
whereas the commitment of employees with an individualistic
orientation may be due to the job itself or the compensation
system. Therefore, the third hypothesis suggests the following
for structural and social bonds:
H3a: Structural bonding has a greater influence on commitment for individualistic countries than for collectivistic countries.
H3b: Social bonding has a greater influence on commitment for collectivistic countries than for individualistic countries.

Research Method
To test these hypotheses, we collected data from five national
cultures. This research is an extension of a larger study based
just on business relationships in the United States. Our study
was designed as an exploratory study to begin testing the
validity of our conceptual model.

Sampling Procedure and Data Collection

A descriptive field study was designed to test the above hypotheses. The study used a questionnaire survey method using a

J Busn Res
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139

sample of business people in five countries: the United States,

China, Jamaica, Costa Rica, and Germany. The convenience
sample was drawn from a set of executive education courses
taught in the respective countries.
We collected 279 questionnaires from the business managers in the five countries (China 25; Germany 31; Costa Rica
40; Jamaica 54; the Unites States 129). In the case of U.S.
data, nonresponse bias was assessed by comparing early with
late respondents as suggested by Armstrong and Overton
(1977). The test found no evidence suggesting that respondents might differ from nonrespondents in terms of the study
variables.

Country Cluster Classification

Comparative management researchers have tended to use a
nation or country as the primary unit of analysis when studying culture (Nath, 1988). In this study, we selected nations,
but rather than compare just specific countries, we chose to
compare individual countries and clusters of countries, as
recommended by Randall (1993). Based upon previous research, we estimated that the five countries selected for our
study would be placed along the continuum of Hofstedes
dimensions, as illustrated in Figure 2. As the individualisticcollectivistic dimension is the most related to IO, we particularly examined Hofstedes (1980) characterization of these
countries on that dimension and other literature to assure
differentiation between the selected clusters of countries.
North American culture typically is characterized as individualistic, with the United States specifically being highly
individualistic (Hsu, 1981). There seem to be strong similarities between North America and the Anglo group of countries
of Western Europe in terms of a strong individualistic orientation (Nath and Sadhu, 1988). Thus, it was hypothesized that
Germany and the United States would be countries that would
exhibit a high degree of individualism and would fall on the
individualistic end of the continuum.
Among the collectivistic countries, very little research has
been conducted specifically on Jamaica. However, we know
that the Caribbean area was populated by migrants primarily
from Africa and Asia (Brodber, 1985), both of which tend to
be collectivistic societies. Today 90% of Jamaicas population
is made up of people form African descent, and research has
shown that most African cultural groups tend to score high
on collectivism because of the prevalence of the extended
family social network that characterizes most societies in Africa
(Kiggundu, 1988). Latin America exhibits similar cultural
norms as Africa in terms of collectivism (Quezada and Boyce,
1988; Nath and Sadhu, 1988). In Latin American business
relationships, the social contacts, i.e., social bonding, developed between the parties are often far more significant than the
technical specifications and the price, i.e., structural bonding
(Herbig and Kramer, 1992; Ghauri, 1986).
Similar to Jamaica, no empirical study as been done on
the Peoples Republic of China, using Hofstedes conceptual

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J. D. Williams et al.

Figure 2. Comparison of country clusters on Hofstedes cultural dimensions.

framework. However, other researchers have observed that a

primary characteristic of Chinese culture appears to be the
collectivistic orientation (Chan, 1986; Ch9ien, 1973; Tung,
1988). Thus, in the present study, Jamaica, Costa Rica, and
China were classified a priori as largely collectivistic societies,
as reflected by the preponderance of evidence in the literature.

interpersonal orientation. The dependent measure of commitment was based upon similar measures used by IMP Groups
standardized questionnaire (IMP Group, 1989) and Mummalanenis (1987) study. All items were measured on a 7-point
Likert scale.

Constructs and Measures

Results and Discussion

The dependent and independent measures used in the present

study were selected from a previously developed scale to
measure antecedents of buyer-seller long-term relationships
in the United States (Han, 1991). In checking the internal
consistency of each construct, Han (1991) examined the reliabilities of the measures by computing Cronbachs coefficient
alphas and found that the coefficients of many items exceeded
0.7, which is the threshold Nunnally (1978, p. 245) recommends. Therefore, we felt the items successfully tapped the
constructs they were designed to measure and could be applied in this exploratory study.
Hans (1991) independent measures were developed primarily from previous research and the authors conceptualization of the constructs. Using the techniques recommended by
Gerging and Anderson (1988) and suggested by Churchill
(1979), we adapted those measures to fit the marketing context of our study, namely, a cross-national comparison of

We conducted regression analysis to examine the hypothesized relationships between a countrys culture in affecting
the interpersonal relationship in a business-to-business relationship. The basis for the specific tests of the hypotheses and
their results are presented in Tables 1 and 2.
The results in Table 1 and Equation 1 of Table 2 indicate
that structural bonding and social bonding are positively related to commitment to the relationship and these results
support H1a and H1b. A review of the individual items in
Equation 1 reveals that the effect of structural bonding on
commitment is much bigger than the effect of social bonding.
Therefore H2 was strongly supported, and this result is consistent with Wilson and Mummalaneni (1988) who posited that
structural aspects of business relationship would be more
dominant in the bonding process.
Equations 2 and 3 of Table 2 show the different regression
models between collectivistic cluster of countries (i.e., China,

Cross-Cultural Business Relationships

J Busn Res
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Table 1. Regression Results from Measuring the Impact of

Structural Bonding and Social Bonding on Commitment

Table 2. Regression Results for Group Data on Commitment

Variable

Standardized Regression Coefficients

China Germany Jamaica Costa Rica

USA

Structural
bonding
Social
bonding
R2

0.61
(4.37)
0.37
(2.63)
0.58

0.67
(9.97)
0.03
(0.46)
0.45

0.67
(5.51)
0.28
(2.28)
0.76

0.58
(4.82)
0.09
(0.75)
0.37

0.55
(3.97)
0.18
(1.31)
0.37

141

Numbers in parentheses show t-value of each coefficient.

All R2 values are significant at p , .001.

Jamaica, and Costa Rica) and individualistic cluster of countries (i.e., the United States and Germany). As seen in the
results, the effect of social bonding on commitment in collectivistic countries was bigger than the effect of social bonding
in individualistic countries (0.20 vs. 0.09).
Hypotheses 3a and 3b stated that a relationship existed
between countries degree of individualism and collectivism
and the extent of structural and social bonding. Our results
supported these hypotheses and confirmed our belief that
highly interpersonal orientation countries would be highly
responsive to interpersonal aspects of business relationship
and put more emphasis on social bonding.
The United States (0.67) and Germany (0.67), which are
highly individualistic countries, exhibited stronger structural
bonding relationships that China (0.61), Jamaica (0.58), and
Costa Rica (0.55) as expected. Although not significantly different, the direction and pattern of effects support our hypotheses. Conversely, China exhibited the strongest social bonding
of all the countries. Similarly, as expected, Jamaica and Costa
Rica exhibited stronger social bonding than the United States.
The one outlier is the social bonding exhibited by Germany.
Germany had the second highest social bonding coefficient
of all the countries.

Conclusion
In this study we have attempted to increase our understanding
of the critical yet neglected subject of business-to-business
relationships and the importance of national culture, particularly interpersonal orientation as reflected through the impact
of bonding. Drawing upon past work on social and structural
bonding and the framework developed by Hofstede (1980)
for describing a countrys national culture, a conceptual model
was developed and an exploratory empirical test was conducted that has significant implications for business-to-business marketers and researchers. At the core of this model is
the set of antecedent variables of social and structural bonding
that determine how firms will interact and how this interaction
will determine commitment to a relationship.

Variable
Structural
bonding
Social
bonding
R2

Standardized Regression Coefficients

Individualistic
Collectivistic
Countries
Countries
All
(i.e., USA and (i.e., China, Jamaica,
Countries
Germany)
and Costa Rica)
0.63
(13.05)
0.10
(1.96)
0.43

0.69
(11.97)
0.09
(1.46)
0.52

0.55
(7.32)
0.20
(2.61)
0.38

The standardized regression model was specified as follows: Commitment 5 B1*Structural Bonding 1 B2*Social Bonding where B1 and B2 are standardized coefficients.
Numbers in parentheses show t-value of each coefficient.
All R2 values are significant at p , .001.

The framework illustrated in Figure 1 provides a mechanism for identifying variables that are important for establishing and managing long-term business relationships. The findings from the present study support the hypotheses that
knowledge of the cultural orientation of the country and its
relationship to the strength of the social and structural bonds
serve as key predictors of the long-term commitment in crossnational business relationships.
The findings from the present study support the hypothesis
that cultural orientation as illustrated through the degree of
individualism and collectivism across countries affects the
probability of success of cross-national business relationships.
As the number of marketing relationships between firms from
different countries continues to increase, such findings will be
essential in the establishment and management of successful
cross-national business relationships.
The authors gratefully acknowledge the financial support of the Korea Research Foundation.

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