Professional Documents
Culture Documents
Sang-Lin Han
CHUNGNAM NATIONAL UNIVERSITY
William J. Qualls
MIT-SLOAN SCHOOL OF MANAGEMENT
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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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.
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137
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,
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.
J Busn Res
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139
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J. D. Williams et al.
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.
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,
J Busn Res
1998:42:135143
Variable
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
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
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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