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Operationalizing cultural distance with country level scores: Moderating role of contextual factors
, Vikas Kumar
Published in Academy of Management
Volume: 2015
Issue: 1
Cultural distance is one of the most widely used distance construct in international business. However, its application as having linear and homogenous impact on organizational actions and performance has long been questioned. In this paper, we attempt to redress this weakness by examining the moderating effects of firm-level capabilities and industry context, on the impact of cultural differences on firm-level outcomes. Drawing on the organizational learning theory with cultural friction perspective, we hypothesize that the ‘cultural experience reserve’ of a focal firm is a potential firm-specific capability, mitigating the negative impact of cultural differences on cross-border deal abandonment. Second, we hypothesize that the firm’s industry context impacts the uncertainties associated with cultural differences. Our findings based on a sample of 197 Indian services sector firms support our theoretical predictions.
About the journal
JournalAcademy of Management Proceedings
PublisherAcademy of Management
Open AccessNo