Culture and International Business

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Culture and International Business: An Exploratory Review of the Empirical Research in JIBS and MIR from 1992 to 2002
Daniel W. Baack
Boeing Institute of International Business
Saint Louis University
458 Davis-Shaughnessy Hall
3674 Lindell Boulevard
Saint Louis, MO 63108
314-977-3810
baackdw@slu.edu

Donald Baack
Pittsburg State University
1701 South Broadway
Pittsburg, Kansas 66762
620-235-4583
debaack@pittstate.edu

ABSTRACT
The study of culture is an important component of international business research. This article reviews 111 empirical papers on the topic from Management International Review and International Business Studies. The review finds that the theoretical framework presented by Hofstede (1980) dominates the literature. Additionally, the literature can be organized into three broad research streams: 1) international expansion decisions and performance (including articles on internationalization and entry mode); 2) business differences (both on the individual and firm level); and 3) cultural differences. Based on the review areas for future research are suggested.

CULTUE AND INTERNATIONAL BUSINESS
The study of culture is an important component of international business, both in terms of research and theory building. Culture may be viewed as both a cause and an effect. The culture of a nation or region may affect how work is performed. A governmental overthrow or revolution may have dramatic effects on the culture of a country. Over the years, academics have created several theories that include culture as part of the framework. For example, some suggest that culture affects the level of uncertainty present in transaction cost theory. Culture has also been operationalized as psychic distance in internalization theory. Beyond these theoretical applications, cultural differences have important practical management and marketing implications for multinational firms. The theoretical and practical importance of culture has drawn the attention of business researchers, and many studies have been the result. These studies have either investigated culture

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itself or applied cultural models to international business activities. One group of articles looks at how culture should be operationalized. Others examine how countries differ in cultural terms. The seminal work by Hofstede in 1980 is the primary example of this type of research. In his work [Hofstede, 2001], a cultural typology is introduced that categories work values into: (1) individualism/collectivism, (2) uncertainty avoidance, (3) masculinity/femininity, (4) power distance, and (5) long-term/short-term time orientation.

A second type of culture-focused research is broader in scope. These studies explore how culture affects a variety of topics including entry mode decisions, joint venture success, and negotiation. In these studies, different theoretical concepts drive the research, and culture plays a peripheral role.

This lack of focus on culture creates a gap in the literature. It is difficult to find literature that discusses the effect culture has within these various topics as a whole or to examine how culture is used across topics. This paper attempts to address the gap by completing a preliminary review of the different articles featuring culture in two major international business journals: Management International Review and International Business Studies. The goal of the review is to extract culture-related findings from studies focusing on other issues. Then, it may be possible to provide a more precise view of the role culture plays in international business. This study begins with a discussion of the sample to be reviewed and the method used to analyze this sample. Then, we will present an organizing framework for a more detailed examination of the articles. Using that framework as a guide, a more detailed discussion of the articles will be undertaken. The objective is to help fine tune future research involving...
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