Formal international contracts in the presence of cultural distance: An empirical analysis of biopharmaceutical alliances

Formal contracts are designed to manage the moral hazard issues and inherent risks that come with relationships between organizations. These contracts play an important role in nonequity international alliances, where greater cultural distance between the partners gives rise to more uncertainty in the relationship. At the same time, the contract is the outcome of a negotiation process, and this process is affected by the cultural distance between the partners. This article addresses whether cultural distance affects contract design and content. Rather than test an established model, we use an inductive approach to conduct a detailed empirical analysis of 135 two‐party international research‐and‐development contracts for clinical development in the biopharmaceutical industry. The results show that cultural distance wields complex effects on the contract and its content. They also indicate that a contract will be less detailed—with fewer monitoring clauses and a narrower definition of the collaborative scope—when the partnering firms operate in highly distant national cultures.     

The role of communication competencies in international business relationship development

Effective communication between international business partners is critical for global success. Underlying national and organizational cultural differences in international business relationships creates hurdles to effective communication, hindering performance. To assist managers in understanding this issue, a model of communication effectiveness for international relationship development, derived from industry examples, theory, and a dataset consisting of 123 qualitative interviews conducted with American, Canadian, Chinese, and Japanese managers is presented. Further, in order to assist managers in the task of developing more effective communications, a six-step process aimed in directing managerial action is presented. By proactively managing its communications, a firm can develop stronger international business relationships facilitating the rapid response to market opportunities and challenges.     

Beyond Paternalism: Cross-cultural Perspectives on the Functioning of a Mexican Production Plant

Expatriate managers of international businesses in emerging countries often struggle to mobilize their workforces. They sometimes perceive profound cultural differences as a barrier to the progress of their organizations. Some international businesses may adopt a paternalistic attitude toward their employees; but this questionable strategy brings mixed results. Are there ways out of paternalism for international businesses in emerging areas? This paper examines the diverging views held by foreign managers and local personnel of a foreign-owned production plant in Mexico, which managed to mobilize its workforce by building a strong sense of community, allowing a certain form of collective control to replace the paternalistic model, with its bonds of personal allegiance. Contrasting perspectives between Mexican and foreign employees show that intercultural misunderstandings, rather than the peculiarities of the local culture, are the greatest challenge to cooperation.     

Managerial Commitment to Sustainable Supply Chain Management Projects

Most companies are under pressure to improve the environmental sustainability of their supply chains. However, there is considerable variance in companies' ability to successfully deploy environmental management projects. One important factor, according to articles in the academic and business press, is the ability of champions of sustainable supply chain management (SCM) projects within organizations to gain the commitment of colleagues (e.g., other managers from a variety of functions) to help these projects succeed. Therefore, this paper examines variables that affect a project champion's ability to gain this commitment from colleagues. In particular, building on existing research, this research employs a video‐based experimental design to examine the effect of the influence approach that the project champion employs, the values of the person the champion is trying to influence, and the organizational climate. The results suggest that organizational climate and certain individual values directly affect commitment. There are also interactions between values and influence tactics. The research adds to the field's growing knowledge on the antecedents of sustainable SCM within companies while providing valuable guidance for environmental champions and for top managers.     

Transformational Leadership: Managing the Twenty‐First Century Sales Force

In today's more diverse sales organizations, sales managers face important interpersonal challenges to achieving high‐quality relationships, which result in better performance within their sales force. In this article, it is argued that cultural distance can negatively influence sales manager and sales subordinate relationships. The quality of these relationships ultimately influences the level of effort that sales subordinates exert toward achieving organizational sales goals. However, despite the potential obstacle of cultural distance, sales managers can utilize transformational leadership as a means to mitigate its adverse effects on one‐to‐one relationships with members of the sales force.     

The Dependence of Family Businesses on a Single Decision‐Maker*

Anecdotal evidence suggests that family businesses are very dependent on a single individual (the owner‐manager). However, the degree of dependence previously has not been studied formally. Further, an explanation for why some family businesses are highly dependent on the owner‐manager and others are not has not been explored. Utilizing a national survey of Canadian family‐owned businesses, this paper therefore addresses two central issues: (1) the degree of dependence of family‐owned businesses on a single individual; and (2) the factors associated with this reliance. Self‐report responses from family business owners provided evidence of a high level of dependence on the owner‐manager. In 75 percent of all family businesses, respondents believed that the company was either dependent or very dependent on them. The response to this subjective question is consistent with responses to our three more objective measures. First, 65 percent of owner‐managers responded that they made all the major decisions in at least three of five functional business areas. Second, these businesses had few key managers—in 57 percent of all businesses, there were only two or fewer key managers in addition to the owner. Third, in 62 percent of all family businesses, neither had a successor been chosen nor had a process been put in place for choosing a successor. These results strongly suggest that family businesses are highly dependent on a single individual. Six factors had significant power in explaining the degree of dependence. Two factors related to the owner‐manager—dependence decreased in the age of the owner‐manager and in proximity of the owner‐manager to retirement. Four factors related to the family business: dependence decreased in the value of the firm, the number of shareholders, and the age of the business and was greater where the owner‐manager's family had voting control. Surprisingly, neither the existence of a board of directors with outside membership nor an advisory board with outside membership helped explain the level of dependence.     

Perceptions about managerial advancement in the people's republic of China

Cultural differences are evident in the managerial advancement strategies of People's Republic of China managers. Using the findings of prior research for comparison, PRC managers were found to be similar to Hong Kong mangers in not valuing highly the strategies preferred by US managers that emphasize individual achievement. Yet PRC managers differ from the Hong Kong managers in terms of the extent to which information control/networking strategies meet ethical approval. The findings here support the implications of prior studies: awareness of cultural differences is necessary in order to understand managerial behavior and achieve success in international business transactions. © 1995 John Wiley & Sons, Inc.     

Language and visual imagery: Issues of corporate identity in East Asia

East Asian companies are increasingly positioning themselves as international players, carrying their corporate and brand identities across East Asia and beyond. Companies in the U.S. and Europe have, meanwhile, sought to compete for business in East Asia, with regionally targeted marketing campaigns of their own. The author points out that corporate identity—the names and symbols that businesses use to represent them in East Asia—must be defined differently than in the West in order to appeal to regional clients and customers. Faced with tough competition in terms of quality and cost, managers of corporate identity must be sensitive to linguistic and cultural factors in order to sell their products. This article summarizes the author's research on the linguistic and cultural factors pertinent to naming and visual identity issues and illustrates how strong sales in East Asia can be partially attributed to an appreciation of these factors     

‘What's so special about family business?’ An exploratory study of UK and Irish consumer experiences of family businesses

While family‐owned businesses are considered to have specific advantages in customer relationships, limited research has been conducted into how these abilities are developed or understood by the public. Consumers may indeed perceive family businesses differently from non‐family businesses, but this aspect has received scant attention within the literature. This paper sets out exploratory work designed to gain an understanding of Irish and UK consumer perceptions of family‐owned businesses, within both urban and rural communities. The study provides insight into the meaning of ‘familiness’ in consumers' minds when linked to family businesses, and explores the relationships and experiences that respondents have of family firms. Emerging issues include family business heritage, community bonds and social stewardship, consumer loyalty and generational transfer, distinction, choice and retail heterogeneity. The findings of this exploratory study suggest that researchers should be paying more attention to the positive aspects of family businesses within communities, and concludes with suggestions for future research to further extend this area of study.     

The efficacy of talent management in international business: The case of European multinationals

The focus of this study is on the efficacy of talent management (TM) practices to the performance and operations of international businesses. There are relatively limited dedicated studies on the value and effectiveness of TM as an identifiable international practice and its contribution to international business. Anecdotal research and consultants' reports have argued for an increase in the return on investment where TM practices are aligned with the business strategy. Conceptually, human capital theory is adopted to explain investment in high potentials in addition to the resource‐based view, which help explain the development of internal sources of competitive advantage, which are rare, inimitable, nonsubstitutable, and valuable. This article builds on knowledge by qualitatively examining managerial experiences of TM practices within 17 European internationally operating businesses with employees ranging from 800 to 200,000. An exploratory qualitative approach is adopted, with semistructured interviews as the main data collection tool. Findings accentuate the significance of developing the most valuable source of competitive advantage—people. We argue that, if TM is effectively implemented can result in the development of unique competences, which can ease the burdens of cross‐border business challenges and lead to sustainable competitive advantage.     

A Cross-Cultural Perspective on Management in Kenya

ABSTRACT

The management discipline is largely populated by models embedded in western cultural views and values. This paper addresses the generally misplaced confidence of management scholars in utilizing western culture-based models of management to analyze management practices and perspectives in African countries. This paper starts with the premise that management is, at its core, a cultural practice that is derived from a cultural value system. As such, exporting US/western management models and practices abroad requires adaptation to local cultural dynamics and socioeconomic conditions. Furthermore, with western management models using nation-state as a unit of analysis to analyze culture, there is an assumption that all peoples (and localities) within a national culture are isomorphic in their value systems. From a cross-cultural management perspective, this is not only misleading but problematic because, by implication, international managers ignore internal cultural differences and dynamics and how various cultural groups interact with foreign businesses. This study argues that an informed understanding of a nation's sociopolitical history, economic conditions, geography, and internal cultural dynamics is crucial for international managers working in Africa. Using Kenya as an example, the study discusses the misplaced application of western culture-based management models and proposes a culturally-integrative framework of management.     

A validation study of the Cross‐Cultural Adaptability Inventory

Despite the claims made about the effectiveness of cross‐cultural training programs, few studies have examined the reliability and validity of the instruments used in these training programs. In this study, the authors examined the factor structure of the Cross‐Cultural Adaptability Inventory (CCAI) via a confirmatory factor analytic approach. A series of confirmatory factor analytic models was tested and applied at the item level to both the CCAI and Goldberg's Big Five Inventory. A confirmatory factor analysis (CFA) model in which a method factor was estimated fits the data significantly better than a model without such a method effect. Further, the method factor suppressed substantive relationships such that the two CCAI factors of Emotional Resilience and Personal Autonomy became significant correlates with self‐reported number of international job assignments after accounting for method variance. Implications for research and practice are discussed.     

Are There “Honorable Merchants” in International Marketing Channels?

The starting points of this initial exploratory study are two research questions: (1) could marketing relationships in international marketing channels be predicted by international marketing managers’ behavior reflected by “honorable merchants’” key concepts (ethics and trust) and experiential learning key concepts such as capability and competence?; and (2) can we measure the progress of this research theme in the international marketing literature and understand the nature of this phenomenon? We examine how scholarly research on international marketing managers’ behavior and their marketing relationships evolved from 2003 to 2013 and envisage the shape of this research theme the next years, to uncover current trends and possible research gaps on the ethics agenda in the international marketing education area. We identified the most salient concepts from 2,083 words for 22 key concepts counted in the abstracts of the 327 journal articles of the international marketing literature, in order to innovatively uncover the trends and concepts, explaining the marketing relationships in the international marketing context. We assessed sets of concepts that best reflect the marketing relationships in international marketing channels and indicated prospects for increasing the focus on specific topics, by conducting a series of multiple linear regression analyses and trend analyses. The research results show that the progress of the research theme can be measured. Innovatively, key competences and capabilities of international marketing managers relating to the key concepts of the “honorable merchant” construct are realized as a strong logical basis for the explanation of effective marketing relationships in international marketing channels. © 2015 Wiley Periodicals, Inc.     

Australian businesses in China: searching for synergy

This article reports on an empirical, interpretive study conducted in 2001-2002 in the Beijing region of China. The case of the ‘Australians managing in Northern China’ is reported here. This research explores two major areas. First, it investigates the imilarities similarities and differences between Australian and Chinese cultures both at the national and corporate levels as the actors – the Australian managers and their Chinese colleagues – see them. Secondly, it studies how the actors are interacting to manage cultural issues in their organizations and whether synergies are emergent from their interactions. The article attempts to help managers and researchers gain a deeper understanding of the questions: what major cultural similarities and differences do Australian and Chinese managers perceive both inside and outside of their organizations; how do managers interact to effectively manage cultural issues in Australian businesses in China and how is synergy possible?     

Core competences,strategy and performance: the case of international retailers in China

This research aims to analyse the central role of core competences in retail internationalisation. The authors analyse field data generated from in-depth interviews of top Chinese subsidiary managers, using the principles of the grounded theory methodology. The inductive process identified two types of core competences in the subsidiaries of international retailers: basic competences and architectural competences. This classification leads to research propositions on the impact of the core competences on strategy choice, and on the performance of the subsidiaries of international retailers.     

Insurance of Techno-Organizational Ventures and Procedural Ethics: Lessons from the Deepwater Horizon Explosion

Hazardous operational consequences of unethical behavior in high-risk projects can be traced back to inadequate relationships between businesses and the insurance industry. The communication of blame, as a consequence of major industrial accidents like the explosion of the Deepwater Horizon drilling rig in the Gulf of Mexico in April 2010, and the relevance of this communication of blame for subsequent insurance litigation, show that the awareness of the relationship between unethical behavior resulting in irresponsible procedural action and deficient loss-prevention practices is a significant component of risk consciousness. The awareness of ethical origins of project risks could alter the methods of design and monitoring of insurance contracts for risky techno-organizational ventures.

     

Examining the impacts of institutional change on knowledge sharing and management learning in the People's Republic of China

As increasing numbers of markets and businesses internationalize, understanding the factors that determine how knowledge is shared and how management learning occurs within international businesses is also becoming more pronounced. In examining management learning in a major transition economy, the People's Republic of China (PRC), this article specifically addresses how institutional developments within this nation are affecting the extent to which knowledge is shared and management learning ensues. The article elucidates new ways of thinking about the role of institutional building for knowledge sharing and management learning and concludes with presenting some challenges for international managers working with institutional changes in the PRC. © 2005 Wiley Periodicals, Inc.     

The role of cross‐cultural absorptive capacity in the effectiveness of in‐country cross‐cultural training

Based on the theory of absorptive capacity, this study examines the following question. In the context of cross‐cultural training, can the amount of previously accumulated cultural knowledge affect the ability of a trainee to absorb further learning about a new culture, thus enhancing total knowledge and presumably cross‐cultural adjustment? In‐country cross‐cultural training was hypothesized to be more effective when the training components are divided and the sessions are distributed over time – resulting in increased cultural knowledge and greater cross‐cultural adjustment. Results from an experimental design suggested that in‐country cross‐cultural training can increase cultural knowledge, when distributed over time. The results also suggested that the training group had greater differences between pre‐training and post‐training scores on cross‐cultural adjustment, but the differences were not statistically different. The results, methodology and conclusions can be generalized to a variety of populations (e.g. international managers and expatriates) and organizations (e.g. multinationals). For international managers and expatriates, the results showed that in‐country cross‐cultural training, like predeparture cross‐cultural training, is also a viable intervention for knowledge acquisition.     

Project management practices: Then and now

This article uses the results of a survey of 56 American construction project managers to identify some risks and improvement opportunities pertaining to the practice of effective project management. In the process, the most and least important project management variables are identified and ranked. Next, the extent of knowledge, extent of use, and extent of relevance to project success are examined for project managers with and without international project management experience. Results of these analyses suggest improvement opportunity for business and higher learning in terms of training and educating future project managers. Based on the results of this study, it is concluded that both higher learning and business must approach the art and practice of project management from a global open system perspective. © 2002 Wiley Periodicals, Inc.