The Influence of Cultural Tightness on the ID-FP Relationship : A Meta-Analysis

Title data

Schüler, Jens ; Nauerz, Timo:
The Influence of Cultural Tightness on the ID-FP Relationship : A Meta-Analysis.
2017
Event: Academy of Management Annual Meeting , 2017 , Atlanta, USA.
(Conference item: Conference , Speech )
DOI: https://doi.org/10.5465/ambpp.2017.17242abstract

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A fundamental question in international business (IB) research is to what extent firms gain financial and non-financial advantages through international diversification (ID). The nature of the ID – firm performance relationship (ID-FP) is one of the most frequently studied relationships in the IB literature. However, our understanding of variables that may influence the ID – FP relationship is still limited. In that regard, cultural and organizational research primarily relies on values and practices to explain cultural differences and their impact on organizational outcomes. Scholars criticize the fact that this paradigm results in a subjectivist bias, where culture is reduced to factors that exist inside individuals’ minds. Culture is a complex phenomenon, necessitating more thorough perspectives to adequately capture its breadth and depth. We use the concept of cultural tightness- looseness (i.e. the strength of social norms and sanctioning within a society) and its psychological consequences for organizational culture to assess how this cultural aspect influences the ID – FP relationship. We complement this by analyzing how cultural practices i.e. the subdimensions of Project GLOBE, moderate the ID – FP relationship. Thereby, we advance IB research by providing cumulative evidence on the importance of cultural aspects for firms in the internationalization context. We show that cultural tightness-looseness, assertiveness, and in- group collectivism are relevant moderators for the ID – FP relationship.