| The Liability of Foreignness: An Empirical Test in the Global Banking Industry |
| | Parkhe, Arvind | Indiana U., Bloomington | aparkhe@indiana.edu | (812)-855-5451 |
| | Miller, Stewart R. | Indiana U., Bloomington | robmill@indiana.edu | 812-855-5240 |
| | When a company operates in multiple, dissimilar environments outside of its home country, it may suffer a “liability of foreignness.” This term attempts to capture the loss of efficiency and competitiveness, vis-á-vis
local companies, as foreign competitors grapple with uncertainties, unfamiliarities and additional costs in their international operations. Does this a priori expectation hold in the global banking industry? Banks
increasingly compete outside of their home countries, and operating environments often differ sharply across countries, both in terms of banking system development and regulatory environment. In this paper, we report the results of an empirical test of the liability of foreignness in the global banking industry, using the BankScope data on 9,300 banks for the period 1989-1996. Our findings support the liability of foreignness hypothesis for all foreign-owned banks. Further, they suggest that foreign-owned banks from similar environments are demonstrably more efficient than other foreign-owned banks. Lastly, we find that in some
environments, U.S.-owned banks are more efficient than other foreign-owned banks. |
| | Keywords: Liability of Foreignness; International Competitiveness; Efficiency |
| Organizational Culture and Effectiveness: The Case of Foreign Firms in Russia |
| | Fey, Carl F. | Stockholm School of Economics | iibcf@hhs.se | 46-8-736-9501 |
| | Denison, Daniel R. | U. of Michigan | ddenison@umich.edu | (1-734)-763-4717 |
| | This paper extends the literature on organizational culture and effectiveness by examining a set of foreign-owned firms operating in
Russia. Based on a large-scale empirical study of 179 firms and four in-depth case studies, this study tests a model of
organizational culture and effectiveness. Results from the empirical study are presented first and are compared to results for a
sample of firms in the USA to investigate the applicability of cultural theories across national boarders. Next, the four case studies
are used to ground the empirical results and highlight differences in the relationship between organizational culture and effectiveness
between foreign firms in Russia and firms in the USA that go beyond what can be captured on numbered scales. |
| | Keywords: Russia; Organizational Culture; Performance |
| Culture Differences and IJV Performance: Do National and Organizational Cultures Matter? |
| | Pothukuchi, Vijay | Rutgers U. | vpothukuchi@hotmail.com | 281-486-6529 |
| | Damanpour, Fariborz | Rutgers U., Newark | fdamanpo@andromeda.rutgers.edu | 973-353-5050 |
| | The role of culture differences in international joint venture (IJV) performance has remained ambiguous because of confusing and contradicting empirical findings. Thus far, researchers have limited their focus to differences in partners' national culture only. We distinguish between national and organizational culture differences and, using a process oriented approach based on U-curve theory of adjustment and social learning theory, hypothesize that while organizational culture differences adversely influence IJV performance, national culture differences do not influence IJV performance. We test these hypotheses by data collected from 205 executives from 130 joint ventures between Indian partners and partners belonging to 23 other countries using structural equations modeling. Findings are generally supportive of the hypotheses. We discuss the implications of these findings to the direction of future research and for managers engaged in IJV formation and operation. |
| | Keywords: IJV Performance; National culture differences; Organizational culture differe |
| Cross-Cultural Understanding and International Management: Some Sonsiderations on a Conceptual Framework for Conflict Resolution in Management in Foreign Cultures |
| | Prof. Dr. Kumar, Brij Nino | U. of Erlangen-Nuremberg | brij.kumar@wiso.uni-erlangen.de | (0049)-911-5302452 |
| | Hoffmann, Karen | U. of Erlangen-Nuremberg | karen.hoffmann@wiso.uni-erlangen.de | (0049)-911-5302452 |
| | Conflict potential and conflict resolution in international management depends on whether and how in multinational corporations cross-cultural understanding is developed and applied.
The main contribution of this article is to suggest and operationalize a theoretical frame of conflict resolution in cross-cultural management by integrating the concepts of cultural philosophy and learning theory.
We conceptualise cross-cultural understanding as a learning process through which involved parties in interaction with each other absorb one anothers cultural values and norms leading to lower tension and conflict between themselves.
According to cultural philosophy the process consists of three consecutive phases. These phases reflect increasing degrees of cross-cultural understanding in the course of which conflict potential in cross-cultural management decreases proportionally thus increasing the possibilities of reaching strived goals and success.
Multinational corporations whose phases of cross-cultural understanding are less developed with respect to cross-cultural learning will show higher conflict potential in cross-cultural management than their counterparts where the phases are more developed. The least conflict can be expected in multinational corporations where in all three phases the learning cycle is developed and applied.
Elements of the framework for implementing cross-cultural understanding will be indicated briefly at the end. |
| | Keywords: cross-cultural management; conflict management; conflict resolution |