The influence of culture on strategic constructs in the process of globalization: An empirical study of North American and Japanese MNCs

The purpose of this article is to explore the cross-cultural differences that influence the formulation of global strategies of North American and Japanese multinational corporations (MNCs). While the role of culture as a determinant of management styles and functional area decision making in both these countries has been extensively studied, the internationalization process, which has important competitive implications, has not been previously examined in a cross-cultural context. One of the most significant developments since World War II is the increasing internationalization of business. Although business has been conducted across national boundaries for centuries, during the last three decades business dealings on a global scale have dramatically escalated. Initially, only innovative/risk taking corporations around the world turned their attention to international business in order to maintain a competitive edge in a dynamic marketplace. But slowly, even hitherto strictly domestic firms have been forced into looking beyond national frontiers for their economic survival. Given that the set of competitors for all companies has now been internationally expanded, it is important to better understand the cultural underpinnings of their strategic thinking. Specifically, in order to learn how to anticipate and interpret MNCs' global competitive moves, their cultural contexts need to be examined, and interpreted. Since the Japanese have become such formidable competitors for North American corporations, MNCs from those two areas are the cross-cultural focus of this research. The remainder of this article is organized into six sections. First, the conceptual underpinnings of the role of culture on strategy formulation is examined. Next, a global strategy model is developed. The following section develops a set of propositions derived from the global strategy and cross cultural research. Then, the research design to examine these propositions is presented. The results of the analysis are contained in the subsequent section. Finally, the article concludes with the implications for international strategists and public policy makers.