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Cultural friction in leadership beliefs and foreign-invested enterprise survival

Author

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  • Pamela Tremain Koch

    (Seidman College of Business, Grand Valley State University, Grand Rapids, MI, USA
    Southwest University of Finance and Economics, Chengdu, China)

  • Bradley Koch

    (Seidman College of Business, Grand Valley State University, Grand Rapids, MI, USA
    Southwest University of Finance and Economics, Chengdu, China)

  • Tanya Menon

    (Fisher College of Business, The Ohio State University, Columbus, OH, USA)

  • Oded Shenkar

    (Fisher College of Business, The Ohio State University, Columbus, OH, USA)

Abstract

Cultural friction posits that cultural differences may be either synergistic or disruptive, but does not specify when or how synergies or disruptions emerge. We theorize that synergies will emerge in foreign-invested enterprises (FIEs) when cultural differences in leadership beliefs are less central to the host nation’s cultural identity; while disruption will occur when differences are in more culturally central leadership beliefs. Analyzing survival data from 274 FIEs in China, we found support for these hypotheses with five of the six GLOBE leadership dimensions. As predicted, differences in the Participative and Team-Oriented dimensions were associated with higher firm death, while differences in the Charismatic, Autonomous and Self-Protective dimensions were associated with firm survival. Our results indicate that while there are areas where differences may indeed need to be accepted or minimized, there are other areas where differences can be beneficial. This requires that managers identify more central aspects of local culture to determine whether to minimize differences or to leverage their synergistic potential.

Suggested Citation

  • Pamela Tremain Koch & Bradley Koch & Tanya Menon & Oded Shenkar, 2016. "Cultural friction in leadership beliefs and foreign-invested enterprise survival," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(4), pages 453-470, May.
    • Handle: RePEc:pal:jintbs:v:47:y:2016:i:4:p:453-470
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    Cited by:

    1. Somnath Lahiri & Karthik Dhandapani, 2021. "Project performance in emerging market: The influence of cultural distance and business group affiliation," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 179-207, March.
    2. Palitha Konara & Alexander Mohr, 2019. "Why We Should Stop Using the Kogut and Singh Index," Management International Review, Springer, vol. 59(3), pages 335-354, June.
    3. Ye, Silin & Zhou, Jing & Jiang, Yunwen & Liu, Xiaming, 2023. "Managers as the bridge: How cultural friction influences the integration of cross-border mergers and acquisitions," International Business Review, Elsevier, vol. 32(4).
    4. Srivastava, Saurabh & Singh, Shiwangi & Dhir, Sanjay, 2020. "Culture and International business research: A review and research agenda," International Business Review, Elsevier, vol. 29(4).
    5. Xiaoteng Ma & Ziyu Tang & Dan Wang & Hao Gao, 2020. "The Influence of Risk Culture on the Performance of International Joint-Venture Securities," Sustainability, MDPI, vol. 12(7), pages 1-21, March.
    6. Qun Tan & Carlos M. P. Sousa, 2019. "Why Poor Performance is Not Enough for a Foreign Exit: The Importance of Innovation Capability and International Experience," Management International Review, Springer, vol. 59(3), pages 465-498, June.
    7. Ryan W. Tang & Ying Zhu & Hongbo Cai & Jinrong Han, 2021. "De-internationalization: A Thematic Review and the Directions Forward," Management International Review, Springer, vol. 61(3), pages 267-312, June.
    8. Oded Shenkar & Stephen B Tallman & Hao Wang & Jie Wu, 2022. "National culture and international business: A path forward," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 516-533, April.
    9. Sjoerd Beugelsdijk & Tatiana Kostova & Kendall Roth, 2017. "An overview of Hofstede-inspired country-level culture research in international business since 2006," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(1), pages 30-47, January.
    10. Child, John & Karmowska, Joanna & Shenkar, Oded, 2022. "The role of context in SME internationalization – A review," Journal of World Business, Elsevier, vol. 57(1).
    11. Wu, Sihong & Chirico, Francesco & Fan, Di & Ding, Jiayan & Su, Yiyi, 2024. "Foreign market exit in family firms: Do historical military and cultural frictions matter?," Journal of World Business, Elsevier, vol. 59(1).
    12. Nguyen, Ha Thi Thu & Larimo, Jorma & Ghauri, Pervez, 2022. "Understanding foreign divestment: The impacts of economic and political friction," Journal of Business Research, Elsevier, vol. 139(C), pages 675-691.
    13. B. Sebastian Reiche & Allan Bird & Mark E. Mendenhall & Joyce S. Osland, 2017. "Contextualizing leadership: a typology of global leadership roles," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(5), pages 552-572, July.
    14. Ilgaz Arikan & Oded Shenkar, 2022. "Neglected elements: What we should cover more of in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(7), pages 1484-1507, September.
    15. Bradley J. Koch & Pamela Tremain Koch & Yiheng Deng, 2023. "China and U.S. organizational culture via value statements: an emic-etic yin-yang approach," Asian Business & Management, Palgrave Macmillan, vol. 22(3), pages 1094-1130, July.
    16. Chengguang Li & Oded Shenkar & William E. Newburry & Yinuo Tang, 2021. "How Country Reputation Differentials Influence Market Reaction to International Acquisitions," Journal of Management Studies, Wiley Blackwell, vol. 58(6), pages 1609-1639, September.

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