Goudarz Azar

How congruent are managers’ perceptions of cultural distance with objective reality?

Purpose – The purpose of this paper is to examine the extent to which managers’ perceptions of cultural distance – one of the most important explanatory factors in the field of international business – are congruent with objective reality. Design/methodology/approach – By subjecting a sample of 242 export ventures to correlation and confirmatory factor analyses, managers’ perceptions of the cultural distance (i.e. perceived cultural distance) between 29 international markets and Sweden (the home market) were compared, with “objective” cultural distance gauged using Hofstedes (1980) scores for dimensions of national culture. Findings – A statistically significant correlation was found between managers’ perceptions of cultural distance and “objective” cultural distance. Originality/value – Despite the importance of perceptual data in many theoretical and practical domains, few studies analyze the validity of such data. The present findings validate the congruence of perceptual data regarding cultural dista...

Cultural distance, innovation and export performance: An examination of perceived and objective cultural distance

Purpose This paper aims to examine the relationship between cultural distance (both perceived and objective), innovation and firm export performance. Design/methodology/approach Hypotheses were tested here by structural equation modeling using data from 186 export ventures into 23 international markets by Swedish companies. Findings The results indicate that managers’ perceptions of substantial cultural differences as well as objective cultural differences (gauged using Hofstede’s (1980, 2001) scores for dimensions of national culture) and subsequent environmental uncertainty when expanding into culturally distant markets triggers strategies for interacting and integrating with the market environment. These include producing and adopting innovations to processes and products and to organizational strategy, structure and administrative procedures to cope with the new environment and overcome uncertainties. These innovations and the associated competitive advantages improve firm export performance. Originality/value Despite much research into the relationship between firm internationalization and innovation, little attention has been paid to the effect of the characteristics of the foreign markets (specifically cultural differences) on firm innovation strategies. Moreover, much research has been devoted to the effect of innovation on firm export performance, but such research has mainly focused on one type of innovation, i.e. technological innovation, while the influence of organizational innovation on firm export performance has been basically ignored. The present study validates the explanatory of cultural distance (both perceived and objective) in relation to innovation strategies (technological and organizational) and export performance.

Food Culture Distance as a Predictor of Foreign Market Selection: The Case of Swedish Food Exporters

The purpose of this article is to examine the impact of dissimilarity in food culture, “food culture distance,” as a predictor of foreign market selection by food exporters. The sample for this study consisted of 96 export ventures by Swedish food companies in 27 international markets. A composite index of the construct food culture distance was calculated and used as a predictor of foreign market attractiveness for food exporters. The findings indicate that food culture distance does positively impact the attractiveness of a foreign market for food exporters, implying that the greater the perceived distance in terms of food culture, the more attractive is the market for food exporters to enter.

How do managers’ deviant perceptions of “cultural distance” relate to the performance of international SMEs?

Our study explores the performance implications of deviations in managers’ perceptions of “cultural distance” – one of the most important concepts in International Business research – when expanding into foreign markets. Despite much research on “cultural distance,” few researchers have paid attention to the effect of deviations in managers’ perceptions of cultural distance on firm performance. This is important since managers formulate strategies for responding to the environment based on their perceptions of the firm’s environment. These perceptions, however, do not always coincide with actual environmental characteristics. Therefore, formulating strategies based on inaccurate data may result in erroneous forecasts, missed opportunities and, ultimately, business failure. We explore this empirically by comparing managers’ perceptions of cultural distance to export markets of Swedish SMEs to cultural distance measures based on secondary data and relate deviations of perceptions to the performance of these SMEs. Our results show that the larger the deviations of managers’ perceptions of cultural differences from “actual differences” as expressed in Hofstede scores on cultural dimensions, the lower the performance expressed in firms’ sales. The implications of the study are discussed.