TY - JOUR
T1 - A theory of global strategy and firm efficiencies
T2 - Considering the effects of cultural diversity
AU - Palich, Leslie E.
AU - Gomez-Mejia, Luis
N1 - Funding Information:
The authors wish to thank the Hankamer Sabbatical Committee of the Hankamer School of Business at Baylor University for its support of this work, as well as de Ministry of Spain (SAB95-0129 DGICYT) and the project SEC96-0637 of CICYT (Spain) for partial funding of this research.
PY - 1999
Y1 - 1999
N2 - The concept of "relatedness," though common in the product diversification literature, has not yet been widely applied to theories of internationalization. Expanding internationally requires managerial adaptation due to differences between national cultures, but these dynamics have not been used to represent the cultural diversity that may hinder efforts to integrate and coordinate efforts as required by global strategies. Tempering popular perspectives that extol the benefits of diversity, the present theory posits that cultural diversity among international divisions of a global firm may actually impede efforts to merge activities and expertise between those units. Specifically, direct (market, production, technology) and indirect (knowledge-based) benefits are more difficult to exploit when cultural diversity makes activity sharing and expertise transfer less efficient. Parallel to established product relatedness theory, this thinking postulates that culturally related international firms will enjoy greater efficiencies than culturally diverse multinationals.
AB - The concept of "relatedness," though common in the product diversification literature, has not yet been widely applied to theories of internationalization. Expanding internationally requires managerial adaptation due to differences between national cultures, but these dynamics have not been used to represent the cultural diversity that may hinder efforts to integrate and coordinate efforts as required by global strategies. Tempering popular perspectives that extol the benefits of diversity, the present theory posits that cultural diversity among international divisions of a global firm may actually impede efforts to merge activities and expertise between those units. Specifically, direct (market, production, technology) and indirect (knowledge-based) benefits are more difficult to exploit when cultural diversity makes activity sharing and expertise transfer less efficient. Parallel to established product relatedness theory, this thinking postulates that culturally related international firms will enjoy greater efficiencies than culturally diverse multinationals.
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U2 - 10.1177/014920639902500406
DO - 10.1177/014920639902500406
M3 - Article
AN - SCOPUS:0033472996
SN - 0149-2063
VL - 25
SP - 587
EP - 606
JO - Journal of Management
JF - Journal of Management
IS - 4
ER -