Abstract
This study uses cognitive categorization theory to explain why exposure to foreign cultures and environments results in difficulties for exporting firms. The phenomenon is labeled “foreignness-induced cognitive disorientation” (FICD). The study investigates how FICD affects the establishment and maintenance of cross-border business relationships.
An instrument to measure FICD is developed using survey data from exporters. Then, FICD’s negative impact on interfirm trust and export performance is assessed with structural equations modeling. Furthermore, a moderation test shows that when FICD is high, the influence of trust on the performance of exporting firms becomes negative. In addition, the analysis of a longitudinal data set with logistic regression verifies how FICD is negatively associated with the survival of export relationships. Finally, using a small but rare dyadic data set, the research shows how the FICD of one exchange party has an indirect negative influence on its overseas partner’s trust.
Drawing on cognitive categorization theory, this research shows how the basic processes of the human brain are the roots of most intercultural issues. The study provides a fundamental explanation of how FICD is a major disturbance to the initiation and maintenance of cross-border business relationships. It questions current methods to mitigate foreignness in international business and opens the way to new investigations that should facilitate cross-cultural interactions for international firms and their staff.
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Notes
I use the words “importer” and “distributor” interchangeably to describe the foreign representatives of exporters.
I acknowledge variations between Latin American idiosyncrasies. However, Latin America is the unit of analysis adopted in his culture analysis by Ogliastri-Uribe (1999).
Yet, several additional indirect relationships are suggested in the conclusion (p. 23).
A detailed description of the qualitative study can be obtained from the author.
A detailed description of the qualitative study is available from the author.
It is important to remember that Dow and Karunaratna selected these PD stimuli because they believe that they influence the amount of trade between two countries.
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Acknowledgements
The author wishes to thank Adamantios Diamantopoulos, Rian Drogendijk and Jean-Claude Usunier for their comments on previous versions of this article. The author is grateful to Tunis Call Center and Export Entreprises S.A. for their support.
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Appendix: Summary of the Literature on the Impact of Foreignness on Exporter-Importer Relationships
Appendix: Summary of the Literature on the Impact of Foreignness on Exporter-Importer Relationships
Article references | Name of construct and definition | |||
|---|---|---|---|---|
Respondents | Operationalization | Construct specification | Dependent variables | Results |
1. Bello and Gilliland (1997) | “Psychic Distance”: Manufacturer’s perception of how different the culture of the target export country is from its home country. | |||
JM U.S. Exporters | Customs and values of people Culture of the country Language of the country | Reflective scale | Output controls (monitoring) | (−) Supported |
2. Lee (1998) | “Cultural Distance”: The perceived difference between the home country and the target country. | |||
IJRM Australian Exporters | How similar or dissimilar do you think the importer’s country is compared to Australia: 1. In terms of the language. 2. In terms of the business practices in general. 3. In terms of the political and legal systems. 4. In terms of the marketing infrastructure | Reflective scale | Exporter opportunism | (+) Supported |
3. Bello et al. (2003) | “Psychic Distance”: Fundamental differences between the home and foreign market that make it difficult or problematic for a firm to formulate and implement international business strategies. | |||
JBR U.S. Exporters | Culture of the country Language Customs and values Foreign business practices | Reflective scale | Relationalism (flexiblity, information exchange, solidarity) | (−) Not supported |
4. Zhang et al. (2003) | “Cultural Distance”: No definition provided. | |||
JIBS U.S. Exporters | Differences in: Power distance Masculinity Individualism Uncertainty avoidance | Index (Kogut and Singh 1988) | Reliance on relational norms (flexiblity, information exchange, solidarity) Trust | (+) Not supported (+) Not supported |
5. Ha et al. (2004) | “Cultural Distance” The extent to which a culture is seen as being different from one’s own. | |||
IMR Korean Exporters and Importers | Sample was divided in two groups according to the location of the foreign partner: Close: China, Japan, South East Asia Far: US, Europe, Australia | Not applicable | Moderating effect on link between: Dependence and cooperation Cooperation and satisfaction Cooperation and trust Cooperation and commitment | (−) Not supported (−) Not supported (−) Not supported (−) Not supported |
6. Lohtia et al. (2005) | “Cultural Sensitivity”: The firm’s awareness of differences between domestic and foreign market business practices and its ability to address and manage these differences. | |||
JBR U.S. Exporters | Our firm has achieved a: 1. Sensitivity to the difficulties of doing business in Japan that is. 2. Willingness to abide by Japanese business practices and customs that is. 3. Knowledge of Japanese culture that is. 4. Ability to adapt to the ways of conducting business in Japan that is. Below Japanese expectations…Above Japanese expectations | Reflective scale | Exporter attitudinal commitment | (+) Supported |
7. Sousa and Bradley (2005) | “Psychic Distance”: Individual’s perception of the differences between the home country and the foreign country. | |||
JSM Portuguese Exporters | Climatic conditions Purchasing power of customers Lifestyles Consumer preferences Cultural values, beliefs, attitudes and traditions Language Level of literacy and education | Reflective scale | Adaptation of export marketing strategy | (+) Supported |
8. Chelariu et al. (2006) | “Perceived Foreignness”: Inconsistencies between the cognitive frameworks of trading partners. | |||
JBR U.S. Exporters | “One or more people from our firm who are involved in dealing with our Eastern European partner… 1. … understand and speak the language of our Partner® 2. … are familiar with day to day living in that country® 3. … understand the working style of people in that country® | Reflective scale | Use of Recommendations Use of Legalistic Pleas Economic Performance | (−) Not supported (−) Supported (−) Supported |
9. Leonidou et al. (2006) | “Distance” The prevention, delay, or even distortion of the flow of information between sellers and buyers, which is responsible for keeping them apart. | |||
IMM U.S. Exporters | Distant social relations Unfamiliarity with business environment Unfamiliarity with organizational culture/values/attitudes Unawareness of organizational structure, Unfamiliarity with working methods | Unclear | Relationship Quality: Adaptation Commitment Communication Cooperation Satisfaction Trust Understanding | (−) Not supported (−) Not supported (−) Not supported (−) Supported (−) Supported (−) Not supported (−) Not supported |
10. Calantone et al. (2006) | “Market Similarity” The extent of which an export market is similar to the home market. | |||
JBR US, Japanese and Korean Exporters | Laws/regulations in your main export market(s) are very similar to those in your home country. The culture of your main export market(s) is very similar to the culture in your home country. | Reflective scale | Product Adaptation Export Performance | (−) Supported (+) Not Supported |
11. Katsikea, et al. (2007) | Psychic Distance” How remote a decision maker perceives a foreign market to be in relation to his or her domestic market and in terms of culture, language, values, economic development, and so forth. | |||
JAMS British Exporters | Differences in: Culture (traditions, values, language, etc.) Accepted business practice Economic environment Legal system Communications infrastructure | Reflective scale | Satisfaction with Export Venture | (−) Supported |
12. Nes et al. (2007) | “Cultural Distance” Not provided | |||
IBR Norwegian Exporters | Differences in: Power distance Masculinity Individualism Uncertainty avoidance | Index (Kogut and Singh 1988) | Trust communication | (−) Supported (−) Supported |
13. Skarmeas et al. (2008) | “Psychic Distance”The importers perceptions of diferences between the operating environments of the two partners. | |||
IMM U.K. Importers | Differences in: Culture (traditions, values, language, etc.) Accepted business practice Economic environment Legal system Communications Infrastructure | Reflective scale | Relationship quality (trust, commitment, satisfaction) | (−) Supported |
14. Solberg (2008) | “Cultural Closeness” Not Provided | |||
JIM Norwegian Exporters | There is no cultural difference between ourselves and our agent The cultural differences that might exist between the country of our agent and our country do not represent any problem in our relations with our agent. There are no language problems between ourselves and our agent | Reflective scale | Moderating effect on link between: Social relationships and relationship quality Introductory role of agent and relationship quality | (+) Supported (−) Supported |
15. Styles et al. (2008) | “Cultural Sensitivity” Not provided | |||
JIBS Dyads: Australian Exporters and Thai Importers | The importer …is aware of the difference in doing business in this country …always tries to show their willingness to adapt to our way of doing business. …is aware that the norms for business and communication are different in our culture. …has worked very hard to familiarize themselves with our legal and economic environment. …appreciates the nature of our decision making and management techniques. …has made an effort to understand some of the cultural values in our country …is fully aware and understands that, compared with them we need to have more lengthy and detailed discussions before committing to a course of action. …seems to know a lot about our culture and our way of doing business. | Reflective scale | Trust Commitment | (+) Supported (+) Supported |
16. Lohtia et al. (2009) | “Cultural Sensitivity” Same as Lohtia et al. (2005) | |||
IMM U.S. Exporters | Same as Lothia et al. (2005) | Reflective scale | Trust | (+) Supported |
17. Katsikeas et al. (2009) | “Interfirm Psychic Distance” Differences between trading partners in culture, language, legal and economic systems, business practices and other country-level factors. | |||
JIBS U.S. importers | Same as Skarmeas et al. (2008) | Reflective scale | Exporter Opportunism Trust | (+) Supported (−) Supported |
18. Bianchi and Saleh (2010) | “Cultural Similarity” Not provided | |||
IMR Chilean and Bangla Desh Importers | The styles of our greeting/address/introductions are similar to those of the supplier. Our business practices (such as keeping appointments and meeting on time) are similar to those of the supplier. Our legal formalities that influence business negotiations are similar to those of the supplier. Our standards of ethics and morals in business are similar to that of the supplier The uses of contracts and agreements in our business are similar to those of the supplier’s business practice. | Reflective scale | Trust | (+) Supported in both samples |
19. Sousa et al. (2010) | “Psychic Distance” Individual’s perception of the differences between the home country and the foreign country. | |||
JIM Spanish Exporters | Same as Sousa and Bradley (2005) | Reflective scale | Export Performance Moderating effect on the links between: Resultant conservatism and export performance Resultant self-enhancement and export performance | (−) Not supported* (−) Not supported* (−) Not supported *found positive significant link. |
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Obadia, C. Foreigness-induced Cognitive Disorientation. Manag Int Rev 53, 325–360 (2013). https://doi.org/10.1007/s11575-012-0149-9
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DOI: https://doi.org/10.1007/s11575-012-0149-9