Beyond cultural distance: Switching to a friction lens in the study of cultural differences Author(s): Oded Shenkar Source: Journal of International Business Studies, Vol 43, No (January 2012), pp 12-17 Published by: Palgrave Macmillan Journals Stable URL: https://www.jstor.org/stable/41408886 Accessed: 19-04-2019 20:52 UTC REFERENCES Linked references are available on JSTOR for this article: https://www.jstor.org/stable/41408886?seq=1&cid=pdf-reference#references_tab_contents You may need to log in to JSTOR to access the linked references JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive We use information technology and tools to increase productivity and facilitate new forms of scholarship For more information about JSTOR, please contact support@jstor.org Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at https://about.jstor.org/terms Palgrave Macmillan Journals is collaborating with JSTOR to digitize, preserve and extend access to Journal of International Business Studies This content downloaded from 154.59.124.188 on Fri, 19 Apr 2019 20:52:07 UTC All use subject to https://about.jstor.org/terms Journal of International Business Studies (2012) 43, 12-17 © 201 Academy of International Business All rights reserved 0047-2506 www.jibs.net RETROSPECTIVE Beyond cultural distance: Switching to a friction lens in the study of cultural differences Oded Shenkar Abstract My 2001 article provided a critical review of one of the most popular constructs Fisher College of Business, The Ohio State University, Ohio, Columbus, USA in international business, and in the management and business literature as a whole, namely cultural distance It listed various illusions, implicit yet unsubstantiated and refutable assumptions that underpinned a construct set to Correspondence: capture the essence of cultural differences The paper questioned the validity of О Shenkar, 730A Fisher Hall, Fisher College the measure; the resultant findings obtained in such international business of Business, 2100 Neil Avenue, Columbus, applications as foreign direct investment patterns, sequence, entry mode, and OH 43210, USA performance; and, ultimately, the wisdom of continuing the use of the measure Tel: +1 614 292 0083; and its underlying construct In this retrospective, I review subsequent work Fax: + 614 292 7062 that tested some of the original observations, the impact the article has had, and, in particular, how we can redirect research away from the static cultural distance paradigm toward the dynamic interaction of the actual entities that come into contact in international business journal of International Business Studies (201 2) 43, 2- doi: 1 057/j¡bs.20 1 42 Keywords: cultural distance; cultural dimensions; cultural friction BACKGROUND The idea for the original paper (Shenkar, 2001) developed over a long period of time It involved research and review of th literature in international business and in related areas, and a number of "critical incidents" that were as much the result of trial and error as they were of systematic investigation Taken together, these diverse processes produced an increasing sense of unease over how the scholarly community, myself included, has measured cultural differences and, in particular, how we have used the cultural distance index to study the impact of those differences on major international business phenomena I have gradually come to realize that what we have been doing was not only superficial, lacking in substance and rigor, but was perhaps invalid or, at the very least, seriously flawed This was not an easy conclusion to reach After all, in over a decade since its introduction, the cultural distance measure developed by Kogut and Singh (1988) has become the field's standard-bearer, supplanting virtually all other modes of gauging cultural variations, including the prior concept of psychic distance It is difficult for me to recall when exactly I first came to identify Received: 30 June 201 Revised: 18 August 201 Accepted: 30 August 201 the deficiencies of the cultural distance measure I can vividly remember, however, an instance roughly two decades ago when, in one of my co-authored studies (Shenkar & Zeira, 1992), initial This content downloaded from 154.59.124.188 on Fri, 19 Apr 2019 20:52:07 UTC All use subject to https://about.jstor.org/terms 13 analysis showed that cultural distance had no an erosion of the interdisciplinary platform that is discernible impact on role ambiguity, one of the supposed to be a stalwart of international business key dependent variables in our study When this research, and which underpins its strengths Being finding was challenged by post-study interviews, "interdisciplinary" has become a popular mantra we became suspicious, and after some brainstorming in business schools, joining "globalization" and came to identify the aggregation of cultural dimen- "relevance" as catchy terms that are fashionably sions as the culprit Indeed, a reanalysis showed promoted while rarely practiced beyond the super- ficial International business has a vital role in that differences on all four of Hofstede's (1980) constituent dimensions, when included separately in exercising interdisciplinary research, but at present the regression, came out as significant, althoughthe field has not lived up to its full potential as with different signs, cancelling out their impact in a hub and model for such research Unlike multithe aggregate measure This not only questioned the disciplinary research, which connotes borrowing rigor of the aggregation, but has also raised another from many disciplinary areas, interdisciplinary issue, namely that not all cultural differences were research requires the intersection and cross-fertilidisruptive and dysfunctional, and that - contrary tozation of disciplines with the aim of extracting the assumption embedded in the cultural distancetheoretical and methodological insights and synerconcept - some could be, in fact, complementarygies Interdisciplinary research implies borrowing and conducive to performance that is not cursory or haphazard, leveraging rather As more and more challenges to the cultural than merely acknowledging the diversity within distance index emerged, I began to suspect the each area, and is aimed at the eventual creation of measure and, in time, the very concept of distance, a feedback loop from the borrower back to the originator This necessitates much more than the as a predictor of impact on business phenomena mechanistic import of disciplinary content exemInconsistent empirical findings in the application plified by the cultural distance construct, which, as a valid representation of cultural differences, and of the construct in a variety of settings should have as I have tried to illustrate, can more harm alerted me and others even earlier to the problem, than good but did not Why? There are a number of reasons One is that there were other plausible explanations for the inconsistent findings, ranging from differ- AFTERMATH Although the 2001 paper was extensively cited, its impact varied widely, not always producing ences in sampling and research designs to theoretical deficiencies A second explanation for failing the outcomes I had hoped for I did not expect an to detect the faults of the measure at an earlier stage immediate impact, but was disappointed, especially was more worrisome, namely the temptation to as other work published around the same time use a simple formula to gauge variations in the corroborated some of the points made in the complex, intangible phenomenon called "culture." article, for example, the distinct influence of the This temptation was simply too big to pass up, individual dimensions of culture (e.g., Pothukuchi, especially as it yielded a single quantitative measure Damanpour, Choi, Chen, & Park, 2002) or the that could be incorporated in a regression equation role of non-cultural mediators (e.g., Brouthers & together with supposedly hard data variables, such Brouthers, 2001) At the same time, several authors as R&D intensity, producing what seemed to be appear to have taken the criticism to heart, as in the seamless research Equally worrisome was a third case of adopting cognitive measures of cultural explanation, that the more it had been used, the differences (Chen, Kirkman, Kim, Farh, & Tangirala, more legitimacy was conferred upon the measure, 2010) Still, these efforts fell short of my hopes for so that subsequent authors justified its utilization redirecting research in the field Worse, in quite a few instances, authors referenced the article to by referring to prior usage This pointed to a fundamental failure in the knowledge-building acknowledge that dealing with cultural differences was challenging, promptly proceeding to use the process that was bigger than any one measure, and constituted one motivation behind the 2001 same measure I had argued against There were other, more determined voices, however For example, Kirkman, Lowe and Gibson (2006: 303) have Although my primary motivation was to enhance paper lent empirical support to several of the illusions the rigor and depth of business research involving listed in the 2001 article, and came up with a culture, I was also seeking to draw attention to other major concerns, among them whatstrongly I saw asworded take-away, recommending that Journal of International Business Studies This content downloaded from 154.59.124.188 on Fri, 19 Apr 2019 20:52:07 UTC All use subject to https://about.jstor.org/terms 14 researchers "avoid further use of the overall cultural which challenges the equivalence/aggregation assumption, as well as the autopilot focus on In the meantime, efforts were under waydistance to as opposed to nominal readings In that convince scholars of the merits of the original paper, we found that MNEs hailing from high recommendations Two subsequent studies tested power distance/assertiveness cultures exercised the first illusion identified in the 2001 paper, namely tight control over subsidiaries in the form of that of asymmetry The illusion was that the term expatriate assignment, regardless of whether the distance index." "distance" connoted, by definition, symmetry - that host country was high or low on those dimensions, is, that the distance from A to В was identical toshowing the that "distance" failed to capture the distance from В to A; yet there was no empirical impact Those findings served as a reminder that evidence or logical or theoretical justificationhome-country to culture was an important determisupport an assumption of symmetry There was nant of strategic and IHR decisions, an assumption indirect evidence to the contrary, but not inonce the taken for granted in the literature, but one form of direct testing, so this was attemptedthat in aseems to have been all but forgotten Indeed, study on expatriate adjustment led by my colleagues another broader concern revealed by the 2001 article was that the field has failed to build on (Selmer, Chiù, & Shenkar, 2007) We confirmed asymmetry for German expatriates assigned to the prior work, which became even more apparent in a US compared with US expatriates assigned to subsequent review, which concluded that earlier Germany: controlling for length of assignment, research in the "psychic distance" tradition was in German expatriates were better adjusted, socio- some ways (e.g., the consideration of non-cultural culturally and psychologically, than the US expatri- variables) richer and more rigorous than the latter ates We await further studies that will test expatriatestream of "cultural distance" research (Shenkar, asymmetry for other national pairs, and which will Luo, & Yeheskel, 2008) expand the scope of research into other facets of Finally, it was probably naive of me to expect an even deeper soul-search to result from my article, In another firm-level study (Lee, Shenkar, & Li,one that would touch on fundamental issues relating 2008), we were able to confirm asymmetry byto the conceptualization and measurement of culsimultaneously studying the inward and outwardture, such as the ability to capture the phenomenon international partnering preferences of South Kor-through a set of discrete dimensions (Bond et al., ean firms We found that while cultural differences 2004; Gelfand, Erez, & Aycan, 2006; Usunier, 1998), did not significantly impact on the control preferthe complexity of dealing with multiple levels of ences of the Korean firms, the relationship was analysis (e.g., Klein, Dansereau, & Hall, 1994), or the moderated by the direction of investment This appropriateness of using questionnaires as a singular data collection device (Smith, Peterson, & Thomas, study was also aimed at highlighting another problem associated with the application of the 2008) This brings me back to the meaning, and cultural distance measure, that of confounding value, of interdisciplinary research, and the risk of firm and environment In other words, scholars generic imports If we not learn the language of often looked at the investment entity and the another discipline, not only will we not be able to investment environment as if they were equivalent, eventually export knowledge to that discipline, but in effect measuring distance between "apples" and will also fail in a more fundamental sense by "oranges." They did not consider, for example, that importing an ill-adapted good International busia Korean firm bringing a foreign partner to work ness scholars are more aware than any of the within Korea faced a different cultural challenge consequences of failing to adapt a product to a local than that faced by counterparts partnering with environment, and we should not treat knowledge selection, training, and performance foreign firms on foreign turf The same confusion inputs of differently levels of analysis can be found in other cultural THE WAY FORWARD distance applications, attesting to the danger of veering away from actual transacting entities When I searched for yet more explanations as to Finally, in another international human resource why cultural distance retained its position as a (IHR) article (Brock, Shenkar, Shoham, & Siskocick, popular concept despite increasingly glaring short2008), we have gone beyond asymmetry, illustratcomings, I came to the conclusion that at least ing that only certain cultural dimensions were part of the problem was the use of "distance" as the impactful when it came to expatriate assignment, base metaphor for capturing the essence of cultural Journal of International Business Studies This content downloaded from 154.59.124.188 on Fri, 19 Apr 2019 20:52:07 UTC All use subject to https://about.jstor.org/terms 15 differences, entailing a positive and as well as a negative their potential: i too much friction will generate heat and resistance, business phenomena This paper (Shenkar but too little friction et will al., bring about 2008) adverse consequences, for example, slippage, as is the case phorical analysis of the argued that of a tire the interfacing withappeal the road The paper also of introduces "drag parameters," to include, in addileast partially rooted in t geographic tion "background to entry mode, workflow interdependence, the breadth of local stakeholders, the speed and noted a rational, objective and which avoided stage of international expansion, dealing and the depth of localization Also discussed meeting are "lubricants," crucial aspects of quently, we namely suggested elements with the potential to doin reduce friction atfavor the point of contact (e.g.,of cultural metaphor in ano friction We sensitivity training) noted A friction formula is provided, that provided aalthough superior empirical work is yet to be conducted repr arguably the heart of the FINAL THOUGHTS business, namely the inte entities We Looking also at recent developments discusse in international sions business, afrom switch to a friction lensthis seems more flowing instance dent sw that necessary than entry ever As the actors in mode the foreign variable investment in arena are internation transformed, the need to also considered specify and groundan them, and to indepen capture the ent entry modes generated variable levels of resultant interaction, becomes paramount Take, friction Much remains to be done, however, if we for example, the sovereign wealth funds, which are to achieve this shifting of metaphors fromhave been rapidly gaining in volume and clout, "distance" to "friction." but which have the potential to generate a very One of the remaining challenges remains the different reaction in a host country than an measurement of friction, a necessary step if we are investment by a business firm, especially one to achieve an eventual switching of measures as lacking a strong national identity Holding other variables (e.g., a friendly vs a hostile takeover) well as of metaphors A study published by Orr and constant, the cultural interaction generated in the Scott (2008) showed how friction may actually case of the former will be much more intense than occur Although their focus was more on institutional distance than on cultural distance, the in the latter case Or think of the likely wave of Chinese foreign investment in the US against the paper's zeroing-in on the actual interaction between specific actors rather than dwelling on background of increasingly tense relations between their degree of separation is equally valid on the the two countries, at least one of which sees the cultural front Using 23 global projects, the authors culture of the other as a material threat Only a illustrated the process by which entities meet and perspective that embeds actual actors within their go through phases of ignorance, sense-making, and respective systems, as well as within their bilateral response While falling short of providing direct and contextual relationship, political as well as quantitative measurement of friction, the paper cultural (Shenkar & Arikan, 2009), is likely to showed the complexity of outcome associated with capture the essence of the transaction; in contrast, direct interaction of actual actors, and managed to clinging to a "distance" view will not only provide a capture tangible instances of friction, "critical limited tunnel vision but may well produce wrong incidents" that provided a visible substitute for readings as far as the nature, scale and scope of the current sterile views encapsulated in the impact are concerned It will be a mistake to focus only on conceptual concept and measure of "distance." Another paper dealing with friction (Luo & and methodological flaws of cultural distance, Shenkar, 2011) seeks inspiration in the disciplines important as they are, or even on the vital work originally associated with the concept, namely that remains to be done in developing and physics and mechanical engineering The knowl- measuring cultural friction, without reassessing edge base in those disciplines is used to develop the very role of culture in our theoretical frameworks The next front must also evolve around a "laws of friction," as well as to remind readers that, in and of itself, friction is a neutral term theory development effort To start with, we should journal of International Business Studies This content downloaded from 154.59.124.188 on Fri, 19 Apr 2019 20:52:07 UTC All use subject to https://about.jstor.org/terms * 16 attend to something that has been taken for granted of the "normative pillar" of institutions The same is true for indigenous international business theories For instance, the Uppsala internationalization model incorporated psychic distance as frameworks into which it has been deposited all too a key construct (Johanson & Vahlne, 1977), and often in an implicit, haphazard and questionable later Oohanson & Vahlne, 2009) it was positioned fashion, and whose latent assumptions are as probleas a root of uncertainty, raising similar questions matic as those underlying the cultural distance construct Take, for instance, transaction cost eco-to those pertinent in the transaction cost application Similarly, Dunning (2009) called for the nomics, which has become the most popular theoreinjection of context into his eclectic theory, and tical platform from which to study market entry cast culture in the potential role of triggering mode Williamson's theory does not include culture as a theoretical construct, and in its various applicacountry-specific and firm-specific advantages, but tions culture has been conceived, when spelled out we at have yet to specify how this would happen within a multinational enterprise, or under what all, by and large as a proxy for uncertainty Although conditions advantages might be eroded rather seldom if ever questioned, this is a very problematic than leveraged as an outcome assumption: there are numerous forms of uncertainty that have nothing to with culture and culturalThe main point here is that until and unless differences, and culture can be, at times, a harbinger culture is appropriately incorporated into the theoretical landscape, rather than reduced to quesof stability As noted in the 2001 paper, the problem tionable and frankly indefensible proxies, worthcan be easily illustrated in the case of entry mode efforts directed at increasing research rigor Gatignon and Anderson (1988; see also Andersonwhile & will have limited value To get there, we will also Gatignon, 1986) acknowledge that transaction cost need to revisit broader, fundamental assumptions, theory can accommodate contrasting predictions: such as whether the narrow economic view of under high cultural distance, a firm may choose institutions is the right prism for international low control to compensate for its lack of local business research (a resounding "no" in my humble knowledge, relying on a local partner; or it may opt for tight control to reduce dependence upon agentsopinion), and whether it should be substituted or supplemented by the more comprehensive view whose actions are poorly understood These contradictory predictions may represent a fundamental flaw available from sociology and other areas (e.g., in the transaction cost argument, but they may political be science) that have all but disappeared for too long, namely the tenuous connection between the construct of culture and the theoretical from the theoretical radar screen of business the result of how cultural differences are positioned scholarship Then again, only a truly interdisciplinSimilar questions regarding the theoretical roleary approach, one that seeks to learn from and work of culture may be raised regarding agency theory, with other areas of study rather than naively import within the theoretical framework where an intriguing question is whether and how out-of-context inputs, will set us on the way of cultural interaction alters the nature of the achieving the theory development we covet This principal-agent relationship; regarding same resource approach can also turn us into knowledge dependence, where culture may be viewed to exporters; after all, many of the problems endemic potentially cement a relationship as a substitute to the cultural distance construct similarly afflict for actual dependence, or, in the presence of such concepts as institutional distance, industry certain moderators, such as historical interaction distance, technological distance, and organiza(Park & Ungson, 1997), strain or sever it; or tional distance, which are widely used in the regarding institutional theory, where culture is organizational literature Let international business surprisingly missing except in limited discussionlead the way REFERENCES Brock, Anderson, E., & Gatignon, H 986 Modes of foreign entry: A D., Shenkar, O., Shoham, A., & Siskocick, I 2008 transaction cost analysis and propositions, lournal of InternaNational culture and expatriate deployment, journal of tional Business Studies, 7(2): 1-26 International Business Studies, 39(8): 293-1 309 Bond, M H et al 2004 Culture-level dimensions of social Brouthers, K Dv & Brouthers, L E 2001 Explaining the national axioms and their correlates across 41 cultures Journal of Cross- cultural distance paradox Journal of International Business Cultural Psychology, 35(5): 548-570 Studies, 32(1): 177-189 Journal of International Business Studies This content downloaded from 154.59.124.188 on Fri, 19 Apr 2019 20:52:07 UTC All use subject to https://about.jstor.org/terms 17 Chen, G., Kirkman, B L., Kim, K., Farh, C I С., & Tangirala, S Park, S., & Ungson, G 1997 The effect of national culture, 2010 When does cross-cultural motivation enhance expatri- organizational complementarity, and economic motivation on ate effectiveness? 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The same confusion inputs of differently levels of analysis can be found in other cultural THE WAY FORWARD distance applications, attesting to the danger of veering away from actual transacting