Building professional discourse in emerging markets: Language, context and the challenge of sensemaking

Using ethnographic evidence from the former Soviet republics, this article examines a relatively new and mainly unobserved in the International Business (IB) literature phenomenon of communication disengagement that manifests itself in many emerging markets. We link it to the deficiencies of the local professional business discourse rooted in language limitations reflecting lack of experience with the market economy. This hampers cognitive coherence between foreign and local business entities, adding to the liability of foreignness as certain instances of professional experience fail to find adequate linguistic expression, and complicates cross-cultural adjustments causing multi-national companies (MNCs) financial losses. We contribute to the IB literature by examining cross-border semantic sensemaking through a retrospectively constructed observational study. We argue that a relative inadequacy of the national professional idiom is likely to remain a feature of business environment in post-communist economies for some time and therefore should be factored into business strategies of MNCs. Consequently, we recommend including discursive hazards in the risk evaluation of international projects

The role of earnout financing on the valuation effects of global diversification

This article examines the impact of earnout financing on the value of acquiring firms engaged in cross-border acquisitions (CBAs), using a dataset of UK, US, Canadian and Australian firms from 1992 to 2012. The results show that firms initiating international business operations via earnout-financed CBAs enhance their value more than acquirers in (a) domestic acquisitions and (b) remaining CBAs by established multinational corporations (MNCs). Our findings demonstrate the superiority of earnout financing in CBAs announced by acquirers that have no prior international business experience. The results are robust to the firms’ endogenous choice to diversify globally and to the use of earnout financing. We contend that earnouts contribute to the reduction of valuation risk faced by firms acquiring a foreign target firm for the first time. Our empirical findings contribute to the existing debate on the merit of international expansion through CBAs and the role of earnout contingent payment

Ex-post Performance Implications of Divergence of Managers’ Perceptions of ‘Distance’ From ‘Reality’ in International Business

Despite much research on “distance”, little attention has been paid to the effect of divergence of managers’ perceptions of distance from reality (i.e. distance divergence) and its implications for firm performance. This knowledge is highly important since managerial perceptions of the firm’s environment do not always coincide with the actual environmental characteristics. Consequently, strategies based on inaccurate data may result in erroneous forecasts, missed opportunities and business failure. Using survey data from senior managers of Swedish exporters and corresponding objective data, this study is a first attempt to explore the ex-post performance implications of “distance divergence” when expanding into foreign markets. Our results demonstrate that the larger the divergence between managers’ perceptions of cultural distance and corresponding “objective” distance, the lower the performance expressed in companies’ sales. However, over/underestimation of cultural distance does not have differential effects on firm performance.“Stiftelsen Olle Hakelius Stipendiefond”, Grant no: 1165001

Les infractions en matière d'écoutes, de prise de connaissance et d'enregistrement de communications et de télécommunications

In this article, we examine the theoretical and empirical understanding of culture within the international business discipline post the publication of Kirkman, Lowe, & Gibson, (2006). In their paper, Kirkman et al. (2006) provide a comprehensive retrospective on the impact of Hofstede’s seminal publication, Culture’s Consequences. In addition to looking at what followed on from Hofstede, they laid out a research program they believed was necessary to move the study of culture forward. Unfortunately, in their current review published in this issue, they outlined how little, if any, of their thoughtful guidance was taken to heart. In our perspective, we believe that this signals that the study and use of culture in the international business field has become stuck in a theoretical and methodological rut and more radical thinking is necessary if we are going to advance beyond “more of the same” science that simply reiterates repeatedly that culture matters without any coherent advancement of the key role that it plays in the international arena

Conceptualizing and Measuring Culture in International Business and Management: From Challenges to Potential Solutions

Understanding the influence of culture on business operations has been one of the most enduring components of international business and management theorizing and empirical investigation. While several critiques and debates questioned the significant progress made in this domain, the special issue we introduce here is meant to demonstrate that further advancement on how we conceptualize and measure culture is not only needed, but also possible. We provide an overview of past and current approaches in the measurement of culture in IB/IM and the challenges associated with these approaches, and emphasize the important, yet insufficiently acknowledged, link between the theoretical conceptualization of culture and its measurement. We then introduce the four papers included in the special issue and highlight how they break away from the “addiction” to approaches that have been very useful in getting where we are today, but that might not always be useful in advancing knowledge beyond what we already know. Last but not least, we offer our own perspective on promising directions in conceptually and methodologically rethinking the study of culture in international business and management

The impact of ethno-linguistic fractionalization on cultural measures: dynamics, endogeneity and modernization

We introduce a measure called ethno-linguistic fractionalization (ELF), which captures the ethnic and/or linguistic diversity in a country and examine its implications on existing cultural measures. Not only do high levels of fractionalization affect the use of statistical means to account for cultural distance (CD), we show that it is not constant and therefore the dynamics of change need to be addressed. We pursue the study of the dynamics and potential endogeneity through an in-depth case study of South Africa over the course of the twentieth century. There is evidence of processes of modernization whereby economic progress impacts upon ELF. There are also complex interactions between the various measures of fractionalization and other sociopolitical and institutional variables. This provides us with an opportunity to bridge the CD and institutional distance literature as institutions impact upon culture and multinational enterprises, and institutional development is, in turn, affected by these. We call for a more realistic assessment of what is being captured in cultural measures and for recognition of the complexity of the notion of identity formation and its dynamics. Countries may have different underlying cultural schisms, including ELF, and its introduction will allow for a richer exploration of distance and diversity in International Business