Cultural Value Orientations as an Antecedent to the Formation of International Interfirm Relationships: The Developmentof Cultural Value Dimensions in a Business Context

With the importance of international interfirm relationships increasing, it becomes critical to understand the antecedents and consequences of relationship formation. Difficulty in relationships occur when firms with differing cultural value orientations attempt to engage in exchange. Culture affects the international firm in several ways: 1) difficulty in establishing a single organizational culture when a firm is comprised of multi-national employees; 2) difficulty in serving the market when cultural differences exist in the consumer; and 3) difficulty in establishing interfirm relationships across cultural boundaries. Individually, these problems are difficult to resolve, combined they can lead to failure. The first two have received considerable treatment in the management and marketing literature. The third area, international interfirm relationships, is just beginning to be investigated. It is this third area that is the subject of this investigation.

In order to test the relationship between culture and relationship structure, we must be able to measure the cultural value orientations of firms. Current measures of cultural value orientations are insufficient. Most existing measures of culture focus on societal culture without specifically recognizing the specialized environment of business. The measures that are operationalized in a business context have received heavy criticism concerning their development, and the validity of the resulting measures. The primary focus of this study is to develop a set of measures of cultural value orientations within a business context. These measures are then used to test the relationship between culture and interfirm interaction.

In this study, a conceptual framework of business decision making within a cultural context is developed and tested. The conceptual framework consists of a matrix created by intersecting five cultural value dimensions: individualism/collectivism, Logic/Emotion, Tolerance for Ambiguity, Equality/Hierarchy, and Time Orientation; with seven business context variables. The result is a thirty-five cell matrix with each cell identifying a particular behavioral situation. The situation is described by a pair of terms representing the polar extremes of the cultural dimension. Scale items were developed for each behavior situation and were administered along with measures of channel relationship preferences.

Data was collected from Hungarian managers, and from U.S. managers. This sample allowed for known group comparisons for each of the five cultural value dimension scales. Comparisons are made between the scales under development, and Hofstede's scales measuring the same dimensions. Finally, tests of predictive ability were made between the scales and measures of business relationships. The results of the study show moderate evidence of the scales' validity. Findings include the identification of a set of post-socialism cultural values that are unique to the Hungarian experience, and may reflect the values held by many throughout Central and Eastern Europe.