This study seeks to contribute to entry mode literature by introducing the concept of ¡§corporate culture diversity¡¨. Compared to multinational corporations (MNCs) from developed countries, Taiwan¡¦s MNCs have shorter history of internationalization. Therefore, international learning is critical to their entry modes. We examined an original determinant of entry mode choice, proposed and tested the operationalization for a new theoretical construct, namely ¡§corporate culture diversity¡¨.
In the theory of knowledge development process, it suggests that MNCs enter a foreign country initially with relatively small commitments, for instance through export, because of the high uncertainty caused by a low level of knowledge regarding the operational environment of the host country. At the later stage, as knowledge development takes place over time and the uncertainty is reduced. MNCs then gradually increase their levels of commitment to the country. MNCs are viewed to go through this sequential and incremental process of internationalization within not only a foreign country but also when they stretch out from one foreign country to another.
To establish a new theoretical construct, hypotheses were developed on the entry modes in relation to cultural diversity of a firm¡¦s international experience, a step beyond the conventional theory of how national cultural differences influence entry mode choice. The hypotheses were tested within the framework of organizational learning, using data on 1,156 entries that 376 Taiwanese MNCs carried out in 41 countries and territories during 1986-2006. Additionally, a moderating effect of corporate culture diversity regarding entry modes in countries with high level of cultural distance was also specified.
The result shows that not only culture distance at national level and prior experience by the MNC in a host country, but also the culture diversity of the MNC itself has a strong effect on the decision making process of entry mode choice. In addition, the research confirmed the traditional view that the amount of cultural learning needed in a particular host country is an important determinant of mode choice in foreign direct investments. However, less traditionally, the finding that corporate culture diversity that reflects the capacity of an MNC in understanding foreign cultures had a significant increasing effect on the selection of WOSs mode over JVs mode seems to provide an important contribution to this field of research. Most importantly, the novelty of the research is that we have successfully formulated an operationalization of a new construct ¡V the culture diversity at corporate level, a step beyond the national level. The culture diversity reflects the level that an MNC exposes to foreign cultures. Our result contributes to support the importance of the concept of corporate culture diversity. The operationalization of this construct has also been tested and found significant in our empirical test.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0901110-123315 |
| Date | 01 September 2010 |
| Creators | Nguyen, Hoang-Linh |
| Contributors | none, Cher-Min Fong, none, Pei-How Huang, C.H. Tseng |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0901110-123315 |
| Rights | not_available, Copyright information available at source archive |
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