The effect of cultural distance on conflict resolution between MNEs and indigenous communities : an exploratory study : a quantitative analysis on conflict resolution with MNE experience as moderating effect

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The Effect of Cultural Distance on Conflict Resolution between

MNEs and Indigenous Communities: An Explanatory Study

A Quantitative Analysis on Conflict Resolution with MNE Experience as Moderating Effect

Final Thesis

MSc Business Administration – International Management

Name: Sophie Wegter

Student number: 6068022 Supervisor: Dr. Ilir Haxhi Second reader: Drs. Erik Dirksen Date: January 26th, 2017

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Statement of Originality

This document is written by Sophie Wegter, who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Acknowledgement

After almost 8.5 years of studying in Amsterdam, this educational journey has come to an end. Although the first years of my studies have not been that satisfactory, the past 4 years have been very successful and brought me a lot. This thesis is the last stage of the very rewarding Master’s in International Management. I would like to thank a few people for standing by my side during my studies and the according thesis process. First, my appreciation goes out to my thesis supervisor Ilir Haxhi, who has trusted, supported, and helped me throughout the past half year and encouraged me to get the best out of myself. Second, I am very grateful to my parents, who have supported me endlessly in everything I have done and given me the chance to follow my heart and pursue this Master’s degree. Also a big thank you to my boyfriend Nick, who has been very patient, understanding, and helpful during all these years and wanted me to push through until the end. Last, I would like to thank Mr. Erik Dirksen for reading and grading my thesis.

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Abstract

The situation in which conflicts arise between multinational enterprises (MNEs), especially in the extractive industries, and indigenous communities, is a global phenomenon. Such conflicts often result in lengthy and violent encounters with severe consequences for either side; however, this would depend on the cultural features of the parties involved. (National) cultural differences are at the core of the process of internationalization and increase the likelihood of conflicts emerging between parties with different cultural backgrounds. The role of culture, and more specifically, the role of cultural distance (CD) between MNEs and indigenous communities, in these conflicts, remains unstudied. This is hence one of the first studies that examines, in a quantitative manner, the relationship between CD and conflict resolution between MNEs and indigenous communities.

We argue that greater CD –in terms of power distance (PDI), individualism (IDV), masculinity (MAS), and uncertainty avoidance (UAI)– between the MNE and the indigenous community leads to longer and more violent conflicts. Furthermore, we argue that an MNE’s previous experience with conflict negatively moderates the this relationship, that is, it leads to shorter and less violent conflicts. We test our predictions on a sample of 336 cases of conflicts around the world. Our results indicate, first, that higher PDI, IDV, and UAI scores lead to longer conflicts; however, only higher PDI scores lead to more violent conflicts. Second, we do not find statistical support for a moderating role of MNE experience on any of the CD dimensions or conflict resolution.

The theoretical contributions of this study are threefold. First, this study follows a quantitative rather than a qualitative approach, which adds to existing literature as research on conflict resolution is often conducted qualitatively. Furthermore, the results indicate that the four CD dimensions have divergent effects on both the duration and levels of violence in the conflict, suggesting that the CD dimensions should not be treated equally and as an integrated construct. Second, testing the effect of CD on conflict resolution on a global scale is novel to existing literature, as CD is often examined in only two countries or cultures. Third, as the current study demonstrates that MNEs’ previous experience does not moderate the relationship between CD and conflict resolution, it provides new insight into the rather ambiguous literature on MNEs’ previous experience. Finally, the practical contribution of this study is that it provides managers of MNEs with guidelines for assessing the risks of internationalization, by carefully examining the CD dimensions of countries perceived as potential investment destinations.

Keywords: Conflict, MNE, Indigenous community, Cultural distance, Power distance, Individualism, Masculinity, Uncertainty Avoidance, MNE experience

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List of Tables and Figures

Tables

Table 1: Regression models for Length of Conflict………52

Table 2: Regression models for Degree of Violence………...52

Table 3: Descriptive statistics and correlation……….57

Table 4: Multicollinearity matrix………58

Table 5: Regression results for Length of Conflict………...66

Table 6: Regression results for Degree of Violence………....67

Table 7: Hofstede’s CD scores by country………..96

Figures Figure 1: Aggregated overview of conflict resolution styles………..24

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“Culture is the manner in which […]these dilemmas are reconciled, since every

nation seeks a different and winding path to its own ideals of integrity.”

– F. Trompenaars, 1996

1. Introduction

In recent years, multinational enterprises (MNEs) have increasingly extended their activities across national borders, leading to a more globalized world economy. An MNE’s internationalization behavior affects the countries where the MNE operates and may impact on the institutional, cultural, and legal environment of the host country (Naruala & Dunning, 2000). MNEs are expected to take into consideration an appropriate balance of transparency, efficiency, and accountability (Luo, 2005), however, they appear to fail to behave in a socially and environmentally responsible manner towards the host country and to actively foster environmental well-being, human-rights compliance, and a culture of anti-corruption (Kolk & Lenfant, 2013). Whereas in the past, opposition to MNEs’ activities originated with the host-country government, more recently it is local communities that have expressed their resistance to free-market capitalism and the accordingly blurred country borders (Lertzman & Vredenburg, 2005; Calvano, 2008). As such, MNEs and indigenous communities find themselves having conflicting interests, as indigenous communities live on the land that MNEs tend to exploit (Lertzman & Vredenburg, 2005).

Local communities often do not benefit from an MNE’s operations and are prone to exploitation of land and labor (Danskin, Dibrell, & Kedia, 2005). Due do their large dependence on land and indigenous territory, from which they mainly derive their identity, indigenous communities feel impaired by MNEs that extract resources from their ground and thereby demolish the ecological, social, and cultural environment (Calvano, 2008). The communities strive for environmental protection, wealth distribution, and development initiatives, and a lack of these is a reason for conflict between the MNE and the community

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9 (Hilson, 2012). It is challenging for MNEs and indigenous communities to mutually understand each other’s goals and objectives, and both parties have difficulty establishing or maintaining dialogue (Danskin et al., 2005). This often leads to longstanding and severe conflicts with negative outcomes for both parties (Mutti, Yakovleva, Vazquez-Brust, & Di Marco, 2012; Barber & Jackson, 2012; Danskin et al., 2005). For this reason, Calvano (2008) addresses the need for a deeper understanding of the causes of conflict between MNEs and indigenous communities, as these remain unclear.

Central to the process of globalization and transnationalization, and the risks that accompany the process of extending operations abroad, is the concept of culture (Joshi, Labianca, & Caligiuri, 2002; Mense-Petermann, 2006; Calvano, 2008). Several scholars argue that (national) culture is a critical factor for MNEs becoming involved in conflicts when they extend their borders internationally (Morris et al., 1998; Morgan, 2001; Joshi et al, 2002; Mense-Petermann, 2006). Although cultural differences do not always cause conflict, they do increase the likelihood of conflicts taking place (Joshi et al., 2002; LeBaron, 2003). When members of different cultures encounter one another, they are confronted with divergent cognitive and interpretative patterns, taken-for-granted beliefs, and meaning systems that are different from their own, leading to feelings of irritation and misunderstanding towards the opposite party (Mense-Petermann, 2006). These cultural differences shape the emergence and course of conflicts; however, they also influence the way in which conflicts are approached and how they are resolved (Tinsley & Weldon, 2003; Brew & Cairns, 2004; Wilson & Power, 2004; Hong, 2005). Approaches to resolving conflict range from using force and violence to the use of collaboration (Getz, Oetzel, & Ladek, 2005; Fisher, 1996). The extent to which MNEs and communities are either violent or collaborative, or a combination of both, depends to a great extent on their cultural backgrounds (Mense-Petermann, 2006).

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10 When approaches to conflict resolution, and communication and negotiation styles in the course of the process, are highly dissimilar, the likelihood of swift and reasonable conflict resolution is reduced (Gladwin & Walter, 1980; Van Oudenhoven & De Dreu, 2001; Komarraju, Dollinger, & Lovell, 2008). As Goodall (1996) strikingly states: “Professionals and academics are being called upon to articulate some new revolutionary ‘communication’ breakthrough capable of teaching us how diverse peoples can learn to live together meaningfully without destroying each other and –in the process– the planet itself” (Goodall, 1996, as cited in Holt & DeVore, 2005, p. 166).

Culture is deeply-rooted, complex, and difficult to change, which makes it difficult to define and conceptualize (Shenkar, 2001). Hofstede’s (1991) six cultural distance dimensions enable us to measure differences among cultures and numerically express how cultures around the globe vary. They have been used for decades, especially with regard to foreign market-investment locations, the sequence and pace of expansion, entry-mode choice, governance styles, and MNE (affiliate) performance (Manev & Stevenson, 2001; Shenkar, 2001; Van Oudenhoven & De Dreu, 2001; Ma & Jaeger, 2010). Furthermore, CD effects have been tested in relation to conflict management theory, however, these studies included only European countries and focused on conflict amongst colleagues, or conflict between superiors and subordinates (Deutsch, 1973; Tjosvold, 1991; Rubin et al., 1994, as cited in Van Oudenhoven & De Dreu, 2001). Other research has only examined interpersonal conflict (Gabrielidis et al., 1997). Even though scholars emphasize that cultural differences are at the core of conflicts that arise during the process of transnationalization (LeBaron, 2003; Mense-Petermann, 2006), existing literature fails to include the cultural context of conflict, as well as its resolution, between MNEs and indigenous communities (Tang & Kirkbridge, 1986).

Existing literature offers an extensive perspective on the concept of CD within the field of international business and management; however, a thorough examination of the

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11 effects of Hofstede’s four dimensions of CD on conflict specifically is lacking. Furthermore, Hofstede’s (1980) four cultural dimensions are examined in relation to the process of internationalization as an integrated construct (Kogut & Singh, 1988), however, they are not tested for having separate effects, thereby limiting the ability to compare them to one another. This study therefore separately examines the effects of Hofstede’s four CD dimensions – power distance (PDI), individualism (IDV), masculinity (MAS), and uncertainty avoidance (UAI)– on a global scale for 336 cases of conflict around the world. Moreover, scholars examining the topic of conflict resolution offer detailed and case-specific perspectives of conflict, limiting the generalizability of their findings at the global scale (Calvano, 2008; Kolk & Lenfant, 2013; Fontana, Sastre-Merino, & Baca, 2017). The current study quantitatively examines the relationship between CD and conflict resolution between MNEs and indigenous communities in terms of the duration of the conflict and the degree of violence. In order to fill these research gaps and complement the existing literature, this study proposes the following research question:

RQ1: To what extent does cultural distance between MNEs and indigenous communities affect conflict resolution (in terms of duration and degree of violence)?

While cultural distance might influence conflict resolution between MNEs and indigenous communities, this effect might be mitigated by other (external) factors. One of these factors is the previous experience of the MNE in dealing with similar circumstances. In the existing literature, MNEs’ experience is largely represented as having a positive effect on the internationalization process, as it allows for the internal transmission of experience and the knowledge gained from previous operations (Johanson & Vahlne, 1977; Cohen & Levinthal, 1990; Barkema, Bell, & Pennings, 1996). It is therefore suggested that previous experience of MNEs can overcome barriers that exist between home and host countries, as organizational learning is encouraged (Barkema et al., 1996; Oh & Oetzel, 2017). In their

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12 recent research, Oh and Oetzel (2017) find that MNEs’ previous conflict-specific experience provides a greater understanding of the host-country government, its role in the conflict, and its ability to comprise and resolve conflict. Castro and Nielsen (2001) add that MNEs’ conflict experience can have positive influence on management agreements, because co-management agreements that are negotiated between the state or MNE and indigenous communities tend to have more success when they are preceded by conflicts. However, both authors also highlight the importance of the cultural environment, which may have a stronger effect than does an MNE’s experience. We therefore are encouraged to examine in more detail the effect of MNE experience on conflict resolution.

The literature is not unanimous about the effects of MNE experience. Earlier scholars largely agree on the positive effect of experience on the internationalization process, whereas the more recent literature on CD and conflict resolution questions the effect of experience, especially in culturally divergent contexts. As an examination of the relationship between MNE experience, CD, and conflict resolution lacks in existing literature and the handful of available studies are not consentient about the effects of MNE experience, the current study aims to extend existing knowledge on the relationship between these phenomena. Therefore, this study proposes the following, second research question:

RQ2: To what extent does MNE conflict experience moderate the relationship of cultural distance between MNEs and indigenous communities, and conflict resolution?

A better understanding of the role of CD in conflicts and their resolution provides deeper insights into the underlying reasons for MNE and community conflict, as these underlying reasons are not easily established (Calvano, 2008; Oh & Oetzel, 2017). Furthermore, insights into the effects of culture on varying approaches towards conflict resolution are required to diminish the duration and severity of current and future conflicts. As culture is a deeply-rooted and rich complex of beliefs and values, and changes slowly

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13 (Schwartz, 2009), it has an (as yet) unmeasurable and unwitting effect on conflict between MNEs and indigenous communities. As these conflicts can have disastrous consequences for both parties (Castro & Nielsen, 2001), extended knowledge of the effect of CD between the actors in conflict is crucial to overcoming the emergence of future conflict. The previous experience of MNEs might help surmount the considerable effect that CD has on conflict, as well as its revolution, and mitigate the risk of expanding abroad where indigenous communities may be encountered.

In order to answer the research questions, this study examines the relationship between CD, MNE experience, and conflict resolution. This analysis is conducted using a sample of 336 cases of conflicts between MNEs and indigenous communities in 42 countries in North and South America, Africa, Asia, and Oceania. Cultural distance is measured using Hofstede’s four dimensions (power distance, individualism, masculinity, and uncertainty avoidance) by calculating a distance score for the relation of the country of origin of the MNE and the country of the indigenous community for each of the four dimensions. Conflict resolution is measured in terms of the duration of the conflict (either “short” or “long”) and the degree of violence (ranging from no violence (0) to severe violence, including deaths (5)). The moderator, MNE experience, is measured in years. This study argues that CD has a positive effect on conflict resolution, and that this relationship is negatively moderated by MNE experience.

This research contributes to the field of international business and management in numerous ways. Theoretically, it contributes by providing deeper insights into the effect of CD on conflict resolution between MNEs and indigenous communities, a rather understudied topic. More specifically, it is the first time in the literature that Hofstede’s (1991) four CD dimensions are tested separately for their effects on the duration and severity of conflicts between MNEs and indigenous communities. Second, this study extends knowledge on the

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14 effect of MNE experience on CD and conflict resolution, as earlier scholars are not consistent as regards its effect (Barkema et al., 1996; Castro & Nielsen, 2001; Bhagat, Kedia, Harveston, & Triandis; 2002; Kostova & Roth, 2002). Third, as regards the methodology, the quantitative rather than qualitative approach of this study is novel to the existing literature on conflict resolution between MNEs and communities, as previous studies have conducted detailed and case-specific research, limiting the ability to generalize results to global conflict situations (Calvano, 2008). Last and practically, the findings of this research can encourage MNEs’ managers to consider the importance of the cultural context of countries and regions identified for future business and investment opportunities, mitigating the risk of becoming involved in conflicts by carefully assessing the cultural dimensions of the countries and regions of interest. The findings can also assist in understanding and assessing current conflicts, and how to approach them in order to attain a fruitful resolution. Furthermore, managers and directors of MNEs should realize that previous experience with conflict does not unambiguously lead to shorter or less violent conflicts with communities.

The remainder of this study is structured as described in what follows. First, a literature review is presented that identifies and discusses relevant topics for this research. The literature review is followed by the theoretical framework, proposed hypotheses, and the conceptual model. Subsequently, the method is presented, including the research design, sample, data collection, and all variables used in this study. Then, the regression results are presented for both dependent variables. A discussion chapter follows, which includes the findings, contributions, limitations, and suggestions for further research. Finally, the conclusion is presented.

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2. Literature Review

This literature review provides an introduction to the relevant concepts used in this thesis and a review of previous research. The first section of this chapter introduces indigenous communities. Second, conflicts between MNEs and indigenous communities are discussed. The third section discusses the concept of cultural distance between countries and how cultural distance affects conflict and resolution of conflict. Finally, in the last section, MNEs’ previous experience with indigenous communities is explained.

2.1 Indigenous Communities

According to Coates (2005), it is difficult to state what exactly defines an indigenous community, because there are many challenges in determining what characteristics make up an indigenous community and the indigenous members that are part of such communities. Distinct features often are not generalizable to other communities and each community has its own unique identity, sometimes overlapping with other cultural groups (Coates, 2005). In a report of the United Nations (1982), José R. Martinez Cobo addresses the problems that arise establishing a working definition for indigenous populations, being that interpretations of indigenous communities vary highly among different countries and sometimes even within countries, and these definitions often contain racial, social, and cultural aspects across each other, making it hard to create a generalizable definition. Overcoming these difficulties, Cobo (1982) presents the following working definition:

“Indigenous communities, peoples and nations are those which, having a historical continuity with pre-invasion and pre-colonial societies that developed on their territories, consider themselves distinct from other sectors of the societies now prevailing on those territories, or parts of them. They form at present non-dominant sectors of society and are determined to preserve, develop and transmit to future generations their ancestral territories, and their

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16 ethnic identity, as the basis of their continued existence as peoples, in accordance with their own cultural patterns, social institutions and legal system”, (Cobo, 1982, as cited in Coates, 2005, p. 6).

According to the United Nations (2009), 370 million people around the world located in 90 different countries, speaking more than 4,000 of the world’s 7,000 languages, are known to be indigenous. Indigenous peoples have a deep self and community-identification that is strongly related to place, territory, a common history and feelings of “sharing” (Bruijn & Whiteman, 2010). Economic wealth of indigenous groups often comes from small-scale agriculture, fisheries, and forestry in secluded parts of regions, where they have lived for decades (Coates, 2005). Worldwide, indigenous peoples face critical situations, such as exclusion from political and economic power, continuous discrimination, wars, environmental disasters, dispossession of land, and deprivation of their natural resources (United Nations, 2009).

Indigenous communities struggle with feelings of disenfranchisement as they feel oppressed and discriminated against by higher-power institutions, such as the national government or MNEs, and are unconfident that their interests are served (Oetzel, Dhar, & Kirschbaum, 2007). They are vulnerable and do not have the resources to defend themselves against the course of globalization, and as a result, MNEs’ internationalization practices can have very negative consequences for the communities (Hilson, 2002; Coates, 2005). Logically, they wish to be perceived as key stakeholders in the process of internationalization (Castro & Nielsen, 2001). When MNEs or governments fail to do so, this leads to resistance from the side of the community to reclaim their territory and traditions (Igoe, 2006), resulting in potentially lengthy and severe conflicts (Calvano, 2008).

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2.2 Conflicts between MNEs and Indigenous Communities

Over the past six decades, there have been hundreds of armed conflicts in 148 locations throughout the world. Ever since the end of the Cold War up to 2002, these conflicts have resulted in a total of 7 million deaths (Uppsala, 2008, as cited in Getz and Oetzel, 2009, p. 375). The severity and consequences of these conflicts together with a continuously increasing level of foreign direct investment (FDI), results in a greater likelihood that MNEs and indigenous communities will be faced with disastrous outcomes (Getz & Oetzel, 2009).

Conflict between parties emerges when aspirations of both sides are incompatible and when there are no alternatives to satisfy the aspirations of the parties (Rubin, Pruitt, & Kim, 1994). In the context where members from different cultures encounter, conflict is defined as “the perceived and/or actual incompatibility of values, expectations, processes, or outcomes between two or more parties from different cultures over substantive and/or relational issues” (Ting-Toomey, 2001, p. 360). Situations of conflict have impact on people, societies, and firms, often in a negative way (Oetzel, Getz, & Ladek, 2005). Although conflict is considered to be important and inevitable for social change, violence that comes with conflict often has terrible outcomes (Miall, Ramsbotham & Woodhouse, 1999, as cited in Oetzel et al., 2005, p. 4). As conflicting parties “want to pursue their own interests to the full, and in doing so, end up contradicting, compromising, or even defeating the interest of the other” (Ochieng Odiambo, 2000, as cited in Hilson, 2002), managing the conflict appropriately is crucial to ensure constructive resolution, as unsuccessful management can result in destructive outcomes for both parties (Cetin & Hacifazlioglu, 2004). For MNEs, conflicts can lead to bad feelings, high turnover, and costly litigation (Hirschman, 2001), and are among the most difficult challenges organizational members are faced with (Phillips & Cheston, 1979). Moreover, severe conflicts, that is, including war, rebellion, deaths, among others, can have impact on the degree of FDIs an MNE undertakes (Oh & Oetzel, 2017). For indigenous

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18 communities, conflicts may lead to loss of identity, deteriorated access to and control over land, as well as diminished political position (Coates, 2005; van de Sandt, 2009). Some indigenous communities are acquainted with the destructive activities of MNEs, however, it is the unexpected and preventable nature of the activities that causes the greatest disruptions and result in serious disputes (Hilson, 2002). Conflict resolution can move along the continuum from the use of force and violence, to complete collaboration from both sides. Decades ago, the use of military power was a common way of conflict resolution, but in time, disputes are resolved through other means of resolution. One of the most known methods of conflict resolution is negotiation, where official actors represent parties involved in the conflict (Oetzel et al., 2005).

2.3 Cultural Distance and Conflict Resolution

2.3.1 Cultural Distance

People around the world are both similar as different, since they can have common characteristics, but at the same time are born and brought up in different contexts, therefore having a different culture and set of values (Naylor, 1997). Culture is “a learned meaning system that consists of patters of traditions, beliefs, values, norms, and symbols, that are passed on from one generation to the next and are shared to varying degrees by interacting members of a community” (Ting-Toomey & Oetzel, 2001, p. 9). Following from this, national cultural distance is defined as “the degree to which the cultural norms in one country are different from those in another country” (Kogut & Singh, 1988, as cited in Shenkar, 2001, p. 139). At least to a certain level, all MNEs are faced with cultural distance when operating abroad (Luo, 2002). When a host-country’s culture is different from an MNE’s home culture, this can lead to legitimacy problems for the MNE (Kostova & Zaheer, 1999) as perceptions of appropriate behavior vary among people from different countries (Hofstede, 1980).

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19 As culture is subtle, intangible, and complex, it is difficult to conceptualize and scale (Shenkar, 2001). Hofstede (1991) has developed a rather simple and standardized tool to measure these differences in culture among different countries, which is able to overcome the complexities and intricacies of culture (Shenkar, 2001). Hofstede’s concept of the dimensions of national culture emerges from a combination of field research, empirical testing, and conceptual reasoning, and is based on several related phenomena that are common to all societies. Examples of these are, among others, focus on self vs. focus on others, establishment of and compliance to rules and regulations, attitudes towards conflict resolution, and perception of power (Hofstede, 1991). These phenomena are combined and as a result, Hofstede developed six dimensions of cultural distance, being power distance (PDI), individualism vs. collectivism (IDV), masculinity vs. femininity (MAS), uncertainty avoidance (UAI), and long-term vs. short-term Orientation (LTO), and indulgence vs. restraint (IND). Hofstede, Hofstede, and Minkov (2010) in their book explain the different cultural dimensions as follows. First, PDI expresses the degree to which less powerful members of a society accept that power is distributed unequally, meaning, higher PDI means more acceptance by less powerful members. In fact, in high PDI countries, hierarchy mainly determines people’s behavior, whereas in low PDI societies, people tend to always search for equality (Van Oudenhoven & De Dreu, 2001). Second, the IDV expresses the degree to which a society is loosely-knit or knit. This means that in an individualistic, tightly-knit society, individuals are expected to only take care of themselves and their immediate family, and perceive themselves independent from society as a whole. In collectivistic, loosely-knit societies, individuals can expect their relatives or members of a particular in-group to take care of them. An important difference here is whether people’s self-image is expressed in terms of “I” or “we”. Third, the MAS index expresses the distribution of roles between genders. The more a society prefers achievement, assertiveness, material rewards for

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20 success, and heroism, the greater the degree of masculinity. In a more feminine society, there is a preference for cooperation, caring for the weak, modesty, and quality of life. Fourth, the UAI index shows the degree to which a society feels uncomfortable with uncertainty and ambiguity, and how society tries to control the future or lets it happen. The higher the UAI score, the more codes and rules exist to control the future, whereas a lower UAI score implicates a more relaxed attitude that counts more than principles. Fifth, the LTO index indicates how a society deals with challenges of the present and future. Low LTO means that a society prefers to maintain norms and traditions, and see societal change as suspicious. Contrary, societies with a high LTO score take a more pragmatic approach towards the future, putting efforts in modern education and encouraging thrift. Last, the relatively new dimension is IND, expressing the degree to which a society allows free gratification of basic and natural human drives relating to enjoying life and having fun. A lower IND score implicates a society regulates and suppresses gratification by means of strict social norms (Hofstede et al, 2010).

About 70 of the world’s countries have a score one or more dimensions, based on the culture of their country. However, the two last dimensions LTO and IND have only emerged rather recently and do not include data on all 70 countries. Therefore, the current study only uses the first four dimensions: PDI, IDV, MAS, and UAI, since these dimensions are most extensively developed for all countries and are most widely represented in existing literature (Hofstede, 2003).

Schwartz’ Cultural Values

There are also other authors that examine the (national) difference in culture and cultural values. First, Schwartz (1999) in his theory of cultural values builds on Hofstede’s dimensions of culture and cultural distance, by adding data from important non-Western

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21 regions of the world (e.g., the former Eastern bloc). Furthermore, Schwartz states that existing dimensions of culture do not validate for cross-cultural equivalence of meaning, therefore lack to capture the full range of potentially relevant value dimensions. He defines values as “conceptions of the desirable that guide the way social actors (e.g. organizational leaders, policy makers, and individual persons) select actions, evaluate people and events, and explain their actions and evaluations” (p. 24). In this, values and trans-situational goals or criteria that are ordered by importance as guiding principles in life. As such, Schwartz (1999) developed seven types of values, structured along three dimensions: conservatism vs. intellectual/affective autonomy; hierarchy vs. egalitarianism; and mastery vs. harmony. He expresses that these cultural values can be used to select socially appropriate behavior and to justify these behavioral choices to others. Schwartz’ values focus on the cultures of national groups, not only to culture set by national boundaries. Bergeron and Schneider (2005) in their scholar highlight the similarities between the work of Schwartz (1999) and Hofstede (1983) and argue that Schwartz’ hierarchy-egalitarianism construct strongly resembles Hofstede’s PDI construct, and the mastery-harmony construct is related to the IDV (and collectivism) construct.

Hall’s High and Low-Context Schema of Cultural Variability

Second, the work of Hall (1976) demonstrates the difference in cultures, mainly in relation as to how communication and the perception of messages are shaped through cultural values. The author claims that he has learned “first-hand about the details and complexities of one of the world’s most significant problems: intercultural relations” (Hall, 1992, p. 76). Hall (1976) based his framework for cultural variability on information that surrounds an event, because this is linked to the meaning of a situation (Warner-Soderholm, 2013). Communication messages can be high-context or low-context. A message is considered high-context when the

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22 information of the message is already in the person, and little is in the coded, explicit, or transmitted part of the message (Warner-Soderholm, 2013). When a message is considered low-context, most of the information of the message is integrated in the explicit code. House, Javidan, Dorfman, and Gupta (2004) link the work of Hall (1976) to the work of Hofstede (1983) and Schwartz (1999), by arguing that high and low-context communication strongly correlates with values such as PDI, IDV, egalitarianism, assertiveness, but also religious values. They argue that collectivists are often categorized as high-context communicators, as they value harmony, indirect communication, and hierarchy. Words are less important than the context surrounding the words. Similarly, people from individualistic societies who value assertiveness, direct communication, and honesty, tend to be low-context communicators (House et al., 2004). Furthermore, scholars have applied Hall’s high and low-context communication scale, putting Japan (low IDV) at the high-context side, and the USA and Scandinavia (high IDV) at the low-context side of the scale (Warner-Soderholm, 2013).

2.3.2 Conflict Resolution

Culture and cultural values shape conflicts and therefore construct conflicts, whether in a minor or central role. Although culture does not have to be the cause of conflict, it is always present, shaping behaviors, attitudes, and perceptions of individuals (LeBaron, 2003). Naturally, different cultures tend to perceive conflict differently, but also favor varying styles to resolve these conflicts (Morosini, Shane, & Singh, 1998; Tyler, Lind, & Huo, 2000; Brouthers & Brouthers, 2001; Lather, Jain, & Shukla, 2010). Culture is inextricably linked to conflict and influences all dimensions of conflict. This can occur at the subsidiary, corporate, and country level (Mense-Petermann, 2006).

It is very likely that MNEs are faced with conflicts in regions where intercultural adaptation is necessary (Gladwin & Walter, 1980). The disputes that emerge from difference

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23 in cultures are difficult to define, because people tend to be led by stereotypical beliefs (Triandis, 1993). Although conflicts may “have an innovative effect […]” (Van Oudenhoven & De Dreu., 2001, pp. 442), the resolution of conflicts should be constructive to be effective. In order to reach constructive and sound solutions, the most important is for both parties to be fair and cooperative, rather than competitive and self-serving (Van Oudenhoven & De Dreu., 2001). The specific challenge in overcoming conflicts between parties from different cultures is the need for having sincere attention for the other party’s view, and stepping aside from one’s own values and perspectives (Brown, 1983). A thorough understanding of the other party’s cultural values with regards to conflict is highly valuable if the party wants to obtain understanding of the conflict (resolution) strategies that are used by the other, and even more so, if they want to predict and foresee the strategy that will be used in (future) conflict situations (Komarraju et al., 2008).

Conflict resolution can be performed in numerous ways and is dependent on the cultural background of the parties involved in the conflict (Lather et al., 2010). Certain approaches towards conflict resolution can minimize the risk of cultural issues, for instance, among others, wanting to collaborate with stakeholders, having a genuine concern for the outcome, being sensitive to cultural norms, and learning from events as they play out (LeBaron, 2003). Over the years, many scholars have attempted to examine and integrate the different conflict resolution styles among varying cultures (Blake & Mouton, 1964; Thomas, 1976; Rahim, 1968, 1979, 2002). An overview of the mostly used and cited scholars on conflict resolution styles is presented in Figure 1, known as the ‘managerial grid’ or ‘five-style paradigm’ as firstly introduced by Blake and Mouton (1964).

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24 Figure 1. Aggregated overview of conflict resolution styles derived from the “dual-concerns theory” (Holt & DeVore, 2005, p. 168)

The aggregated overview of conflict resolution styles in Figure 1 presents five discrete ways of handling conflict, which all are highly similar, although developed by different authors (Holt & DeVore, 2005). The five styles originate from two primary motivations, being ‘concern for production’ (also own concern, concern for self, or concern for personal goals) and ‘concern for people’ (also satisfy other’s concerns, concern for others, or concern for relationships). Mapping each of these concerns as high or low results in five resolution styles: withdrawing (low concern for both production and people), smoothing (low concern for production and high concern for people), compromising (medium concern for both dimensions), forcing (low concern for people and high for production), and problem solving (high concern for both dimensions). Most cultures have a predominant preference for one (or sometimes more) conflict resolution style.

C o n ce rn f o r P eo p le ( Bl a ke & M o u to n ) Pa rt y’ s D esi re to S a ti sf y Ot he r’ s C o n ce rn s (T h o m a s) C o n ce rn f o r Ot h er s (R a h im ) C o n ce rn f o r R el a ti o n sh ip s (H a ll , R en w ic k)

Concern for Production (Blake & Mouton) Party’s Desire for Own Concern (Thomas) Concern for Self (Rahim)

Concern for Personal Goals (Hall, Renwick) Smoothing (Blake & Mouton, Renwick)

Accommodating (Thomas) Obliging (Rahim)

Yield-Lose (Hall)

Problem-Solving (Blake & Mouton) Confronting (Renwick)

Collaborating(Thomas) Integrating (Rahim) Synergistic (Hall)

Compromising (Blake & Mouton, Renwick,Thomas,Rahim,Hall)

Withdrawing (Blake & Mouton, Renwick) Avoiding (Thomas, Rahim)

Lose-Leave (Hall)

Forcing (Blake & Mouton) Competing (Thomas) Dominating (Rahim) Win-Lose (Hall)

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25 As we will elaborate further in the theoretical framework, different conflict resolution styles are typically found among different cultures in varying parts of the world (Lather et al., 2010; Wei, Yuen, and Zhu, 2001). For instance, individualists value individual achievement, as well as egalitarianism, freedom, democracy, competition, and independence, leading to direct, dominating, and competing conflict resolution styles. They perceive disagreements and conflicts as part of life, leading to a more direct and active attitude towards conflict (Wei, Yuen, & Zhu, 2001). These attitudes are typically found among North-Americans. Contrary, collectivists tend to value the needs of the group and give less priority to personal goals and preferences; resulting in cooperative behavior, respect for seniors, and acceptance of authority. They prefer an indirect, collaborative, or avoiding, style resolution style (Gudykunst et al., 1988). These attitudes are prevalent in Asian countries. Last, as Australians value economic opportunity, fairness, security, respect for others, and personal freedom, they prefer compromising resolution styles (Lather et al., 2010).

As Gladwin and Walter (1980) point out, only compromising or collaborative resolution styles foster the actual resolution of conflicts; other styles only express how a conflict is coped with. For instance, when either an MNE or a community prefers a forcing resolution style but the other party uses an avoiding style, it becomes very hard to communicate effectively and collaborate in order to reach an agreement (Komarraju et al., 2008). In extreme cases, an avoiding resolution style can ultimately lead to alienation of one of the parties, therefore limiting the chance of finding sound solutions and unnecessarily lengthening conflict process (Blake & Mouton, 1970).

2.4 MNE Experience

Whilst cultural distance might influence conflict resolution between MNEs and indigenous communities, there might be other factors that play a role in this relationship. One of these

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26 factors is MNE experience. Already in early emerging literature on the behavioral theory of the firm and theory on the process of internationalization, scholars point out the importance of acquiring knowledge and learn from previous globalization efforts (Johanson & Vahlne, 1977; Cohen & Levinthal, 1990; Hamel, 1991; Barkema, Bell, & Pennings, 1996). An MNEs’ ability to obtain competitive advantage and enhance its performance is heavily dependent on its learning capability (Barney, 1991; Luo & Peng, 1999). The process of internationalization is path-dependent and should consist of incremental steps into environmentally and contextual close countries, whereby the acquisition and integration of knowledge is important to successfully operate in host-countries (Johanson & Vahlne, 1977). Encountering a variety of divergent experiences while doing business makes the MNE less vulnerable to unexpected situations and knowledge about these experiences might be transferred to other markets and subsidiaries in the future, which is called organizational learning (Barkema et al., 1996). Bhagat et al. (2002) argue the absorption and transfer of knowledge is difficult for MNEs involved in cross-border activity, which is particularly complicated by a high cultural distance between the MNE and the host-location. Also Kostova and Roth (2002) and Barkema et al. (1996) point out that a difference in culture might be an obstacle for MNEs in the internationalization process and hinder the applicability and transfer of knowledge, ultimately leading to higher management costs for the MNE (Slangen & Hennart, 2008).

More recently, scholars have examined the role of MNE experience in relation to conflicts between MNEs and indigenous communities. Oh and Oetzel (2017) study the relationship between violent conflict in a host country and MNEs’ subsidiary investments, with MNE conflict experience as a moderator. They find that location and conflict-specific experience provides a greater understanding of the host-country government, its role in the conflict, and its ability to comprise and resolve conflict (Oh & Oetzel, 2017). In the same

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27 scholar, however, they also address that the effect of MNE experience might be limited when there is a high dissimilarity in the cultural environment of previous and future conflicts, although they do not have empirical support for this. Other research by Castro and Nielsen (2001) shows that MNE conflict experience can have positive influence on co-management agreements, because co-management agreements that are negotiated between the state or MNE and indigenous communities tend to have more success when they are preceded by conflicts. Co-management is defined as “a situation in which two or more social actors negotiate, define, and guarantee amongst themselves an equitable sharing of the management functions, entitlements, and responsibilities for a given territory or set of natural resources” (Borrini-Feyerabend, Taghi Farvar, Nguingiri, & Ndangang, 2000, p. 1). Castro and Nielsen (2001) point out in the same scholar that cultural barriers might impede negotiations about co-management, because the differences between the community and other resource holders (i.e., the MNE) with regards to their ideas, practices, and expression of interests, are too big to overcome. However, both Oh and Oetzel (2017) and Castro and Nielsen (2001) have not tested the effect of MNE experience in a culturally dissimilar environment, therefore leaving room for the current study to examine this phenomenon. As potential ways to encourage cultural learning of MNEs, Jassawalla, Truglia, and Garvey (2004) propose that pre-departure visits to the region of interest are beneficial for learning about the host environment. Furthermore, they highlight the importance of providing employees with cultural training to improve their interpersonal skills, such as conflict management, ethical reasoning, and active listening skills (Jassawalla et al., 2004).

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3. Theoretical Framework

As there is increasing tension between MNEs operating in the areas where indigenous communities live and the indigenous communities themselves, many scholars have called for a more thorough understanding of conflict resolution and prevention of these matters between these parties (Calvano, 2008; Getz & Oetzel, 2009). Conflicts between these parties can lead to increased operating and litigation costs, devaluated assets, and reputational consequences for the MNE on the one hand (Hirschman, 2001; Franks et al., 2014), and debilitation, undermining, and uprooting of the indigenous community on the other (Castro & Nielson, 2001).

In order to understand the underlying factors that contribute to MNE and community conflict and its resolution, many scholars have attempted to capture the possible causes and outcomes of their emergence. Although the existing studies offer valuable insights into the dynamics of such conflict, they also suffer from certain limitations. First, most scholars argue that the causes are external to the conflict. For example, the causes are explained as being economic or socio-environmental, that is, as relating to poor governmental regulations, a weak institutional framework, or political instability and violence (Hilson, 2002; Lertzman & Vredenburg, 2005; United Nations, 2012; Acuña, 2015). Furthermore, some scholars suggest that responsibility for this lies with the MNEs, in terms of the degree to which the MNE incorporates corporate social responsibility (CSR) practices and “does good” for society (Eweje, 2006). Others suggest that it depends on the ability of national governments to influence the sustainability initiatives of MNEs and the implementation of such initiatives (Dentchev, Van Balen, & Haezendonck, 2015). Last, certain scholars discuss the number of stakeholders involved in the conflict and their objectives, and the ability of these stakeholders to work together constructively towards a jointly beneficial outcome (Castro & Nielsen, 2001; Calvano, 2008; Mutti et al., 2012). Although these findings provide important insights

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29 in the dynamics of conflict resolution between MNEs and indigenous communities, scholars overlook examining the more internal and fundamental role of culture and cultural distance, which has proven to be important in conflict resolution (Tang & Kirkbridge, 1986). Second, regarding the method for examining conflict resolution, scholars have not examined the concept of conflict resolution by means of an integrated approach; rather, they focus on the separate components, either the duration or the intensity of conflict (Calvano, 2008; Fontana et al., 2017). Furthermore, this phenomenon of conflict is often tested using a single-case approach, which limits the possibility of generalizing results to situations of conflict around the world (Calvano, 2008). The current study presents a quantitative analysis of factors influencing both the duration and degree of violence of the conflict, thereby expanding the scope and dynamics of conflict resolution in the existing literature.

The principal drivers of the resolution of conflict are collaboration, cooperation, and dialogue (Castro & Nielsen, 2001; Danskin et al., 2005; Jamali & Mirshak, 2010). Cooperative attempts at conflict resolution lead to mutually beneficial and productive outcomes, whereas non-cooperative (i.e. competitive or avoiding) attempts ultimately lead to frustration, fragmented relationships, hostility, and revenge (Tjosvold, 1998). However, as people from culturally different countries tend to have different perceptions of life and are guided by different norms and values, this profoundly influences their behavior towards, and management and communication of, conflict and its resolution (Hofstede, 1990, 1994; Van Oudenhoven & De Dreu, 2001; LeBaron, 2003; Mense-Petermann, 2006). Many authors convincingly propose that a preferred conflict resolution style is heavily dependent on an individual’s cultural background (Morosini et al., 1998; Tyler et al., 2000; Brouthers & Brouthers, 2001; Wei et al., 2001; Lather et al., 2010). Ultimately, differences in cultural values between parties make certain conflict resolution styles more effective than others (Tyler et al., 2000). Hofstede’s (1990) four CD dimensions (i.e. PDI, IDV, MAS, and UAI)

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30 capture the varying beliefs and values regarding, and orientations towards, conflict and the variability in preferred conflict resolution styles among people from culturally distant countries (Deutsch, 1973; Kirkbridge, Tang, & Westwood, 1991; Tjosvold, 1991; Rubin et al., 1994, Gabrielidis et al., 1997). A greater cultural distance between parties involved in conflict leads to a higher discrepancy in their perceptions of, and approaches towards, the resolution of the conflict, ranging from collaboration and problem solving to enforcement and violence. In this light, it is fair to assert that a greater cultural distance between parties leads to less compatible conflict resolution styles, ultimately impeding the resolution of conflict. Therefore, the current study proposes that cultural distance negatively influences conflict resolution, that is, it leads to more enduring and more violent conflicts.

MNE experience is traditionally considered to have a positive influence on MNEs expanding their operations abroad, as it fosters organizational learning that is transferable within the organization (Johanson & Vahlne, 1977; Barkema, et al., 1996; Luo & Peng, 1999). Encountering new and divergent situations is important for MNEs in order for them to become familiarized with a variety of host-country environments (Lampel, Shamsie, and Shapira (2009). As the MNE becomes more familiarized with the host country’s culture, it becomes easier to manage the foreign (cultural) environment and the risk of becoming involved in conflicts with local stakeholders diminishes (Sanchez, Spector, & Cooper, 2000). Efforts to truly understand the host country’s cultural values and perceptions and to adjust their behavior accordingly can enable (expatriate) managers of MNEs to establish sustainable relationships with local communities by including the community in the decision-making processes and granting it (partial) power (Sanchez et al., 2000; Castro & Nielsen, 2001). When the MNE and the indigenous community are able to participate in collaborative agreements, both parties become experienced cooperators and benefit from increased acceptance of the other party (Tjosvold, 1998). This strengthened relationship fosters

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two-31 way learning for both parties (Lertzman & Vredenburg, 2005) and, ultimately, constructive approaches towards conflict resolution (Deutsch, 1994). Furthermore, location and conflict-specific experience provides significant insights into how to resolve (future) conflict (Oh & Oetzel, 2017) and is a fruitful basis for co-management agreements to be negotiated between the MNE and the community (Castro & Nielsen, 2001). Taking these findings into consideration, it is reasonable to propose that the previous experience of MNEs negatively affects the effect of CD on conflict resolution, that is, it leads to less enduring and less violent conflicts.

The four sections that follow discuss all the factors that influence conflict resolution. First, for each cultural dimension used in this study (i.e. PDI, IDV, MAS, and UAI), each section specifies the varying preferences for, and tendencies towards, conflict resolution, and how the particular CD dimension influences the duration and degree of violence of the conflict. Subsequently, the section thereafter discusses the effect of MNE experience on the relationship between CD and conflict resolution. Finally, the last section presents the conceptual model of this study.

3.1 Power Distance and Conflict Resolution

High and low power distance cultures differ greatly in the manner in which conflict is approached and handled (Hofstede, 1991). In high PDI societies, conflict between the powerful and the powerless is constantly though latently present (Hofstede, 1983). As a result, people from high PDI cultures have a greater tendency to mistrust each other than do people from low PDI cultures (Hofstede, 1983). Mistrust is an important factor in the existence and emergence of conflicts, and a high level of mistrust can impede conflict resolution (Chambers & Melnyk, 2006). Jamali and Mirshak (2010) add to this by asserting that trust is a key determinant for MNEs to have high-quality relationships with their

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32 environment. High-quality relationships lead to collaborative styles of conflict resolution, whereas relationships of lower quality lead to avoiding or competitive resolution styles (Luo, 2006; Jamali & Mirshak, 2010). Tyler et al. (2000) confirm that people from high PDI cultures prefer an autocratic or competitive resolution style and people from low PDI cultures prefer a consultative or collaborative resolution style. A competitive resolution style results in destructive outcomes as it stimulates hostile behavior and the solution to the conflict is achieved by forceful means or violence (Deutsch, 1994). As people from high PDI cultures are outcome-oriented, they do not shy away from using violence as exerting power and authority in an aggressive manner is accepted (Hofstede, 1983).

People from differently valenced PDI cultures regard (hierarchical) inequality in different ways and accordingly show different forms of behavior when handling and resolving conflict. Disagreements and increased mistrust decrease the opportunity for successful conflict resolution. First, as people from high PDI cultures are accustomed to exerting power rather than sharing it, they use forceful or competitive conflict resolution approaches. As they do not take into account (personal) relationships and mistrust others, this collides with the approach of people from low PDI cultures who, because they highly value relationships, prefer to consult the other party. Therefore, in case of a large PDI difference, it is expected that the MNE and the community will face prolonged conflict. Second, since in high PDI cultures the enforcement of power is expressed by using violence, while low PDI cultures perceive violence as undesirable, it is expected that this distance leads to more violent conflicts between the MNE and the community, as at least one of the parties comes from a (fairly) high PDI culture.

Two studies demonstrate how power distance influences conflict resolution. First, Van Oudenhoven and De Dreu (2001), in their research on CD and conflict resolution conducted among 100 culturally different middle-managers from a MNE producing branded

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33 goods, find that managers from high PDI cultures express less problem-solving behavior than do managers from low PDI cultures. Rather, they express assertive and competitive behavior during the resolution of conflict. As the approaches of high and low PDI individuals are highly dissimilar, quick and constructive conflict resolution becomes difficult, leading to a more enduring conflict (resolution) process. Second, Bergeron and Schneider (2005) provide valuable insights into the role of PDI in the use of aggression during conflict. They conducted a meta-analysis on cross-cultural differences and the degree of violence used during peer-directed conflicts. Their findings demonstrate that higher PDI is associated with higher levels of violence, as aggression is used to exert power, and lower PDI is associated with cooperation without the use of violence. Following this line of thought, this study predicts the following:

H1a: A greater difference in power distance scores between the country of the MNE

and the country of the community leads to more enduring conflicts, that is, to slower conflict resolution

H1b: A greater difference in power distance scores between the country of the MNE

and the country of the community leads to more violent conflicts, that is, to slower conflict resolution

3.2 Individualism and Conflict Resolution

The individualism-collectivism construct has been examined in ample detail in relation to conflict management (Purohit & Simmers, 2006). A fundamental difference between cultures exhibiting high and low levels of IDV concerns the perception and valuation of (personal) relationships. Several scholars explain that people from individualistic cultures tend to satisfy their own concern and value their autonomy, whereas people from collectivistic cultures attempt to satisfy the concern of the other party and are thereby willing to prioritize the goals

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34 of these collectives over their own personal goals (Rahim & Bonoma, 1979; Hofstede, 1983; Komarraju et al., 2008). As a result, people from collectivistic cultures use an avoiding or obliging conflict resolution style to maintain harmony, whereas individualists prefer dominating or forceful styles to protect their self-interest (Ting-Toomey, Oetzel, & Yee-Jung, 2001) Holt & DeVore, 2005). Furthermore, collectivists are open to the involvement of third party during the conflict resolution process, for instance an intermediary or mediator, whereas individualists prefer direct communication with the counterparty, as this leads to maximization of rewards (Kozan & Ergin, 1998). As some scholars have emphasized, the use of direct and indirect aggression during conflict is more accepted in individualistic than collectivistic societies (Bergeron & Schneider, 2005; Galin & Avraham, 2009).

As collectivists tend to avoid confrontation while individualists actively seek confrontation (Leung, 1987), maintaining a dialogue becomes difficult and misunderstanding between parties increases. As such, resolving the conflict becomes more complicated. First, a large discrepancy between parties as concerns their degree of IDV logically leads to variance in their preferred conflict resolution style. In the case of the MNE and indigenous community, this unnecessarily lengthens the process of conflict, as neither party is able to compromise and reach an agreement. Second, since in highly individualistic cultures the use of aggression is more accepted than in collectivistic cultures, it is expected that a large discrepancy between parties as concerns their attitude towards violence leads to more violent conflicts, as at least one of the parties comes from a (fairly) individualistic culture.

The effect of individualism on conflict resolution is illustrated by two cases in the existing literature. First, the study by Tinsley (1998) explains the role of IDV and the preference for certain conflict resolution styles among Japanese, American, and German business managers. The author finds that Americans, who are characterized in the scholar as highly individualistic, focus solely on the ability to maintain their interests during conflict,

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35 whereas (collectivistic) Japanese managers focus on who has the power in the conflict; and (moderately individualistic) German managers focus on whether regulations are followed during the conflict. These divergent preferences regarding the resolution ultimately lead to a slower process of resolution, and hence a more enduring conflict. Second, the meta-analysis of Bergeron and Schneider (2005) explores the influence of IDV on the use of aggression during conflict. Their findings show that cultures with highly individualistic values demonstrate higher levels of aggression during conflict than do collectivistic cultures, as this facilitates the achievement of personal goals and interests. As such, building on findings of these previous studies, we predict that:

H2a: A greater difference in individualism scores between the country of the MNE

and the country of the community leads to longer conflicts, that is, to slower conflict resolution

H2b: A greater difference in individualism scores between the country of the MNE

and the country of the community leads to more violent conflicts, that is, to slower conflict resolution

3.3 Masculinity and Conflict Resolution

Hofstede (1980) states that people from masculine societies tend to care less about relationships with others (i.e. exhibit high self-concern), whereas people from feminine cultures tend to care about maintaining good relationships with others (i.e. exhibit high other-concern). Masculine cultures value autonomy, dominance, and aggression (Hofstede, 1980) and display confrontational, competitive, and sometimes aggressive resolution styles (Williams et al., 1998). Conflicts in masculine cultures tend to be resolved by “fighting them out” (Hofstede, 1994, p. 4). On the contrary, feminine cultures embrace humility, helpfulness, and affiliation (Hofstede, 1980); therefore feminine people are more open to, and put greater

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36 effort into, displaying a constructive problem-solving approach (Van Oudenhoven & De Dreu, 2001). In addition, other scholars confirm that people from feminine societies prefer harmony-enhancing and non-competitive approaches such as mediation and cooperation, while masculine individuals favor confrontational and competitive styles of conflict resolution (Gabrielidis et al., 1997; Morris et al., 1998). As pointed out by Deutsch (1994), the use of competitive resolution styles can ultimately impede conflict resolution, as the conflict can take a destructive course.

Masculine and feminine cultures appear to be opposing poles when it concerns having a human-centered mindset on the one hand, and a task-centered mindset on the other (Bergeron & Schneider, 2005). As these cultures do not share perceptions regarding maintaining harmony for both parties and the appropriate approach towards conflict resolution differs greatly, conflicts between masculine and feminine cultures might be difficult to resolve. First, as masculinists undervalue high-quality relationships and collaboration, they prefer competitive and forceful approaches. This collides with the approach of feminine individuals, who favor constructive problem-solving initiatives and shy away from competitiveness. In this light, in the case of a large difference in masculinity, the MNE and the community face prolonged conflict, as their perceptions of problem solving are too divergent to rapidly reach constructive agreement. Furthermore, as masculine individuals are comfortable using competitive styles, including aggression, and this is highly uncommon in feminine cultures, it is expected that a large discrepancy between parties regarding their attitude towards violence will lead to greater levels of violence, as at least one of the parties is from a (fairly) masculine culture.

Two existing studies demonstrate the effect of masculinity on conflict resolution. First, Van Oudenhoven and De Dreu (2001), in their research on CD and conflict resolution conducted among culturally different middle-managers from a large international firm, find

The effect of cultural distance on conflict resolution between MNEs and indigenous communities : an exploratory study : a quantitative analysis on conflict resolution with MNE experience as moderating effect