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The effect of subsidiary culture on the communication channel that is used to communicate with the Headquarters
Abstract
In this article we will empirically investigate how the culture of a subsidiary affects the richness of the communication channel that is used to communicate with the Headquarter. In order to study and examine the culture of the subsidiary four GLOBE dimensions will be examined: Power Distance, Assertiveness, Collectivism (in-group) and Uncertainty Avoidance. To assess the communication from the subsidiary to the headquarters, we will look at the richness of the communication channels consisting out of face-to-face
communication, telephone and email. The findings suggest that the national culture of a subsidiary is not related to the decision for a specific communication channel. Therefore, the paper ends with suggestions of variables that may be related to the decision to choose for specific communication channels.
Sirin Yildiz S2351447
Rian Drogendijk
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Introduction
The subsidiary is playing an increasingly important role in generating competitive advantage for the overall multinational corporation (Johnston and Menguc, 2005). According to
Mudambi (1999) the role of a firms headquarter in its relationship with the subsidiary has been the subject of considerable interest. This relationship, that sometimes can be conflicting and sometimes cooperative, has become a significant concern in international management (Johnston and Mengue, 2005). Birkinshaw, Holm, Thilenius and Ardvidsson (2000) argue as subsidiaries are organized through interdependent exchange. Geographically dispersed subsidiaries of multinational corporations also confront high levels of sequential and reciprocal interdependencies (Prahalad and Doz 1987). Those coherent interdependencies require extensive interunit coordination and integration (Ghoshal and Bartlett 1990).
Interunit communication is a key mechanism for achieving integration ( Ghosal, Korine and Szulanski, 1994). Systematic analysis of the factors that influence the interunit
communication are of considerable interest to multinational corporations ( Ghoshal et al., 1994). Prahalad and Doz (1987) reinforce the importance of interunit communication and argue that the world is characterized by an increase in transnational linkages improving communication facilities and spreading multipoint competition between multinational corporations and subsidiaries. Furthermore strong communication and interaction between the subsidiary managers and senior managers from the headquarter enables the subsidiary to stay in contact with the headquarters (Bouquet, Morrison and Birkinshaw, 2008). Yet it is often the case that the relationship between the headquarter and the subsidiary can be problematic. A major factor influencing this relationship negatively is the lack of
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This incorrect manner of communication between the headquarter and the subsidiary can be caused by misunderstanding between the sender and the receiver of a message. According to the communication theory (Fielding, 2006), communication is a system that involves a interdependent set of elements working together, namely a sender, a receiver, a message and a specific communication channel. “The sender of the message is the person that starts of with any message” (Fielding, 2006 pagina 56). “The receiver can be identified as the person that receives the message of the sender” ( Fielding, 2006 pagina 53). “The message is structured information from a sender to the receiver”( Fielding, 2006 pagina 53). In order to send the message a communication channel is used. This communication channel refers to “any pathway by which the messages are send ”(Fielding, 2006 pagina 53). Fielding (2006) argues that the sender and the receiver of the message may come from different cultural backgrounds and the difference in background may cause a barrier for effective communication, since different cultures may not understand other cultural values ( Fielding, 2006). The headquarter subsidiary relationship is often characterized by a
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Communication and information exchange is influenced by contextual cues ( Sproull and Kiesler, 1980). The contextual cues differ per communication channel ( Daft and Lengel, 1986) varying from a rich communication channel with a high amount of contextual
cues a communication channel that is less rich. ( Daft en zeg wat is rich wat is less rich).
Other communication channels do not allow for timely adjustment and refocusing of the message ( Daft and Lengel, 1986).
Face-to-face communication can be identified as the richest communication channel allowing rapid mutual feedback ( Daft and Lengel, 1986) between the subsidiary and the headquarter. This communication channel provides the capacity to process complex and strategic issues (Lengel and Daft, 1984) where the headquarter and the subsidiary often cope with. The communication channel has an influence on the communication effectiveness because the communication channel can enhance or worsen the intended message and cause
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Therefore the purpose of this study is to explore whether the selected cultural GLOBE dimensions have an influence on the choice of an individual to select a particular
communication channel in the context of the relationship between the subsidiary and the headquarter. In order to investigate the influence of the national culture on the choice of a channel, the richness of the communication channel that is used by the subsidiary to communicate to the headquarters will be analysed.
The intended contribution is to explore the curren field since limited information is available contribute to the current literature and
contribution —> openen als onderzoeksgebied want er is weinig informatie over dit terrein weinig of grensvlak tussen communicatie en culture door deze exploderende studie open het velt hoe hebben deze factoren samenhangen binnen de context van MNC>
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Literature Review
Communication is a central topic in this paper and can be identified as a process in which individuals share and create information in order to reach mutual understanding (Rogers and Kincaid, 1981). Gudykunst, Matsumoto, Ting-Toomey, Nishida, Kim and Heyman (1996) argue that cultural values influence the communication behaviour of an individual. ( 2
redenende hoe) bv national culture influence blab la en communicatie,.
http://journals.sagepub.com/doi/pdf/10.1177/0022022110396866 - Culture influence communication in a way.
It is important to understand communication between individuals from different cultures because of an increase in the mobility of individuals across national and cultural boundaries, and the push towards globalization of businesses (Singhal and Nagao, 1993). A better understanding of the relation between culture and communication can help reduce the
possibility of conflict between individuals from different cultures (Singhal and Nagao, 1993). Furthermore it is argued ( Hybels and Weaver, 2004) that cultural diversity can not be
ignored during communication interaction. Managers should recognize other cultures‘ approaches towards works and decision-making and adapt their communication upon this (Wiseman, Hammer and Nishida, 1989). This recognition of culture and adapting
communication is also a relevant aspect for the headquarter and the subsidiary since the relationship between the two entities is a key challenge for managers of multinational corporations (Nohria and Ghosal, 1994).
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2010). These cultural values are manifested trough communication styles and can act as barriers to perceiving, analysing and decoding explicit and implicit messages (Henderson, 2005). Communication styles are behaviours that consistently occur in the “way one verbally and nonverbally, and interacts to signal how literal meaning should be taken, interpreted, filtered, or understood” (Norton, 1983, p. 58). The communication styles that individuals use vary across cultures and within cultures ( BRON).
One way to explain the variations in the communication style is according to the theory of Hall (1976). According to this theory ( Hall, 1976) cultures can be viewed on a low-to-high context continuum (Hall, 1976). High context communication is communication where more of the information is either in the physical context or internalized in the person ( Hall, 1976). Very little of the message is coded and explicit (Hall, 1976). High context cultures convey the message through non-verbal context and the individuals internalized values and norms convey the message (Hall, 1989). High context cultures emphasize the non verbal aspects of communication ( Okabe, 1983) and openness is less emphasized ( Guydkunst and Nishida, 1986). Contradictory to high-context cultures, in low-context cultures the mass of
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Communication Channels and their Richness
According to Daft and Lengel (1986) communication channel richness refers to the extent to which a channel is able to overcome different frames of reference, clarify ambiguous issues and facilitate understanding among communication between individuals (Daft and Lengel, 1986). A rich medium enables immediate feedback, supports multiple cues such as facial and nonverbal expressions, accommodates language variety and allows communication
participants to tailor a message to fit personal requirements (Johnson and Lederer, 2005). Face-to-face communication, the richest medium, provides the opportunity to convey complex information and tacit knowledge among the headquarters and the subsidiary since face-to-face communication is most appropriate for task that contain complex information and that are difficult to analyse (Turrof and Hiltz, 1978). Furthermore, shared meaning can be more easily created when the medium used for the communication is rich so the channel is able to convey multiple verbal and nonverbal cues and allowing immediate feedback ( Daft and Lengel, 1986). Short, Williams and Christie (1976) reinforce this argument and argue that the physical cause can be as important to understand a message as the actual words. Communication channel that are lower in their richness are the telephone and e-mail and are more appropriate for tasks that easily can be analysed ( Rice, 1984). These channels are suitable to exchange non-complex information ( Rice, 1984) between the subsidiary and the headquarter.
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perceived convenience, the ease and the immediacy that the channel creates for the individual, factors that are influenced by the cultural value of an individual (Schwartz, 1994). The headquarter and the subsidiary and headquarter mostly differ from culture and therefore in their judgement to use a specific communication channel. Therefore,
misunderstanding can occur because of their different perception of the effectiveness of a certain communication channel.
In the next part four cultural GLOBE dimensions and their relatedness with the richness of a communication channel will be examined. This in order to provide a better understanding and to identify the relation of the national culture and the choice of particular communication channel.
2.4 GLOBE dimensions
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communication channel that is used. The second dimension was selected because
Collectivism has a direct effect on communications styles (Gudykunst et al., 1996). The next dimension, Assertiveness is included in this study because it has been identified as an
indicator of interpersonal communication competence (Singhal and Nagao, 1993). This is the ability of individuals to choose between different communication styles in order to
accomplish their goals during an encounter (Wiemann, 1975). The last dimension, Uncertainty Avoidance, is present in this research paper because the effectiveness of
communication is influenced by Uncertainty Avoidance and how the uncertainty is managed (Gudykunst and Nishida, 2001). Moet hier nog iets???
2.4.1 Power distance
Power Distance can be defined as the degree to which members of an organization or society expect and agree that power should be unequally shared (House et al., 2002). This dimension determines how a community divides the individuals and groups with respect to power, authority and status (Javidan and House, 2001). In terms of the formal hierarchy,
headquarters occupy a higher position than it‘s subsidiaries (Drogendijk and Holm, 2012). However, the perception of the appropriate balance of power between the headquarters and the subsidiary is affected by their national culture (Drogendijk and Holm, 2012), causing different perceptions. Individuals from high power distance cultures validate differences in decision making (Hofstede, 2001). This by distinguishing individuals that are in a high power positions versus individuals that are in a low power positions ( Hofstede, 2001).
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(Hofstede, 2001). Individuals that are from a culture that is high in power distance ensure that people of position of authority are treated with respect and a formal relationship between the leaders and followers is desirable (Javidan, Dorfman, de Luque and House, 2006). This argument is reinforced by Kirkman, Chen, Farh, Chen and Lowe (2009) and it is argued that individuals that are higher in power distance orientation are more eager to believe that their leaders are superior. Moreover, individuals will be highly motivated to behave in ways that benefit their leaders ( Kirkman et al., 2009). Members from high power distance cultures autocratic decision making and are resistant to trust one another, while members from lower power distance cultures prefer participation, cooperation and consultation ( Matveev and Nelson, 2004). Besides, in high power distance cultures a distinction is made between people with status and power and people without it. This in contrast with countries that are low on power distance, they tend to be more egalitarian and prefer participatory decision making (Matveev and Nelson, 2004).
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Firstly, Hofstede (1991) argues that members from low power distance countries prefer a more egalitarian approach during communication. Contradictory, members from high power distance countries prefer excessive influence during communication from powerful
individuals ( Hofstede, 1991). Cultural practices are particularly important drivers in regulating these communication behaviours (Madlock, 2012). This explains why
communication varies between individuals from high and low power distance countries. Additionally, where individuals from high power distance countries tend to have a
hierarchical decision making process accompanied with limited communication (Javidan et al., 2006), individuals from low power distance cultures feel more comfortable to voice their opinions (Kirkman et al., 2009). Power distance influences the relationship between the headquarter and the subsidiary and members from high power distance cultures may prefer to use avoidant behaviour when communication to higher subordinate ( Madlock, 201), such as the Headquarter. In contrast to members from low power distance cultures that emphasize a strong relationship and support for among those who are lower in power distance ( Tyler, Lind and Huo, 2000). The decision to communicate with a specific communication channel is also influenced by the level of Power Distance in a particular culture.
According to Sproull and Kiesler (1986), individuals prefer to send emails to superiors in comparison with subordinates. Moreover, members from high power distance cultures may even prefer to use avoidance behaviour when communication with higher subordinates (Madlock, 2012). This argument is reinforced by Hofstede (1980), who states that individuals from high power distance cultures have a fear of communication with their superiors.
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comparison with individuals that are from low power distance cultures (Steil & Hilman, 1993). Therefore it is expected that individuals from high power distance cultures prefer indirect communication and select less rich communication channels. Examples are the email and telephone that provide the ability to communicate indirectly. Contradictory, members from low power distance cultures prefer richer communication channels. Face-to-face communication is an example, providing the ability to communicate directly.
Therefore it is expected that an increase in the Power Distance may lead to the selection of a communication channel that is less in its richness.
H1 : Power distance is negatively related to the richness of the communication channel
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2.4.2 Assertiveness
Assertiveness can be identified as the degree to which individuals in organizations or societies are assertive, confrontational, and aggressive in social relationships ( House et al., 2002). This GLOBE dimension can be seen as the behaviours that enables individuals to act in their best interest or stand up for themselves without undue anxiety, or to express their rights without denying the rights of others ( Alberti and Emmons, 1970).Assertiveness is culture bound and consist out of a set of learned attitudes (Furnham, 1979). Therefore culture is an important element that can affect if individuals will score high or low on this
dimensions. Assertive behaviour values individual events, beliefs and feelings above those of groups ( Shoemaker and Satterfield, 1977). Therefore this dimensions is often characterized as more of a individualist interpersonal oriented behaviour (Shoemaker and Satterfield, 1977).
Individuals that score high on assertiveness are often characterized as experiencing little social anxiety and performing adequately and frequently in interpersonal behaviour (Arrindell, Brideges, van der Ende, Lawrence, Gray-Shelberg Harnish and Sanderman, 2001). Memebers of cultures that score high on assertiveness are more likely emphasize results over relationships, attempt to exercise control, act opportunistically, and think of others as opportunistic (Den Hartog, 2004). Additionally, managers from high assertiveness cultures are likely to be more suspicious and less trusting and caring ( Den Hartog,
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valued as much as in individualistic cultures (Singhai and Nagao, 1993). There is a more collectivistic interpersonal oriented behaviour (Shoemaker and Satterfield, 1977) and therefore collectivistic cultures do not value assertiveness as much as in individualistic cultures (Singhai and Nagao, 1993).
Several scholars link communication skills to assertiveness (Kukulu, Buldukoğlu,, Kulakaç, and Köksal, 2006). This in a way that individuals‘ assertiveness beliefs and behaviour will influence their interpersonal communication (Weston, 1999). Assertiveness can be seen as a skill and a capacity of interpersonal communication (Albeti and Emmons, 1970). Serber (1972) argues that an assertive person is better in communicative behaviour than a non-assertive person. This statement is reinforced by Zakahi (1985), who states that non-assertiveness is viewed as a characteristic of a component communicator. Yet, perception of assertiveness is influenced by the culture and the situational context (Cook and St. Lawrence, 1990), so communication competence may be perceived differently in different cultural context
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An example is that members that are from cultures that are low in assertive prefer high frequency of informal speech (Castellá, Abad, Alonso, and Silla, 2000). Members that are from high assertive cultures prefer les rich communication channels such as the email. Emails reduce social cues (Daft, Lengel and Trevino, 1987) and attention is focused away from the message context promoting a more assertive behaviour of communication ( Short, Williams and Christie, 1976). The anonymity that the computer communication provides increases assertive behaviour when compared with face- to -face communication (Short et al., 1976. Another finding of their study shows that low assertive members, in a better group climate, show higher frequency of informal speech than those that are high assertiveness members. (Castellá et al., 2000).
It can be stated, that after extensive reviewing the literature, high assertive members prefer emails to communicate. Social cues are reduced and attention is focused away from the message context ( Short et al., 1976). This means that a communication channel that is low in it‘s richness is preferred. This whereas members that are low in assertiveness show higher frequency of informal speech and less assertiveness occurs during face to face
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2.4.3 In-Group Collectivism
In-group collectivism can be identified as the degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families (House et al, 2004). Individuals
from collectivist cultures are integrated into strong cohesive groups ( Bond, Leung and
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individualistic cultures assume responsibility only themselves and their immediate family (Triandis, 1988). This in contrast to collectivist cultures, where individuals tend to belong to in-groups that look after them in exchange for the individuals’ loyalty (Triandis, 1988). Furthermore, individualism involves a focus on the self as an unique entity, whilecollectivism involves a focus on the self embedded in group memberships (Triandis, 1988). The
collectivistic or individualistic tendencies that individuals learn when being socialized in their cultures influence values individuals hold (Rockeach, 1973) and these individualistic or collectivistic norms and rules in a culture guide behaviour (Gudykunst et al., 1996).
Ting-Toomey and Kurogi (1998) argue that members from individualistic countries have a high self-face concern that tends to result in employing dominating conflict strategies in general, cooperating conflict strategies during task interactions and self-honouring face behaviour during competitive situations. In contrast, individuals from collectivists countries have a high other-face concern that leads to avoiding or obliging conflict strategies in general and high mutual-face concerns that leads to cooperating conflict strategies during relational interactions (Ting-Toomey and Kurogi, 1998). Therefore, collectivism is an important dimension that can influence the behaviour of the subsidiary during cooperation, task interaction and conflict strategy with the headquarters.
Members of individualistic cultures have been found to be more inclined to communicate than members from collectivist cultures ( Gaetz, Klopf & Ishii, 1990). Furthermore,
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individuals (Kim & Wilson, 1994). An explanation for this behaviour is that collectivistic values mediate the influence of cultural individuals-collectivism of the use of high-context communication (Brashers, 2001). This argument is reinforced by Gudykunst and Ting-Toomey (1998). They argue that high context communication is used predominantly in collectivist cultures (Guydkunst and Ting-Toomey, 1988). Members of a collectivist culture prefer rich communication channels and see computer mediated communication, like email, as a threat to group cohesions (Tan, Wei, Watson, Clapper and Mclean, 1998). Contradictory, individualistic values mediate the influence of cultural individualism-collectivism on the use of low-context communication ( Brashers, 2001). Therefore low-context communication is used predominantly in individualistic cultures (Guydkunst and Ting-Toomey, 1988) and members of the individualistic cultures prefer less richer communication channels. This argument is reinforced by Tan et al. (1998). Their study found that individuals from a culture that emphasize individual rights may see computer mediated communication as an
opportunity to share opinions frankly and challenge the majority position ( Tan et al., 1998). The overall conclusion is that members of in-group collectivist cultures prefer high-context communication more than members of individualistic cultures (Gudykunst et al., 1996). Therefore it is expected that an increases in the in-group collectively may result in a selection of a richer communication channel.
H3: in group collectivism is positively related to the richness of the communication
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2.4.4 Uncertainty Avoidance
Uncertainty avoidance is the extent to which members of an organization or society strive to avoid uncertainty by reliance on social norms, rituals, and bureaucratic practices to reduce the unpredictability of future events (House et al., 2002). Uncertainty exists when details of situations are ambiguous, complex, unpredictable, when information is unavailable and when people feel insecure in their own state of knowledge (Babrow, Hines and Kasch., 2000). Individuals differ in their tolerance for uncertainty and thereby their reaction to situations involving ambiguity (Hofstede, 2001). According to Hofstede (2001) individual tolerance for uncertainty is partly determined by personality and partly by the individuals’ collective culture. This is reinforced by Babrow et al. (2000) that argue that uncertainty is multi-layered and interconnected and the effectiveness of responses used are likely to vary across contexts and situations.
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Individuals that are from a culture that is characterized by a low level of uncertainty avoidance demand less structure and are not as concerned about following the rules and procedures (Berger and Calabrese, 1975). Contradictory, individuals that are from a culture high in uncertainty avoidance prefer consistency, a structured lifestyles and clearly
articulated expectations ( Berger and Calabrese, 1975). The level of uncertainty avoidance also influences type of relationship that individuals have ( Gudykunst and Ting-Toomey, 1998). There is a significant interaction between cultural similarity and type of relationship (Brasheres, 2001). Individuals that are from high uncertainty avoidance cultures perceive their relationship to be more personal than members that are from low uncertainty avoidance cultures. (Gudykunst and Ting-Toomey, 1998). Another element that is related to the
uncertainty avoidance in a culture is the context of the culture (Guydkunst, 1983). Individuals in high context cultures are more cautious in initial interactions and have a greater tendency to make assumptions based upon a stranger's cultural background (Guydkunst, 1983).
For effective communication between individuals that are from different cultures managing uncertainty is a critical factor (Berger and Calabrese, 1975). Managing uncertainty is defined as ‘the ability to predict accurately how others will behave and the ability to explain the behaviour of others’ (Pagina NUMMER). Cross cultural encounters, such as the
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communication did not occur previously can be characterized by a lack of of information on which can individuals base their judgment (Brasheres, 2001). Furthermore, communication with members from different cultures, such as the communication between the headquarter and the subsidiary, is more characterized by uncertainty (Gudykunst and Shapiro, 1996). In order to reduce this uncertainty, individuals from high uncertainty avoidance cultures prefer shared communication and interaction (Gudykunst and Nishida, 1986 and a strong
relationship (Gudykunst and Ting-Toomey, 1998). Contradictory, members from countries that are characterized by lower uncertainty avoidance are less bothered with communication policies and will use a communication medium that is most convenient (Rowe and Struck, 1999), such as the email and telephone. Therefore, it is expected than an increase in the uncertainty avoidance may lead to the use of a richer communication channel.
H4: Uncertainty avoidance is positively related to the richness of the communication
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Figure 1 provides an overview of the influence of four culture dimensions on the richness of the communication channel that is used by the subsidiary to communicate with the headquarters.
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Figure
3. Methodology 3.1 Data Collection
To gain a deep understanding of the subject and to provide an answer on the research
question a quantitative approach is used. The data about the dependent variable in this paper, communication richness, is collected by a research time 1( Haq, Drogendijk and Holm, 2016).
The data about the independent variables, four different culture dimensions, are retrieved from the GLOBE culture dimensions. The objective of the data collection is to provide the opportunity to investigate if the independent cultural variables, Power Distance,
Assertiveness, Uncertainty Avoidance and In-group Collectivism are positively or negatively related to the dependent variable, the richness of the communication channel that is used by the subsidiary to communicate with the headquarters.
3.1.1 Richness of the communication channel - The dependent variable
In order to provide the perception of the subsidiary managers about their relationship with the headquarter and to get insight which channels are used by the subsidiary to communicate with the headquarter, a survey questionnaire was used by the researchers (Haq, Drogendijk and Holm, 2016).
In order to collect data a list of potential participants was created. The potential participants consisted out of 169 multinational companies with 2971 foreign subsidiaries. In order to collect the data, the database ORBIS was used. In order for a company to be selected it had to
1 Research team from the RUG and Upsalla Univeristy collected data that is in line with the
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fulfil three different criteria. Firstly, the companies where classified as industrial companies. Secondly, the companies consisted out of more than 500 employees. Lastly, the companies hold subsidiaries in three or more countries including Sweden where that was more than 51 percent of ownership of the parent company. KIJKNNN
The research team sent out an email and an online survey to the country manager or the managing direction of the companies that fulfilled the three different criteria. In order to increase the number of the respondents the survey was kept short. The research teams received 142 responses and out of that number 110 complete responses where used for the analysis. Responses with more than five percent missing value where not included in the analysis.
The subsidiaries belonged to 62 different multinational companies and where located in 43 different countries (Haq et al., 2016). The majority of the responses came for subsidiaries that are located in Nordic countries and Germany.
which is representative of the internationalization patterns of Swedish multinational companies (Johanson & Vahlne, 1977)
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The survey questionnaire asked about specific business opportunities that the subsidiary had recently communicated with the headquarters. This also included information about which communication channel was used by the subsidiary in order to communicate with the headquarter and provided the opportunity to analyse the richness of this specific
communication channel. In this paper three different communication channels where used. Namely, face-to-face communication, the telephone and email.
According to Daft and Lengel (1986) a channel can differ in its richness varying from low to high. This is based on the capacity of the channel to facilitate shared meaning. Daft and Lengel (1986) rank channels in terms of their richness and the capacity for processing information. The hierarchy rank is face-to-face communication, telephone and written documents whereas face-to-face communication is the richest medium and the written documents are the less rich medium. In order to measure the richness of the three different communication channels every channel was assigned a different weight. GA HIER OP IN QUA SPSS en over de questionnaire enz voort.
Face-to-face communication provides immediate feedback, multiple cues and message content expressed in natural language ( Daft and Lengel, 1986).Therefore, face-to-face communication has a weight of 0.5. ---The telephone has a weight of 0.3 and
The email has the smallest amount of contextual cues and therefore is assigned with a weight of 0.2.
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3.1.2 The GLOBE cultural dimensions - Independent Variables
GLOBE (Global Leadership and Organizational Behaviour effectiveness) is a multi-method project where the interrelationship between societal culture, organizational culture, and organizational leadership are examined (House, Javidan, Hanges, Dorfman, 2002). The study provides an examination of the national culture of 61 different nations. The national culture is examined in terms of nine dimensions ( House et
al., 2002).The dimensions provide richly descriptive, yet scientifically valid accounts of cultural influences on organizational processes (House et al., 2002). In order to examine the cultural influences on the decision making of the subsidiary in regard to the communication channel, this method is appropriate to use, especially because the GLOBE dimensions have a focus on the national culture, which is also the case in the research paper.
For this research paper data of four cultural dimensions will be used. Namely, Power
Distance, Uncertainty Avoidance, Assertiveness and In-Group Collectivism.. The dimensions will provide the opportunity to investigate weather or not the culture of the individuals that operate in the subsidiary has an influence on the richness of the communication channel that is used2 The culture items that are written for the GLOBE dimensions reflect two cultural
manifestations. Namely, institutional practices “As Is” and values reported in terms of what “Should Be” (House et al., 2002). For this research paper we use the data of the institutional
2 The countries that are not included in the GLOBE method but in the sample where replaced
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practices “As Is” because in this paper we analyse the current culture and institutional practices that are typical for a country and that may have an influence on the richness of the communication channel that is used by the subsidiary from that specific country. What will follow is a description of the method used in order to measure the different culture
dimensions.
In group collectivism
In-group collectivism reflects to the degree to which individuals express pride, loyal and cohesiveness in their organization and families. The cultural dimension is rated on the 7-point Likert-type that ranged from scoring very low (1) on in group collectivism to scoring very high (7) on in-group collectivism. The aggregated scores on the In-group collectivism per country are used. The different aggregated cultural scores are derived from the book Culture , Leadership and organizations : The globe study of 62 societies by House, Javidan, Dorfman and Gupta (2004).
Power Distance
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Assertiveness
Assertiveness refers to the degree to which individuals are assertive, confrontational and aggressive in their relationship with others. The items are rated on the 7-point Likert-type that ranged from scoring very low (1) on assertiveness to scoring very high (7) on assertiveness. The different aggregated scores per country of this dimension are derived from the book Culture , Leadership and organizations : The globe study of 62 socities by House, Javidan, Dorfman and Gupta (2004).
Uncertainty avoidance
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3.3.3 Control Variables
The analysis controlled for several variables that may possibly influence the communication channel that is used by the subsidiary to communicate with the headquarter. Namely the geographic distance, the subsidiary size, the cultural distance and the presence of a longstanding relationship between the headquarter and the subsidiary.
Geographic Distance
The distance related variable, geographic distance, is included as a control variable. Geographic distance can impact the richness of the communication channel because communication costs will increase for a subsidiary that is located far away from the headquarter. This distance may hinder personal interaction and information exchange (Johanson and Wiedersheim-Paul, 1975). In this paper the geographic distance is measured as the natural logarithm of distance, in kilometres between Stockholm and the capital of the country in which the subsidiary is located (Haq et al., 2016). It is expected that companies that are geographically dispersed and large in size have more established norms and channels for communication which can influence the choice for a specific communication channel. (Haq et al., 2016).
Subsidiary size
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also may have an influence on the communication channel. The subsidiary size is measured at the natural logarithm of the number of employees in the subsidiary
Cultural Distance
Cultural distance can be considered as a variable that also may have an influence on the decision to select a specific communication channel. Organization members prefer
communication with other members from similar cultures rather than communicating with members from distant cultures (Lane, Greenberg, Berdrow, 2004). Since the headquarter and the subsidiary are from different cultures the cultural distance may have an influence.
Furthermore, cultural distance makes it more difficult for workforces to come together, to interact and to share ideas, and, as a result impedes communication (Reus and Lamont, 2009). This may result in the selection of a less rich communication channel. Cultural
distance was measured. Previous Communication
Previous communication is considered as a control variable in the analysis. The previous communication was measured as the the presence of previous communication
between the headquarter and the subsidiary. Previous communication can create trust and regular communication will maintain trust which plays an important role in the
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trough the survey questionnaire. Respondents where asked to in what extent they had
previously, besides this opportunity, communicated with the mentioned managers within the company. Respondents answered this question on a seven points Likert scale that ranged from 1 meaning not at all till 7 meaning very much.
Type of business opportunity
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Longstanding Relationship
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3.4 Analysis
In order to test the four hypotheses a multiple regression analysis was used. The multiple regressions provides the opportunity to find a linear combination of a set of predictors that provides the best points estimates of the dependent variable across a set of observation (Mason and Perreault, 1991). The multiple regression analysis was executed with SPSS. The analysis provided the opportunity to identify a possible linear combination of the Culture GLOBE dimensions that provides the best point estimate of the richness of the
communication channel that is used by the subsidiary to communicate with the headquarters across the data set ( Mason and Perreault, 1991).
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Table 1 Pearson correlation between all variables
The regression analysis is presented in table 2. Unexpectedly, the independent variables that where being analyzed led to none significant results. Hypothesis 1, 2, 3 and 4 where all rejected. The results show that the cultural variables, power distance, assertiveness, in-group collectivism and uncertainty avoidance do not have a significant effect on the richness of the communication channel that is used by the subsidiary to communicate with the headquarters. Additionally, all the standardized B values are low. Yet the control variables, Previous Communication, Geographic distance and the Longstanding relationship have a higher B value in comparison with the independent cultural variables.
Even tough the control variables that are mentioned are not significant they point in a specific direction. Subsidiaries that have a longer relationship with the headquarters may opt for a richer communication channel. Furthermore, the previous communication between the headquarter and the subsidiary also may lead to a more richness of the
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communication channel of the subsidiary may be. This was an expected direction based on the literature review.
Table 2 The regression analysis with standardized beta values
Lastly, the geographic distance may not be significant but points in a negative direction. The greater the geographic distance the less rich the communication channel of the subsidiary may be. This was an expected direction based on the literature review.
The adjusted R square presented the explained variance, The control variables account for 10,4 percent of the variation of the sum richness. The inclusion of the independent variables decreased this to 2,4 percent. As told there is no direct multicloneaireit it may be the case that there was indirect multicolineariy. Yet the F value decreased which results in a
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variables are included.
4. Discussion and Conclusion
The results of the analysis where unexpected and they show that the culture does not explain the richness of a communication channel that is used by an individual. The four hypothesis where not accepted and the analysis resulted in higher B values for the control variables, in comparison with the independent variables. Additionaly, the inclusion of the independenr variables caused a decrease of the adjusted R Square zeg iets over F value.
Implications for practice : Based on the literature review several relations where identified
and based upon the review hypotheses where created. It can be stated that the literature in this context, with the sample and data set are not accepted. Therefore the dependent variable richness of the communication is not a proper measurement in this context. Cultural
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Headquarters should focus more on the relationship between the subsidiary to achieve
effective communication. Further research is necessary to investigate how this can be done in a effective way. Previous communication may also influence the subsidiary and headquarters relationship. The relationship between trust and interaction (Meyerson, Weick and Kramer, 1996) is a circle reinforcing itself. Team members are less willing to contribute and cooperate if there is a lack of trust. (Mayer, Davis and Schoorman, 1995). Previous communication can create this trust and Järvenpä and Leadiner (1998) conclude that regular communication is the best way of maintaining trust, which also is considered to play an important role in the
communication process (Järvenpää SL, Leidner D. 1998). Additionally, as individuals
develop experience in communication with others using a specific channel such as email they may develop a knowledge base for applying this communication channel. Given this
increasing ability to communicate effectively in various situational contexts trough a
particular channel people are expected to perceive the channel as becoming increasingly rich (Carlson and Zmud, 1999). Therefore, headquarters and subsidiaries should focus more on the frequency of their communication and further research is necessary in order to confirm this. Lastly, the geographic distance provided a negative standardized B of -0.226, pointing in the direction that geographic distance is negatively related to the richness of the
communication channel. This is in line with previous research that states that geographic distance can impact the richness of the communication channel in a way that the
communication costs increase for subsidiaries located far away from HQ, and can hinders
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1975). Headquarters should take the geographic distance into account in advance and perhaps adjusted their communication to this variable.
Implication for research —> The richness was not explained by Culture therefore future
researcher can identify other elements that do have an influence.
In future research improve. Not look at countries but more on a individual level. Besides use other score, Hofstede, Because likert scale only from 1-7 countries in same area even tough they differ.
May be still interesting how culture can have effecot on communication in order to learn adaport to creative mutual understanding. Other variables than the richness of a
communication channel may explain this. The
This assumption is made based on the fact that none of the hypotheses that assumed a culture influences on the richness of the communication channel was significant in this analysis. This could be because of various reasons.
desirable values from the multinational instead of the national culture. For future research it is important to another variable than richness that can help explain the influence of a culture on communication.
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individualist characteristic that may influence the communication channel that is preferred to use during communication. Other interesting variables can be relationship variables such as LinkedIn connection and frequency of conferences attended. This can provide the
information if more previous face-to-face interaction will encourage the use of a richer communication channel in the future.
The GLOBE may not be the proper measurement, because it provides cultural values on a national level. The individual values of the managers in the subsidiary may differ from the national values that GLOBE measured resulting in non significant hypotheses. This in a way that the companies are subsidiary companies from multinationals.
5. Limitations and Future Research
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an effect on the outcome and the influence of the independent variables. Another limitation is that only four of the nine GLOBE dimensions are used to test the national culture. The outcome may provide a different results if all dimensions where included or a combination of different dimensions was tested.
Future research. It is important, since national culture is not related to the decision for a specific communication channel, to identify the variables that actually do have a significant effect. In order to order to expand the current literature how communication between the headquarters and the subsidiary can be effective with minimal misunderstanding and
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