Lecture 8: Home & Host Country Distance

Question 1

Globe Project

Answer 1

Develops 10 cultural constructs to describe cultural distance:

1. GLOBE Power distance
2. GLOBE uncertainty avoidance
3. Human orientation
4. Institutional collectivism
5. In-group collectivism
6. Assertiveness
7. Gender egalitarianism
8. Future orientation
9. Performance orientation
10. LCT leadership value

Question 2

Hofstede describes cultural distance with his dimensions

Answer 2

individualism/collectivism, power distance, uncertainty avoidance, masculinity/femininity, long-term orientation

Question 3

Survey of Values (Schwarz)

Answer 3

7 country-level value orientations:
1. conservatism/embeddedness
2. intellectual autonomy
3. affective autonomy
4. hierarchy
5. egalitarianism
6. mastery
7. harmony
which are summarised in three dimensions
1. conservatism vs autonomy
2. hierarchy vs egalitarianism
3. mastery vs harmony
In addition, he distinguishes between two levels of cultural dimensions: culture-level and individual-level dimensions

Question 4

Double diamond model (porter)

Answer 4

nations are most likely to succeed in industries or industry segments where the national ‘diamond’ is most favorable. the diamond has four interrelated components:
1. Factor conditions - Basic natural sources, climate, advanced factors like capital and infrastructure
2. Demand conditions - domestic demand
3. related and supporting industries - the presence of internationally competitive suppliers or related industries
4. firm strategy - different management ideologies and domestic rivalry
And two exogenous parameters: government and chance

Question 5

What does the double diamond model do:?

Answer 5

It creates an environment that promotes the emergence of clusters of competitive industries

Question 6

Why is this model incomplete?

Answer 6

As it does not incorporate multinational activities

Question 7

Therefore, the model has been extended with the

Answer 7

generalized double diamond model, whereby multinational activity is formally incorporated into the model

Question 8

the outside diamond represents the … and the inside one the …

Answer 8

global diamond and the domestic diamond

Question 9

the size of the diamond is fixed, but the size of the domestic generalized varies

Answer 9

with the country size and its competitiveness

Question 10

National competitive advantage

Answer 10

the capability of firms engaged in value-added activities in a specific industry in a particular country to sustain this value added over long periods of time in spite of international competition

Question 11

what is the most important difference between the single diamond model and the generalized double diamond model?

Answer 11

the successful incorporation of multinational activities in the latter.

Question 12

Country effects as determinants of foreign affiliate performance:

Answer 12

FSA effect vs. country effect
industry effect vs. country effect
national institutions vs. country effect