Original Research Article

British Journal of Economics, Management & Trade 4(7):

1083-1101, 2014
SCIENCEDOMAIN international
www. sciencedoain. org
The Cultural Diversity of German Companies
Executive oar!s an! the Success of Their
Internationalisation
Se"astian #eusthoff
$
%& 'ana(Maria Grieser
$
an! )einhar! Mec*l
$
University of Bayreuth, Universitatsstra&e 30, D-95440 Bayreuth, Germany.
Authors contributions
This wor was !arrie" out in !olla#oration #etween all authors. $uthors %&G an" '( "esi)ne" the
stu"y. $uthor %&G *erforme" the statisti!al analysis, wrote the *roto!ol, an" wrote the first "raft of
the manus!ri*t. $uthors +& an" '( mana)e" the analyses of the stu"y. $uthor '(mana)e"
stru!ture, analysis, literature sear!hes an" ar)umentation of followin) "rafts an" the final version.
The arti!le #enefite" mu!h from hi)hly valua#le reviews, !omments an" amen"ments #y +&. $ll
authors rea" an" a**rove" the final
manus!ri*t.
Received 23
rd
Januar 2!"# Acce$ted %
th
March
2!"# &ublished "%
th
March 2!"#
AST)ACT
!he socioc"lt"ral co#osition o$ e%ec"ti&e 'oards has a long-ter rele&ance $or the s"ccess o$ their
co#anies and their organisation(s internationalisation. )o#anies "st weigh the #ossi'le
ad&antages o$ ha&ing e#lo*ees $ro di$$erent c"lt"ral 'ac+gro"nds against #ossi'le ine$$iciencies
ca"sed '* c"lt"ral is"nderstandings. ,sing on ,##er -chelon theor* and .ocial )a#ital theor* we
h*#othesised that c"lt"ral di&ersit* has a #ositi&e e$$ect on internationalisation s"ccess. /e "sed the
01la" 2nde%3 to calc"late c"lt"ral di&ersit* and eas"red internationalisation s"ccess as the le&el o$
internationalisation, a coon s"ccess eas"re in internationalisation st"dies. 4ata were
generated $ro co#anies( ann"al re#orts. .5! e'ers( citi6enshi#s were additionall* &alidated
'* internet-'ased '"siness-oriented social networ+s. )ontrolling $or tea si6e and co#an* si6e
e$$ects did not change o"r concl"sions. ,sing a #anel anal*sis, this article e%aines the e$$ect o$ the
le&el o$ c"lt"ral di&ersit* in the 'oards o$ the 4A730 co#anies on their s"ccess in
internationalising. )o#leenting #re&io"s st"dies, a slight '"t signi$icant #ositi&e correlation was
e&ident, ass"ing that a higher internationalisation s"ccess can 'e $o"nd in $irs ha&ing a c"lt"rall*
di&erse senior
,orres*on"in) author- .mail- se#astian.weusthoff/uni-#ayreuth."e0
anageent tea. O"r st"d* re&ealed a #ositi&e correlation 'etween c"lt"ral di&ersit* in .5!s and
internationalisation s"ccess. !he res"lts o$ o"r st"d* ight ser&e as a good reason $or ada#ting the
social str"ct"res o$ 8eran .5!s to the $irs( econoic realit*. 9"rtherore, it a* enco"rage the
legislati&e 'od* to ree%aine the 8eran )or#orate 8o&ernance reg"lations $ro an international
#ers#ecti&e. 9"t"re research co"ld in&estigate this correlation on a 'roader 'asis and rein$orce o"r
arg"entation, #ossi'l* '* incl"ding c"lt"ral st"dies.
1eywor"s- U**er-.!helon theory0 so!ial !a*ital0 !ultural "iversity0 internationalisation su!!ess0 to*
mana)ement teams.
$+ INT)OD,CTION
2n the last $ew *ears the #ro#ortion o$ di$$erent nationalities in the higher le&els o$ 8eran co#anies
has risen. .ion :"cher ; <artners( ele&en *ears long st"d* o$ 4A7 co#anies( e%ec"ti&e 'oards
noted an increase $ro 13.3= in 2000 to 27.8= in 2011 (2011). !his increase is not least 'eca"se o$
the re>"ireent $or cor#orate go&ernance 'oards to internationalise "nder the 8eran )or#orate
8o&ernance )ode% (Regier"ngs+oission 4e"tscher )or#orate 8o&ernance :ode%, 2012, ##. ?i$.
@o. A.1.2 and A.4.1) B1C. According to Da'ric+ and 5ason(s E,##er -chelons( !heor* (1F84, c$. see
also e. g. Da'ric+, )ho, ; )hen, 1FFG B2CH Athanassio" ; @igh, 2002 B3CH Iee ; <ar+, 200G B4CH
@ielsen, 2010 BAC), !hara!teristi!s o$ the senior anageent tea ha&e a decisi&e in$l"ence on the
#er$orance and s"ccess o$ a co#an*. .t"dies o$ this #ers#ecti&e arg"e that the co#osition o$ the
higher anageent le&els strongl* in$l"ences co#anies( a'ilit* to internationalise (Jans, 2004, #. 4
BGCH .t"#$, 200A B7CH c$. Iee ; <ar+, 200G, #. 1FA B4CH &an :ni##en'erg ; .chi##ers, 2007, #. A18 B8CH
9ernande6-Orti6 ; Io'ardo, 200F, #. 132 BFCH @a+"i, <a"l"s, ; &an der ?ee, 2011, #. 2328 B10C).
!his st"d* ais to contri'"te to the as *et little researched correlation 'etween c"lt"ral di&ersit* and
internationalisation s"ccess. .chid and 4a"th re$er to a &er* restricted n"'er o$ e#irical st"dies
which in&estigate the in$l"ence o$ the international di&ersit* o$ the anaging 'oard on the le&el o$
internationalisation co#anies achie&e (@K1F) or on their coercial s"ccess (@KF) (c$. .chid ;
4a"th, 2012, ##. 780-781 B11C). !he* note that E...so $ar there has 'een little research into
internationalit* o$ 8eran 'oards and anageent teas( (c$. .chid ; 4a"th, 2012, #. 781 B11C).
Onl* the st"dies '* &an Leen and -l'ertsen (c$. 2008 B12C), 1ieann and /ol$ (c$. 200F B13C) and
Arnegger, Do$ann, <"ll, and Letter (c$. 2010 B14C) $oc"s on 8eran co#anies( e%ec"ti&e 'oards (c$.
.chid ; 4a"th, 2012, #. 781 B11C).
2n order to answer the research >"estion this st"d* will e%aine the 4A730 co#anies o&er a #eriod o$
11 *ears "sing a #anel anal*sis, which will research the correlation 'etween the c"lt"ral co#osition o$
their senior anageent teas and the international #er$orance o$ the $irs. 2t will there$ore enrich
the c"rrent state o$ the research into the connection 'etween c"lt"ral di&ersit* and co#anies( s"ccess
in internationalising.
-+ T.EO)ETICA/ ASIS
-+$Cultural !iversity in Senior Mana0ement Teams
!he conce#t o$ the senior anageent tea (.5!) $irst a##eared in anageent literat"re at the start
o$ the eighties and has since attracted increasing interest as a research to#ic (see also e.g. 1o"rgeois,
1F80, #. 234 B1ACH c$. Da'ric+, 1FF4, #. 172 B1GC). A .5! is co#rised o$ a sall gro"# o$ anagers
who are at the to# o$ the organisational hierarch* and there$ore e%erta signi$icant in$l"ence on the
co#an* (c$. Da'ric+ ; 5ason, 1F84, #. 1F3 B17CH <ettigrew, 1FF2, #. 1G3 B18CH 9in+elstein ;
Da'ric+, 1FFG, #. 8 B1FC). 2n this st"d* the e%ec"ti&e 'oards ta+e the $"nction o$ .5!s, 'eca"se in
listed co#anies the* ser&e as the res#onsi'le 'od* $or the strategic direction o$ the '"siness. !his
st"d* "ses the ters 0!o# 5anageent !eas3 and 0.enior 5anageent !eas3 interchangea'l*
(see also e. g. Da'ric+ ; 5ason, 1F84, #. 201 B17C).
)"lt"ral di&ersit* has 'een de$ined in n"ero"s wa*s $ro di$$erent #ers#ecti&es (c$. Jac+son, 5a*, ;
/hitne*, 1FFA B20CH 5anni% ; @eale, 200A B21CH Darrison ; :lein, 2007 B22C). !he ost widel* +nown
de$inition is that o$ Jac+son et al. (c$. 1FFA, #. 217 B20C), which incl"des readil* detecta'le
characteristics, s"ch as c"lt"re, age or gender, and "nderl*ing ones, s"ch as &al"es, attit"des,
ca#a'ilities or ed"cation.
/ithin the $raewor+ o$ this st"d* c"lt"ral di&ersit* is de$ined as the heterogeneit* o$ c"lt"re as well as
national characteristics within a "nit, i.e. within the .5!s (c$. !rice ; 1e*er, 1FF3, ##. 82-83 B23CH
Do$stede, 2001, ##. 11-12 B24C).
O#inions on the e$$ects o$ the deogra#hic co#osition o$ the .5! $ollow di$$erent strands o$
arg"ent. On the one hand, di&ersit* can 'e considered as a &al"a'le reso"rce (reso"rce
#ers#ecti&es) '"t on the other, it can 'e seen as the so"rce o$ con$lict in the tea #rocess (#rocess
#ers#ecti&es) (c$. Jans, 2004, #. 4 BGC).
9irstl*, $ollowing the reso"rce #ers#ecti&e, the cogniti&e theor* states that deogra#hic di&ersit* is
acco#anied '* cogniti&e di&ersit* (c$. )o%, Io'el, ; 5cIeod, 1FF1, #. 82F B2ACH )erto, Iester, 4alton,
; 4alton, 200G, #. 870 B2GC), and there$ore a c"lt"rall* heterogeneo"s anageent tea has a wide
range o$ di$$erent e%#eriences, ca#a'ilities and &al"es at its coand (c$. Jans, 2004, #. 4 BGCH &an
:ni##en'erg ; .chi##ers, 2007, #. A18 B8C). .econdl*, according to the theor* o$ social ca#ital, a
c"lt"rall* di&erse tea has access to a 'roader range o$ in$oration, than+s to the di$$erent social
networ+s and contacts that the tea e'ers #ossess o"tside the co#an* (c$. Adler ; :won, 2002
B27CH )erto et al., 200G, #. 817 B2GC). !he arra* o$ #ers#ecti&es, +nowledge and in$oration in c"lt"rall*
di&erse .5!s leads to a 'etter assessent o$ $"t"re e&ents, ore #otential trade alternati&es and a
'etter +nowledge o$ the li+el* conse>"ences thereo$ (c$. Da'ric+ ; 5ason, 1F84, #. 1FA B17C). !his
has a #ositi&e e$$ect on the co#an*(s ada#ta'ilit* and $le%i'ilit* in new co#etiti&e and #ro'leatic
sit"ations (c$. &an :ni##en'erg ; .chi##ers, 2007, #. A18 B8C).
9ro the #rocess #ers#ecti&e, di&ersit* leads to a higher instance o$ con$lict, less co"nication and
little social integration (c$. Jans, 2004, #. A18 BGC). On the indi&id"al le&el this is ca"sed '* the nat"ral
a$$init* and ties which #eo#le with siilar (c"lt"ral) characteristics share, and on the collecti&e le&el '*
the e$$ect o$ categorisation and identi$ication #rocesses with sociall* siilar #eo#le (c$. Jans, 2004, #. A
BGC). !heoretical e%#lanations are #ro&ided '* !aM$el and !"rner(s theor* o$ social identit* B28C as well as
1*rne(s siilarit*-attraction h*#othesis B2FC. <eo#le with co#ara'le li$e e%#eriences de&elo# relati&el*
siilar attit"des, &al"es and 'elie$s. !hro"gh these the inter#ersonal attracti&eness o$ the interaction
#artner is rein$orced (c$. Jans, 2004, #. A18 BGCH 5anni% ; @eale, 200A, #. 3F B21C). 1"ilding on this, the
theor* o$ Esocial identit*( descri'es the wa* in which #eo#le di$$erentiate 'etween Ein-gro"#( and Eo"t-
gro"#( #eo#le. !he res"ltant $a"lt lines (lines o$ tension) 'etween the gro"#s decrease their
inter#ersonal attracti&eness (c$. !hatcher, Jehn, ; ?an"tto, 2003, #. 21F B30CH &an :ni##en'erg ;
.chi##ers, 2007, #. A18 B8CH R"igro+, 5a*r, ; 8re&e, 2010, ##. 7-8 B31C) and increase the ris+ o$
eotional con$lict or less coo#eration (c$. -llwart, 5oc+, ; Rac+, 2010, #. 17 B32C).
!he organisation o$ the .5!s "st identi$* and de&elo# conditions in which the #ositi&e e$$ects
o&ercoe the negati&e ones (c$. R"igro+ et al., 2010, ##. G-7 B31C), so that the 'ene$its o$ c"lt"ral
di&ersit* can 'e "sed to their a%i" #otential. !he s"r&i&al and co#etiti&eness o$ co#anies are
de#endent on their a'ilit* to s"ccess$"ll* eet the challenge o$ internationalisation (c$. 8oe6-5eMia ;
<alich, 1FF7, #. 313 B33CH .anders ; )ar#enter, 1FF8, #. 1A8). !he necessar* collection o$ in$oration
and #rocessing co#etence (c$. .anders ; )ar#enter, 1FF8, #. 1A8 B34CH Iee ; <ar+, 200G, #. 1F7
B4C)can 'e s"##orted '* the c"lt"ral di&ersit* within the anageent tea. !he tea e'ers(
di$$erent e%#eriences a+e a signi$icant contri'"tion to a 'etter "nderstanding and inter#retation o$ the
international en&ironent (c$. !ache&a, 2007, #. 13F B3AC), which o#tiises their interaction with it.
-+- The influence of SMTs on the Success of Internationalisation
5an* st"dies ha&e considered #ossi'le ethods $or eas"ring how s"ccess$"ll* co#anies ha&e
internationalised (e.g. Jaw ; Iin, 200F B3GCH :ac6are+, 200F B37CH I" ; 1eaish, 2004 B38CH (c$. e.g.
!allan ; Ii, 1FFG B3FCH I" ; 1eaish, 2004 B38CH Jaw ; Iin, 200F B3GCH :ac6are+, 200F B38C, $or an
o&er&iew c$. .chid ; 4a"th, 2012, ##. 774-777 B11C). 2t has 'een shown that internationalisation
sho"ld 'eeas"red on the 'asis o$ "lti#le indicators, and that non-$inancial $actors, e.g. geogra#hical
distri'"tion, can also 'e "se$"l.
1"ilding on )*ert and 5arch(s 1FG3 E1eha&ioral !heor* o$ the 9ir( B40C (c$. Da'ric+ et al., 1FFG, #.
GG2 B2CH @ielsen, 2010, #. 303 BAC) and Da'ric+ and 5ason(s 1F84 E,##er -chelons( theor* B17C, a
gro"# o$ #eo#le at the to# o$ the co#an* can 'e "sed as an o'Mect o$ anal*sis (c$. )ar#enter,
8elet+an*c6, ; .anders, 2004, ##. 7A2-7A3 B41C). !he s"ccess o$ a co#an* can 'e seen as a
&aria'le de#endent on the strategic decisions o$ doinant gro"#s - the to# anageent - within the
organisation (c$. Da'ric+ ; 5ason, 1F84, ##. 1F4-1FG B17C), which is in$l"enced '* the traits and
characteristics o$ the .5! e'ers and their res"ltant heterogeneit* (c$. Da'ric+ ; 5ason, 1F84, #.
1F3 B17CH 9in+elstein ; Da'ric+, 1FF0 B42CH Da'ric+ et al., 1FFG B2C). 9ig. 1 shows this #res"ed
correlation.
Additionall*, .5!s create social str"ct"res whose e$$icienc* is li+el* to 'e in$l"enced '* e%isting social
ca#ital (c$. Adler ; :won, 2002 B27CH .hi#ilo& ; 4anis, 200G B43C). .hi#ilo& and 4anis(200G)B43C state
that social ca#ital 0is $"ndaental to "nderstanding the B.5!C characteristics, strategic choice,
en&ironental content and $inancial #er$oranceN (.hi#ilo& ; 4anis, 200G, #. 22 B43C). As
internationalisation is an "n#redicta'le $ield, it re>"ires creati&e and soeties "ncon&entional
decisions, which ha&e to 'e s*nthesised and erged into a coherent strateg*. Ass"ing that h"an
ca#ital $actors in$l"ence social ca#ital in .5!s (c$. Iin, 1FFF B44CH .hi#ilo& ; 4anis, 200G B43C), c"lt"ral
di&ersit* ight also $oster internationalisation s"ccess $ro a social ca#ital angle '* integrating its
'ridging and 'onding #otential (c$. 1"rt, 1FF2 B4ACH )olean, 1F88 B4GCH 8rano&etter, 1F73 B47C).
1i0+ $+ Mo!el of strate0ic choice in SMTs& ta*in0 "oun!e! rationality into account Source2 "ase!
on 1in*elstein an! .am"ric* 3$445& p+ 6-7 8$49
-%isting st"dies on the di&ersit* o$ .5!s and their co#anies( #er$orance #ortra* a i%ed #ict"re.
<ositi&e (c$. e.g. )aligi"ri, Ia6aro&a, ; ?ehet'a"er, 2004 B48CH 1oone ; Dendri+s, 200F B4FC), negati&e
(c$. !s"i, -gan, ; OOReill* 222, 1FF2 BA0C) or no correlations (c$. Olson, <ara*ita, ; !wigg, 200G BA1C),
as well as si"ltaneo"s #ositi&e and negati&e connections (c$. Da'ric+ et al., 1FFG B2CH Richard ;
.helor, 2002 BA2C), can 'e identi$ied. An e%#lanation o$ this is the &er* di$$erent wa*s in which the to#ic
has 'een a##roached and treated (c$. Darrison ; :lein, 2007, #. 1200 B22CH 9ernande6-Orti6 ;
Io'ardo, 200F, #. 134 BFC). !he literat"re does not "s"all* di$$erentiate 'etween the &ario"s di$$erent
as#ects o$ di&ersit* (c$. !ache&a, 2007, #. G2 B3AC), '"t treats it as a general constr"ct. -&er* $eat"re o$
di&ersit* is assigned to the sae e$$ect, regardless o$ the dis#arit* 'etween the (c$. Da'ric+ ;
5ason, 1F84 B17CH 9in+elstein ; Da'ric+, 1FFG B1FCH !ache&a, 2007 B3AC). 9"rther ca"ses o$ these
dissiilar res"lts co"ld 'e the di$$erence in the de#endent &aria'les, de$initions "sed, and conte%t
$actors considered (c$. @ielsen, 2010, #. 301 BACH @a+"i et al., 2011, #. 2328 B10C). 9"rtherore, there
are st"dies with a decided $oc"s on c"lt"ral di&ersit* in .5!s (c$. -lron, 1FF7 BA3CH DeiMltMes, Olie, ;
8l"n+, 2003 BA4CH )aligi"ri et al., 2004 B48C), as well as those with theaticall* siilar &aria'les, s"ch
as international e%#erience (c$. Athanassio" ; @igh, 2002 B3CH !ache&a, 2007 B3ACH :ac6are+, 200F
B37C) which can 'e "nderstood as s*non*o"s with +nowledge o$ E$oreign( co"ntries and the
"nderstanding o$ &al"es and 'ac+gro"nds o$ #ractices and needs (c$. Athanassio" ; @igh, 2002, #.
47A B3CH :ac6are+, 200F, #. 17G B37CH )ris# ; !"rner, 2011, #. 2A7 BAAC). Dowe&er, in the last ten
*ears the disc"ssion a'o"t the e$$ect o$ c"lt"ral di&ersit* in .5!s has widened $ro #"rel* loo+ing at
co#anies( #er$orance to other as#ects o$ co#anies( di&ersit* (c$. Derrann ; 4atta, 200A, #. GF
BAGCH !ache&a, 2007, #. 137 B3AC).
:+ T.E )ESEA)C. CONCE;T
:+$ )esearch .ypotheses
2nternationalisation leads to ore co#le%it* and as s"ch to higher deands on the .5!s. )"lt"ral
di&ersit* in the .5!s can there$ore 'e cond"ci&e to dealing with co#le% $actors in the ost e$$ecti&e
wa*.
.t"dies ha&e shown that in the long ter, negati&e o#erational e$$ects ca"sed '* c"lt"ral di&ersit*
red"ce the le&el o$ coo#eration within an .5!. Dowe&er, this st"d* ass"es that c"lt"ral di&ersit* has
a #ositi&e e$$ect on in$oration gathering and #rocessing in .5!s, as .5!s "s"all* wor+ together $or
se&eral *ears, so this negati&e in$l"ence has less o$ an e$$ect on o#erations. !here$ore a #ositi&e
correlation 'etween the di&ersit* o$ .5!s and their co#anies( s"ccess in internationalising is
antici#ated.
!he e%#ression Einternationalisation s"ccess( is not e%#licitl* "sed in anageent literat"re, '"t the
nat"re o$ the as#ects 'eing researched a+es it clear, that as a r"le the degree o$ internationalisation
is s*non*o"s with its s"ccess. 4rawing on ."lli&an, 1FF4 BA7C, the degree o$ internationalisation is
"sed as the $actor $or deterining s"ccess. !his leads to the $ollowing h*#othesis:
D*#othesis 1: !here is a #ositi&e correlation 'etween c"lt"ral di&ersit* in .5!s and the le&el o$
internationalisation attained '* their co#anies.
1ased on ."lli&an, 1FF4 BA7C, a co#an*(s le&el o$ internationalisation can 'e di&ided into s"ccess-
'ased, str"ct"re-'ased and 'eha&io"r-'ased diensions. Rel*ing on e%isting st"dies (c$. e.g. I" ;
1eaish, 2004 B38CH Jaw ; Iin, 200F B3GC) that '"ild on ."lli&an(s wor+ the 'eha&io"r-'ased diension
sho"ld 'e ignored. 4oing so sho"ld not i#air the research o$ the 'readth (scale o$ the co#an*(s
international di&ersi$ication) or the de#th (the signi$icance o$ the o&erseas 'ranches $or the co#an*),
as the s"ccess-'ased diension re$lects the de#th, and the str"ct"re-'ased diension the 'readth, o$
the internationalisation (c$. Jaw ; Iin, 200F, #. 22G B3GC). As the #ro#ortion o$ $oreign sales gi&es a
s"ccess-'ased $ig"re, and the n"'er o$ $oreign s"'sidiar* co#anies o$$ers a str"ct"re-'ased
indicator, the $ollowing h*#otheses can 'e reached:
D*#othesis 1a: !here is a #ositi&e correlation 'etween c"lt"ral di&ersit* in .5!s and the #ro#ortion
o$ a co#an*(s $oreign co"ntr* re&en"es.
D*#othesis 1': !here is a #ositi&e correlation 'etween c"lt"ral di&ersit* in .5!s and the #ro#ortion
o$ a co#an*(s $oreign co"ntr* a$$iliates.
:+- )esearch Desi0n
:+-+$ .a#le
!he #reliinar* sa#le o$ the 30 4A7 co#anies as o$ Octo'er 2011 was red"ced to 28 a$ter the
reo&al o$ the 'an+s ta+ing $inancial crisis into acco"nt. 8eran ins"rance gro"#s reain incl"ded
ass"ing that the* did not s"$$er $ro $inancial crisis organisationall* as 'an+s. !here$ore .5!
co#osition o$ ins"rance gro"#s is less in$l"enced '* e%ternalities and can still 'e regarded as
strategic choice. !he co#anies incl"ded are all acti&e internationall* and $"nction as liited
co#anies with an e%ec"ti&e 'oard. 1eca"se the
co#anies ha&e di$$erent re#resentati&e 'ranches the res"lts can 'e either 'e generalised or $oc"sed
on a single 'ranch (c$. Iee ; <ar+, 200G, #. 200 B4C). !he data $ro the 4A7 30 co#anies was
co#iled o&er a #eriod o$ 11 *ears, $ro 2000 - 2010. 2t was #redoinantl* ta+en $ro the rele&ant
re#orts $ro the co#anies, s"##leented '* their o$$icial we'sites as well as online data'ases (e.g.
Ie%is@e%is, 5"n6iger Online, /irtscha$ts /oche Online) when in$oration was issing. Additionall*,
direct contact with the rele&ant e#lo*ees was attained in soe cases (2n&estor Relations). !he $inal
sa#le was red"ced to 17 co#anies, 'eca"se soe lac+ed data. .o o&erall this *ielded a sa#le
with ,K17 co#anies, with a research #eriod o$ !K11 and @K187 o'ser&ations.
:+-+- <"tting the research into o#eration
2evel of internationalisation 3245- !he le&el o$ internationalisation is "s"all* anal*sed "sing
"ltidiensional eas"reents, in order to 'oost its &alidit*. !his a##roach will 'e $ollowed and the
degree o$ internationalisation will 'e eas"red as the a&erage o$ the #ro#ortion o$ a co#an*(s
re&en"es coing $ro a'road and the >"antit* o$ $oreign s"'sidiaries. !he constr"ct Ele&el o$
internationalisation( ta+es a &al"e $ro 0 (no internationalisation) to 1 (a high le&el o$
internationalisation).
6ro*ortion of forei)n revenues 37+5- the #ro#ortion o$ a co#an*(s $oreign co"ntr* re&en"es was
eas"red '* ."lli&an, 1FF4 BA7C as the ratio o$ $oreign re&en"es in relation to a co#an*(s total
re&en"e (c$. .anders ; )ar#enter, 1FF8 B34CH I" ; 1eaish, 2004 B38CH Iee ; <ar+, 200G B4CH Jaw ;
Iin, 200F B3GC). !his &aria'le can ta+e a &al"e 'etween 0 (no $oreign re&en"es) and 1 (where a
co#an*(s total re&en"e all coes $ro a'road).
The *ro*ortion of forei)n affiliates 37$5- the eas"reent o$ the #ro#ortion o$ s"'sidiar* co#anies
which are $oreign was also ins#ired '* #re&io"s st"dies (see a'o&e) and is de$ined as the ratio o$
$oreign s"'sidiar* co#anies to the total n"'er o$ s"'sidiar* co#anies (."lli&an, 1FF4), ta+ing a
&al"e 'etween 0 (no $oreign s"'sidiaries) and 1 (all s"'sidiaries a'road). ."'sidiaries o$ the co#anies
were onl* chosen i$ the* were $"ll* incl"ded in the consolidated 'alance sheet in the co#an*(s re#ort,
as #er the 8eran coercial code (P 2F4, P 310) and the 2nternational 9inance Re#orting .tandards
(2A. 27).
,ultural "iversity 3,D5 in .5!s: c"lt"ral di&ersit* re$ers to the co#osition o$ the e%ec"ti&e 'oard and is
de$ined here in re$erence to the nationalit* o$ the 'oard e'ers. )iti6enshi# *asses here $or a
#erson(s characteristics as well as orals (c$. :ac6are+, 200F, #. AF B37C) and ens"res the
accessi'ilit* o$ the data (c$. $or ore and 'roader co&erage o$ )"lt"ral 4i&ersit* in .enior 5anageent
!eas .chid ; 4a"th, 2012 B11C).
!he e%tent o$ c"lt"ral di&ersit* can 'e eas"red "sing di$$erent "is*ersion measurements (c$. Allison,
1F78 BA8CH Jans, 2004, #. F BGCH &an :ni##en'erg ; .chi##ers, 2007, #. A22 B8CH 5a*r, 2010, ##. 33-34
BAFC). !he 1la" 2nde% (12) has 'een chosen $or this st"d*, as it is coonl* "sed in di&ersit* st"dies (c$.
:ild"$$, Angelar, ; 5ehra, 2000 BG0CH Richard ; .helor, 2002 BA2CH Olson et al., 200G BA1CH Do"ghton,
.tewart, ; 1arr, 2010, #. 102 BG1CH 5ac)"rtain, 9lood, Raaoorth*, /est, ; 4awson, 2010 BG2CH
@ielsen, 2010, #. 30F BAC). !he 12 considers the di$$erent 'eha&io"rs associated with 'elonging to
inorities or aMorities within a tea (c$. 5anni% ; @eale, 200A, #. 37 B21C) and is calc"lated as:
(0 Q 12 Q 1).
!he 12 is there$ore the re#resentati&e n"'er o$ the #ro#ortion o$ #eo#le 'elonging to a certain
nationalit* within the gro"# as a whole. !he 12 can theoreticall* ta+e a &al"e 'etween 0 and 1. !he
'igger the &al"e is, the ore di&erse the gro"# (the .5!) is with res#ect to the considered
characteristic (@ationalit*).
1oards lasting less than a *ear were not incl"ded in the anal*sis. 9ollowing (R"igro+ et al., 2010),
#eo#le with d"al nationalit* were coded as Ehal$ nationalities( "sing the res#ecti&e nationalit* M, so that
the #ro#ortion was shared 'etween 'oth nationalities.
:+-+: )ontrol &aria'les
2n this in&estigation the si6es o$ the anageent tea and the co#an* will act as the control
&aria'les. !hese ha&e alread* 'een a##lied in an* st"dies and ha&e #ro&ed rele&ant (c$. e.g.
Da'ric+ et al., 1FFG B2CH Athanassio" ; @igh, 2000 BG3CH !ihan*, -llstrand, 4ail*, ; 4alton, 2000 BG4CH
Richard ; .helor, 2002 BA2CH Olson et al., 200G BA1CH 9ernande6- Orti6 ; Io'ardo, 200F BFC).
3.8.3.9 Team si:e
!he si6e o$ the .5! can in$l"ence the le&el o$ heterogeneit*. Iarger teas can consist o$ ore
e'ers with di$$erent nationalities. 2n contrast, saller teas can 'e ore &olatile, in that one
additional e'er with a di$$erent nationalit* will ha&e a greater in$l"ence on the gro"#(s a+e"# (c$.
!ihan* et al., 2000, #. 11GF BG4C).
3.8.3.8 ,om*any si:e
!he si6e o$ the co#an* can ha&e an in$l"ence on its strategic initiati&es. Iarger co#anies ha&e the
#ersonnel and the reso"rces to enter the international ar+et (c$. !ihan* et al., 2000, #. 11G8 BG4C). !he
si6e o$ the co#an* will 'e eas"red '* the ao"nt o$ e'ers in each res#ecti&e *ear o$ the re#ort
(c$. e.g. see also !ihan* et al., 2000 BG4CH 9ernande6-Orti6 ; Io'ardo, 200F BFC).
:+-+6 .tatistical anal*sis
!here are o'ser&ations $or all 17 o$ the incl"ded co#anies and all the eas"reent #oints, so this
st"d*is co#rised o$ a 'alanced #anel o$ 187 o'ser&ations. A #anel anal*sis o$$ers noteworth*
ad&antages (c$. .chroder, 200F, #. 31A BGAC) as it o$$ers a 'roader in$oration 'ase (c$. e.g. !ache&a,
2007, #. 82 B3ACH .chroder, 200F, #. 31A BGAC) co#ared to #"re longit"dinal data (c$. !ache&a, 2007, #.
82 B3ACH .chroder, 200F, #. 31A BGAC). 2n$oration a'o"t the chronological se>"ence o$ conditions and
e&ents can 'e o'tained, which allows "no'ser&ed indi&id"al heterogeneit* to 'e scr"tinised (c$.
.chroder, 200F, #. 31A BGACH /ooldridge, 200F, ##. 11-12 BGGC).
1"ilding on a si#le odel (the 6ero odel), which #ro&ides 'asic concl"sions a'o"t the data
str"ct"re, a odel with $i%ed e$$ects (9- odel) was a##lied to the relationshi# 'eing in&estigated. !he
re&iew o$ the ass"#tions o$ the linear i%ed odel "sed was acco#lished "sing a linear regression
(c$. 9ield, 200F, #. 73F BG7C).
6+ DATA INTE);)ETATION AND )ES,/TS
6+$Descriptive Statistics
!he a&erage si6e o$ the co#anies was 1A1,G3A e#lo*ees, with a range $ro F,G4A to A20,112. !he
a&erage si6e o$ the .5!s (e%ec"ti&e 'oards) was G.8F e'ers, with a &ariation 'etween 4 and 14
e'ers. !he ean &al"es, standard de&iation, doain (5in.R5a%.) and the correlation o$ the di$$erent
&aria'les are shown in !a'le 1.
!he .5!s had an a&erage c"lt"ral di&ersit* &al"e o$ .20A, with a range 'etween .000 and .720. !he
high standard de&iation o$ the c"lt"ral di&ersit* &al"e is #artic"larl* noteworth*, as it highlights a wide
&ariation in the c"lt"ral co#osition o$ the e%ec"ti&e 'oards (5K.20A, .4K.1FF). !he correlations are
#ositi&el* 'iased, since the #resent #anel data str"ct"re cannot 'e $actored in the <earson #rod"ct-
oent correlation. Ii+ewise, signi$icance cannot 'e "sed as a &alid eas"re. !he high &al"es $or the
correlation 'etween the le&el o$ internationalisation and the de#endent &aria'les are e%#lained '* the
wa* the constr"ct is $ored.
!he res"lts o$ the 4"r'in-/atson statistics show the #resence o$ #ositi&e a"to-correlation (4/9RK.372H
4/9AK.300H 4/,K.3FA). A"to-correlation is a well-+nown #ro'le with #anel data. 9"rtherore, the
regression has considera'le wea+nesses with res#ect to the >"alit* o$ the con$orance. !he
#ro#ortion o$ the e%#lained &ariance in relation to the total &ariance onl* acco"nts $or 14=, 12= and
17= (r
2
9RK.144H r
2
9AK.11GH r
2
"K.171).
!he a##lication o$ the linear i%ed odel (c$. !a'le 2) is corro'orated '* the high &al"es o$ the
calc"lated intraclass-correlation coe$$icients (2))9RK.8GAH 2))9AK.8GGH 2)),K.8A8), which show that
circa 8G= o$ the total &ariance in each odel can 'e traced 'ac+ to the di$$erence 'etween the
co#anies.
!he total ean &al"es (!5L) o$ the de#endent &aria'le show a relati&el* high a&erage le&el o$
international acti&it* across all the co#anies and eas"reent #oints. !he a&erage #ro#ortion o$
$oreign re&en"es acco"nted $or GA= o$ the total, the a&erage ao"nt o$ $oreign s"'sidiar* co#anies
73= and the le&el o$ internationalisation was, on a&erage, GF= (!5L9RK.GA3H !5L9AK.728H !5L,K.GF0).
9"rtherore, it can 'e shown that a sall '"t signi$icant &ariation in the tie series o$ each co#an* is
#redoinant (o/ 9RK.003, <Q.001H Ow $aK 002, <Q.001H o/K 002, <Q.001). Alongside this there are
signi$icant di$$erences 'etween each o$ the co#anies, which, co#ared to the &ariations in the
co#anies( tie series, are "ch ore s"'stantial oS 9RK.022, <K.01H oS9AK.01G, <K.01H oSISK.013,
<K.01).
Ta"le $+ Mean 3M7& stan!ar! !eviation 3SD7& !omain 3Min+<Max+7 an! pro!uct(moment
correlation accor!in0 to ;earson
=aria"les M SD Min Max $ - :
1. )"lt"ral 4i&ersit* ()4) .20A .1FF .000 .720
2. .hare o$ $oreign co"ntr* re&en"es .GA3 .1G1 .1F0 .F0A .28FTTT
(9R) (.000)
3. .hare o$ $oreign co"ntr* a$$iliates .728 .134 .2F3 .FA4 .318TTT .424TTT
(9A) (.000) (.000)
4. Ie&el o$ 2nternationali6ation (I2) .GF0 .12A .383 .F2F .3A8TTT .873TTT .811TTT
(.000) (.000) (.000)
; < 9=>,
f
6 < .90, ? 6 < .05, ?? 6 < .09, ??? 6 @ .009
6+- Examination of the .yopotheses
!he 9- odels (c$. !a'le 3) show signi$icant #ositi&e correlations 'etween c"lt"ral di&ersit* and the
#ro#ortion o$ a co#an*(s re&en"es coing $ro a'road, as well as the ao"nt o$ s"'sidiar*
co#anies 'ased a'road ()49R-9-K.031, <K.10H )49A-9-K.037, <K.10). Dowe&er, the strength o$ the
correlation is not es#eciall* #rono"nced. Ass"ing the e$$ects are $i%ed, h*#otheses 1a and 1' can 'e
con$ired '* a inor #ositi&e correlation. !he e#irical res"lts are re$lected in the ass"ed #ositi&e
correlation 'etween c"lt"ral di&ersit* and the constr"ct Ethe le&el o$ internationalisation o$ co#anies( o$
h*#othesis 1 ()4I2- 9-K.03G, <K.0A). Onl* a slight correlation is shown here, '"t in co#arison to
#re&io"s st"dies it is clearl* ore s"'stantial. D*#othesis 1 can there$ore also 'e s"##orted, ass"ing
the e$$ects are $i%ed. !he s"'stantiall* ore signi$icant correlation and the decided increase in the
>"alit* o$ the con$orance co#ared to the $irst two odels (#ro#ortion o$ $oreign re&en"es and
ao"nt o$ $oreign s"'sidiaries) con$ir the o'ser&ation into the constr"ct (le&el o$ internationalisation)
which has 'een carried o"t (-2III2K-814.4A3 co#ared to -2II9RK-747.GA2 and -2II9AK-71F.440).
!he signi$icance and the si6e o$ the correlation 'etween c"lt"ral di&ersit* and the ao"nt o$ $oreign
s"'sidiaries stand o"t in co#arison to that o$ the #ro#ortion o$ $oreign re&en"es. 2n t"rn, the
in$oration criteria onl* ha&e a low con$orance, while neither o$ the two odels a* 'e gi&en a
#re$erence regarding the res"lts. !he res"lts $or the control &aria'les are #artic"larl* nota'le. @one o$
the odels show a noteworth* correlation 'etween the anageent tea or co#an* si6e with their
res#ecti&e de#endent &aria'les. !he dis#arate signi$icance o$ the control &aria'le stands o"t, '"t it is
not within the sco#e o$ this st"d* to in&estigate which reasons lie 'ehind this.
Ta"le -+ >ero mo!el
1) 1A /I
)onstant !er (total ean) .GA3TTT .728TTT .GF0TTT
(.037) (.030) (.028)
/ithin-Lariance: oU .003TTT .002TTT .002TTT
(.000) (.000) (.000)
1etween-Lariance: oJ .022TT .01GTT .013TT
(.008) (.00A) (.00A)
!otal Lariance: ot
2
0tai .02G .018 .01G
2ntraclass-correlation coe$$icient (2))): .8GA .8GG .8A8
4,, < , 2, , 0 Q 4,, @ 9
(0RV $$w)
-2IIV
-4A4.743 -A24.F13
A2)V -448,743 -A18,F13 A41.G4
A3A.G4
;<9=>, metho"e- in!lusion,
T
6<.90, ?6<.05, ??6<.09, ???6@.009
;on-stan"arise" !oeffi!ient with stan"ar" errors in #ra!ets.
A 7urther information !riteria- 4,, ,$4,, B4,
!he anal*sis o$ the 9- odel con$irs the #ositi&e correlation 'etween c"lt"ral di&ersit* and the le&el
o$ internationalisation, the #ro#ortion o$ a co#an*(s re&en"e coing $ro a'road and the ao"nt o$
s"'sidiar* co#anies which are $oreign, as #osited in h*#otheses 1, 1a and 1'. 9ollowing on $ro
that, the #ositi&e connection 'etween c"lt"ral di&ersit* and s"ccess in internationalising can 'e
s"##orted '* e#irical e&idence.
/hen co#aring 9- odels and odels with rando e$$ects (R- odels), it was $o"nd that the* onl*
di$$er slightl* $ro each other in ters o$ the >"alit* o$ their con$orance. !he R- odels show a trend
towards a 'etter con$orance, '"t this con$irs the conMect"re that in co#arison to the 9- odels
the estiators are slightl* distorted.
!he res"lts o$ the 9- and R- odels show siilar 'eha&io"r with res#ect to the #ro#ortion o$ $oreign
re&en"es and the ao"nt o$ $oreign s"'sidiar* co#anies, '"t not in ters o$ the le&el o$
internationalisation. 2n re$erence to h*#otheses 1a and 1' 'oth odels coe to the sae concl"sion.
/ith the R- odel no concl"sion co"ld 'e reached $or h*#othesis 1, '"t the si#li$ied odel (9-
odel) con$ired the h*#othesis.
?+ DISC,SSION AND IM;/ICATIONS
2n the descri#ti&e statistics the low ean &al"e (.20A) and the high standard de&iation stand o"t. 2n
co#arison, #re&io"s st"dies showed higher a&erage &al"es $or c"lt"ral di&ersit* (e.g. !ache&a, 2007
B3AC with .34 or :ild"$$ et al., 2000 BG1C with an a&erage o$ .37 c"lt"ral di&ersit*). A reason $or this is the
data this st"d* was 'ased on. )o#anies who dis#la*ed little or no c"lt"ral di&ersit* o&er the
o'ser&ation #eriod were wholl* incl"ded in the anal*sis. /ith a relati&el* sall sa#le and a
co#arati&el* long o'ser&ation #eriod this wo"ld ha&e a signi$icant e$$ect on the ean &al"e. 2n total
73 o$ the 187 o'ser&ation &al"es showed a c"lt"ral di&ersit* o$ 6ero, eaning that with 3F= o$ the
o'ser&ation #oints the 'oards showed no di&ersit*.
/ith the linear i%ed odels the sall sa#le and the lower le&el o$ di&ersit* co"ld also 'e reasons
$or the low strength o$ the correlation 'etween c"lt"ral di&ersit* and the de#endent &aria'les. 2n
#re&io"s st"dies the correlation 'etween c"lt"ral di&ersit* and the de#endent &aria'les was $o"nd to
'e stronger. -lron, 1FF7 BA3C esta'lished a correlation &al"e o$ .18 and )aligi"ri et al. 2004 B48C e&en
$o"nd &al"es $ro .30 to .4F. 1oth st"dies had 'igger sa#les and "sed Aerican co#anies as the
'asis $or their data. 9"rtherore, the* 'oth cond"cted cross-sectional anal*ses, while a #anel anal*sis
was "sed in this st"d*. 2t is o'&io"s that the in$l"ence o$ the sa#le si6e, the di$$erent co#anies and
co"ntries e%ained and the di$$ering anal*sis ethods were the reasons $or the di$$erence here.
/ith res#ect to #ro&ing the h*#otheses the e#irical res"lts show a signi$icant correlation 'etween
c"lt"ral di&ersit* and the #ro#ortion o$ a co#an*(s re&en"es coing $ro a'road, as well as with the
ao"nt o$ s"'sidiar* co#anies 'ased a'road.
Ta"le :+ /inear mixe! mo!el ( 1E mo!el 3fixe! effects mo!el7
1) 1A /I
Mo!el $ Mo!el - Mo!el $ Mo!el - Mo!el $ Mo!el -
!ea si6e -.002(.002) -.003
!
(.002) .001(.002) .000(.002) -.001(.001) -.001(.001)
)o#an* si6e .000TT(.000) .000T(.000) .000(.000) .000(.000) .000(.000) .000(.000)
)"lt"ral di&ersit* .031
!
(.01F) .037
t
(.021 ) .03GT(.01G)
5eas"reent .FF1TTT(.004) .FF0TTT(.00A) .F78TTT(.008) .F77TTT(.00F) .F8ATTT(.007) .F84TTT(.007)
iterations
(ARD1 rho)
-2II -744.FAA -747.GA2 -71G.4A2 -71F.440 -80F.F0A -814.4A3
A2) -714,FAA -71A,GA2 -G8G,4A2 -G87,440 -77F,F0A -782,4A3
;<9=>,
f
6<.90, ?6<.05, ??6<.09, ???6@.009 ;on-stan"arise" !oeffi!ient with stan"ar" errors in #ra!ets
9oreign s"'sidiar* co#anies re#resent the highest le&el o$ ar+et integration '"t also the highest
le&el o$ ris+ in $oreign co"ntries (c$. 5ec+l, 2010, ##. 1G-17 BG8C). A co#an* with international
s"'sidiar* co#anies is there$ore 'etter esta'lished on the international ar+et than a co#an* with
trade-'ased internationalisation (c$. 5eissner ; 8er'er, 1F80, #. 224 BGFCH :"tsch+er ; .chid, 2011,
#. F07 B70C). !he e%#erience and +nowledge a'o"t E$oreign( ar+ets (c$. Da'ric+ ; 5ason, 1F84, #.
1FA B17CH &an :ni##en'erg ; .chi##ers, 2007, #. A18 B8C), which a c"lt"rall* di&erse tea #ossesses,
can increase a co#an*(s readiness to ta+e ris+s or in&est. )onse>"entl* there is a stronger correlation
'etween c"lt"ral di&ersit* and the #ro#ortion o$ $oreign s"'sidiar* co#anies than 'etween c"lt"ral
di&ersit* and the #ro#ortion o$ re&en"es coing $ro a'road.
!he correlation 'etween c"lt"ral di&ersit* and the constr"ct Ethe le&el o$ internationalisation( can also 'e
con$ired. !he correlation is co#ara'l* strong, tho"gh it is clearl* stronger than in the one
diensional odels.
2n this st"d*, the in&estigated ca"salit* is 'ased on the E,##er--chelons( !heor* incl"ding the
#ers#ecti&e o$ social ca#ital. Dowe&er, in realit* the direction o$ the correlation 'etween c"lt"ral
di&ersit* and s"ccess in internationalising "st reain o#en to de'ate. Are c"lt"rall* di&erse .5!s
res#onsi'le $or the international alignent and s"ccess o$ their co#anies or does increasing
internationalisation lead to a co#an* ha&ing a c"lt"rall* di&erse .5! (c$. !ache&a, 2007, #. 142 B3AC)W
.t"dies which e%ained the in$l"ence o$ internationalisation s"ccess on c"lt"ral di&ersit*, rather than
the other wa* ro"nd, also $o"nd this correlation (c$. :ac6are+, 200F B37C). 2n this case re$erence to the
selection #rocess $or the .5!s was ade. !here$ore it wo"ld ha&e to 'e considered, whether certain
'oard e'ers were chosen 'eca"se the* had a di$$erent nationalit* or whether their nationalit* was a
coincidental res"lt o$ choosing the 'est #erson $or the Mo' (c$. !ache&a, 2007, #. G8 B3AC). As a r"le
nationalit* is not the onl* criterion "sed to a+e a decision, eaning that the 'est #erson $or a Mo' is
not solel* de$ined '* their nationalit*. 2t wo"ld conse>"entl* a+e sense to e%aine $"rther as#ects o$
di&ersit* 'oth in isolation and as a whole constr"ct, as well as integrating other rele&ant eleents (e.g.
)L, international e%#erience, etc.), into $"t"re st"dies on this to#ic. !o this end, the eas"reent o$
internationalisation recoended '* .chid and 4a"th co"ld 'e a "se$"l #oint o$ de#art"re $or $"rther
research (c$. .chid ; 4a"th, 2012, #. 78A B11C).
2n this st"d* onl* one deciding as#ect o$ c"lt"ral di&ersit* was researched, as nationalit* was the onl*
E#ro%* &aria'le( (c$. !ache&a, 2007, #. 140 B3AC). 2n other st"dies se&eral &aria'les were e%ained.
8enerall*, the* were in&estigated in relation to the deogra#hic characteristics o$ .5! e'ers (c$.
Derrann ; 4atta, 200A BAGCH 5ari"th" ; :olandaisa*, 200F B71CH R"igro+ et al., 2010 B31C) and
were o$ten anal*sed as a constr"ct rather than in isolation (c$. Da'ric+ ; 5ason, 1F84 B17CH
9in+elstein ; Da'ric+, 1FFG B1FCH !ache&a, 2007 B3AC). As a co"nter to an* criticis o$ the #artial
anal*sis carried o"t in this st"d*, it can 'e arg"ed that e&er* deogra#hic characteristic can ha&e a
di$$erent e$$ect and as s"ch "st 'e researched se#aratel* (&gl. 5a*r, 2010, #. 3F BAFC).
2t can 'e >"estioned whether the deogra#hic &aria'le Enationalit*( is a s"ita'le #ro%* &aria'le $or the
#s*chological characteristics and the 'eha&io"r o$ .5! e'ers (c$. -dondson, Ro'erto, ; /at+ins,
2003, #. 4 B72CH Iee ; <ar+, 200G, #. 1FG B4CH .chid ; 4a"th, 2012, #. 773 B11C), as #eo#le(s &al"es,
'elie$s and 'eha&io"r can strongl* di$$er within a national gro"# (c$. :ild"$$ et al., 2000, #. 22 BG0C).
Altho"gh this criticis sees #artl* &alid, nationalit* has #ro&ed itsel$ as a classic &aria'le o$
interc"lt"ral anageent research, as d"e to its o'ser&a'ilit* and i#licit relationshi# with c"lt"ral
&aria'les it has o$ten shown a s"$$icient a##ro%iation o$ the researched correlation.
2n considering an o&erall e&al"ation o$ the correlation, the $act that .5!s are in$l"enced '* n"ero"s
internal and e%ternal $actors "st also 'e entioned (c$. 1"ltel, 200F, #. F1B73C). 2nternal ca#acities and
goals are not the onl* $actors which #la* a roleH e%ternal circ"stances, $or e%a#le the o&erall
$inancial #osition or the ar+et deand, also do so in e>"al eas"re. !hese internal and e%ternal
in$l"ences ha&e an e$$ect 'oth on the .5!s( decisions as well as the #er$orance o$ a co#an*.
Laria'les o$ten "sed in this research $ield, s"ch as the si6e o$ the anageent tea or co#an*, were
there$ore integrated into this st"d*.
5anageent tea e'ers do not a+e #"rel* rational decisions, '"t are additionall* constrained in
their decision-a+ing '* the interacti&e tensions 'etween the tea e'ers. A tea e'er(s
#erce#tions o$ and attit"des to di&ersit* or "t"al tr"st can change the wa* the* interact with their
colleag"es (c$. !ache&a, 2007, #. 141 B3ACH &an :ni##en'erg ; .chi##ers, 2007, #. A31 B8CH @a+"i et al.
2011, #. 2328 B10C). 1ased on 0c"lt"ral stereot*#es, strategies o$ e%cl"sion, and $eelings o$ s"#eriorit*N
(c$. ?weigenha$t ; 4oho$$, 200G, #. 234 B74C) the $oration o$ di$$erent gro"#s is coon, d"e to this
#erce#tion as well as identi$ication with colleag"es who are siilar. !here is a widel* esta'lished 'od*
o$ research concerning stat"s attainent (c$. Io*, 1FGF B7ACH .ith ; A''ott, 1F83 B7GC), which ight
derogate a o#tial reso"rce allocation #rocess and red"ce the #otential o$ social ca#ital at the
wor+#lace. /ithin a tea there are so-called $a"ltlines (c$. !hatcher et al., 2003 B30C) which ha&e a
negati&e i#act on teawor+. ."ch internal #rocesses within the .5!s and 'etween their indi&id"al
e'ers co"ld 'e a #ossi'le e%#lanation $or the sall correlation $o"nd in this st"d* (c$. 1e6r"+o&a,
Jehn, ?an"tto, ; !hatcher, 200F, #. 3A B77C).
)onsidering that 0$irs with higher degrees o$ coalignent aong their B.5!C social ca#ital
co#osition, strategic #ro$ile and e%ternal en&ironent will enMo* s"#erior #er$oranceN (.hi#ilo& ;
4anis, 200G, #. 22 B43C), $irs there$ore $ace the challenge o$ integrating c"lt"ral di&ersit* into an
a##roach o$ strategicall* anaging di&ersit* iss"es. As o"r st"d* re&eals, re$lecting the '"siness
internationalisation in the .5!s( c"lt"ral str"ct"re ight ha&e a #ositi&e e$$ect on $ir #er$orance.
Ii+ewise, ?weigenha$t and 4oho$$ (200G) B74C show an incease in (ethnic) di&ersit* in Aerican
9ort"ne 1000 co#anies o&er the #ast two decades (c$. ?weigenha$t ; 4oho$$, 200G, ##. 10F-110
B74C). !here$ore 8eran $irs wo"ld 'e well ad&ised to strengthen their still wea+ o&erall c"lt"ral
di&ersit* in .5!s. 9or this #"r#ose, !hoas(2010) #ro&ides a co#rehensi&e $raewor+ which
e#hasises that 0Organi6ations that desire the 'ene$its o$ the 'eha&io"ral &ariations that $low $ro
deogra#hic di&ersit* wo"ld 'e wise not to eliinate or e&en inii6e their associated re#resentation
tension0 (!hoas, 2010, #. AG B78C). ,n$ort"natel* the act"al 8eran )or#orate 8o&ernance )ode%
does not acti&el* #roote c"lt"ral di&ersit* in .5!s. !he legislati&e 'od* co"ld a* there$ore consider
ada#ting reg"lations to the c"lt"rall* di&erse realit* o$ co#anies which are targeted '* the )ode%.
Dowe&er, ass"ing the challenges and i#ondera'ilit* o$ an increase in c"lt"ral di&ersit*, anagers
ight 0see di&ersit* as a #ro'le to 'e sol&ed and #"shed asideN (!hoas, 2010, #. %ii B78C). 9oc"sing
on the &eri$ied #ositi&e correlation 'etween c"lt"ral di&ersit* and internationalisation s"ccess the
legislati&e 'od* ight 'e a'le to enco"rage 8eran co#anies to co#l* with these #ossi'le new
reg"lations.
5+ CONC/,SION
!he ass"ed #ositi&e correlation ('ased on Da'ric+ and 5ason(s E,##er--chelon( theor*, 1F84 B17C)
'etween c"lt"ral di&ersit* and the le&el o$ internationalisation, the #ro#ortion o$ re&en"es $ro a'road
and the ao"nt o$ s"'sidiar* co#anies a'road was researched "sing 17 4A7 co#anies and a data
collection o&er a #eriod o$ 11 *ears, and was e&al"ated "sing linear i%ed odels.
!he e#irical res"lts con$ired the s"ggested h*#otheses, as a sall correlation was $o"nd in this
st"d*, as in other st"dies. Dowe&er, it reains to 'e seen whether the sall correlation can 'e
attri'"ted to a wea+ e$$ect o$ c"lt"ral di&ersit* in 8eran co#anies or whether the sall si6e o$ the
sa#le, the di$$erent data 'asis or the statistical ethods o$ anal*sis a##lied had an e$$ect on the
strength o$ the correlation.
2n consideration o$ $"rther research e$$orts into this theatic area a larger sa#le si6e co"ld 'e "sed. 2n
addition the $oc"s co"ld 'e directed towards certain sectors, so an* #ossi'le di$$erences can 'e
identi$ied. 9"rther st"dies co"ld anal*se the o##osite direction o$ the correlation researched here or
in&estigate non-linear correlations.
!he n"ero"s st"dies a'o"t .5!s and their in$l"ence on the s"ccess o$ a co#an* show the s#ecial
#osition o$ the thee. Dowe&er, an o#tial arrangeent o$ the .5!s "sing deogra#hic &aria'les
wo"ld 'e di$$ic"lt. On the one hand the internal #rocesses are not +nown well eno"ghH on the other
there are an* di$$erent in$l"ences on the le&el and s"ccess o$ internationalisation in internal and
e%ternal co#an* en&ironents. @e&ertheless this st"d* showed that the c"lt"ral di&ersit* o$ an .5!
has a #ositi&e e$$ect on the s"ccess o$ a co#an*(s internationalisation. 2t can there$ore 'e "sed as a
#oint o$ de#art"re $or $"rther conce#t"al and ethodical research into 'oth di&ersit* and senior
anageent teas.
AC@NO#/EDGEM ENTS
!he a"thors ac+nowledge the &al"a'le assistance o$ 5irMa A'erle and )ath* Iear in #roo$reading and
ada#ting the article to the #"'lishing co#an*(s g"idelines.
!he article 'ene$ited $ro highl* &al"a'le insights o$ @.9) <roMect-@o.: 712720G0R80204
COM;ETING INTE)ESTS
A"thors ha&e declared that no co#eting interests e%ist.
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