Distance Frameworks

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Distance

Notes

  1. Distance is not always a negative factor
  2. Different industries can be more or less sensitive to distance (ex. A place that manufactures large, heavy products would find geographic distance more troubling than a company that provides a phone service that can be easily translated.)

Hofstedede Framework

  • Tries to determine cultural distance
    • Power distance - obedience and respect for family and authority
    • Uncertainty avoidance - how trusting people are (includes job security)
    • Individualism - role of government in providing for citizens
    • Masculinity - importance of family and work

CAGE

Cultural

  • differences in languages, ethnicities, religious, norms

Administrative Distance

  • Difference in bureaucratic patterns owing to cultural ties, preferential trade agreements, common currency, legal systems

Geographic Distance

  • Actually greatest circle distance
  • Lack of a common border
  • Weak transportation or communication
  • Time zone difference

Economic Distance

  • Difference in GDP
  • Differences in infrastructure and resources
  • Difference in inflation rates
  • How much trade the country has with the rest of the world.

Institutional Dimensions of Distance

  1. Economic
  2. Financial
  3. Administrative
  4. Cultural
  5. Demographic
  6. Knowledge
  7. Global conectnedness
  8. Geographic