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Cultural Differences

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Cultural Differences
Hofstede (1984) have determined that Korea's culture is one of the most dissimilar cultures from that of the U.S. According to Hofstede, Korea can be characterized as follows: large power distance, authoritarian, collectivistic, and strong uncertainty avoidance. The U.S. is, basically, at opposite ends of the continuums associated with each of these characteristics. The U.S. has low power distance, is more participatory, is individualistic, and has low uncertainty avoidance. These types of differences have the potential to create conflict and, consequently, impact the level of trust and organizational commitment of managers confronted with situations involving managers from another culture. In the context of U.S. companies doing business in Korea, conflict may occur over such issues as how decisions are made, perceptions of what makes for appropriate relationships, and how authority is to be handled (Chung and Lee, 1989). These conflicts can, consequently, result in lowered trust and less organizational commitment.
Organizational Commitment
According to Sommer et al., (1996), organizational commitment is the construct most often researched to explain employee attachment or loyalty to an organization. Even though various terms have been used to describe the different elements of organizational commitment, most researchers agree with the three dimensions proposed by Mowday et al., (1982). These are "identification" as a proud member of the organization, "involvement" as a willingness to contribute, and "loyalty" as a desire to stay. however, Banai and Reisel (1993) effectively reduced the dimensions of the organizational commitment construct to two factors: loyalty/ identification and involvement. They found that loyalty and identification actually explain the greatest percentage of the variance in commitment. Furthermore, they found a significant correlation between the loyalty and identification dimensions in the first factor. Additionally, loyalty has been identified by many researchers as one of the most important dimensions of the organizational commitment construct (Cook and Wall, 1980). Accordingly, we use "loyalty/identification" to parsimoniously represent organizational commitment and will use the terms loyalty and organizational commitment interchangeably.
Research has shown a high correlation between organizational commitment and turnover intentions. Employees who think about leaving their jobs usually search for other jobs, If better opportunities are found, they quit. If not, they may withdraw emotionally or mentally from their jobs, which equates with lower productivity and lack of loyalty (ceg, Chen & Francesco, 2000). Banal and Reisel (1993) investigated the impact of various antecedent conditions such as role, nationality, age, rank, and seniority, on the level of managerial organizational commitment for PCNs and HCNs. They did not, however, investigate the effect of entry mode on the level of loyalty of managers, information that can have significant implications for global human resource management and strtegic entry mode decisions. Regardless, none of these studies directly compare the loyalty of local managers with that of PCN managers under different types of organizational and cultural settings such as wholly-owned subsidiaries versus joint ventures. Given the importance of decisions that are associated with the choice of entry mode, it is surprising that the relationship between entry mode and level of commitment in terms of loyalty has been continuosly neglected in research.
As Shenkar (1995) notes employees in IJVs experience a problem unique to these types of organizations. that problem is one of split loyalty. This conflict results from concerns of employees that if they promote the goals of one entity, the other entity may be adversely affected (Shenkar and Zeira, 1987). For instance, individualistic PCNs may feel that if they are more loyal to the newly-formed IJV than they may hurt their chances for opportunities back in the parent company because of percieved disloyalty. Highly collectivistic HCNs may feel that loyalty to the IJV rather than to their parent organization is disloyalty to their cultural or original parent company ingroup.
In a WOS, the problem of split loyalty is not likely to occur, at least not to the same extent that it would in an IJV (Shenkar, 1995). In other words, the U.S. managers working for the wholly-owned subsidiaries are less likely to suffer a "split identity" or "multiple loyalty dilemma" (Park, 1991) since, in most cases, the expatriate manager will share the same national ity/identity with the parent company. Under this kind of setting, the U.S. managers can devote undivided attention to their parent company's interests.
Actually, in the context of a WOS, the loyalty of both groups of managers is most likely to be with the foreign parent company. There is no local parent who can protect or advocate for the local managers' interests when interests of the local managers and those of the foreign owner or expatriate managers collide. Unlike in an IJV, the managers in a WOS do not anticipate returning to another parent company to which they need to remain loyal (Shenkar and Zeira, 1987). This kind of situation forces HCNs to be more loyal than their counterparts (local managers) working for joint ventures.

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