Managing Business Relationship Development: A Cross-Cultural Perspective

Cross-cultural issues have been put forward to explain the high failure rate among American firms doing business in China and vice versa. This study focuses on investigating the strategic orientations and behaviors of subsidiaries in business relationship development (BRD) for multinational firms with bases in both countries. In particular, it explores how local managers perceive the effectiveness of BRD and cope with issues between the parent company and the local environment. The study conducted multiple-case studies, based on examination of documents, observation and extensive interviews with local managers from four multinational firms. It provides an integrated perspective for increasing the success of BRD for a subsidiary’s manager dealing with interactions between the organizational culture of its parent company and the subsidiary’s environment. The research focuses on understanding how organizational culture may conflict with a subsidiary’s local environment and affect the local manager’s strategic orientation. Finally, the study introduces major additional factors: how the founder’s professional background and personal business beliefs moderate an organization’s culture, and how a local manager’s background moderates a subsidiary’s strategic orientation for BRD, which in turn produces different performance expectations.