The purpose of this paper is to examine and compare the validity of different operationalizations of cultural and institutional distance.
First, a review of the theoretical background for Hofstede's, Schwartz's, Trompenaars's, and Global Leadership and Organizational Behavior Effectiveness' (GLOBE) cultural frameworks is provided, as well as the institutional environment. Then, the validity of each framework is assessed by evaluating how well each framework groups countries into appropriate clusters, and finally comparisons between the different frameworks are drawn.
It was found that the cultural distance (CD) constructs based on Hofstede and Trompenaars have strong convergent validity. CD constructs based on Schwartz and GLOBE are found to have the weakest validity. The institutional distance (ID) constructs are conceptualized to be broader than the traditional CD constructs. However, high correlations indicate a strong overlap between ID and CD. Additionally, the ID constructs are highly correlated with factors related to economic development, potentially limiting their usefulness.
Both researchers and practitioners can choose from a variety of CD/ID frameworks to fill their needs; however, variance in the performance between frameworks may lead to faulty conclusions. In response to this need to accurately capture cross‐cultural differences, the validity of nine different operationalizations of CD/ID have been examined. Contrary to popular belief, the traditional CD construct based on Hofstede is shown to compare favorably with other frameworks and calls for the abandonment of this index may be premature.
Magnusson, P., Wilson, R.T., Zdravkovic, S., Xin Zhou, J. and Westjohn, S.A. (2008), "Breaking through the cultural clutter: A comparative assessment of multiple cultural and institutional frameworks", International Marketing Review, Vol. 25 No. 2, pp. 183-201. https://doi.org/10.1108/02651330810866272
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