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Country classification and the cultural dimension: a review and evaluation

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Johanna Vanderstraeten Department of Management, Faculty of Applied Economics, University of Antwerp, Antwerp, Belgium, and

Paul Matthyssens Department of Management, Faculty of Applied Economics, University of Antwerp, Antwerp, Belgium and Department of Marketing Management, Erasmus University, Rotterdam, The Netherlands Abstract Purpose – The purpose of this paper is to identify, review and evaluate international marketing (IM) studies in the domain of cultural country classification (1985-2006). Design/methodology/approach – First, articles in which an “original” classification is developed are identified. Then, the paper characteristics are summarized using Ronen and Shenkar’s characteristics. Eventually, Hunt’s evaluation criteria are used to evaluate these classifications. Findings – Summarizing and evaluating the selected papers reveals that the authors of the selected papers do not always seem to explicitly consider Ronen and Shenkar’s useful recommendations concerning questionnaire and sample characteristics. Moreover, evaluation seems to indicate that Hunt’s evaluation criteria are not always met. Research limitations/implications – It is recommended that future cultural country classification researchers consider Ronen and Shenkar’s recommendations. Moreover, researchers might explicitly specify the concept of culture and/or incorporating other influencing factors. It is also recommended that researchers develop their own classification scheme to check whether the scheme meets Hunt’s evaluation criteria. Other researchers might try to contribute to a convergence of the cultural country classification domain by empirically testing newly developed typologies; refining studies; assigning other countries; and testing comparatively existing classifications. Practical implications – Practitioners might think of grouping countries culturally for fine-tuning marketing strategy. When seeking for co-ordination and synergy, multinationals can use country cluster offices as a step-stone or alternative to more centralized, global headquarters. Originality/value – Besides, Ronen and Shenkar’s paper in 1985 – another evaluation paper in the domain of cultural country classification and IM was not discovered. The paper tries to offer some useful recommendations to both scientific researchers and practitioners. Keywords International marketing, National cultures, Culture, Classification, Market segmentation Paper type Literature review

International Marketing Review Vol. 25 No. 2, 2008 pp. 230-251 q Emerald Group Publishing Limited 0265-1335 DOI 10.1108/02651330810866308

Introduction For international marketeers, segmenting the market is necessary in order to identify a company’s target markets. Segmenting the market can be done in various ways, such as quality of life grouping (Peterson and Malhotra, 2000), regional country classification (Furnham et al., 1994; Lessem, 2001) or cultural country classification (Hofstede, 1980).

Although researchers do not agree on “the best way” of segmenting the market, we support the idea that segmentation based on cultural country similarities can be valuable for both international marketing (IM) practitioners and researchers. For IM practitioners and researchers, several questions can be raised while studying this topic, such as “What are the advantages of segmenting the world?” “Why using countries as a level of analysis when doing so?” and “What is the usefulness of considering cultural similarities?” These questions will be addressed before explaining the purpose of this research. Segmenting the world based on cultural country similarities According to Kale and Sudharshan (1987), Kreutzer (1988), Papadopoulos and Denis (1988), and Steenkamp and Ter Hofstede (2002), the basis for IM and IM expansion is segmentation and country selection. Helsen et al. (1993) are convinced of the usefulness of country-based segmentation in order to make entry and standardization decisions. The latter leads to enhanced efficiency (Kreutzer, 1988). According to Hofstede (1984), Ronen and Shenkar (1985), and Paik et al. (2000), the convergence theory can be applied within a country cluster or segment, whereas the divergence theory should be adopted between two clusters or segments. Within the same country cluster, this will result, for instance, in similar types of relationships (Matthyssens and Wursten, 2003) or equal new product promotions (Wills et al., 1991). Also other researchers are convinced of the usefulness of segmenting the world on the country level. Sriram and Gopalakrishna (1991) believe that by doing so, international marketeers can adopt similar advertising campaigns and uniform brand names in a country segment. Kale (1995) believes that cultural clustering can be very useful when selecting an appropriate marketing mix. Depending on the cultural cluster, consumers will prefer, for instance, product novelty and variety or product functionality. Next, the question is raised which basis to adopt to do the clustering. Several researchers decided to use regional proximity (Furnham et al., 1994; Lessem, 2001). Hayes and Allinson (1988), however, warn for an over-simplification. They state that countries which have ecological or climatic similarities can have very different cultural values, beliefs or attitudes. Consequently, we believe that using countries as a level of analysis should not be equalled to segmenting the world based on regional similarities. Instead, we support the use of cultural differences or similarities as a basis for market segmentation while they are deemed to have a significant impact on marketing (Hofstede and Bond, 1988; Zandpour and Harich, 1996; Ellis, 2006). Cultural differences, however, can be studied at various levels (Sivakumar and Nakata, 2001). This makes one wonder whether using national boundaries as a proxy for differentiating between cultures is an over-simplification of the “real world” or not. Within-country differences are deemed less significant than between-country differences (Hofstede, 1991; Smith and Schwartz, 1997). Although differences between subgroups cannot be ignored, several researchers decided to conduct research on cultural differences on the level of national culture[1] (Dorfman et al., 1997; Jones and Davis, 2000; Steenkamp, 2001; Cano et al., 2004; Yamazaki, 2005). Purpose of this research National cultural proximity and similarity is widely used to cluster countries (Hofstede, 1980; Ronen and Shenkar, 1985). In their milestone paper, Ronen and Shenkar reviewed

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eight cluster studies. They discussed the studies’ sample characteristics, variables, questionnaire characteristics and followed procedure and analysis, which resulted in useful remarks concerning the repeatability and applicability of these studies. Many authors used the Ronen and Shenkar clusters while examining cultural country differences (Schneider and de Meyer, 1991; Brodbeck et al., 2000), which indicates that this study has a high-academic value[2]. Nevertheless, after 1985 several authors (Kale, 1995; Hsieh, 2002) decided to develop their own cultural country classifications. We are curious to know whether these authors took into consideration the useful remarks Ronen and Shenkar made concerning classification characteristics. We, therefore, provide an overview and evaluation of the cultural country classification studies developed in the period 1985-2006 in the domain of IM. Such a literature review might help (re-)focusing the field and might signal future research opportunities. (Re-)focusing the field of cultural country classification studies in the domain of IM might be valuable because the IM domain has undergone several changes (Kotabe, 2003; Cateora and Graham, 2005). After 1985 no review or evaluation of the papers written in the domain of cultural country classifications[3] and IM has been undertaken. By providing an updated literature review and evaluation, we try to answer the following questions: RQ1. Did the authors of “new” ( ¼ post 1985) cultural country classification studies in the domain of IM take into consideration Ronen and Shenkar’s suggestions? RQ2. What is the usefulness of these classifications for the IM researcher and practitioner? RQ3. Why did these authors decide to develop their own classification scheme instead of using earlier contributions such as the Ronen and Shenkar synthesized clusters? Before trying to answer these questions, we explain the importance of classification in scientific inquiry. Classification and scientific inquiry First, the importance of classification schemes for scientific research is explained. Thereafter, the differences between typologies and taxonomies are examined. To conclude, Hunt’s (2002) criteria to evaluate classification schemes are discussed. Importance of classification for scientific inquiry Contributors to the philosophy of science and researchers alike have stressed the importance and advantages of classification systems. According to Everitt (1993), a classification scheme has the advantage of organizing data. Consequently, data can be retrieved more efficiently, and a convenient summary can easily be provided. The call for classification is deeply rooted in the philosophy of science and marketing science. Marketing research scholars Frank and Green (1971) argue that almost every major problem requires the classification of objects by several characteristics. They argue that classification is a major concern of science. Also other scholars are convinced of the importance of classifying the complex world (Hall, 1972; Carper and Snizek, 1980). Hunt (2002), a marketing theory advocate, claims that classification frameworks play a fundamental role in theory development because they are our primary means to organize phenomena into classes or groups.

Taxonomy vs typology Two procedures for generating configurations are widely distinguished: typologies and taxonomies (Carper and Snizek, 1980; Hambrick, 1983; Miller and Friesen, 1984; Hunt, 2002). When developing a typology, the researcher imposes a classificatory structure before analyzing any specific set of data. Configurations or types are conceptually determinant, not by any replicable empirical analysis. Hence, this procedure implies a lot of reasoning and a profound knowledge of the phenomenon. The resulting typologies tend to be neat and elegant. However, five distinct theoreticians might generate five distinct typologies. Taxonomies are configurations or types which are developed empirically. The scholar applies multivariate analysis to a set of objects or phenomena. He/she attempts to find natural clusters in the data and these clusters are the basis for configurations. Two researchers starting with the same database and employing the same multivariate technique must yield the same classification. However, it also implies that taxonomies are not as neat and elegant as typologies. Evaluating classification schemes Each classification scheme should be evaluated in order to determine each contribution. Hunt (2002) developed evaluation criteria, which have been used by other scholars to develop classifications (Fern and Brown, 1984; Varadarajan, 1986). The following five criteria are proposed (pp. 229-36): (1) Does the scheme adequately specify the phenomena to be classified? Hunt claims that the researchers should specify “exactly what is being categorized.” It should be clear which universe is being classified. Is it consumers, countries, products, managers’ work values, or other? (2) Does the scheme adequately specify the properties or characteristics that will be doing the classifying? This implies that two different researchers should classify the phenomena under investigation in the same group. Moreover, the question whether these properties are “the appropriate properties for classificatory purposes” is implicitly included in this criterion. (3) Does the scheme have categories that are mutually exclusive? In a sound typological scheme, no item or phenomenon should be allowed to fit two distinct classes at the same hierarchical level. (4) Does the scheme have categories that are collectively exhaustive? That means, does every phenomenon of the universe have a “home”? Surely, the inclusion of a category “others” may be a solution to this problem, but this will undermine the next point. (5) Is the scheme useful? A taxonomy or typology is not to be generated for elegance only. It should serve a scientific or pedagogical purpose. In the following section, the selected papers on country classification are evaluated using the above criteria. Research study In this part, we address three subdivisions; “method,” “overview of cultural country classifications,” and “evaluation”.

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Method While searching for published material via Web of Science and EbscoHost (Business Source Premier) on cultural country classifications with implications in the domain of IM, articles were selected when they met the following requirements: . papers should develop an “original” classification (typology or taxonomy); . this taxonomy or typology should be based on country differences in cultural values or culture-based attitudinal dimensions; . only papers in which more than one country attributed to each category are considered; and . the taxonomy or typology should have implications in the domain of IM. The following search terms were used: “country” or “culture” in combination with “cluster,” “type,” “taxonomy,” “typology,” “orientation,” “group,” “classification,” “profile,” “segmentation,” or “culture.” The wildcard symbol “ *” was utilized to broaden the search. When the number of journal articles was too high, the search was limited to the following subject terms: “business,” “management,” “economics,” and “marketing.” The adopted selection path was as follows. First, peer-reviewed journals specialized in IM and international business (IB) were examined for the period 1985-2006[4]. Then, two publisher-independent article databases were checked: Web of Science (part of the ISI web of knowledge database), and EbscoHost (Business Source Premier). Finally, after the articles from these selections were read, a number of articles were found on the basis of the literature list of these articles. Eventually, this paper selection resulted in eight studies on cultural country classification in the domain of IM[5], published in four journals[6] and one book. Before evaluating the papers, we first summarize the paper characteristics, such as response rate and questionnaire translation. Because the Ronen and Shenkar (1985) paper has a high-academic value (see earlier), and there did not occur another literature review in the domain of cultural country classifications and IM after 1985, the Ronen and Shenkar characteristics are adopted while doing so. After an overview of the examined papers is given, Hunt’s (2002) evaluation criteria are used to evaluate these classifications. We each evaluate the papers independently, after which the individual evaluations will be discussed. Consequently, a consensus will be reached. Some more information should be given about the method used to evaluate Hunt’s fifth criterion (Is the scheme useful). Deciding about the usefulness of a classification scheme is rather subjective. We, therefore, try to look at more objective sub-criteria like: . the applicability of the classification; and . the kind of citations the paper received. The first sub-criterion will be evaluated using a summary of Hunt’s other evaluation criteria. It seems logical to say that the applicability of a classification lowers when it does not meet one (or more) of Hunt’s other criteria. The second sub-criterion will be analyzed using the Chubin-Moitra classification scheme as explained in Egghe and Rousseau (1990). Chubin and Moitra developed a citation classification scheme, in which citations are first subdivided into affirmative citations and negative ones. Negative citations can be partially negative (only a part of the paper received criticism) or totally

negative (the paper as a whole received criticism). Affirmative citations are further categorized as either essential or supplementary. First, essential citations can be either basic or subsidiary. They are basic if the findings of the reported research depend on the referenced paper. They are subsidiary if the findings are not directly connected to the subject of the paper. Second, supplementary citations can be additional or perfunctory. They are additional if the referenced paper provides some additional information besides the main idea of the reported paper. They are perfunctory if they are related to the reported paper without providing some additional information. Overview of cultural country classifications The selected papers are presented in the following tables. Table I, “Taxonomies using Hofstede’s or Hall’s cultural dimensions,” gives an overview of the taxonomies in which the authors used existing work – Hofstede’s or Hall’s cultural dimensions – to reflect “culture.” An extensive description of the work of Hofstede (1980) and Hall (1983) can be found in their work[7]. Therefore, for this category of taxonomies, only a few sample and questionnaire characteristics are described, such as the variables, and the number of countries. In Table II, “Typologies,” an overview of the deductive classification papers is given. Because the authors reasoned “from above” and did not conduct any empirical research, characteristics such as the variables and sample characteristics are left away. Table III, “Combination papers,” provides an overview of the work in which the authors combined the development of a typology and an application of this logical partitioning or several taxonomies. When an original empirical research is conducted, all questionnaire and sample characteristics are used. When existing data is utilized, only the characteristics describing the “new” research are reported. Basis and intent, terminology, and country groups. As can be read from Tables I-III, the most prominent topics are advertising and branding, and relationship marketing. Six studies have been published in the second decade of our research (1995-2006). Only two studies were published between 1985 and 1994. Notable is the fact that from the eight papers reviewed, the authors of only two papers introduced a terminology for their country groups. Studies are relatively inconsistent with regard to which countries are culturally similar. For instance, Denmark and The Netherlands are appointed to the same cluster in the work of Sriram and Gopalakrishna (1991), while each of these countries belongs to a different country cluster in the work of Zandpour and Harich (1996). Nevertheless, the authors of both papers developed country groups with a purpose of standardizing international advertising campaigns in the countries belonging to the same cluster. Needless to say that this kind of contradictive results is confusing for both IM practitioners and researchers. Questionnaire and sample characteristics. While comparing the questionnaire characteristics, two features can give interesting information about the fundaments of the classification (Ronen and Shenkar, 1985): the quality of the questionnaire translation and of the questionnaire distribution: (1) Questionnaire translation. It was a back-translation used or was the questionnaire distributed in English in non-English speaking countries? The latter is less reliable. (2) Questionnaire distribution. Distribution on site or during a training program or event abroad? The latter can be a source of error.

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40 Hierarchical cluster analysis and discriminant analysis

Number of countries

Classification: procedure and analysis

Note: Country abbreviations shown in the Appendix

Variables

Questionnaire?

Terminology Country groups

Identifying candidate countries based on economically, culturally, and media availability similarity for standardized international advertising campaigns No specific terminology AR, BR, MX, YU AU, CA, HK, IE, NZ, PE, ZA, SG, UK, USA, VE AT, BE, CL, CO, FR, DE WEST, GR, IL, IT, PT, ES, CH, TW, TR DK, FI, NL, NO, SE IN, IR, PK, PH, TH JP No, use of existing macro-variables and Hofstede’s results 9 (macro) economic, 4 cultural (Hofstede: PDI, UAI, IDV, MAS), and 7 (macro) media availability/usage variables

Table I. Taxonomies using Hofstede’s or Hall’s cultural dimensions No, Hofstede’s and Hall’s results, and content analysis (1,914 commercials) 4 cultural dimensions (Hofstede: PDI, Emotional and rational advertising UAI, IDV, MAS) appeals, advertising information Advertising industry environment Culture: Hofstede (PDI, UAI, IDV) and Hall (time) 17 Television commercials: 8 Think and feel positioning map: 23 SAS centroid hierarchical clustering Positioning map procedure and non-hierarchical SAS procedure

No, use of Hofstede’s results

Think and feel positioning map: international advertising standardization

Developing marketing mixes for clusters of euro-consumers. Clustering is based on Hofstede’s cultural dimensions (PDI, UAI, IDV, MAS) No specific terminology AT, DE, CH, IT, UK, IE BE, FR, GR, PT, ES, TR DK, SE, FI, NL, NO

No specific terminology BE, NL, IT, AU AT, CA, DE, KP þ KR, USA DK, FR, HK, JP, ES, SE, TW, UK AR, BR, IN

Zandpour and Harich (1996)

Kale (1995)

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Cultural country classification: basis and intent

Sriram and Gopalakrishna (1991)

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Asian NICs and JP Third World Scandinavian countries, USA, CA Traditional countries of the first world, such as the UK

Note: Country abbreviations shown in the Appendix

Impact of culture (Hofstede’s cultural dimensions: PDI, UAI, IND, MAS) on relationship marketing

Matthyssens and Wursten (2003)

Contest, network, family, pyramid, solar system, well-oiled machine Contest: AU, CA, UK, IE, NZ, USA North America and North-western Network: DK, NL, NO, SE and Central Europe: not further Family: CN, HK, ID, IN, MY, PH, SG specified (n.f.s.) Mediterranean Europe: FR (excluding Pyramid: BR, CL, CO, EC, SV, GR, GT, IT (South), KR, MX, PE, PT, RU, Paris), ES, PT, IT, GR TW, TH, TR, UY, VE Latin America: n.f.s. Traditional cultures: JP, CN, centrally Solar System: BE, FR, IT (North), ES, CH (FRENCH) planned economies, formerly Well-oiled Machine: AT, CZ, FI, HU, centrally planned economies, and DE, CH (German) developing countries: n.f.s. The Middle East: n.f.s.

Country groups

Terminology

Culture classification model based on Interrelationship between context (high vs low) and product diffusion – time, task and relationship, applied to the global sales and negotiation how multinational corporations model – preparing for business should enhance the design and exchange with someone from another marketing of global products culture No specific terminology No specific terminology

Schuster and Copeland (1999)

Cultural country classification: basis and intent

Wills et al. (1991)

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Table II. Typologies

Table III. Combination papers

Sample volumea

Response rate Quest. translation Quest. distribution Variables

Questionnaire?

Country groups

Terminology

Cultural country classification: basis and intent

Brand image taxonomy and cultural taxonomy (Hofstede) Nation clusters based on brand image scores and nation clusters based on national characteristics ( ¼ trading blocs, level of economic development, cultural dimensions (PDI, UAI, IDV)) are compared No specific terminology

Cultural typology: functionalists, deferents, survivors, enthusiast, conservationists, achievers, situationists, absolutists, easygoers, followers, diplomats, leaders Cultural taxonomy (Hofstede): Functionalists: IE, USA, AU BE, FR, JP, ES, AU, CA, UK, NL, USA, DE, IT Situationists: AT BR, MX, TR, KR, TW, TH Deferents: EG, LB Brand image taxonomy: Absolutists: EG, LB Countries are clustered separately for each brand Survivors: AT (Volkswagen, Ford, Chrysler, Peugeot, Toyota, Easygoers: none and Fiat) Enthusiasts: HK, ID Other nation clusters (trading blocs, economic Followers: ID, EG, LB development) are not further discussed Conservationists: ID Diplomats: none Achievers: IE, USA, AU, HK Leaders: AU, USA, IE, AT Cultural typology: use of Hofstede’s results Cultural taxonomy: use of Hofstede’s results Application (ethical beliefs): original data gathering Brand image taxonomy: use of part (4,320 car owners) of data set MORPACE Mall intercept method þ shopping mall customers Existing data No, English Existing data Consumers in major shopping centres Existing data Beliefs concerning ethical implications (consumer Cultural taxonomy: 3 cultural dimensions (PDI, IDV, UAI) situations), ethical ideology, Machiavellianism, Brand image taxonomy: brand image variables cultural dimensions (Hofstede) 1,636 respondents; 8; 120 Existing data; 20; existing data (continued)

Cultural typology (Hofstede) and application (ethical beliefs) Comparison of a cultural typology based on Hofstede’s dimensions (PDI, UAI, IND, MAS) and consumers’ ethical beliefs

Hsieh (2002)

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Combination?

Rawwas (2001)

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Age: most: between 20 and 49 years old Gender Education: various Marital status Professionals, managers and employees. Not further specified None of these characteristics are reported Cultural typology: adopted from Hofstede (positioning maps: PDI and UAI; UAI and MAS; PDI and IND) Application (ethical beliefs): multiple discriminant analysis

Existing data Cultural taxonomy: cluster analysis Brand image taxonomy: hierarchical cluster analysis

Existing data

Existing data

Hsieh (2002)

Notes: aSample size; number of countries; minimum sample size of each country, borganization size; headquarters location; industry; origin of respondents; country abbreviations shown in the Appendix

Continuation of sample profileb Classification: procedure and analysis

Organization level/function

Demographic information

Rawwas (2001)

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Table III.

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Ronen and Shenkar also emphasized that while gathering original data for a “culture” study, it is important to provide information concerning both the sample profile (i.e. explicitly mentioning the response rate, demographic information, organizational level or function, organization size, origin of respondents, headquarters location and industry type) and sample volume (sample size, minimum sample size of each country, number of countries)[8]. Depending on the sample characteristics, the results of a study can only be applicable to a particular group or might have larger validity. Sirota and Greenwood (1971), for instance, emphasized that the results for participants of different organizational levels should not be compared or combined. From the eight papers reviewed, only Rawwas (2001) conducted an empirical research using original data gathering. The other authors decided to use existing databases. Consequently, we only provide some remarks concerning Rawwas’ questionnaire and sample characteristics. For instance, although he did distribute his questionnaire in countries with another mother tongue than English (e.g. Austria, Egypt and Lebanon), they were distributed in English. Moreover, he did not report any information concerning the origin of respondents. This characteristic, however, is important for all original data gathering in the cultural research domain. Then, he executed his research in eight countries. Needless to say that the more countries are involved, all the more the results are easily applicable. Evaluation As can be read from Table IV, not all papers met Hunt’s (2002) evaluation criteria. There does not seem to be a problem concerning criterion one (Does the scheme adequately specify the phenomena to be classified?). IM researchers and practitioners have a good idea of which phenomena (in this case, countries) have been classified. This seems to indicate that marketing managers can confidently use the described studies while making location decisions for “regional” centres (such as “regional” headquarters with the intent of developing products or targeting advertising campaigns towards a cluster of countries with “cultural affinity” (Usunier, 2000)). Moreover, IM researchers can probably use these studies when selecting representative countries for comparative cultural research. Several researchers (Ter Hofstede et al., 2002), though, do not agree on using countries as a level of analysis. They argue that some countries should probably be subdivided into two or more cultural regions (e.g. Belgium). When evaluating criterion two (Does the scheme adequately specify the properties or characteristics that will be doing the classifying?) it becomes clear that not all authors seem to base their classifications on objective classification criteria. In such cases, this implies that if another scholar would classify the countries examined, other country groups might emerge. We look at two sub-criteria while evaluating whether the discriminating properties or characteristics are adequately specified. First, we check whether the country characteristic dimensions are described in detail. Is the content of each dimension clear for the reader? We also check whether these dimensions have some numerical value. In other words, we want to know whether the authors used some clearly defined and measurable country characteristic dimensions. Second, we verify whether the authors used a clearly defined cut-off rate to allocate a country to a particular country group. While evaluating the studies on these sub-criteria, it becomes clear that all authors describe their dimensions in detail. However, not all authors use numerical data to “measure” these dimensions. For instance, studies using the Hofstede scores fulfil this

Typologies Yes

Yes

Yes

Combination papers Yes

Yes

Hsieh (2002)

Yes

Rawwas (2001)

Matthyssens and Wursten (2003)

Cut-off rate?

Yes

No

Brand image taxonomy: yes Cultural taxonomy: yes

Brand image taxonomy: yes Cultural taxonomy: yes

Cultural typology: no (countries in two or more groups) Yes

Yes

Yes

No

Yes, if only the countries examined are considered

Brand image taxonomy: no (not all countries are allocated to each “brand-group”) Cultural taxonomy: no (not all countries are allocated)

Yes, if only the countries examined are considered

Yes, if only the countries examined are considered

Yes, if only the countries examined are considered

Yes, if only the countries examined are considered

No, IT ¼ outlier (should be Yes, if only the countries examined are considered in two clusters: north and south IT) Yes No (AU, MX, NZ, NO unclear)

Yes

Does the scheme have Does the scheme have categories that are mutually categories that are collectively exhaustive? exclusive?

No

No

Yes

Cultural Cultural typology: yes typology: no

^ (Numerical value?) ^ (Numerical value?) Yes

Yes

Yes

Taxonomies using Hofstede’s or Halls cultural dimensions Yes Yes Yes

Schuster and Yes Copeland (1999)

Wills et al. (1991)

Zandpour and Harich (1996)

Sriram and Gopalakrishna (1991) Kale (1995)

Does the scheme adequately specify the phenomena to be classified? Dimensions?

Does the scheme adequately specify the properties or characteristics that will be doing the classifying?

Yes

Yes

Yes

^ (Traditional regions)

^ (No clear allocation of countries) ^ (Not all countries are allocated)

Yes

^ (Traditional regions)

Yes

Yes ^ (Not all countries are allocated)

Yes

Yes

Yes

^ (Italy)

Yes

Is the scheme useful? Only affirmative citations? Applicable?

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Table IV. Evaluation criteria

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sub-criterion, while studies using Hall’s (non-quantified) cultural dimensions do not. The authors of several studies do not define explicitly the cut-off rates used (Zandpour and Harich, 1996; Matthyssens and Wursten, 2003). This seems to indicate that the allocation to clusters is rather subjective. The fact that not all studies meet criterion two has implications for both IM practitioners and researchers. A classification scheme that they want to use might not (yet) have been tested empirically. Especially, typologies, with their conceptual (top-down) character, are less robust. However, they have been developed by researchers with a profound knowledge of the research domain. Consequently, one can assume that the typologies are not “randomly” developed. Eventually, though, their managerial value might be higher than their academic rigor. Criterion three (Does the scheme have categories that are mutually exclusive?) tries to check whether a country is only found in one classification group. Six out of eight papers seem to meet this criterion. However, in the work of Rawwas (2001), several countries can be found in two or more classification segments. Also papers in which a country is ambiguously allocated to a country segment do not meet criterion three (see Kale (1995), who states that Italy (an outlier) should probably be subdivided into north and south Italy). The fact that some countries are not clearly allocated to one cluster group implies that IM researchers and practitioners can probably not rely on the results for this specific country. We want to make a distinction between classification schemes in which almost all countries are found in two or more classification segments (Rawwas, 2001) and studies in which only one country is not clearly allocated (Kale, 1995). We believe that the latter is probably more robust than the first. Six out of eight papers meet criterion four (Does the scheme have categories that are collectively exhaustive?), which deals with the question whether each phenomenon has a “home.” Hsieh (2002) does not allocate all 20 countries examined to her cultural and brand image taxonomy, and therefore does not meet this criterion. In the work of Zandpour and Harich (1996), four countries are not allocated to cluster segments. It can be frustrating for IM practitioners and researchers seeking for information about the cultural affinity of a country if it is not allocated. Criterion five (Is the scheme useful?) deals with the question whether the scheme serves a scientific or pedagogical purpose. This criterion has – as explained earlier – been evaluated by looking at: . the applicability of the classification; and . the kind of citations the paper received. When examining the applicability of the classification, it becomes clear that some authors chose to examine country regions, such as Schuster and Copeland (1999), who allocate regions (e.g. “Latin America”) besides countries. Traditional cluster homogeneity has, however, been tested by various authors such as Paik et al. (2000), Lenartowicz and Johnson (2002), and Tixier (1994). The work of these authors indicates that countries of the same traditional cluster do not necessarily have the same characteristics. Also studies in which a country is not clearly allocated to a cluster segment, or in which not all countries considered are allocated, do not fully meet criterion five. Thereby, scientific and practical usefulness is limited. While analyzing the citations of the reviewed papers with the Chubin-Moitra classification scheme (Egghe and Rousseau, 1990), we only look at the citations in which authors explicitly refer to the classification scheme. We do not consider citations

in which other parts from the reported papers are cited. A literature search seems to indicate that all citations are affirmative. When looking at each citation separately, we notice that most citations can be categorized as “perfunctory.” Only few seem to be “basic.” The results of Schuster and Copeland’s (1999) study are, for instance, used to formulate hypotheses (Gould et al., 2000) and to underpin a theory (Kumar et al., 2005). The work of Rawwas (2001) has also been used to formulate a hypothesis (Rawwas et al., 2005; Zgheib, 2005). The same can be said about the work of Zandpour and Harich (1996). Toffoli and Laroche (2002) and Lepkowska-White et al. (2003) use Zandpour and Harich’s (1996) results to underpin their research hypotheses. Kale’s (1995) study has been used to explain results (van Everdingen et al., 2000) or formulate hypotheses (Hsieh et al., 2004). The fact that these papers receive affirmative citations indicates that their work is useful for both researchers and practitioners. Discussion Previous research in the cultural domain in general and specifically in cultural classifications has received some criticism (Ronen and Kraut, 1977; Bhagat and McQuaid, 1982; Ronen and Shenkar, 1985). We use these criticisms to evaluate whether progress has been made in this field. Ronen and Kraut warned in 1977 that few authors examining country clusters use quantitative data. In the eight cluster studies reviewed by Ronen and Shenkar (1985) some empirical data is used. The question can be raised whether “current” (post 1985) classifications are developed based on an empirical research study. When looking at the eight studies discussed in this paper, the authors of six studies use some kind of quantitative data (newly developed or existing databases). This seems to indicate that – when looking at the studies discussed in this paper – this research domain appears to be slightly more “robust” than 30 years ago. Bhagat and McQuaid (1982, p. 675) raised their concern about the fact that many researchers use “culture as an unspecified independent structure”. It therefore seems necessary to: . specify the concept of culture; and . incorporate other influencing factors than culture. Concerning the first aspect, we would recommend researchers to use a multidimensional conception of culture and not restrict themselves to four-dimensional (Hofstede, 1980) or two-dimensional models (Hall, 1976, 1983). Also Kale (1995) remarks that Hofstede’s results should probably not be applied without searching for other possible cultural dimensions. Unfortunately, in the eight papers reviewed, many authors (Sriram and Gopalakrishna, 1991; Kale, 1995) adopt Hofstede’s cultural dimensions to conceptualize culture without searching for other cultural dimensions. Regarding the second aspect, we notice that many authors tend to use cultural country differences or similarities to “explain” the differences or similarities concerning marketing practices such as relationship marketing or advertising. Although we tend to agree on the fact that cultural differences or similarities cannot be ignored, we do believe that – besides culture – other factors (e.g. economic, political and legal) might influence the effectiveness of marketing practices (Wills et al., 1991; Sriram and Gopalakrishna, 1991; Zandpour and Harich, 1996; Ralston et al., 2001; Rawwas, 2001; Hsieh, 2002).

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When developing new cultural country classifications, it seems obvious that researchers try to utilize recommendations made by other authors (Bhagat and McQuaid, 1982). Ronen and Kraut (1977) and Ronen and Shenkar (1985) emphasize the importance of a clearly defined sample profile and volume. However, as discussed earlier, few authors of the reviewed studies seem to follow this useful remark. Specifically, in the area of the translation of questionnaires, recommendations by Bhagat and McQuaid (1982) and Ronen and Shenkar (1985) have not been followed. Some points of interest for researchers who want to develop an “original” classification scheme are derived from Table IV (see earlier). First, researchers can probably increase the reliability and applicability of their classification scheme by explicitly describing (cultural) country characteristics. By doing so, researchers seem to avoid representing them as a “black box.” Moreover, other scholars and practitioners can probably better understand why a particular country is attributed to a certain category if researchers using numerical values representing dimensions clearly describe the cut-off rate. In addition, other (not yet categorized) countries can probably be categorized more easily. Second, scholars have to allocate each country to a category, and to only one category (mutual exclusivity). Moreover, if a country appears to be an outlier, researchers can possibly consider subdividing this country into two or more cultural regions, or at least reflect on its position, rather than merely excluding it from their “neat” classification. By doing so, the classification scheme can be more “robust,” which presumably increases the applicability of the classification. We argue that the era of divergence in the domain of cultural country classification has passed, and that there exists an urge for convergence. So far, IM researchers do not seem to build on existing research results. Eventually this has resulted in a proliferation of “competing” classification schemes. Often, researchers start “from scratch,” building their own typology or taxonomy instead of refining the existing classification schemes. Consequently, future IM researchers could try to refine earlier results, such as Schuster and Copeland’s (1999) broad cultural country groupings. When adopting existing classifications in research, such as studies testing the effectiveness of IM strategies or marketing mix elements in different countries or country groups, researchers should make their choice of cultural classifications more explicit. So far, researchers do not seem to make a conscious selection of the existing classifications, nor do they seem to use multiple classifications to test the robustness of their research. Studies such as Jackofsky et al. (1988) and Townsend et al. (1990) do not provide any explanation for their choice of classification. Regarding practitioners, this study argues that IM managers might think of grouping countries culturally for fine-tuning their marketing strategy. When seeking co-ordination and synergies, multinationals might use country cluster offices as a step-stone or alternative to more centralized, global headquarters and “regional” offices. Depending on the topic and goal, we recommend marketing managers to try out different classification schemes for different purposes. Country clusters based on work goals can be more suitable for establishing organizational and HR approaches for subsidiaries or alliances abroad, whereas other cultural classification schemes are probably more useful for the differentiation of relational marketing and advertising strategies. We also recommend IM managers to continuously question their own country groupings. Following up on new country classification studies (either testing or comparing existing schemes or developing an alternative classification) might lead

to a re-allocation of some countries and a re-thinking of marketing mix approaches towards a country or a group of countries. Conclusion and future research We try to answer our three research questions (see earlier), incorporating recommendations for future research. Firstly, while describing the research characteristics of the eight selected papers, it became clear that not all empirical studies take into account Ronen and Shenkar’s (1985) useful remarks concerning questionnaire and sample characteristics. Although future cultural country classification researchers might first want to evaluate whether all recommendations are useful for the research they are planning to execute, they should at least consider them explicitly. By doing so, they can probably improve the reliability and validity of their research, which in turn can considerably advance the IM research domain. We also recommend future researchers to specify the concept of culture and/or incorporate other influencing factors than culture (see the “discussion” section for further explanation). Secondly, we have discussed the fact that some of the selected papers do not meet Hunt’s (2002) evaluation criteria. Consequently, both IM researchers and practitioners have to take into account that the classifications’ usefulness can be rather low. In general, we believe that researchers could use Hunt’s evaluation criteria as follows: first, they might explicitly check whether the classification scheme they have developed or refined meets these criteria. By doing so, they can probably increase the reliability and repeatability of the classification scheme (see also the “discussion” section for a summary of some points of interest). Second, researchers might use our “ratings” of the selected papers to know which aspects of the existing classifications can be refined. Some future research directions contributing to a convergence of the cultural country classification research domain are: . To empirically test newly developed typologies. By doing so, these classification schemes can probably become more robust, which in turns can advance the cultural country classification research domain. . To refine studies in which countries are ambiguously allocated to two or more country clusters. Moreover, geographic areas such as “Latin-America” could be subdivided into two or more country groups. . To assign other countries to the classification schemes in which only a few countries are examined. That way, the classification scheme could be enriched. Currently, IM researchers and practitioners need to be “lucky” that the countries they are interested in are examined in the selected papers. . To test comparatively existing typologies and taxonomies in order to evaluate their robustness. So far, classification schemes seem to exist “independently” from another. To answer our third research question, we believe that researchers develop their own classification schemes instead of using the Ronen and Shenkar (1985) synthesized clusters because in each domain, cultural influences can differ. We believe that cultural influences are different when searching for “best” HR practices as compared to “best” IM decisions. Even within a particular domain, different country clusters can probably emerge when examining different aspects. Cultural country groups used to develop advertising

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campaigns might be dissimilar from relationship marketing cultural country groups. We, therefore, would urge for the development and testing of different cultural classification schemes along different marketing intents (e.g. advertising, relationship marketing). We also believe that the existing classification schemes could – as explained in the previous paragraphs – be refined by future researchers. By doing so, future researchers can contribute to a convergence in the domain of cultural country classifications.

246 Notes 1. That national culture has been examined during various decades, proofs the extensive amount of articles which emerges in databases such as EbscoHost Business Source Premier or Web of Science. For example, when searching for “nation * cultur *” in the Web of Science database (Social Science Citation Index), 452 articles in the subject categories business, management and economics are found (July 18, 2007). 2. The Ronen and Shenkar (1985) study has been cited by several researchers. On July 18, 2007, this paper had been cited 230 times in the Social Science Citation Index of the Web of Science. This database indexes more than 1,725 journals across 50 social sciences disciplines, and it indexes individually selected, relevant items from over 3,300 of the world’s leading scientific and technical journals. Most of the citations occurred in the management (56.09 percent) and business (55.23 percent) disciplines (remark: some of the papers could be classified in two or more disciplines). 3. There did occur other review studies in the international market segmentation domain, such as a study from Steenkamp and Ter Hofstede (2002), who reviewed the international market segmentation literature. They did not, however, specify their research to the cultural dimension. 4. The following peer-reviewed journals were selected and checked for the period 1985-2006: in the domain of IM: Advances in International Marketing, International Journal of Advertising, International Journal of Market Research, International Journal of Research in Marketing, International Marketing Review, Journal of International Marketing, and The International Review of Retail, Distribution, and Consumer Research; in the domain of IB: International Business Review, International Journal of Management Reviews, International Studies of Management and Organization, Journal of International Business Studies, Journal of International Management, Journal of World Business, and Management International Review. For some journals, the reviewed period had to be limited to the electronically available data. Advances in International Marketing was electronically available for the period 2000-2006; International Journal of Management Reviews for the period 1999-2006; The International Review of Retail, Distribution, and Consumer Research for the period 1990-2006; Journal of International Marketing for the period 1993-2006; International Business Review for the period 1993-2006; and Journal of International Management for the period 1998-2006. 5. We first executed our literature search considering the same requirements as listed under “Method,” but without restricting ourselves to the marketing domain. We found 19 papers having implications in the domain of IM or IB. These were: Rosenstein (1985), Evans et al. (1989), Sriram and Gopalakrishna (1991), Wills et al. (1991), Altman (1992), Quelch (1992), Kale (1995), Myers et al. (1995), Smith et al. (1996), Zandpour and Harich (1996), Trompenaars and Hampden-Turner (1997), Schuster and Copeland (1999), Hsieh (2002), Ralston et al. (2001), Rawwas (2001), Gupta et al. (2002), Hofstede et al. (2002), Drost et al. (2002) and Matthyssens and Wursten (2003). When only considering papers with implications in the domain of IM, eight papers remained: Sriram and Gopalakrishna (1991), Wills et al. (1991), Kale (1995), Zandpour and Harich (1996), Schuster and Copeland (1999), Hsieh (2002), Rawwas (2001) and Matthyssens and Wursten (2003).

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Appendix. Country abbreviations AL AR AU AT BS BE BO BR BG CA CL CN CO CR CZ DK EC EG SV FI FR GE DE GR GT

Albania Argentina Australia Austria Bahamas Belgium Bolivia Brazil Bulgaria Canada Chile China Colombia Costa Rica Czech Republic Denmark Ecuador Egypt El Salvador Finland France Georgia Germany Greece Guatemala

HK HU IN ID IR IE IL IT JM JP KZ KP KR KW LB MY MX MA NA NL NZ NG NO PK PE

Hong Kong Hungary India Indonesia Iran Ireland Israel Italy Jamaica Japan Kazakhstan Korea (North) Korea (South) Kuwait Lebanon Malaysia Mexico Morocco Namibia The Netherlands New Zealand Nigeria Norway Pakistan Peru

PH PL PT QA RO RU SG SK SI ZA ES SE CH TW TH TR UK USA UY VE YU ZM ZW

Philippines Poland Portugal Qatar Romania Russian Federation Singapore Slovak Republic Slovenia South Africa Spain Sweden Switzerland Taiwan Thailand Turkey United Kingdom United States of America Uruguay Venezuela Yugoslavia Zambia Zimbabwe

Corresponding author Johanna Vanderstraeten can be contacted at: [email protected]

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251

Table AI.