Cultural distance and customer orientation strategy of Chinese service MNEs under the belt and road initiative. Issue 3 (14th May 2021)

• Record Type: Journal Article
• Authors: Li, Hui; Xu, Lei; Fan, Youqing
• Is Part Of: Cross cultural & strategic management. Volume 28:Issue 3(2021)
• Page Start: 657
• Page End: 678
• Publication Date: 2021-05-14
• Subjects: Chinese service MNE -- Cultural distance -- Customer acquisition -- Customer retention; Management -- Cross-cultural studies -- Periodicals; Management -- Social aspects -- Periodicals; International business enterprises -- Management -- Social aspects -- Periodicals; Diversity in the workplace -- Periodicals; 658.4
• DOI: 10.1108/CCSM-08-2020-0165
• Languages: English
• ISSNs: 2059-5794

Abstract

Abstract : Purpose: The purpose of this paper is to explore mechanisms of cultural distance in the base of Chinese Service Multi-National Enterprise (MNE) settings. When attempting to enter overseas markets, many service MNEs face challenges caused by the cultural distance between the home and host countries. Culture distance attracts much attention in academia and industry. However, there are few empirical works to examine how cultural distance affects customer orientation strategies in a global supply chain. This paper aims to answer the following research question: How is the effect of cultural distance on customer acquisition and customer retention strategies, and the effect of customer orientation strategies on the performance of service-oriented MNEs controlled by Chinese capital along the Belt and Road Initiative? Design/methodology/approach: This paper examines the effect of cultural distance on the customer acquisition strategy and customer retention strategy, and the effect of customer orientation strategies on the performance of Chinese Service MNEs. A large-scale empirical study of Chinese Service MNEs operating in overseas markets is performed and questionnaires were distributed and collected. This paper uses Hofstede's method (Hofstede, 2010 ), Schwartz's method (Schwartz, 2003) and House et al. 's method (House et al., 2004) to calculate cultural distance. By using each kind of method, this study calculates the absolute culture distance and relative culture distance respectively. Findings: The results suggest that cultural distance negatively affects customer orientation strategy, customer acquisition strategy positively affects performance and the interaction of customer acquisition and customer retention positively affects performance. Research limitations/implications: This study aims to contribute to the existing literature with a more fine-grained understanding of the inclusion of customer orientation strategy of Chinese Service MNEs in global supply chains. Practical implications: The findings outline several important implications that Chinese Service MNEs seeking to expand to overseas markets. Originality/value: This paper contributes a novel, combined perspective of culture distance and customer orientation strategy.