Is there an illusion of symmetry in cultural distance from Asia–pacific Emnes? the role of business groups in navigating cultural distance through ambidextrous learning

• Published in: Asia Pacific journal of management 2023-09, Vol.40 (3), p.1169-1215
• Main Author: Venkateswaran, Ramya T.
• Format: Article
• Language: English
• Subjects: Business and Management; Culture shock; Emerging markets; Management; Multinational corporations; Organizational learning; Organizational structure
• ISSN: 0217-4561; 1572-9958
• DOI: 10.1007/s10490-022-09811-2

Do emerging market multinational enterprises (EMNEs) from the Asia–Pacific region experience cultural distance in the same way that developed economy firms do? In swapping the focal home country position from developed economies to emerging economies, we examine whether the ‘illusion of symmetry’ of the cultural distance construct prevails. When EMNEs make strategic decisions about cross-border equity ownership, they are driven by the critical need for learning. We study the internationalization of Asia–Pacific EMNEs and explore how the organizational form of the business group (BG) influences the learning behavior of EMNEs while they navigate cultural distance. We perform a multilevel analysis of 400 acquisitions made by Indian firms across several industries into 38 host countries between 1990 and 2015. We find that the BG organizational form provides structural and contextual antecedents to strategic ambidexterity by leveraging the absorptive capacity and cross-cultural experience of the BG through simultaneous exploratory learning (entailing lesser control) and exploitative learning (entailing greater control). Our results hold good for other group-affiliated EMNEs from the Asia–Pacific region as well and contribute to multiple streams of literature.