International Supply Chain Management

Paper Summary:

The paper focuses on the theory that 'distance' between two countries is manifested along the following four basic dimensions: are cultural, administrative, geographic and economic. The paper first assesses the utility of these dimensions of distance as a strategic tool for companies seeking to develop international markets and supply chains. The paper then shows how linguistic and cultural distance is the most severe of all the four dimensions, followed by administrative, geographical and finally economic distance as the least in the range of severity.

Outline:
Objective
Introduction
Attributes of Cultural Distance
Attributes of Administrative Justice
Attributes of Geographical Distance
Attributes of Economic Distance
Summary and Conclusion

From the Paper:

"Ghemawat states that the attributes of a country's culture "determine how people interact with on another and with companies and institutions." (2001) Ghemawat holds that trade between countries who have a common language "will be three times greater than between countries without a common language." (2001) This sounds reasonable as trade is much enhanced by the ability to communicate information about the product and in discussing pricing of the product. One can certainly imagine the difficulty of trade negotiations in which neither party understands the other and product and pricing information is obscure or even unknown due to barriers of language. Ghemawat (2001) states that while some attributes of cultural are easily "perceived and understood...Others are more subtle." For example, there are social norms, described as "deeply rooted system[s] of unspoken principles that guide individuals in their everyday choices and interactions" which are "often nearly invisible" and this is true even for those "who abide by them." (Ghemawat, 2001)"

Sample of Sources Used:

• Boerner, Beatrice Barbara (2008) Flat or Not: World Economies, Here Comes Business! Oxford Business & Economics Conference Program. Online available at: http://www.gcbe.us/2008_OBEC/data/Beatrice%20Barbara%20Boerner.doc
• Ghemawat, Pankaj (2001) Distance Still Matters: The Hard Reality of Global Expansion. Sept 2001. The Tool Kit.
• Lavie, Dovev; and Miller, Stewart (nd) The Performance Implications of Alliance Portfolio Internationalization Learning within and Across Organizational Boundaries.

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