Uppsala Internationalization Model

It has been asserted that the cultural and psychic distances will control the entry pathway of firms in foreign countries (Johanson & Vahlne, 1977). The Uppsala internationalization model identifies the establishment of companies in a foreign country as very progressive and includes the cultural differences between countries as an element affecting this expansion (Johnson & Vahlne, 1977, p.30). Cultural pattern is one of the specific market knowledge a firm will acquire in the foreign market when taking decision for expansion (Johanson &Vahlne 2006, p.171). Varner and Beamer (2011) have addressed three steps to minimize or prevent cultural mistakes: first the knowledge of another culture, second being the drive to know and use the

Namely, individualism/collectivism, power distance, masculinity/femininity and uncertainty avoidance. In the analysis of cultural distance, most researchers emphasize that as the cultural distance between home and host country increases, the firm’s capability of operating effectively decreases (Gomez-Meija & Palich, 1997). Tihanyi, Griffith and Russel (2005) assert that a firm could face operational complications as a result of a large cultural distance, in general this is triggered by a lack of understanding the norms, values and institutions that are part of the social exchange across markets. Looking into a hypothetical business partnership relations between Mondelez International and Nidar AS from Nigeria and Norway respectively, the following argument is put

In low power distance societies, employees tend to feel equal and close to each other in their daily activities. In the business or work environment in Norway, the power distance is fairly low with a score of only 31 on the scale of Hofstede compared to Nigeria with a score of 80 (The Hofstede Centre, 2015). In Nigeria, there is a big gap between the employee and the boss, and a hierarchy order is accepted. It is more inequality in Nigeria, and power is less equally distributed in the way that it considers age, education and experience when assigning authority (Clearly Cultural, 2004- 2015). Assume that Nidar from Norway plans to expand to Nigeria in partnership with MDLZ, the conception that the boss-employee relationship, or the hierarchy order in the Nigerian business environment has a positive effect on organizational performance from the perspective of induction of ‘carrot and stick approach to motivation’. The proper knowledge and understanding of this benefit to productivity is expected to trigger Nidars’ decision to initiate the internationalization move to