25.4 The Convergence–Divergence
Debate
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While recognizing criticisms of Hofstede’s work, the importance of national
culture is an enduring issue in international business research (Peng 2004 ).
Much of the discussion surrounding the implications of national cultural diversity
is related to the convergence–divergence debate, which is widely viewed as an
important issue in the management of transnationalWrms (Myloni et al. 2004 ).
Since Kerr et al. ( 1960 ) presented the thesis that the organizational and institutional
patterns of industrial societies are converging, or becoming more similar, despite
disparate politics, ideology, and cultures, many researchers have explored not only
similarities and diVerences across cultures worldwide, but whether these are
dynamic.
The convergence hypothesis suggests that there is increasing similarity in organ-
izations and managerial practices worldwide, based on the argument that the
common requirements of management—or a common logic of industrialism—
disregard the importance of cultural diVerences. Additionally, contextual contin-
gencies, such as the growth in worldwide communications and travel and greater
interdependence and collaboration between organizations and nations (Doz and
Prahalad 1991 ), are seen to be factors eroding diVerences between organizations
and management practices.
If national cultures are indeed converging, then a universalist approach to
management practices would be expected to emerge; this would enhance the
transfer of managerial practices between units of a multinational corporation
and, therefore, global coordination. However, since the 1970 s, the convergence
hypothesis has received substantial criticism and is regarded by many leading
scholars as overly simplistic and optimistic (Leung et al. 2005 ).
These criticisms, then, lend support to the divergence hypothesis, whereby
organizations maintain their culturally based dissimilarities (Adler et al. 1986 ).
In contrast to the convergence hypothesis, the divergence hypothesis postulates
that the form and content of functional specialization that develops with
growth would vary according to culture. According to the divergence hypothesis,
any attempt to integrate units of a transnationalWrm must take into account
the diVerentiation inherent between units. The divergence argument is that
diVerences in approaches to management practices are enduring; these diVer-
ences are predominantly attributed to a ‘country of origin eVect,’ generally
assumed to be produced by the interaction of local culture and institutional factors
(Aycan 2005 ).
transnational firms and cultural diversity 513