Section Fiveexample, in which positive effects are expected, is the use of
just-in-time inventory management techniques in cultures that
are compatible with the technique, such as in Japan. In Japan,
there is appreciation for efficient space utilization and group-
oriented commitment to work duties. Another example in which
positive effects are expected is by organizing marketing
activities around commonalities such as exist between the
United States and Canada, as opposed to the United States and
Indonesia. Culturally unrelated global diversification was
expected to have a negative result. For example, when
companies diversify by establishing business units in countries
with very different cultures, there is greater likelihood of
misunderstandings and communication difficulties. With greater
“cultural distances” between operations, there is need for more
complex control systems and correspondingly higher
transaction costs.^24
The study, which employed a longitudinal design,
measured performance by return on assets (ROA) and market-
to-book value (MTB). Changes in these performance measures
over various time periods were analyzed with regression
equations including several control variables. Nonetheless, in
contrast to expectations, the study found no impact on
performance for either ROA or MTB resulting from several
measures of cultural diversity. Stated optimistically, these
results could mean that companies overcome factors that