Cultural Differences and Supply Chain – Case Study Example

Download full paperFile format: .doc, available for editing

Kohlbacher & Krähe (2007) stated that the expansion of organizations in the global market creates a daunting need to ensure that the subsidiaries operate with the same efficiency and competence that is desired by the main establishment or headquarters. The regional offices should be able to understand the vision of the company and deliver the same excellence that has been the company’s trademark. To achieve this excellence, it is necessary for every establishment to be equipped with the required knowledge. Creation of knowledge is a continuous process and needs to be updated at all the regional offices and subsidiaries so that every office works in the same direction with the same vision.

The distributed nature of a global supply chain makes the creation and transfer of knowledge a necessary process to achieve competitive advantage and success. 3. Cultural Differences and Supply Chain Different researchers have identified different factors that affect the flow of knowledge and thus the learning effectiveness in global supply chains. Bresman (1999) identified some factors that pose a threat to the effectiveness of knowledge creation and transfer in a global setup; absence of personal relationships within peers and absence of trust and support.

The third factor that was identified by him was cultural differences between the different units thereby causing resistance and frictions in the transfer of knowledge. Barkema (1999) defined cultural distance as the factor that raised the need for transfer of knowledge and also the traits that serve as an obstruction in the process of knowledge transfer. These obstructions may constitute the difference in language, customs, values or business ethics etc. Monckza (1998) contributed a valuable notion that supply chain performance is not directly affected by the cultural differences.

On the contrary, it is only indirectly affected. He explained his idea by stating that cultural differences may cause a lack of trust among the concerned parties, along with minimal communication. Stanley (2003) supported this notion and added that the commitment level between the supply chain partners might not be as strong as witnessed amongst the partners from the same culture. Wilding (2003) proposed traits of effective relationship among the supply chain units- 3Ts of highly effective supply chains.

These 3Ts were time, transparency and trust. As stated earlier, cultural differences may cause a lack of trust because of which the relationship between the participating supply chain units may suffer.


Barkema, HG, Shenkar, O., Vermeulen, F., & Bell, JHJ, 1997, ‘Working Abroad, Working with Others: How Firms Learn to Operate International Joint Ventures’, Academy of

Management Journal, vol. 40(2): 426-442

Bresman, H., Birkinshaw, J., & Nobel, R 1999, ‘Knowledge Transfer in International Acquisitions’, Journal of International Business Studies, vol. 30(3): 439-462

Davenport, TH & De long DW, Beers MC 1997, ‘Building Successful knowledge management projects’, Managing the Knowledge of the Organization, Ernst and Young LLP.

Dan, I 2010, China Supply Chain Problems: Maybe Its All in Your Head, viewed 30th August 2010, <>

Gupta, AK, & Govindarajan, V 2000, ‘Knowledge Flows within Multinational Corporations’,

Strategic Management Journal, vol. 21(4): 473-496

Hudson, S 2005, Cultural Affects on the Global Supply Chain, Supply Chain Resource Cooperative, viewed 30th August 2010, <>

Hofstede, G 1991, Culture and organizations: software of the mind. McGraw-Hill,

London. (n.d.) Supply Chain Risk: Culture Shock, viewed 30th August 2010, <>

Hauke, A 2006, ‘Impact of Cultural Differences on Knowledge Transfer in British, Hungarian and Polish Enterprises’, MS Thesis, The Poznan University of Economics, Poland

Kohlbacher, F. & Krähe, M. O. B 2007, ‘Knowledge creation and transfer in a cross-cultural context—empirical evidence from Tyco Flow Control’, Knowledge and Process Management, vol. 14: 169–181

Lee, DJ, Pae, JH & Wong, YH 2001, ‘A model of close business relationships in China (Guanxi)’, European Journal of Marketing, vol. 35(1/2), pp.51.

Monczka, RM, Petersen, KJ, Handfield, RB & Ragatz, GL 1998, ‘Success factors in strategic supplier alliances: The buying company perspective’, Decision Sciences, vol.29, No.3, pp.553.

Minbaeva, D., Pedersen, T., Björkman, I., Fey, C F, & Park, HJ 2003, ‘MNC knowledge transfer, subsidiary absorptive capacity, and HRM’, Journal of International Business Studies, vol. 34: 586-599.

Nonaka, I 1990, ‘Managing Globalization as a Self-renewing Process: Experiences of Japanese MNEs’, In C. A. Bartlett, Y. Doz, & G. Hedlund (Eds.), Managing the Global Firm, 69-94. London:Routledge.

O’Dell, C. & Grayson, C 1997, ‘Identifying and transferring internal best practices. Best Practice’, White Paper, American Productivity and Quality Centre.

Stanley, T 2003, ‘Knowledge transfer across countries and cultures: An international theory building case study’, MS Thesis, Queensland University of Technology

Sanchez, R 2003, ‘Tacit Knowledge” versus “Explicit Knowledge” Approaches to Knowledge Management Practice’, MS Thesis, Copenhagen Business School

Smith, EA (n.d.), The role of tacit and explicit knowledge in the workplace, viewed 30th August 2010, <>

Schulz, M 2001, ‘The Uncertain Relevance of Newness: Organizational Learning and Knowledge Flows’, Academy of Management Journal, vol. 44(4): 661-681.

Wilding, RD 2003, ‘The 3Ts of highly effective supply chains’, Supply Chain Practice, vol. 5(3).

Zhu, Z 2004, ‘Knowledge management: towards a universal concept or cross-cultural contexts?’ Knowledge Management Research & Practice, vol. 2(2): 67-79.

Download full paperFile format: .doc, available for editing
Contact Us