Rethinking Ethnocentrism in International Business Research

• DOI: http://doi.org/10.1002/gsj.1159
• Author: Janne Tienari,Rebecca Piekkari,Marianne Storgaard,Snejina Michailova
• Date: 01 November 2017
• Published date: 01 November 2017

Rethinking Ethnocentrism in International Business

Research

Snejina Michailova,

1

*Rebecca Piekkari,

2

Marianne Storgaard

3

and Janne Tienari

4

1

Department of Management and International Business, The University of

Auckland Business School, Auckland, New Zealand

2

Department of Management Studies, International Business, Aalto

University School of Business, Helsinki, Finland

3

Department of Entrepreneurship and Relationship Management,

University of Southern Denmark, Kolding, Denmark

4

Department of Management and Organization, Hanken School of

Economics, Helsinki, Finland

Research summary: For nearly five decades, international business (IB) research in

general and the literature on organizational design and staffing of multinationals in

particular have treated ethnocentrism mainly as an adverse attribute. Limited attention

has been paid to the disciplines that originally established the concept—anthropology,

sociology, and psychology. These disciplines have examined ethnocentrism as a posi-

tive, neutral, or negative phenomenon with a complex hierarchical structure. IB litera-

ture, in turn, has almost exclusively adopted a negative view, suggesting that

ethnocentrism hinders adoption of a global strategy. This article borrows insights from

the three base disciplines to rethink the concept of ethnocentrism in IB research and to

draw implications for global strategy research. The article also calls for a more care-

ful borrowing of concepts from other disciplines.

Managerial summary: This article is about ethnocentrism. Ethnocentric people tend to

believe that their group, organization, culture, or ethnicity is superior to others. Ethno-

centrism can exist in international business, for instance, where home country staff con-

sider themselves superior to foreign staff in other countries. In international business

research, ethnocentrism is usually considered undesirable, something that should be

eliminated. However, sociology, anthropology, and psychology, where the concept was

originally established, have adopted a wider, far more nuanced and intellectually richer

view that also acknowledges the neutrality and benefits of ethnocentrism. We draw on

this more refined view to rethink ethnocentrism in international business and show

implications for global strategy research. Copyright © 2017 Strategic Management

Society.

Introduction

The concept of ethnocentrism has a nearly 50-year

history in international business (IB) research. It

can be traced back to Howard Perlmutter’s article

“The tortuous evolution of the multinational

corporation,”originally published in French in

Keywords: ethnocentrism; multinational corporation; interna-

tional business research; base disciplines; concept borrowing

*Correspondence to: Snejina Michailova, 12 Grafton Road,

Auckland 1142, New Zealand. E-mail: s.michailova@auckland.

ac.nz

Copyright © 2017 Strategic Management Society

Global Strategy Journal

Global Strategy Journal, 7: 335–353 (2017)

Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/gsj.1159

1965 and in English in the Columbia Journal of

World Business in 1969. Perlmutter (1969,

p. 11) pointed out that ethnocentric executives

regard themselves as “superior to, more trust-

worthy, and more reliable than any foreigners in

HQ or subsidiaries.”By capturing the degree of

multinationality existing in the “state of mind”

of a firm’s managers, he explicitly connected

managerial cognition with the firm’s global strat-

egy (Perlmutter, 1969, p. 11; see Kaplan, 2011,

for a review of cognition in strategic manage-

ment). He argued that the collective attitudes of

managers toward “foreign people, ideas, [and]

resources”impact the quality of decision making

with regard to organization design, control, com-

munication, people management, and the identity

of the internationalizing firm’and ultimately

its long-term viability (Perlmutter, 1969, pp.

11–12).

There is general agreement in the IB literature

that ethnocentrism refers to a universal attitude

among individuals according to which “their par-

ticular version of what is and what should be is

the best and that all other systems of knowledge

and belief are not only different from but inferior

to their own”(Wortzel & Wortzel, 1985, p. 412,

emphasis in original). The bulk of IB research not

only regards ethnocentrism in itself, but also its

effects, as negative; it is said to hinder adoption

of a global strategy. Such thinking is particularly

evident in research on the organizational models

of the multinational corporation (MNC) as well

as on international human resource manage-

ment (IHRM).

The concept has been mystified to a great

extent by the lack of active debate on ethnocen-

trism in IB research. Mystified concepts tend to

be used routinely and are preloaded with a partic-

ular meaning. As a result, they rarely elicit ques-

tions; they are “mind-numbing either because they

are worn smoothly into platitudes or because they

are fraught with emotion and/or taboo and confu-

sion”(Minnich, 1990, p. 96). In order for such

concepts to be better understood, they need to be

revisited and their meaning questioned and

challenged.

How can this be done? Several scholars have

pointed out that complex phenomena (and ethnocen-

trism is one of these) are best understood from multi-

ple disciplinary perspectives (Birnbaum, 1981;

Cheng, Henisz, Roth, & Swaminathan, 2009).

A careful consideration of how anthropology,

sociology, and psychology

1

have treated ethnocen-

trism reveals a perspective that is different from the

negative view held by IB research for decades.

Anthropology, sociology, and psychology have

examined ethnocentrism theoretically and empirically

in a substantial and detaile d manner over a considera-

bly longer time span than the IB discipline, starting

back in 1900. IB scholars, however, have not

invested the effort needed to study theconcept of eth-

nocentrism thoroughly and to engage cognitively

with it. For this reason, we,

2

as IB scholars, have

largely failed to capture its intellectual richness and

functional utility, which could have liberated and

advanced our collective thinking and empirical work.

Instead, we have incrementally furthered the overall

storyline that eth nocentrism is negative and that it is

disadvantageou s to MNC strategies and must, there-

fore, be overcome. In other words, we seem to have

developed a strong negative taste for the concept and

have become emotional users of it. In other words,

we have “domesticated”(Oswick, Flemming, &

Hanlon, 2011, p. 318) ethnocentrism in a rather

unfortunate manner; we have missed its multifaceted

nature and largely ignored the fact that it could be

neutral or beneficial, as acknowledged and documen-

ted in the base disciplines.

In this research platform article, we argue that

the negative treatment of ethnocentrism in IB liter-

ature is limiting and outdated and propose a more

nuanced definition of the concept. Inspired by the

base disciplines, we argue that ethnocentrism does

not necessarily involve superiority or hostility in

relation to others and that it is not unequivocally

detrimental to MNCs. In fact, when ethnocentrism

is understood as a neutral or positive phenomenon,

it can be nurtured and used constructively in both

designing and implementing MNC strategies. Our

analysis invites the IB community to revisit the

existing literature on ethnocentrism and to pose

new research questions that can potentially rein-

vigorate scholarly work on global strategy. At a

more general level, we make a case for more care-

ful and systematic borrowing of theoretical con-

cepts from other disciplines, thereby offering a

contribution to long-standing discussions about

1

Markóczy and Deeds (2009, p. 1077) call these disciplines

“base”or “mother”disciplines, while Whetten, Felin, and

King (2009, p. 537) refer to them as “underlying”disciplines.

We primarily use the former.

2

We consider ourselves IB scholars and communicate this

part of our scholarly identity by intentionally using “we”

rather than “they.”

336 S. Michailova et al.

Copyright © 2017 Strategic Management Society Global Strategy Journal, 7: 335–353 (2017)

DOI: 10.1002/gsj