An exploratory study of cultural differences and perceptions of relational risk

This working paper is part of a research project examining the role of culture and culture differences in foreign partnerships. We build on prior research on culture distance to explore the influence of perceptions of cultural differences on perceived relational risk. Perceived relational risk is defined here as the degree of satisfaction of being involved in business activities with nationals of a given country. Contrary to expectations, preliminary analysis suggests that cultural differences are sometimes perceived as a desirable characteristic and may be associated with lower relational risk. We speculate that culture distance is an asymmetric construct in which the perception of a cultural difference may be interpreted as positive or negative depending on the perspective from which the reading is made and the nature of the task in which the perception is formed. Plans for future research are discussed