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Running Head: THESIS 1
THESIS 2
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good, you are going in the right direction, I have added some
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Thesis name: The discussion about the influences from cultural
differences and educational level on knowledge sharing during
the strategical alliances.
Abstract
This paper studies the impact of cultural differences and
educational levels on group identity and the effect that that
group identity has on knowledge sharing behavior in employees.
The findings are that cultural differences as well as education
levels have impacts on group identity. In addition, group
identity is found to have an influence on knowledge sharing
between employees.
Contents
Abstract 2
1. INTRODUCTION 4
Hypothesis 5
2. DEFINING THE CONCEPTS 7
i. Individualism and collectivism8
ii. Power distance 9
iii. Uncertainty avoidance 10
iv. Long-term and short-term orientation 11
v. Masculinity and femininity. 12
High- and low context 13
3. METHODOLOGY 13
4. ANALYSIS AND FINDINGS 14

4.1. Influence of Cultural Differences on Group Identity and
Overall Influence in Knowledge Sharing 14
4.2. Influence of Education Differences on Group Identity and
Overall Influence in Knowledge Sharing 18
5. CONCLUSION AND DISCUSSION 18
5.1. Conclusion 18
5.2. Limitations and Future Research 19
6. References 20
1. INTRODUCTION
Knowledge remains one of the most significant resource for any
given firm (Grant, 1996a: 375). New knowledge is essential in
all organizations, it contributes to the innovation,
organizational change, cost-reduction routine performance and
their survival. Knowledge provides the organization the
opportunities to improve their capacity and their market
position. Nowadays strategic alliance has become a common
cooperation form in the modern economy. In the past years,
strategic alliances have significantly increased, since 1900
strategic alliances have increased by more than 25 per cent
annually. (Andrew, 1998) Organizations recognized the
importance of the strategic alliance, which is during the
strategic alliance, knowledge exchange occurs in each party.
Because of this, more and more organizations increase their
motivation to do strategic alliances with other parties in order
to get the benefits associated with knowledge exchange.
Alliances are offer ways in which organizations can make
proper use of their strengths by the help of their partners.
Different organizations have different knowledge and skills.
Therefore, alliances are unique avenues through which
organizations can work together, share this knowledge and
unlock their potentials (Hamel et al., 1989). Comment by
Author: Clear introduction. Perhaps for the section on
knowledge you can include a reference. Comment by Author:
Here I would also include a reference, I think this is a clear

intro as to why organizations aim for strategic alliances.
Comment by Author: Other?
Cultural differences affect people’s behavior in many aspects,
during the organization of strategic alliances, people from
different cultures or society behave differently. People from the
same cultural group are more likely to form a group identity
which can influence the knowledge exchange during the
strategic alliances. According to Hofstede (1997), the value
systems that exist in our societies play a pivotal role in shaping
people’s behavior and cannot be separated from the manner they
look at the world. However, it is difficult to facilitate
knowledge exchange in strategic alliances, and we do not know
how different cultures can influence the knowledge exchange
differently. Education level can also be a factor which can
influence the result of the knowledge exchange. During the
strategic alliances, knowledge sharing towards the target
program is critical. In today’s competitive markets, knowledge
sharing is critical for firms’ success (Grant, 1996). In the
strategic alliance’s case, knowledge sharing can influence two
or more firm’s success. Employees’ educational level can
influence the knowledge exchange process. Employees with
high educational level can learn the tacit knowledge more
efficient than the people who have a lower educational level.
(Steven et al., 2008). In addition, because of no fear of the
replacement, people with high educational level have more
motivation to share the knowledge with others. Comment by
Author: Here you jump from cultural differences to group
identity, yet the group identity is not yet explained to the
reader. Perhaps you can first introduce both concepts, and then
make the bridge between the two.
Perhaps start off with that strategic alliances form diverse
environments for companies, expecially international strategic
alliances, meaning that they will thus encounter cultural
differences in their operation. Comment by Author: Here I
think this is a good bridge to your gap and contribution, perhaps

you can provide a reference, and show that while we know
cultural differences are important in cooperation, its effects on
knowledge exchange (especially in strategic alliances) is yet
underexplored which is where your study comes in. Hypothesis
Hypothesis 1: Culture differences shape people behavior which
can form a group identity, the subgroup which formed by small
cultural differences can lead to high efficiency in the knowledge
transfer process during the strategic alliance. Comment by
Author: Generally the hypotheses come after you introduce the
theory, they are seen as a logical conclusion of what you build
up to based on prior literature (hence I would move them to the
end of this section, first describe them then mention them).
Hypothesis 2: Difference in educational level can influence the
employees’ motivation to share the knowledge with others,
different behavior can form different group identities, and it can
lead to different results in knowledge transfer during the
strategic alliance.
According to Sceiby (1997), knowledge is an immaterial
resource and is found in the mind of the individual who holds it.
Blau (1964) argues that when individuals are in some sort of an
exchange, they expect that a balance between the parties will be
maintained. While the individual behavior is strongly affected
by their culture. Culture is a complex amalgamation of
knowledge, belief, art as well as other capabilities and habits
that are acquired by man as a member of society. (McCort and
Malhotra, 1993). Individuals have their social value embedded
in their behaviors affected by their social norm and value which
is called national culture. National culture formed by collective
values, norms and principles shared in national communities
that guide people’s behavior and interactions (Hofstede, 2001,
House et al, 2004 and Ghemawat, 2001).
van Beers et al. (2018) argue that people tend to share
knowledge based on the perceived benefits that will be accrued
from their knowledge sharing behavior. As such, people with
various educational levels have different ways of perceiving the
benefits gained from a given knowledge sharing environment

(van Beers et al., 2018). People with higher levels of education
tend to see more avenues to gain benefits in knowledge sharing
set ups and will be, therefore, be predisposed to share
knowledge with others in their groups than those with lower
education levels (van Beers et al., 2018). Meanwhile, even
though some scholars suggested that cultural differences and
educational level can influence the knowledge sharing in a
given organization, there is no evidence to prove the
relationship between culture difference, educational level and
knowledge exchange in strategic alliances. In this thesis, I focus
on answering the central question which is: Comment by
Author: How so? This would be interesting to go into more
detail on why this is the case, it would help you make your
point for the contribution of the study.
RQ: how do cultural differences and different educational
levels of employees influence knowledge exchange among
employees of different organizations during strategic
alliances.
In order to clarify the relationship between cultural differences,
educational level and knowledge exchange during the strategic
alliances, I introduce a mediation variable which is group
identity. People with similar preference are more likely to form
the same group identity. (Yan.C et al., 2009). For instance,
people who are from a similar culture society or people with
higher educational level are more likely to form a group
identity, they will share the same social value and norm in this
subgroup, therefore, their behavior is similar with other group
members, within this subgroup, people will have fewer conflicts
and communication biases, so the knowledge sharing process is
more likely to occur and the efficiency of this process is
relatively high. Comment by Author: I think this is good, you
can spend some more explanation as to what group identity is (it
does not become fully clear from your intro) and how it is
linked to knowledge exchange. 2. DEFINING THE CONCEPTS
Group Identity Comment by Author: I think this is clear, you
can include a short section at the end where you translate this to

your own context
i.e. in the context of our study, organizational identity therefore
relates to the … that employees experience in a strategic
alliance.
Group identity is described as sense of belonging to a certain
group of a person. More specifically, group identity involves
the social influence in a group. The social influence is based on
a given social category or the interpersonal relations between
members of a given group. Ho et al. (2012) present group
identity as a precursor for trust and social relationships between
employees from a given organization or between organizations.
The trust then facilitates knowledge sharing between the
employees.
Knowledge Sharing Comment by Author: Is the definition in
the first few sentences also based on Ho et al.?
Knowledge sharing involves exchange of information among
people, organizations or communities. In organizations,
knowledge is regarded as an asset and is critical in creating as
well as maintaining competitive advantage. Knowledge sharing
has been seen as a major way of gaining as well as sharing
information in business alliances other than mergers and
acquisitions. Ho et al. (2012) explain that for knowledge
sharing to occur successfully within an organization, employees
need to trust each other. As indicated above, trust is based on a
person’s group identity, indicating that group identity acts as a
mediation in knowledge sharing.
On Cultural Differences and their Impact on Self Identity and
Overall Effects on Knowledge Sharing in Strategic Alliances
So as to test the relationship between cultural differences and
knowledge sharing during the strategic alliances, I introduce
two main theories, the first theory is from Hofstede’s culture
dimensions. According to Hofstede (1980), cultural differences
are from 5 dimensions, individualism and collectivism; power
distance; uncertainty avoidance; Long-term and short-term
orientation; Masculinity and femininity. Comment by Author: I

think this is good to let the reader know which theories you
base your study on, that helps them manage the expectations for
your model.
i. Individualism and collectivism
Individualism on the one hand is the level to which a country’s
people prefer to act as individuals rather than as members of a
group (Hofstede, 1994, p. 6), it stresses the individual goal and
the right of an individual person. Collectivism on the other
hand is characterized by close-knit social frameworks where
people are either in-group or out-group and people within an in-
group are expected to look after each other and feel that they
belong to the group (Hofstede, 1980b, p. 45). According to
Sumner (1906), the distinction that exists between in-groups
and out-groups is the major distinction between collectivism
and individualism. In-groups are made up of individuals who
share values and interest s that are common to all of them
(Triandis, 1988. They are concerned about each other’s welfare
and could be members of a family, co-workers or people who
share religious and political affiliations. Individualism is based
on self and is concerned with individual orientation as well as
performance while collectivism advocates for harmony and
cooperation.
Because the knowledge sharing behavior is strongly implied by
culture dimensions, the sharing and harmony value held by
collectivism culture would take the knowledge sharing behavior
between in-group members, I raise the hypothesis 1a: people
from collectivist society are more likely to share the knowledge
with others during the strategic alliances. Comment by
Author: I think the overview of what collectivism/individualsm
does is clear. You can make a bit of a further explanation as to
how it is linked to knowledge sharing. (i.e. what are the features
of knowledge sharing that are important/affected by cultural
values, what are the reasons that it affects it? Comment by
Author: And then in a one or two sentences translate this to the
alliance context.

“Therefore, if an organization engages in a strategic alliance
with a company that is… they will experience…
ii. Power distance
Power distance defines as “the extent to which a society accepts
the fact that power in an institution or an organization
distributes unequally” (Hofstede, 1980b, p. 45). When the
power distance is high, employees expect their leaders to be
dominant, take charge, and give strong direction (Kirkman et
al., 2009). In this case, people from a large power distance
society are less likely to share knowledge with other people.
Because they think the decisions should be under the scope of
leadership. (Cole et al., 2013; Hu & Judge, 2017; Tyler, Lind, &
Huo, 2000). Besides that, people who are from a small power
distance country, people desire more power sharing (Earley,
1999), the result of the power sharing is that the leaders will be
attentive to members’ input and enable individual members to
share information and speak up (Ou et al., 2014; Owens &
Hekman, 2016). Comment by Author: I think this is clear.
Perhaps you can also introduce a sentence or two (before the
hypothesis) where you explain a bit more explicitly how things
work in the alliance context (how does what the literature says
translate to your context).
Therefore, I raise the hypothesis 1b: Employees from small
power distance societies are more likely to share knowledge
with others during the strategic alliance.
iii. Uncertainty avoidance
Uncertainty avoidance index takes into consideration the level
or extent to which a given uncertainty or an ambiguity is
tolerated. This dimension assesses how a given unknown
situation or unexpected occurrences are dealt with (Hofstede,
2003). The dimensions are expresses as:
a. High uncertainty avoidance index. Cultures with high
uncertainty avoidance index have low tolerance for

uncertainties and ambiguities. They are highly risk averse. To
minimize the unknowns, the cultures employ very strict rules
and regulations (Hofstede, 2003). People within societies that
have high uncertainty avoidance index form groups that have
low social connections and less trust especially towards people
with whom they have had no prior interactions with.
b. Low uncertainty avoidance index. Cultures with this
dimension have high levels of tolerance for uncertainties and
ambiguities. They are risk lovers. There is open acceptance of
the unknown and the rules and regulations are lax (Hofstede,
2003). People within societies with low uncertainty avoidance
index are quick to extend trust to others. As such, they are able
to share knowledge with more ease with people whom they have
had no prior interaction with.
Chang et al. (2020) say that there is a relationship between
uncertainty avoidance index and group identity. In addition,
group identity informs knowledge sharing behavior. According
to their study, groups that have higher uncertainty avoidance
indices tend to view knowledge sharing as a process through
which they may not benefit in. Such employees are uncertain
that they will learn back from their colleagues after they have
themselves shared their own knowledge. As such, they tend to
be less motivated to share knowledge (Chang et al., 2020).
Employees within settings that have low uncertainty avoidance
indices are less skeptical about the possibility of learning new
information back from the people with whom they are in
knowledge sharing strategic alliance with. Comment by
Author: This would be interesting to go into more detail on,
what are the reasons for this connection, how does this
connection take shape?
iv. Long-term and short-term orientation
This dimension takes into perspective the extent to which a
given society or culture looks at its time horizon. Long-term
orientation on the one hand is more focused on the long-term
future rather than the short term (Hofstede, 2003). As such,

people with long-term orientation are happy to delay their
success or gratification on the short term so that they can
achieve long-term success. Such people are more concerned
with persistence, perseverance as well as growth in the long-
run. Short-term orientation on the other hand focuses on the
near future, with efforts put to earn short-term success or
gratification and emphasizes on the present rather than on the
long-term future. It also emphasizes quick results (Hofstede,
2003).
People tend to form groups according to their orientation. As
such, there are groups with long-term orientation as well as
those that have short-term orientation. On the one hand, groups
with long-term orientation have been seen to have knowledge
sharing behavior (Bashir & Usuro, 2017). Such groups are
focused on working together over the long term future and to
deliver group success over the long time into the future. As
such, they tend to have more knowledge sharing behavior
compared to short-term orientations that is far more competitive
and focused on short-term success (Bashir & Usuro, 2017).
v. Masculinity and femininity. Comment by Author: I was
curious why you did not form hypotheses for these sections like
you did in the earlier hypotheses? Perhaps you could do so for
all sections (to be consistent).
This dimension focuses on a society’s preference regarding
achievement, sexual equality and behavior. Masculinity is also
regarded as “tough”. It is characterized by distinct gender roles,
assertiveness and is more focused on material achievements as
well as gathering wealth. Femininity on the other hand is
characterized by more fluid gender roles, modesty, nurturing
behavior and focuses on the quality of life rather than wealth
creation. Femininity is referred to as “tender” (Hofstede, 2003).
Kasmir et al. (2010) argue that there are higher levels of trust in
groups that exhibit femininity which leads to higher incidents of
knowledge sharing. Masculine groups exhibit high levels of
competitiveness and mistrust leading to lower levels of

knowledge sharing. Kasmir et al., 2010)
1. On Communication Context and Its Effect on Group Identity
and Overall Impact in Knowledge Sharing in Strategic Alliances
The second theory we used in this paper is from Hall (1976)
high- and low- context culture which illustrates the different
communication styles from the different culture.High- and low
context Comment by Author: I think this is clear, yet the link
with identity is not yet made from this paragraph. Perhaps you
can still show how the high and low context related to group
identity
The communication context is the physical framework within
which communication occurs. High-context cultures are highly
reliant on the context and members of such societies form close-
knight relationships, are stable and collectivist and hold
interpersonal skills in high esteem (Wu, 2010). Low-context
cultures on the other hand has lesser regard to context and are
heavily reliant on verbal communication. People within groups
that have low context form short-term relationships. Van den
Hooff & den Ridder (2004) indicate a higher connection
between communication context and knowledge donating as
well as knowledge gathering. Groups with high communication
contexts were seen to have higher levels of knowledge sharing
behavior (Van den Hooff & den Ridder, 2004). 3.
METHODOLOGY Comment by Author: For the literature
review you can extend this description in further detail. I.e.
what journals did you use, how many articles did you find, what
keywords did you use to find your articles?
It might help to explain your search strategy as transparently as
possible, and in the different steps you took (i.e. finding
articles, checking which ones are useful, how did you
include/exclude them).
Finally, you can include a table with an overview of the amount
of articles you found per stage, and another table where you
state how many articles come from what journal.

This research aims at establishing how cultural differences as
well as different education levels influence employees’ group
identity and how the group identity affects knowledge sharing
behavior by employees from two different organizations in a
strategic alliance. As such, I perform an exploratory study based
ion literature review where literature on the above mentioned
themes are analyzed and developed in order to gain new insights
on the main concepts. I extract major concepts from previous
studies in the area of study and thereby identifying information
relevant as per the research questions.
Literature relevant to this study were identified through initial
overviews of the abstracts of articles in the research subject.
Once a relevant source was identified, further in-depth analysis
was done. 4. ANALYSIS AND FINDINGS Comment by
Author: Perhaps you can include a short introductory paragraph
with how you will structure this section and how you go about
answering your research question.
4.1. Influence of Cultural Differences on Group Identity and
Overall Influence in Knowledge Sharing
The link between cultural differences group identity and its
overall influence on knowledge sharing behavior is best looked
at based on Hofstede’s cultural dimensions theory.
Individualism and Collectivism Comment by Author: What I
think would be nice is if you could summarize every section in
a proposition
i.e. based on these findings, we propose the following
relationship between individaulsism/collectivism and knowledge
sharing: …
Jetten et al. (2002) found out that people who exist in
individualistic settings have high group identification levels. As
such, the people are more predisposed to incorporate the social
norms of the societies that they live in into their actions.
However, such norms include competitiveness and limited
levels of trust and therefore find it difficult to share knowledge

with other people, especially when those other people do not
belong to the same society as the persons who hold the
information (Jetten et al., 2002). Comment by Author: How
come, what are the reasons for this? Comment by Author:
This is clear.
Casimir et al. (2012) further argue that collectivists have lower
group identification levels compared to individualists. Their
collectivist norm, however, drives them to trust each other and
take care of each other thereby with a view to working towards
a common goal. They are therefore more likely to be more
involved in knowledge sharing behavior (Casimir et al., 2012).
Power Distance
Kirkman et al. (2009) link high power distance with low group
identity. Since high power distance societies place most of their
responsibilities on their leaders and employees feel lower need
to share power, they feel that they are less identifiable with a
given group that is there is low group identity. Jetten et al.
(2002) argue that employees who accept highly skewed
leadership power are less liberal and are less likely to
contribute to a knowledge sharing set up as they are more
prepared to wait and learn rather than share new information
themselves. People in lower power distances treat each other
almost as equals and easily identify with the social groups
within which they exist. They are also more liberal (Kirkman et
al., 2009). As such, they share they are more likely to share
information with other employees in a strategic alliance.
Comment by Author: This sentence is not fully clear to me.
Perhaps you can explain more explicitly how this happens.
Uncertainty Avoidance Index
Employees from societies with high uncertainty avoidance
indices are more skeptical than those in societies with lower
uncertainty avoidance indices. They are more likely to avoid
risks and have low group identity (Ho, 2013). This low group
identity that is caused by risk averseness is also manifested in
low knowledge sharing behavior. Employees from societies with
low uncertainty avoidance indices are less risk averse and

identity more with their groups (Chang, 2020). Such risk loving
behavior which is a characteristic of their group identity is
manifested in their predisposition to share knowledge with
others. Comment by Author: Would like to see a bit more on
this relationship, since this sounds interesting to your overall
research question, the why/how for this relationship.
Long-term and Short-term Orientation
Societies with long-term orientation were seen to identify more
within their groups as decisions and actions are based on long-
term success and are more concerned with the success of the
group at as a whole. As such, they are characterized by
collaborative working (Bashir & Usuro, 2017). This
collaborative behavior bolsters knowledge sharing in strategic
alliances. Short-term orientation is seen to have less group
identification. Employees with short-term orientation identify
less with their groups and are more focused on short-term
success and gratification of the self rather than of the group at
large. As such, they tend to hold on to knowledge so that they
can use it for themselves and gain success in the short-term
(Sheldon & McGregor, 2000). They are less likely to engage in
knowledge sharing behavior since it is less to bring
instantaneous success for them.
Masculinity and Femininity
Masculinity was seen to lead to low group identity based on
high competitiveness levels in masculine societies while
femininity has high group identification based on less
competitiveness and high cooperation (Early, 1964). Masculine
groups have lower knowledge sharing behavior compared to
feminine groups. This is because group identities of highly
masculine societies encourage competition and success of the
self rather than collaboration and shared success. As such, they
hold such acts as knowledge sharing in low esteem and would
be happier to hold on their knowledge rather than share it with
another organization in a strategic alliance. Femininity is more
concerned with this collaboration and shared success and
therefore is more predisposed to encourage knowledge sharing

since it is a collaborative act in itself.
Communication Context
High communication context societies exhibit closely knit
characteristics where employees are highly identifiable with the
groups that they exist in. When such a group characteristic as
collaboration is highly cultivated in such a group, chances are
that knowledge sharing will be encouraged and widely
practiced. Therefore, such a group identity that is based on
collaboration encourages knowledge sharing (Blau, 1964). Low
communication context is characterized by lower group identity
as employees are less closely knit in their activities and
therefore exhibit low group identity. Such a group identity is
based on less open communication and therefore leads to less
knowledge sharing behavior (Cole et al., 2013). In strategic
alliances, employees from organizations that have high
communication contexts will not only experience successful
knowledge sharing but also experience knowledge movement
with more ease compared to those that have lower
communication contexts. The employees who have experienced
high communication context will always be ready to take
responsibility. As such, they feel that it is their duty to
effectively represent their companies and act the best possible
way that is in the interest of their organizations. In this case,
this would mean engaging in more knowledge sharing activities
as expected of them by their organizations and take it upon
themselves to further gather knowledge from their peers form
the different organization to ultimately benefit the organization
for which they work for.
Influence of Education Differences on Group Identity and
Stabuger (2009) asserts that educational levels determine the
group identity of individuals. People with high educational
levels are more likely to identify with their groups than do
people with lower education levels. There is less conflict with
the group identities of highly educated professionals which
makes it easier for them to work together and are more

predisposed to share knowledge with each other (Stabuger,
2009).
4.2 Influence of Education Differences on Group Identity and
Stabuger (2009) asserts that educational levels determine the
group identity of individuals. People with high educational
levels are mor e likely to identify with their groups than do
people with lower education levels. There is less conflict with
the group identities of highly educated professionals which
makes it easier for them to work together and are more
predisposed to share knowledge with each other (Stabuger,
2009). In strategic alliances, this group identity comes into
play. Employees who have higher education levels will find it
easier to interact with each and share information with each
other. More often than not, they are conscious of what they need
to learn from their peers from another organization and will
work actively collaborate with them to gain and share
knowledge. Conflicts that characterize interactions between
people with lower education levels, exhibited in their low group
identity are one of the reasons why it would be very difficult for
knowledge to be shared by them. Comment by Author: Here,
what is the reason that Stabuger argues for, how come that
people with high educational levels are more likely to do so?
Comment by Author: I think that overall this section is
clear and going in the right direction.
Some parts that I am still missing are the theoretical
contributions (how do your findings relate to existing research,
to the ‘gap’ that you identify in the introduction).
What are the practical contributions (what is the take-away that
managers should care about, what should they learn for their
practice?)
Finally, you can go into some further detail for the future
research directions, perhaps find 1 or 2 interesting areas that

you found, and explain why these are promising for further
research, and what we can learn from them. 1. CONCLUSION
AND DISCUSSION
1.1. Conclusion
The literature review above has explored the main concepts of
cultural differences, educational levels, group identity and their
overall impact on knowledge sharing in a strategic alliance of
two organizations. I have identified and developed linkages
between cultural differences and educational levels to group
identity. I have identified further linkages between group
identity and knowledge sharing behavior between employees.
The following conclusions have been made from the study.
First, cultural differences between individuals inform their
group identities. Their group identities then inform how they
make decisions, that is, people who identify with a group tend
to perform actions and make decisions based on social norms.
When social norms are encouraging collaboration and
knowledge sharing, then the employees are more predisposed to
engage in more knowledge sharing behavior. When people
identify with groups that discourage knowledge sharing, such as
individualism, masculinity, short term orientation and low
communication context, then knowledge sharing will be less
likely to be successful. Second, educational levels are linked
with group identities. People with high educational levels are
more likely to identify with their groups than do people with
lower education levels. There is less conflict with the group
identities of highly educated professionals which makes it
easier for them to work together and are more predisposed to
share knowledge with each other. Lastly, as indicated in the two
conclusions above, group identity plays a pivotal role
knowledge sharing between employees. Therefore, it is
important for the two organizations seeking to form a strategic
alliance to take into consideration their employees’ cultural
differences and educational levels as they would influence their
knowledge sharing behavior. Comment by Author: Perhaps

you can mention (without going into too long of an explanation,
as I know that there are quite a few things to discuss) what
directions you found (i.e. what was positive, what was
negatively related to group identities). Comment by Author:
This sentence in itself does not argue much, when people
encourage x, they do x. Perhaps you can state why, or how?
1.2. Limitations and Future Research
While this research has no doubt shed new light on the
relationship between educational levels and group identity, the
literature regarding that subject is limited. There is need to
carry further research to evaluate the relationship between
education levels and group identity to further support the
findings of this research.
2. References
Academy of Management Learning & Education Vol. 7, No. 2
(Jun., 2008), pp. 189-208 (20 pages)
Bashir, S., & Usuro, A. (2017). The relationship of long-term
orientation with knowledge sharing in virtual
community. Communications of the IIMA, 15(2), 4. Retrieved
from
http://scholarworks.lib.csusb.edu/cgi/viewcontent.cgi?article=1
384&context=ciima
Blau, P. M. (1964). Exchange and Power in Social Life. New
York: Wiley and Sons.
Casimir, G., Lee, K., & Loon, M. (2012). Knowledge sharing:
influences of trust, commitment and cost. Journal of knowledge
management. Retrieved from
https://www.emerald.com/insight/content/doi/10.1108/13673271
211262781/full/html?journalCode=jkm
Chang, Y. W., Hsu, P. Y, Shiau, W. L., & Cheng, Y. S. (2020).
The effects of individual and national cultures in knowledge
sharing: A comparative study of the US and China.
In Information Diffusion Management and Knowledge Sharing:
Breakthroughs in Research and Practice (pp. 513-532). IGI

Global. Retrieved from https://www.igi-global.com/chapter/the-
effects-of-individual-and-national-cultures-in-knowledge-
sharing/242147
Cole, M. S., Carter, M. Z., & Zhang, Z. (2013). Leader-team
congruence in power distance values and team effectiveness:
The mediating role of procedural justice climate. Journal of
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(Mar., 2009), pp. 431-457 (27 pages)
Abstract:
In todays interconnected world, businesses have become more
and more integrated
with society, which is the result of their increasing expansion
and involvement on

the international stage. Corporate Social responsibility (CSR)
has in that regard
become an important activity to partially manage this
globalization and the related
responsibility. Therefore, this paper aims to examine the role of
CSR when firms
expand abroad. In the first part of this paper the core themes:
CSR, shared value,
internationalization, competitive advantage, firm performance
and distances are
explained, where after the different types of CSR and their
potential impact on
internationalization is discussed. After explaining the
underlying reasoning behind
this literature review, the relationship between CSR and
competitive advantage,
firm performance abroad and distances are examined to assess
the role that CSR
can play when firms internationalize. The findings suggest that
CSR can play a
positive role when firms expand operations across borders.
Key words: Corporate Social Responsibility; CSR;
Internationalization; Competitive
advantage; FSA; Distance; Firm performance.

CSR’s role in the internationalization
process of firms
Economic and internationalization benefits next to social,
environmental and
reputational advantages.
Halil Ibrahim Deniz
s2973863
University of Groningen
Faculty of Economics and Business
BSc International Business
Supervisor: L. Em
Word Count: 5966
P266430
Rechthoek
2

Table of contents
1. Introduction 3
1.1. Background of the study 3
1.2. Problem statement, research question and sub-research
questions 4
1.3. Relevance of the study 5
2. Defining the concepts 7
2.1. Corporate social responsibility and Shared value 7
2.2. Internationalization 7
2.3. Competitive advantage 8
2.4. Firm performance 9
2.5. Distance 10
3. Types of CSR and their potential impact 11
4. Methodology 12
5. Analysis and findings 14
Relationship between the concepts 14
5.1. CSR’s role in creating competitive advantages 14
5.2. CSR’s role in achieving higher firm performance abroad 15

5.3. CSR’s role in overcoming distances 17
5.4. CSR’s role in the internationalization process 19
6. Conclusion and discussion 21
6.1. Conclusion 21
6.2. Limitations and future research 21
7. References 22
3
1. INTRODUCTION
1.1. Background of the study
Nobel Prize winner Milton Friedman said: “there is one and
only one social
responsibility of business--to use its resources and engage in
activities designed to increase its
profits so long as it stays within the rules of the game, which is
to say, engages in open and free
competition without deception or fraud”(Friedman, 1970: 6).
However, this does not entirely
hold anymore in today’s globalized world, in which the
interconnectedness between firms and

their business environment makes it inevitable to take decisions
without taking in consideration
the firm’s stakeholders (Harris et al., 2009). In that sense has
Corporate Social Responsibility
(CSR) become an important activity for firms in order to be
ethical and not only legal in their
actions when conducting business.
Prior research (Cegliński & Wiśniewska, 2016; Ebrahim &
Rangan, 2014; Porter &
Kramer, 2006; Sprinkle & Maines, 2010) suggests that CSR can
be an important mechanism to
attain reputational advantages, while it can also be a source of
improvement, innovation and
competitive advantage. Furthermore, Porter and Kramer (2011)
have extended the CSR concept
and found out that CSR can also be a source of economic
success when it addresses social and
environmental challenges present in the business environment,
and this resulted in the
development of the concept ‘’shared value’’, which will be
explained in detail later on. Thus,
it suggests that firms can better expand operations and therefore
achieve a higher firm

performance when they integrate CSR in their business model.
Hence, when the domestic market stagnates or when the growth
potential at home is
limited, CSR can to a certain degree be a mechanism to help
firms to internationalize (Feller,
2016). CSR can therefore play a positive role when firms decide
to expand operations across
borders.
4
1.2. Problem statement, research question and sub-research
questions
Engaging in CSR does not suddenly make firms capable to
operate in a foreign market.
Several factors (distances, FSAs, local responsiveness,
resources and capital) are important to
consider when firms want to successfully internationalize in
order to achieve a high firm
performance abroad (Feller, 2016). Initially there are two
elements of high importance to
consider when firms are planning to internationalize since they
are one the first aspects firms
should evaluate before expanding operations abroad (McCarthy,

2018: 29). Firstly, firms must
either possess or have to be able to develop non-location bound
firm specific advantages
(FSAs). Secondly, a firm must be able to overcome the liability
of foreignness, which are the
set of costs ‘’based on a particular company’s unfamiliarity
with and lack of roots in a local
environment’’(Zaheer, 1995: 343), so they have to the overcome
the distance between the home
and host market. Nevertheless, this does not take away that
many other factors can influence
the success of an internationalization process.
In this literature review several types of CSR will be explained,
as well as their impact
upon the pre- and post- internationalization process, in order to
determine the role that CSR can
play when firms decide to internationalize. For a CSR strategy
to be able to positively affect
the internationalization process, a firm must embrace a broad
vision of CSR, in which a
company’s social and environmental activities should be aligned
with its business purposes and
values, in which coordination and a logic connecting various
CSR programs by senior managers

or even the Corporate Executive Officer are necessary (Rangan,
Chase, & Karim, 2015).
Therefore, this research focuses on CSR and the role it plays
when firms expand
operations abroad. The reason for this is that in today’s
globalized era multinational
corporations (MNCs) are seen as expanding at the expense of
the broader society (Porter &
Kramer, 2011) and many global challenges require the expertise
and scalable business models
5
of the private sector (Kramer & Pfitzer, 2016). Corporate social
responsibility has in that sense
become an important tool to tackle these challenges.
Therefore, to theoretically examine the relationship between
CSR and
internationalization the research question of this literature study
will be as follow:
What role does corporate social responsibility play when firms
expand operations
across borders?

To research the impact of CSR upon the internationalization
process it must first be
determined what impact CSR has on the development of (non-
location bound) FSAs, what role
it plays in overcoming distances and how it helps to increase
firm performance abroad, since
these elements influence whether and how successful the
internationalization process will be.
Hence, this paper will be divided in several sub-sections in
which the following sub-research
questions will be addressed:
I. How does corporate social responsibility help firms to
develop a competitive
advantage?
II. How does corporate social responsibility help firms to
overcome distances
between home and host country?
III. How can corporate social responsibility help to increase
firm performance
abroad?
1.3. Relevance of the study
Various researchers have already investigated the benefits that
CSR can provide when

firms deal with social and environmental challenges. Porter and
Kramer (2006) already pointed
out that firms can improve their competitive context when
pursuing CSR activities, because
they perceive CSR not only as a way to be a good citizen by
making donations, but also as a
source of improvement and development. Furthermore, Sprinkle
and Maines (2010) describe
6
what kind of benefits and costs are involved when firms engage
in CSR, for example that CSR
efforts may lead to efficiencies and cost savings in the value
chain.
However, even though scholars have already researched the
concept of CSR intensively,
as mentioned above, they are mainly concerned with the
potential economic successes that CSR
can deliver next to the social and environmental benefits (Porter
& Kramer, 2011) and not
specifically how it can help firms to internationalize and
overcome potential differences when
conducting business abroad. Additionally, scholars have

primarily researched how firms can
get the most out of CSR activities (Kramer & Pfitzer, 2016;
Porter & Kramer, 2011; Rangan et
al., 2015; Sasse & Trahan, 2007) , in other words, how
businesses can achieve the full potential
that lies within CSR. They overlooked the point of explicitly
identifying in which cases CSR
can help firm to internationalize and bridge the gap regarding
different business circumstances.
Consequently, the current literature lacks in establishing a
relationship between CSR and
internationalization.
The objective of this research is therefore to investigate how
CSR’s full potential can
be applied when companies expand abroad. Hence, this paper
will contribute in two ways to
the existing literature. First, it provides a new perspective upon
the link between CSR and (non-
location bound) FSAs, overcoming distances and firm
performance abroad. Secondly, this
literature study provides a new insight upon the linkage between
CSR and internationalization.
The outline of the paper will be as follows. Firstly, the
definition and explanation of the

core concepts are described. Secondly, the different types of
CSR and their potential impact
upon internationalization will be briefly discussed. Thirdly, the
methodology used and the
research design will be outlined. Fourthly, the linkages between
the concepts of the research
question and sub-research questions will be addressed. Finally,
the conclusion of the findings
along with the limitations of the paper and recommendations for
future research are presented.
7
2. DEFINING THE CONCEPTS
Many people perceive CSR as a source of charity rather than a
win-win situation which
can actually be achieved (Porter & Kramer, 2006). Therefore,
beside CSR’s philanthropic
intentions, CSR will be mainly considered in terms of shared
value. which will be explained
along with the other core concepts in the following part. In
section 5 the linkages between these
concepts will be explored in detail.

2.1. Corporate social responsibility and Shared value
To begin with, CSR can be defined as ‘‘the firm’s
considerations of, and response to,
issues beyond the narrow economic, technical, and legal
requirements of the firm to accomplish
social [and environmental] benefits along with the traditional
economic gains which the firm
seeks.’’(Davis, 1973: 312). In other words, CSR is an activity
in which organizations
voluntarily incorporate social and environmental challenges in
their business operations and in
their interaction with their stakeholders.
The concept of shared value can be defined as ‘’policies and
operating practices that
enhance the competitiveness of a company while simultaneously
advancing the economic and
social conditions in the communities in which it operates
(Porter & Kramer, 2011: 67).
Therefore, it is suggested that besides the reputational
advantages that CSR can provide, it can
also help firms to achieve economic success (abroad) when
addressing social and
environmental challenges (in a foreign market).

2.2. Internationalization
Internationalization can be described as ‘’the process of
increasing involvement in the
international markets’’(Welch & Luostarinen, 1988: 36), in
which we can divide
internationalization in import-orientated and export-orientated
processes (Mikić, Primorac, &
Kozina, 2016). The focus will be on the latter process, since the
aim of this study is to determine
8
the impact of CSR when firms enter new markets through export
or foreign direct investment,
rather than an import-orientated approach in which firms attain
products and services from
foreign markets. Furthermore, in relation to firm performance,
successful internationalization
is indicated by a high business performance abroad,
encompassing financial, operational and
overall performance (Dörrenbächer, 2000; Mikić et al., 2016).
2.3. Competitive advantage
Barney (1991) wrote that a firm can have a competitive
advantage when it implements

a value creating strategy, which is not implemented in a
simultaneous manner by any existing
or future rivals. In relation to CSR and internationalization
three questions are of importance
when considering competitive advantages: How does a firm
create a competitive advantage?
How does a firm sustain a competitive advantage? And are the
firm’s competitive advantages
location bound or not? It is important to highlight these
processes, because firms can only
successfully internationalize when they are capable of
developing (sustainable) non-location
bound FSAs (McCarthy, 2018: 37) and CSR can be a tool to
achieve this objective.
The creation of an FSA depends upon the combination of market
based outside-in
models and resource based inside-out models. According to
Porter (1979), an organization’s
ability to position itself against the following five market forces
enables the creation of FSAs:
threat of new entrants, threat of substitutes, bargaining power of
customers, bargaining power
of suppliers and industry rivalry. The resource-based view
suggests that the special combination

of (internal) resources can be used to explain the source of an
FSA, which can in turn determine
firm performance (Barney, 1991).
Resources can become sustainable FSAs, when they satisfy the
four conditions of the
VRIN framework, in which a resource must be valuable, rare,
inimitable and non-substitutable
(Barney, 1991). FSAs are sustainable whenever they keep
existing despite attempts by existing
9
and potential competitors to duplicate it. Related to that are
isolating mechanisms which are
economic forces that restrict the ability of current and future
competitors to imitate FSAs. Two
main types of isolating mechanisms involve impediments to
imitation (legal barriers and
superior access to resources and customers) and early-mover
advantages (reputation, buyer
switching costs and learning curves).
Firm-specific advantages may be location-bound if they entail
substantial costs when

applied in other regions (Dunning, 2009; Rugman & Verbeke,
1992; Shan & Song, 1997), as
to say FSAs are location-bound when they can only achieve
their full potential in a specific
location. When a firm’s strength is based in the home country
and if the firm cannot develop
non-location bound FSAs, it should not expand operations
across borders (McCarthy, 2018:
37).
2.4. Firm performance
Why some firms outperform others on the international stage is
a key question within
the field of international business (IB) (Hitt, Hoskisson, & Kim,
1997; Tallman & Li, 1996).
Firm performance comprises the achieved outputs or results
measured in comparison to its
expected goals, results, objectives or outputs (Richard,
Devinney, Yip, & Johnson, 2009). In
order to adequately analyze firm performance it must be
evaluated based on three types of
measurements: financial performance, operational performance
and overall effectiveness
(Venkatraman & Ramanujam, 1986).

Financial performance includes outcome-based metrics which
indicate economic
objectives, including market-based and accounting-based
indicators, as to say the overall
profitability of an organization. (Venkatraman & Ramanujam,
1986). In which for example, a
growth in foreign sales after conducting a CSR activity can
indicate a relationship between the
two, as to say there could be a link between CSR and a part of
firm performance in that case.
10
Operational performance refers to the operational success
dimensions, which could in
turn lead to higher financial performance, so it includes non-
financial aspects such as, market
share, innovation, efficiency, productivity and employee
retention (Venkatraman &
Ramanujam, 1986). Where an increase in efficiency after
engaging in a CSR project, resulting
in decreased cost or usage of resources, can in turn increase
profitability and financial
performance, therefore indicating a positive relationship
between CSR and operational

performance.
Finally, overall effectiveness employs a broader approach to the
concept of
performance, which is comprised of reputation, achievements of
objectives, perceived overall
performance (relative to competitors) and survival (Lewin &
Minton, 1986; Venkatraman &
Ramanujam, 1986). Especially reputation refers back to the
benefits that CSR can provide, and
once again a partial relationship between employing CSR
practices and overall effectiveness
and therefore firm performance can be determined.
2.5. Distance
In the field of IB distances entail the extent of differences
present between countries
(Hutzschenreuter, Kleindienst, & Lange, 2016). Therefore,
distances present complexity
(Vermeulen & Barkema, 2002) and friction (Shenkar, Luo, &
Yeheskel, 2008) by increasing
the difficulties associated with achieving and sustaining cross-
border expansions
(Hutzschenreuter et al., 2016).

According to Ghemawat’s CAGE framework (2001), distance
can be defined along four
dimensions: cultural, administrative, geographic and economic.
The different dimensions
influence the internationalization process of businesses in
various manners and CSR projects
affect these dimensions in different ways which will be
explained later on.
11
Cultural distance refers to the differences in ethnicity,
language, social norms and
religion, and influences how entities in different countries
interact with other actors in the
business environment (Ghemawat, 2001). Administrative
distance refers to the extent of
historical and political ties between countries and arises from
the lack of shared
monetary/political associations, colonial ties, government
policies, institutional weaknesses
and political hostility (Ghemawat, 2001). Geographic distance
does not refer only to the
physical distance present between countries, but also to
differences in the size of the country,

absence of a common border, access to sea and river ways,
topography and poor transportation
channels (Ghemawat, 2001). While, this distance affect tangible
goods in terms of
transportation costs, it also affects intangible costs by means of
differences in the level of
communication and information infrastructure between
countries, which affects the flow of
cross-border equity (Ghemawat, 2001). Economic distance
mainly refers to the differences in
income and wealth, but also to discrepancies in costs and
quality of infrastructure, intermediate
inputs and human, financial and natural resources (Ghemawat,
2001).
3. TYPES OF CSR AND THEIR POTENTIAL IMPACT
Despite the gap in the CSR literature with regard to
internationalization, it does not take
away the fact that it provides useful insights regarding the
concept of CSR and in addition they
can provide important implications for this research as well,
since important knowledge can be
gained from these papers. On that account, this part will outline
relevant literature upon the

different types of CSR and their advantages in the
internationalization process. It is important
to distinguish between different types of CSR activities since
they can provide various
advantages (economic, social, reputational and environmental)
in the internationalization
process, as will be examined in the following part. According to
Rangan, Chase and Karim
(2015) there are three theatres among which CSR activities can
be divided.
12
Theatre one focuses on philanthropy, which mainly involves
gifts and donations, and
therefore no profit or revenue goals are pursued, in most cases
the brand image will improve
(Rangan et al., 2015). Hence, from this theatre firms themselves
can mainly attain reputational
advantages in the internationalization process, since it may
stimulate consumers abroad to buy
a firm’s products or services (Sprinkle & Maines, 2010).
Theatre two is concerned with improving operational
effectiveness, in which delivering

social and environmental benefits can in turn lead to improved
efficiency and effectiveness,
such as waste reduction or improved productivity (Rangan et
al., 2015). Showing environmental
and social concern when internationalizing, can decrease
production costs abroad through cost
efficiency and effectiveness (Sprinkle & Maines, 2010).
Finally, theater three involves transforming the business model,
in which again social
and environmental challenges are addressed, however this time
with improved firm
performance as a requirement (Rangan et al., 2015). Theatre
three activities can generate
benefits in the internationalization process with regard to
procurement, distribution, local
connections, employee productivity, energy use and logistics
(Porter & Kramer, 2011). In
addition, firms can engage in multiple theatres at the same time,
the categorization does not
indicate that firms can only purse activities in one theatre at the
time (Rangan et al., 2015).
4. METHODOLOGY
The aim of this research is to review how CSR can help firms
when they internationalize

and to find out in which parts of the internationalization process
the influence of CSR is
substantial. This exploratory study is conducted by performing a
literature review in which
existing literature upon the study’s main themes were analysed
to develop an integrated
research in order to shed a new light upon the core concepts,
CSR and internationalization, to
come up with a theoretical understanding regarding their
relationship.
13
A literature study extracts the existing literature in a subject
area. The objective of a
literature review is therefore also to summarize the state of art
in that subject field that support
the identification of specific research questions (Rowley &
Slack, 2004). By reviewing the
existing work of scholars, researchers become able to identify
gaps in the literature in which
future research would be beneficial (Rowley & Slack, 2004).
Therefore, a literature study must
help the reader to understand the underlying theoretical

concepts and terminology, and the
discussion and conclusion paragraphs should eventually lead to
recommendations for future
research and methodologies (Rowley & Slack, 2004).
Relevant literature was found by performing an initial review of
paper abstracts related
to the research topic, after which in depth research and reading
were conducted whenever a
source was deemed as relevant.
This study was build up by first explaining the core concepts,
after which the different
types of CSR along with their benefits in the
internationalization process were identified
(Rangan et al., 2015) in which the main categorization involves
the three theatres of CSR: first
theatre (philanthropy); second theatre (improving operational
effectiveness) and; third theatre
(transforming the business model). Where after, the linkages
between CSR and creating FSAs,
overcoming distances and achieving a higher firm performance
abroad were established based
on theoretical reasoning and practical application in order to
properly assess the impact of CSR

in the internationalization process.
14
5. ANALYSIS AND FINDINGS
Relationship between the concepts
5.1. CSR’s role in creating competitive advantages
The link between CSR and competitive advantages can be
mainly established when
firms engage in CSR in terms of shared value, since in that case
CSR is not only a cost or a
donation, but it also generates opportunities, innovations and
FSAs (Porter & Kramer, 2006).
As mentioned in section 2.3, a competitive advantage can be
created by the combination of
inside-out and outside-in practices. In the case of CSR this can
done by looking at the firm’s
value chain and its social dimension of competitive context, this
can be analyzed by considering
Porter’s diamond framework, which includes: local demand
conditions, factor input conditions,
related and supporting industries and context for firm strategy
and rivalry (Porter, 1990).

Firms should aim to decrease as much of the negative social
impacts of their value chain
as possible, which can set out a path that can offer strategic and
social opportunities. When
considering the competitive context, firm cannot not engage in
every dimension of the diamond.
Therefore, firms should take on areas in the social competitive
context, which can deliver the
greatest strategic value. Hence, a firm should choose a social
initiative that will have a positive
impact in the value chain and one that is also related to the own
business domain, this will result
in the greatest shared value and the creation of competitive
advantages. Porter and Kramer
(2006) suggest several steps to create a competitive advantage
with CSR: identifying points of
intersection between firm and society; selecting social issues
related to the own business
practices; creating a corporate social agenda by incorporating
CSR in the core business
operations; integrating inside-out and outside-in practices and
adding a social dimension to the
set of needs that firms can meet for their customers that others
cannot (value proposition).

15
A prime example in this regard is Nestlé’s entry in the Indian
market. By collaborating
with small local farmers, they have ensured a stable and reliable
supply of milk, coffee and
cocoa which are key inputs to their operations. Investing in
local infrastructure and transferring
knowledge and technology over time resulted in a tremendous
social impact through better
health care, improved education and economic prosperity for the
community. Therefore,
Nestlé’s business strategy has become interwoven with its
social impacts (Porter & Kramer,
2006)
As mentioned before a sustainable FSA can be created when the
different conditions of
the VRIN framework are satisfied and when isolating
mechanisms (impediments to imitation
or early mover advantages) are present, a clear illustration
regarding early mover advantages
concerns the pharmaceutical firm Novo Nordisk. While diabetes
was relatively undiagnosed

and therefore untreated in China, a country with around 10
million diabetes patients, Novo
Nordisk entered China by creating the World Diabetes
Foundation and worked with the Chinese
government and other (non-governmental) agencies to treat
these patients by funding medical
research and challenging the social stigma related to the disease
through an extensive media
campaign. While addressing a social problem and making a
social impact, Novo Nordisk also
created a market worth over a billion dollars and attained an
advantage which later entrants
have not been able to duplicate or neutralize. Novo Nordisk has
nowadays a market share of
around 60%, while it closest competitor, Eli Lilly, has to do
with an 15% market share (Kramer
& Pfitzer, 2016).
5.2. CSR’s role in achieving higher firm performance abroad
While previous research (Arlow & Gannon, 1982; Cochran &
Wood, 1984) indicated
mixed results or did not find a significant relationship between
CSR and firm performance at
all, a recent paper (Foote, Gaffney, & Evans, 2010) indicates
that CSR may actually lead to

performance excellence. Evans, Foote and Gaffney (2010)
conclude that CSR can have a
16
significant impact on performance, because it can lead to an
advantage when CSR is used in a
strategic manner and this advantage can be exploited fully when
a company engages in CSR
for the right reasons and when firms address decisions regarding
CSR activities proactively and
strategically as it would be with other core business decisions.
As mentioned in part 2.4, firm
performance consists of financial performance, operational
performance and overall
effectiveness and below their relationship with CSR is
illustrated with real-life examples.
An example related to financial performance involves
Unilever’s entry in rural India,
where they employed village women instead of wholesaler-to-
retailer distributors to reach the
rural areas, by providing them with loans and training the
income for more than 65,000 village
women doubled, while at the same time Unilever gained more

than $100 million in revenue
from this CSR project (Rangan et al., 2015). This example also
relates back to the third theatre
of CSR initiatives as mentioned before, namely transforming the
business model.
Secondly, operational performance, in terms of market share
becomes most clear in our
previous example, in which Novo Nordisk had attained a market
share of 59% in China, while
it biggest rivals, Eli Lilly and Sanofi, have to do with a share of
15% and 5% respectively. In
terms of productivity and efficiency, the agricultural company
Yara grow its business by
improving the logistical infrastructure when entering
Mozambique through investments in ports
and roads in order to provide local farmers with more efficient
access to agricultural inputs,
while this led to the creation of more 300,000 jobs, it also
increased the productivity and
efficiency of the both the farmers and Yara in sourcing inputs
and producing at much lower
costs (Porter & Kramer, 2011). These examples illustrate that
efficiency and effectiveness can
in turn increase financial performance and can therefore be

positioned in theatre 2 of CSR
activities (improving operational effectiveness).
Finally, in terms of overall effectiveness, all previous examples
illustrate how CSR can
help firms to improve overall performance and performance
relative to competitors, by either
17
improved efficiency, effectiveness, financial performance
and/or reputation (Janssen, Sen, &
Bhattacharya, 2015). In addition, as Nespresso engaged in CSR
related to its business, by
helping and educating coffee bean farmers in Africa and Latin
America, they simultaneously
obtained a reliable source of specialized coffee beans and
experienced annual growth of 30 %
since 2000 (Porter & Kramer, 2011).
Nevertheless, engaging in CSR for the sake of ‘’window
dressing’’ and insincere
reasons, may heavily backfire in terms of firm performance and
reputation, as it was the case
with tobacco company Philip Morris, who supported a youth
smoking prevention campaign,

while it was related to its business it received heavy critics and
damaged firm performance,
because the public was of opinion that this support had high
benefit salience for Phillip Morris
(Yoon, Gürhan-Canli, & Schwarz, 2006).
5.3. CSR’s role in overcoming distances
Most of the literature in this regard is focused on the effect of
the different dimensions
of distance (cultural, administrative, geographic and economic)
upon the type of CSR practices
(global vs. local) pursued rather than on the role of CSR in
overcoming distances when firms
internationalize (Campbell, Eden, & Miller, 2012; Jacqueminet,
2017; Yang & Rivers, 2009).
However, Yang and Rivers (2009) indicates that the effect of
administrative distance upon
internationalizing firms can be eased when firms engage in
locally responsive CSR rather than
in global CSR initiatives, since institutional differences are
mainly country-based and therefore
less likely to be overcome with a global approach. Moreover,
Feller (2016) noted that cultural
distance can be partly overcome when firms pursue global CSR

initiatives. Moreover, by
logically and critically assessing the benefits of CSR and
existing CSR projects, more specific
links between CSR and overcoming administrative, geographic
and economic distances were
explored, while no specific examples related to cultural distance
were found.
18
CSR can be a mechanism of risk management, in which for
example a car manufacturing
company can mitigate the risk of future legislation in which
stricter rules could apply (Sprinkle
& Maines, 2010) by reducing its emissions or building more
environmentally friendly cars, and
they could therefore potentially overcome a part of the
administrative distance, when they for
example expand operations to a host country with tighter
emission standards. Toyota for
example developed a non-location FSA with its hybrid
technology arising from the
environmental benefits it generates (Porter & Kramer, 2006).
Their hybrid vehicles only

emitted 10% of the harmful pollutants that standard vehicles
emitted and therefore provided
Toyota with a positive value chain impact and addressed a
competitive context challenge,
leading them to develop a unique position among customers.
Therefore, Toyota’s early socially
responsible actions in response to public concern about
emissions, made them able to develop
an early-mover advantage, while also being able to cope more
easily with administrative
differences with regard to emission regulations in foreign
markets.
Yara’s program to improve the logistical infrastructure in
Mozambique as mentioned in
the previous part illustrates the impact of CSR upon the tangible
side of geographic distance
with regard to improvements in the transportation
infrastructure. Whereas, Vodafone’s CSR
project in Kenya proved that CSR can ease the intangible aspect
of geographic distance, in
terms of differences in the level of information infrastructure
and communication channels.
Vodafone provided cheap mobile phones in Kenya which
included a mobile banking service,

that made it possible for the poor to safe their income in a
secure way, while also making
farmers able to produce and market their products more
effectively. Already over 10 million
customers are making use of this initiative called Vodafone M-
PESA (Porter & Kramer, 2011).
With a similar social impact, the Canadian Multinational
Thomas Reuters provides farmers in
India information on the weather and crop pricing and gave
them agricultural advice at the cost
19
of $5 per quarter, this project reached over 2 million farmers
already, who saw their incomes
grow with more than 60% (Porter & Kramer, 2011).
Considering the effect of CSR upon economic distance it can be
seen that it mainly
decreases discrepancies in income and wealth, while it also
helps to attain (intermediate) inputs
and improved access to human and natural resources in a host
country. From the previous
examples (Nestlé, Unilever, Nespresso, Yara, Vodafone and
Thomas), it can be observed that

these CSR projects had and have a substantial impact upon the
increase of income and wealth
and therefore upon the partial decrease of the economic distance
in the countries/regions where
these firms conduct business. Furthermore, as a result of
Nestlé’s and Nespresso’s CSR
projects, their cost of intermediate inputs and natural resources
decreased while the quality and
access to these inputs increased substantially, making the
economic distance for these
companies decline partially. Finally, CSR can be a source to
attract, recruit, motivate and retain
employees (Sprinkle & Maines, 2010) and can therefore be a
source to lessen the economic
distance with regard to human resources, where in addition CSR
initiatives involving education
and training can also contribute to ease this distance.
5.4. CSR’s role in the internationalization process
Finally, CSR can actually help firms to expand operations
across borders through
various means. To begin with, in the pre-internationalization
stage, CSR initiatives can set out
a path for firms to develop non-location bound FSAs which are
necessary for firms who are

planning to internationalize. For example, one of Nestlé’s FSAs
came from the local sources of
milked derived from the relationship with small farmers in
Switzerland, while this FSA was
location-bound, Nestlé achieved to make this FSA non-location
bound in India by engaging in
CSR to improve the social and business environment in the
region. The same applies for Toyota
who managed to develop a non-location bound FSA with is
hybrid electric/gasoline technology
(Porter & Kramer, 2006). Moreover, in order to successfully
internationalize firms have to
20
overcome certain distances and the related liability of
foreignness. Hence, CSR can be a
mechanism to reduce the effect of administrative distance in the
pre-phase, when firms mitigate
the risk of future or different legislation, since administrative
differences are important to take
into account before expanding operations abroad.
In the post-internationalization phase, CSR can be a source to
create a competitive

advantage at the location where the firm has expanded to.
Unilever, managed to establish a FSA
in their distribution channel by employing village women in
India rather than using expensive
middle-men; and by being the first to show concern for diabetes
in China, Novo Nordisk
managed to attain a sustainable FSA. In the post-
internationalization stage the impact of
geographic and economic distance was mainly lessened, as a
result of improvements made by
firms in the tangible and intangible infrastructure, in the
income, wealth and human and natural
resources at the locations where they expanded to. Whereas
Nestlé and its subsidiary Nespresso
mainly improved the access to factor input conditions and
related and supporting industries,
Vodafone and Thomas Reuters did this by improving the
information and communication
infrastructure and Yara by improving the transportation
channels.
The combination of all these factors led to the improvement of
firm performance abroad,
mainly in terms of cost savings and revenue, meaning that CSR
can (partially) help firms to

successfully internationalize, which is indicated by a larger
(global) market share and a higher
business performance (abroad) as a result of CSR. Nevertheless,
the additional reputational
benefits that CSR can generate to help in the global expansion
process should not be
disregarded, while the social impact of these CSR activities
upon the community should not be
forgotten either.
21
6. CONCLUSION AND DISCUSSION
6.1. Conclusion
This literature study has explored CSR’s role when firms
internationalize in the
following way. To begin with, the core themes of this study
were defined, after which the
different types of CSR and their potential role in the
internationalization process was discussed,
where after in the final part the linkages between the core
concepts were examined to establish
a relationship between them. This was done through theoretical

and practical assessment, in
which it was found that CSR can actually help firms to expand
operations across borders.
Firstly, CSR can assist firms to develop non-location bound
competitive advantages needed to
internationalize and CSR can stimulate firms who settled in a
foreign market to develop
location-bound FSAs to attain a strong local competitive
position. Secondly, CSR can play a
role in overcoming distances, since it provides firms with an
opportunity to improve the
economic and social circumstances at the locations where they
operate, while it also prepares
the firm to adapt to challenges in the geographic and
administrative environment. Finally, a
firm’s ability to create (non-location bound) FSAs and
overcoming distances by engaging in
CSR could lead to higher financial, operational and overall firm
performance and can make
them capable to increase involvement in the international
markets.
6.2. Limitations and future research
Although I have shed a new light upon the relationship between
CSR and

internationalization, this literature study still remains limited in
scope. Firstly, due to a limited
timeframe and word limit, it was not possible to take this
research a step further by assessing
the relationship between CSR and different types of
internationalization, such as gradual vs
radical expansion. Therefore, to further extend this study, future
research upon the relationship
between CSR and different types of internationalization is
needed. Secondly, in the practical
22
examples it was mainly found that CSR had benefits for firms
that internationalize to
developing countries, which can decrease the study’s
generalizability, therefore future study
should include examples that also involve developed countries.
Thirdly, as mentioned before
the effect of CSR upon overcoming distances remains an
underdeveloped field in the IB
literature, this may set out a path for researchers to fill up this
void. Fourthly, other moderating
and mediating factors could have a substantial influence upon

the linkages between the core
concepts, for example previous experience in CSR and/or
internationalization might imply that
CSR can have even more benefits in the internationalization
process, this should be considered
in future empirical research. Finally, Ebrahim and Rangan
(2014) noted that credible and
measurable claims about outcomes can only be made under two
conditions: first, if firms
implement a narrow scope of activities where the casual link
between inputs and outcomes is
clearly established through evidence; secondly, when firms
implement a broad scope of
activities that are vertically integrated to increase control over
outcomes.
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| 1
Recap: conducting a literature review
1
Example of a theory-based approach
Consulting firm looking to develop a framework for
accountability and culture in banking firms.
When asked about scientific evidence, they stated the following:
“Our framework is grounded in the work by professor X on
trust.
Furthermore, we explored the literature, a subset including the
work of Professor Y and Professor Z on culture, Professor B on
dishonesty

Is this a good evidence-based approach?
No!
| 2
Author-centric vs Concept-centric
Important note: in a systematic literature review, you aim to
systematically (hence the name) get a broad view of the
literature related to your research question. In the prior example
a systematic approach was not taken. The firm only examined
work from a few authors, which does not provide an unbiased,
systematic review of the entire stream of literature.
2
Key stages in conducting a systematic literature review
(1) Scoping
(2) Planning
(3) Identification (searching)
(4) Screening
(5) Eligibility
| 3
I: Scoping
Formulate one or more research questions
E.g.: “How does teacher stress affect their psychological and
physical well-being?
Clarify existence of previous work

E.G.: “It has been 10 years since the previous systematic
review, thus...”
PICOC method
| 4
Finding relevant studies: PICOC
| 5
PopulationWho?Type of employee, subgroup, people who may
be affected by outcomeInterventionWhat or how?Management
technique/method, factor, independent
variableComparisonCompared to what?Alternative intervention,
factor, variableOutcomeWhat are you trying to
accomplish/improve/change?Objective, purpose, goal,
dependent variableContextIn what kind of
organization/circumstances?Type of organization, sector,
relevant contextual factors
PICOC: examples
P: Teachers
I: Teacher stress
C: No-stress
O: Psychological and physical well-being
C: High-school
| 6

II: Planning
Break down research questions into individual concepts
Using the information from PICOC
Create most important search terms
Find related and alternative search terms
Formulate preliminary inclusion and exlusion criteria
Tip: create clear record keeping systems
| 7
III: Identification (searching)
Use databases
Which databases? (i.e. Google Scholar, EBSCO-Host, Web of
Science)
How to use databases?
How to apply search terms? (Search operators)
Inspect search results
Do they match search/exclusion criteria?
| 8
RQ: “How does teacher stress affect their psychological and
physical well-being?

| 9
P: Teachers
I: Teacher stress
C: No-stress
O: Psychological and physical well-being
C: High-school
IV: Screening
Export references to citation manager (e.g. Mendeley)
Easy overview
Read title/abstract of identified work
Refer back to exclusion criteria
First filter of literature, try to sift as many articles as possible
| 10
V: Eligibility
Sift the full-text version of potentially eligible articles and
extract information to be included
How to select articles? Type of study/journal?
Step 1: select meta-analyses or reviews for the underlying
principles
Step 2: Controlled or longitudinal studies (primary studies) -
HQ
Step 3: Cross-sectional/ non-empirical work - LQ

| 11
Final steps
Screening
Compare abstract against RQ and PICOC
No general guidelines to evaluate applicability of findings for
your own RQ, this is where your judgement comes into play!
Look at your own eligibility criteria
Examine: conceptualizations, study design, setting, measures,
participants, year of publication etc.
| 12
To try yourself: CAT-Manager
Critically-appraised-
studies
| 13
13

Thank you for your attention!
| 14
Analyzing the Past to Prepare for the Future: Writing a
Literature Review
Author(s): Jane Webster and Richard T. Watson
Source: MIS Quarterly, Vol. 26, No. 2 (Jun., 2002), pp. xiii-
xxiii
Published by: Management Information Systems Research
Center, University of Minnesota
Stable URL: https://www.jstor.org/stable/4132319
Accessed: 04-01-2019 10:06 UTC
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Webster & Watson/Guest Editorial
ANALYZING THE PAST TO PREPARE
FOR THE FUTURE: WRITING A
LITERATURE REVIEW
By: Jane Webster
Queen's School of Business
Queen's University
Kingston, ON K7L 3N6
CANADA
[email protected]
Richard T. Watson
Terry College of Business
The University of Georgia
Athens, GA 30602-6273
U.S.A.
[email protected]

A review of prior, relevant literature is an essential feature of
any academic project. An effective review
creates a firm foundation for advancing knowledge. It
facilitates theory development, closes areas where
a plethora of research exists, and uncovers areas where
research is needed.
In the information systems (IS) field, we see few published
review articles. As a result, the progress of our
field is impeded. To address this concern, the MIS Quarterly
launched MISQ Review several years ago.
The clear intention was to accelerate the accumulation of IS
knowledge. A particular goal was to advance
the state of theory within the IS field. The stated purpose of
MISQ Review is to
...promote MIS research by publishing articles that
conceptualize research areas and
survey and synthesize prior research. These articles will
provide important input in
setting directions for future research.1
The lack of theoretical progress in the IS field may be
surprising. From an empirical viewpoint, the IS field
resembles other management fields. Specifically, as fields of
inquiry develop, their theories are often
placed on a hierarchy from ad hoc classification systems (in
which categories are used to summarize
empirical observations), to taxonomies (in which the
relationships between the categories can be
described), to conceptual frameworks (in which propositions
summarize explanations and predictions), to
theoretical systems (in which laws are contained within
axiomatic or formal theories) (Parsons and Shils
1962). In its short history, IS research has developed from

classification systems to conceptual frame-
works. In the 1970s, it was considered pre-paradigmatic.
Today, it is approaching the level of development
in empirical research of other management fields, like
organizational behavior (Webster 2001). However,
unlike other fields that have journals devoted to review articles
(e.g., the Academy of Management
Review), we see few review articles in IS-and hence the
creation of MISQ Review as a device for
accelerating development of the discipline.
One reason we see so few theoretical articles in IS relates to
the youth of the field. Another concerns the
complexity of assembling a review in an interdisciplinary field.
That is, constructing a review is a chal-
1http://www.misq.org/misreview/announce.html
MIS Quarterly Vol. 26 No. 2, pp. xiii-xxiii/June 2002 xiii
2019 10:06:54 UTC
lenging process because we often need to draw on theories
from a variety of fields. Moreover, we have
so few theories of our own. Nevertheless, the literature review
represents the foundation for research in
IS. As such, review articles are critical to strengthening IS as a
field of study.
Another challenge relates to methods of structuring and

presenting these reviews. As the initial senior
editors for MISQ Review, we quickly learned that many IS
scholars are not familiar with the structure and
format of reviews, which provided the motivation for this
article. Unfortunately, this finding is not uncommon
in other areas, as has been noted:
Authors of literature reviews are at risk for producing mind-
numbing lists of citations and
findings that resemble a phone book-impressive case, lots of
numbers, but not much
plot. [In contrast] a coherent review emerges only from a
coherent conceptual struc-
turing of the topic itself. For most reviews, this requires a
guiding theory, a set of
competing models, or a point of view about the phenomenon
under discussion [Bem
1995, p. 172].
Like Bem in psychology, we seek to encourage more
conceptual structuring of reviews in IS. Drawing on
our editorial experiences, as well as other editors' experiences
in related areas (e.g., Daft 1985; Sutton
and Staw 1995; Whetten 1989), we believe that we can help
prospective MISQ Review authors and IS
scholars in general by setting forth some guidelines and
thoughts on how to write a review article.2
In this paper, we first consider who should write for MISQ
Review and identify the types of articles that are
appropriate. Next, we spend most of the paper providing advice
to would-be authors based on what we
have learned from our experiences. We then discuss the
reviewing process. Finally, we conclude by

summarizing our expectations for a review article.
Prospective Authors and Topics
There are two points in a scholar's life that lend themselves
naturally to writing a literature review. First,
those who have completed or made substantial progress on a
stream of research are well positioned to
tell their colleagues what they have learned and where the field
can most fruitfully direct its attention.
Second, scholars who have completed a literature review prior
to embarking on a project and have
developed some theoretical models derived from this review
are also potential authors.
From another angle, two types of reviews exist. First, authors
could deal with a mature topic where an
accumulated body of research exists that needs analysis and
synthesis. In this case, they would conduct
a thorough literature review and then propose a conceptual
model that synthesizes and extends existing
research. Second, authors could tackle an emerging issue that
would benefit from exposure to potential
theoretical foundations. Here, the review of current literature
on the emerging topic would, of necessity,
be shorter. The author's contribution would arise from the fresh
theoretical foundations proposed in
developing a conceptual model.
Because literature reviews are more time-consuming and have
fewer outlets than research articles,
prospective authors should contact the current senior editor of
MISQ Review prior to commencing. An
2While this article is centered around MISQ Review, we

believe much of what we say has general value for most IS
literature reviews.
xiv MIS Quarterly Vol. 26 No. 2/June 2002
2019 10:06:54 UTC
outline of the review will enable the senior editor to advise
whether another author is currently working on
the topic and to give broad guidance on the direction of the
work.
Writing a Review Article
To assist you in crafting your paper, we indicate the broad
structure of a review paper and provide several
suggestions on executing your review. We reflect on some
pragmatic issues (e.g., what should be included
in the introduction to your paper?) and some more ambiguous
issues (e.g., how can you justify a
proposition?). Throughout, we provide examples from past
articles in a variety of fields to give you
exemplars of how others have addressed these issues.
Beginning Your Article
In some papers we have received, the topic does not "emerge"
until well into the article. Moreover, the
contributions are not clear. In contrast, to hook your reader

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