Culture’s Impact on the Importance of Fairness in Interorganizational Relationships

As the business landscape becomes more global, managers must navigate cross-cultural relationships with an increasingly diverse set of partners. These relationships are built on economic as well as social considerations. Parties to a business relationship may consider qualities such as financial outcomes, convenience, interpersonal relationships, fairness, trust and other aspects of potential partners as they manage their network of business partnerships.

Given a diversity of cultural backgrounds, it seems that some managers may favor more communal interactions within relationships than would be desirable by the typical American firm. With the drastic increase in global business, it is important to understand that our expectations for relationships may not apply to business partners from other cultures.

Lund 200In a nutshell, Dr. Lund and his colleagues found that fairness is most important in cultures that are highly avoidant to uncertainty. Of five different cultural dimensions, uncertainty avoidance accounted for the majority of variation across countries in the importance of fairness. Findings also show that increased exposure to diverse cultures through business relationships enhances the importance of fairness.

The implication for organizations is that they need to consider some specific means for ensuring fairness. One way to achieve this is through employing managers with direct exposure to foreign cultures. Foreign exposure sensitizes managers to values that are important in other cultures, and helps in developing soft skills which translate into relationships of higher quality across borders.  A second step an organization can take is to understand the stability of the environment. The findings highlight that when situations cause managers to become especially risk averse (e.g., political or economic uncertainty), fairness becomes critically important. Thus managers dealing with partners in developing countries need to pay close attention to their partners’ expectations for the relationship.

The findings identify research implications as well.  From a theory development standpoint, the findings indicate that not all theories apply to all cultures.  Additionally, researchers should further investigate which aspects of the relationship, such as trust, communication, and reciprocity are desirable in different cultures and promote healthy business relationships, and which aspects are not as valued and may be even counterproductive.

Dr. Donald Lund (Ph.D. University of Missouri) is an assistant professor of marketing. His research focuses on the management of business relationships.  Dr. Lund draws from his experience as a Dominos Pizza franchise owner to enhance his teaching of marketing research and marketing strategy.  Dr. Lund’s research has been published in the Journal of Personal Selling and Sales Management, the Journal of Services Marketing and the Journal of International Marketing.  This article appeared in the Journal of International Marketing in December, 2013. 

More on the research can be found in the January/February 2014 publication of the American Marketing Association, Marketing Insights.