To adapt or not adapt: The moderating effect of perceived similarity in cross-cultural business partnerships

We study the relationship between adaptation and joint venture satisfaction and the moderating effect of perceived similarity on this relationship. The research setting is the Sino-Western joint ventures in China. Our contention is that levels of perceived similarity may determine a partner's view of the effect of adaptation and such views could vary across cultures. In this study, we find that adaptation is positively associated with satisfaction among Chinese joint venture partners, but negatively associated among Western joint venture partners. However, at high cultural similarity, Chinese managers experience lower satisfaction with increasing adaptation whereas Western managers experience higher satisfaction with increasing adaptation.

► We study the relationship between adaptation and joint venture satisfaction. ► Our focus is the moderating effect of perceived similarity on this relationship. ► Adaptation has a positive relationship with satisfaction for Chinese joint venture managers, but has a negative relationship for Western joint venture managers. ► Increasing adaptation at high cultural similarity leads to lower satisfaction among Chinese but higher satisfaction among Western managers.