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Psychic Distance, its Impact and Coping Modes

Interpretations of SME decision makers

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Abstract

  • This paper adopts an interpretative focus in addressing SME decision makers’ perceptions of psychic distance. It draws on empirical evidence from British SMEs exporting to Brazil. The study also addresses the hitherto neglected question of how SMEs cope with the difficulties of engaging in international business with psychically distant countries. It discusses the implications of its cognitive approach and findings for further research and conceptual development.

  • Results indicate the relevance of a broad-based multi-dimensional interpretation of psychic distance. Distance dimensions also have a differential impact on doing business with Brazil, although a strong socio-institutional cluster appears. Further exploration of the understandings that SME decision-makers have of psychic distance-related impacts and the possibilities of coping with these, illustrate how they attempt to bridge psychic distance features or adopt avoidance measures.

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Notes

  1. It had 300 employees. By contrast, the upper employment threshold in the US definition of an SME is 500 employees.

  2. There was, however, no systematic association between the length of business experience executives had with Brazil and their psychic distance scores.

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Authors and Affiliations

  1. University of Birmingham, Birmingham, UK

    John Child (Chair of Commerce) &  Suzana B. Rodrigues (Professor of International Business and Organization)

  2. Middlesex University, London, UK

    J. George Frynas (Professor of Corporate Social Responsibility and Strategic Management)

Authors
  1. John Child
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  2. Suzana B. Rodrigues
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  3. J. George Frynas
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Additional information

The authors wish to thank the reviewers and editors of Management International Review for their valuable comments which have contributed to improvements in this paper. They also thank three anonymous reviewers for their helpful feedback on a previous version of this paper which was presented to the Academy of International Business Annual Conference, Beijing June 2006. They are grateful to the Economic and Social Research Council [ESRC] which funded the research from which the paper draws, and to Paul Eadie for his invaluable advice on SMEs involved with Brazil and on issues arising in exporting to Brazil.

Appendix

Appendix

Opening Questions asked of SME Interviewees concerning Psychic Distance between Brazil and the UK, and its Impact on their Business with Brazil.

Please evaluate the following features, using a scale of 1 to 5, where:

1 = ‘no real difference’ / ‘does not impact on my business at all’

5 = ‘very great difference’ / ‘impacts on my business very much’.

Respondents were then asked to elaborate on each answer, and their replies were tape recorded.

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Child, J., Rodrigues, S. & Frynas, J. Psychic Distance, its Impact and Coping Modes. MANAGE. INT. REV. 49, 199–224 (2009). https://doi.org/10.1007/s11575-008-0136-3

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