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International business expansion has been a hall mark of strategic management literature (Miller, 1992). When firms reach a dominant or healthy (read reservoir of slack resources) position in domestic market the natural tendency is to expand beyond the domestic market to foreign shores (Luo & Tung, 2007; Oviatt & McDougall, 2005). Literature is abound with studies on how North American, Western European and Japanese firms internationalized (Hackett, 1976; Glaister, 1998; Bartlett & Ghoshal, 2000; Glaister, 1996; Yang, Jiang, Kang & Ke, 2009). Contextually, the expansion of emerging economy firms to the developed world has been less studied till the 2000s (Yang, Jiang, Kang & Ke, 2009; Yiu, Lau, & Bruton, 2007; Yamakawa, Peng & Deeds, 2008). Further, research studies on emerging economy firms expanding onto other emerging economies or developing countries has been rarer still (Yiu, Lau, & Bruton, 2007; Yamakawa, Peng & Deeds, 2008). When a firm expands into international markets, the home country culture matters a lot in the way the firm carries out international business operations (Park & Ungson, 1997). Indian firms have expanded internationally in recent times substantially (Elango & Pattnaik, 2007; Athreye & Kapur, 2009; Gaur & Kumar, 2009; Chittoor, & Ray, 2007).
In this study, the author specifically studies the cultural context of an Indian firm manager while internationalizing business operations into another emerging economy (China) and developing country (Saudi Arabia). Saudi Arabia matters for India because historically both India and Saudi Arabia have shared rich business and trade relationship and a lot of Indians work in Saudi Arabia (Weiner, 1982). China has been a rising economic power in the last three decades. Indian business firms had to expand in China as a part of the internationalization initiative as China is both an important factor input market as well as a consumer market (Gupta and Wang, 2009; Nicholson and Salaber, 2013). Researchers have pointed out that doing business in both Saudi Arabia (Rice, 2004; Budhwar & Debrah, 2013) and China (Ambler, Witzel, & Zou, 2008)) comes with its own set of challenges.
Theoretically, international business managers had looked into both the drivers and challenges of expanding into foreign markets (Calof & Beamish, 1995; Evans, Bridson, Byrom & Medway, 2008). Theoretical lenses of these investigations have been contoured by the notion of managerial cognitive biases (Zahra, Korri, & Yu, 2005), internationalization process (Verbeke, 2013), institutional perspectives (Peng, 2003) and strategic positioning (Jain,1989). One dimension transcending all these theoretical perspective is culture (Peng, Wang & Jiang, 2008). If culture eats strategy for lunch (Goldman & Casey, 2010) then it becomes more compelling to state that culture rules international business strategy (Hofstede, 1994). In this study, with the theoretical base of ‘culture’ the author attempts to explore the internationalization of Indian firms in China and Saudi Arabia.