Constructing differences in a cross-cultural context: National distance, social differentiation or functional distinction

This article develops theory about the perspectives through which expatriate managers and their employees socially construct differences in a cross-cultural context. On the basis of qualitative research on three kinds of organizations – multinational corporations, small and medium-sized enterprises and start-up companies – we identify three perspectives on differences in a cross-cultural context: the national distance perspective, the social differentiation perspective and the functional distinction perspective. Each perspective relates to a specific basis for categorization (nationality, status and function), focus of attention (values, attitudes and expertise) and definition of diversity (separation, disparity and variety). We find that international experience and country experience on one side, and the purpose of business (business development, business creation or business turnaround) on the other side, explain why some expatriate managers and their employees adopt one perspective or another, sometimes as default. The passing of time, as reflected in growing country experience, growing work experience and growing company tenure, can be the motor of transition from one perspective to another. Our findings contribute to cross-cultural and diversity studies, to social constructionism, and have consequences for international human resource management research and practices.