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Methodology

This chapter will account for what research approach and method that have been used in order to fulfill the purpose of this study. It further presents the data collection and discusses the validity and reliability of the findings. Finally it also includes a detailed description of the proceeding of the research and a section for shortcomings and reflections.

Research Approach

This section will discuss the methodological outline of the thesis. A qualitative approach is presented, a hermeneutic perspective argued for and a deductive strategy is chosen.

Qualitative Approach and Hermeneutic Perspective

To be able to answer the purpose and the research questions of this thesis the authors choose to use a qualitative approach, this in form of interviews. The authors found the qualitative approach as the most suitable approach since the nature of the purpose and re-search questions required more in depth answers and analysis. The qualitative approach was also chosen as the purpose and research questions could not be quantified and meas-ured in numbers.
Hermeneutics is the study of interpretation theory and means that different people can have a different understanding of the same text (Vikström, 2005). In this thesis the authors have chosen to use a hermeneutic perspective to interpret the interviews to fulfill the pur-pose of the thesis. As earlier studies within the same subject has used a qualitative approach with a hermeneutic perspective the authors believed that in order to make use of them and to further develop their conclusion, using the same or a similar research strategy would fa-cilitate the process. This might however cause common method bias and will be discussed in section 3.5.1.

Deductive Strategy

Since a lot of research already exists within the areas of cultural differences and expansion strategies the authors has chosen a deductive research strategy. This means that you test whether or not a theory is applicable in a practical context (Saunders et. al., 2007). This has been done by applying relevant theories on the four companies chosen for this study. The result might still be of interest to other Swedish companies planning to expand to Saudi Arabia. However the purpose is purely exploratory and the conclusions are solely based on statements contradicting or supporting the frame of reference.

Data Collection and Literature Search

The data in this thesis mainly consists of material from interviews and scientific articles. Other data consists of company specific information, news articles and previous research within the same field.
All the books and scientific articles were found through and are available at Jönköping University’s library as well as the library’s database. The most frequently used databases were; Ebrary, Emerald, ABI Inform, Google Scholar, Scopus. Examples of search words are; corporate culture, organizational culture, psychic distance, cultural distance, power, control, principal agent theory, Middle-East, Saudi Arabia etc.
Company specific information, news articles and previous research were found through browsing the Internet. The authors used search words as; Abetong, IKEA, Oriflame, Tetra Pak, expansion strategies, Middle-East, Saudi Arabia, culture etc.
The interviews are discussed separately and in more depth in section 3.4.

Primary Data

To gather primary data that is specific for this research, the authors used interviews. A total of four interviews were conducted with managers at suitable positions at respective com-pany. The interviews are discussed separately and in more dept in section 3.4.

Secondary Data

The secondary data in this thesis consist of data that has been collected earlier by other re-searchers for other purposes. This involves data from books, previous research, scientific articles, company specific information and news articles. To the possible extent the authors tried to use articles published during the last few years since the topic is very current and the prerequisites for establishing branches in the Middle-East has gone through some ma-jor changes.

Validity, Reliability and Credibility

Validity concerns the issue of whether the data collection methods accurately measure what it intended to measure (Saunders et. al., 2007). In this thesis this could be related to if the chosen method is relevant to fulfilling the purpose of the thesis. In this case the authors have used previous research as a template when designing both the purpose and the me-thodology. Therefore, with support from earlier studies this strengthens the possibility of reaching a strong validity for this thesis. External validity or generalizability concerns whether or not findings can are equally applicable to other research settings (Saunders et. al., 2007). This concern is specifically strong when conducting a case study. Since previous research has focused solely on a specific company their generalizability can be highly ques-tioned. Since this thesis is a multiple case study between four companies the findings are more relevant in terms of generalization. However the authors are well aware of the fact that the companies are distinctly different in many ways, and making too large generaliza-tions may be questionable.
Reliability concerns the issue if the different steps the authors have taken are identified clearly and if another researcher could repeat the process and acquire the same result (Saunders et. al., 2007). The reliability of this thesis could be questioned since it is a qualita-tive study with a hermeneutic perspective. This means that the authors have allowed them-selves to be an active part in the interviews and the results and conclusions are affected by their previous experiences and opinions. The authors do not, however claim that the result is purely objective and instead strive for a more general understanding of the problems and the possible solutions to them. However, Golafshani (2003) argues that the term reliability might not be relevant when analyzing qualitative studies. The purpose of the quantitative study is to “explain” while the purpose of a qualitative study is to generate understanding. It is this difference that makes reliability irrelevant within qualitative research. Stenbacka (2001, p. 552) argues that “the concept of reliability is even misleading in qualitative research. If a qua – litative study is discussed with reliability as a criterion, the consequence is rather that the study is no good”.

Proceeding of the Research

This section will in detail present how the research was conducted, and present the metho-dology of the interviews in detail.

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Selection of Questions

The interview questions (found in appendix A) have been developed to match the frame of reference, and are also influenced by the previous research presented in Appendix B. They are further divided into six different sections in order to facilitate the analysis of the empir-ical findings. The different sections are information about the respondent, information about the company/expansion/target market, corporate culture, psychic distance, principal agent theory and control. However these have been compiled into three sections for the analysis, corporate culture, psychic distance and principal agent theory and control.
Regarding the characteristics of the questions, the authors chose to develop open-ended questions. This was done in order to establish a more in-depth dialogue between the au-thors and the respondents and a deeper understanding of the situation and possible prob-lems. The questions are to some extent formed in a way that guides the respondent to give a specific answer, this by providing the respondent with different examples after posing the question. This was done both to clarify some of the questions and to keep the answers within the frame of reference.
The questions are written in both Swedish and English since all of the respondents are na-tive in the Swedish language.

Selection of Respondents

Saunders et. al. (2007) argue that there are two types of sampling techniques; probability and non-probability sampling. The authors have chosen to conduct a self-selective sam-pling which is an alternative technique within non-probability sampling (Saunders et. al., 2007). Self-selection sampling was considered a suitable choice since data has been col-lected from those who have been asked to take part in the study and they have showed their desire to participate.
A number of Swedish companies with operations in the Middle-East were therefore con-tacted and asked if they would be interested to take part in the study. Although many of them declined, with the reason that due to the current financial situation they do not have any time to spare for student theses. At first the authors wanted to make a comparison be-tween four companies within the same industry, and by doing so hopefully be able to iden-tify interesting differences. Although this did not prove possible for the authors and instead four companies in different industries were chosen for the study. This meant that instead of focusing on differences between the companies, the authors have focused on similar cul-tural problems encountered when operating in Saudi Arabia.
The four companies chosen for this study were; Abetong, IKEA, Oriflame and Tetra Pak. These companies differ in some aspects, for example type of expansion strategy, number of years established in Saudi Arabia, type of industry sector and size of company. The authors however believe that in spite of these differences, the outcome of the study has not been affected. On the contrary, the authors believe that these differences instead have contri-buted to identify interesting and similar problems encountered by the four companies.
A total of four interviews were conducted at these companies, with Fredrik Holst, Deput-ing Managing Director at Abetong, Jonas Abelsson, Store Manager at IKEA in Riyadh, Ste-fan Karlsson, Chief Marketing Officer and Business Development Director at Oriflame and with Jörgen Haglind, Information Director at Tetra Pak. The interviews were con-ducted over the phone because of the geographical distance between the respondents and the authors. By conducting these four interviews the authors believe they will be provided with the necessary information to analyze the problem and fulfill the purpose of the thesis.
Regarding the choice to only interview one person at respective company the authors went this way simply because this would be the only person within the company that possesses the relevant information and therefore conducting additional interviews would have proven pointless.

Setting

All interviews were conducted over the phone or by Skype due to the fact that of the geo-graphical distance between the authors and the respondents. All of the interviews were conducted in Swedish to avoid misunderstandings since the authors’ and the respondents’ are not native in English. Apart from this, all interviews were conducted through speaker phone so that both authors could actively participate and the interviews could be recorded. Finally both authors took notes for all of the interviews.
The first interview was conducted with Fredrik Holst 2009-04-21 at 5 pm. The interview took around 50 minutes and while Holst was in his car the authors conducted the interview from a study room at Jönköping International Business School.
The second interview was conducted with Jörgen Haglind 2009-04-24 at 10 am. The inter-view took around 40 minutes and while Haglind was in his office the authors conducted the interview from a study room at the School of Education and Communication.
The third interview was conducted with Stefan Karlsson 2009-04-28 at 10 am. The inter-view took around 25 minutes and while Karlsson was in his office the authors conducted the interview from a patio at the School of Education and Communication.
The last interview was conducted with Jonas Abelsson 2009-04-30 at 3 pm. The interview took around 35 minutes and was conducted via Skype since Abelsson works and lives in Saudi Arabia. During the interview Abelsson was in his home while the authors were at a study room at Jönköping International Business School.

Data Processing and Analysis Method

In order to process and in an easier way analyze the data, the interview questions were ca-tegorized in six different sections, four of them corresponding to the frame of reference of this thesis. These four are corporate culture, psychic distance, principal agent theory and control. The other two sections cover information about the respondent and the company and its operations in Saudi Arabia.
The answers to the questions were interpreted in a certain way, for example meaning that if a respondent answered that he had encountered problems with cultural differences the au-thors connected this to the theory of psychic distance, relating it to economical, geographi-cal or cultural distance. Another example could be if the respondent answered that they have encountered problems with asymmetric information, the authors connected this to differences in cultural practices between the companies involved.
During the interviews and as mentioned earlier both authors took notes and recorded the interview. The material was then transcribed carefully. The authors have as a second stage of the data analysis performed a data reduction in order to reduce, focus and organize to be able to process the data in an easier way. The reduced, and thereby the most relevant find-ings were then translated to English with exceedingly cautiousness. The findings are pre-sented in section 4.2, where they are categorized under corporate culture, psychic distance and principal agent theory and control. The four interviews are at first analyzed separately and then a comparison between them was made where interesting differences and similari-ties are highlighted.

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Shortcomings of and Reflections on the Research

This section presents shortcomings of and reflections on the research. It discusses both methodological problems during the interviews and source criticism in both primary and secondary data.

Methodological Problems (Interviews)

As the interviews were conducted over the phone it leaves a higher risk of misinterpreta-tion and misunderstandings than if they had taken place face-to-face. However to deal with this and minimize the risk of misinterpretations and misunderstandings the authors dis-closed the print-outs from the interviews to the respondents. This to let them validate the material and possibly indicate if there is something they want altered.
This thesis might also suffer from common method bias since the authors have conducted a single-method study consisting of a semi-structured approach. The authors are aware of this shortcoming but due to shortage of time and the relatively small research project, the authors were not able utilize different types of methods.

Source Criticism

This section presents criticism of the different sources chosen for this thesis. It is further divided into primary data, were the interviews are discussed, and secondary data were the articles and other scientific and current publications are discussed.

Primary Data

The interview questions do to some extent presuppose that it does exist differences and problems within the companies, based on what has been described in the frame of refer-ence. Another shortcoming concerning the interview questions is the use of the word “problems”. In retrospect the authors reflected that this word was not ideal and well thought-out. Many of the answers to the questions including the word “problems” indi-cated that the companies had not faced any problems. However, this since the respondents might have been unwilling to admit that they have faced any problems. A better way to formulate those questions would have been to use words such as challenges or difficulties. The authors are aware of that this might have resulted in embellished view of reality.
As this thesis is written in English and the authors and the respondents are native in Swe-dish, this leads to the issue of translation errors. A risk for translation errors can occur when translating the interview question. Other translation errors can arise when translating the findings of the interviews. In order to minimize those, the authors have reviewed the interview questions with our tutor and opponents at one of the thesis seminars. Regarding the translation of the empirical findings, the authors have sent the compiled and translated interviews to the respondents in order for them to validate the material.
Considering the fact that the authors have chosen to interview Jonas Abelsson who actually represents the franchisee have resulted in that some of the interview questions have been more difficult to pose. However, the authors believe that Abelsson’s knowledge about the Saudi market has been very valuable and considering his answers, the authors can conclude that the outcome has been applicable.
As all of the four companies chosen for this study are considered to be “successful” the au-thors faced the problem of success bias. This means that the companies are likely to unde-restimate the problems encountered when operating in Saudi Arabia. This is something that has been taken into consideration in the analysis and when the respondents stated that they have not encountered any problems in Saudi Arabia, the authors have taken this with a pinch of salt.

Secondary Data

Even though the authors have done thorough searches to find appropriate and suitable ar-ticles for the thesis, there is always a risk for not finding the most relevant articles. One should also consider the fact that even secondary data, such as articles might be influenced by the researcher and presents a subjective interpretation of the problem, or it may even be so that they in some cases present information that is inaccurate. Therefore it is of great importance to thoroughly review the data in a critical perspective.
Another problem that the authors encountered was the fact that since the topic is very cur-rent, and that a lot of things have happened only during the last six months, finding articles that discussed these issues was troublesome. Although the authors believed they managed to solve this is a satisfying way, one might question the relevance in at least some of the ar-ticles. Additional information related specifically to the section on Company Review (sec-tion 4.1) was collected from the selected companies’ web pages respectively. This informa-tion must therefore be considered as valid.

Table of Contents
Acknowledgement 
Definitions 
Abstract 
Sammanfattning 
1 Introduction
1.1 Background
1.2 Problem discussion
1.3 Research questions
1.4 Purpose
1.5 Multiple Case Studies
1.6 Delimitations
1.7 Disposition
2 Frame of Reference 
2.1 Literature Review
2.2 Target Market Review
2.3 Expansion Strategies
2.4 Corporate Culture
2.5 Psychic Distance
2.6 Principal Agent Theory
3 Methodology
3.1 Research Approach
3.2 Data Collection and Literature Search
3.3 Validity, Reliability and Credibility
3.4 Proceeding of the Research
3.5 Shortcomings of and Reflections on the Research
4 Empirical Findings of the Research
4.1 Company Review
4.2 Interviews
5 Analysis 
5.1 Corporate Culture
5.2 Psychic Distance
5.3 Principal Agent Theory and Control
6 Conclusions and Discussion 
6.1 Conclusions
6.2 Reflections and Critique
6.3 Suggestions for Further Research
References
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Swedish Companies in Saudi Arabia The Struggle to Maintain Corporate Culture

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