Introduction
During the last decades, it has often been argued that barriers between different cultures have diminished (Nordström, 199 1, p. 28ff). Cultural integration has thus been in focus and several researchers have argued that the world, especially within the business community, has become more and more homogeneous (see e.g. Vernon, 1979, Porter, 1980, 1986; Levin, 1983, Ohmae, 1985). A recent trend, however, is to stress heterogeneity rather than homogene@. Not least the animated discussions during the last few years about the future of the European Union shows that cultural differentes still exist. Such differentes are of special interest in MNCs, whose most characteristic feature is that they tonsist of units located in many countries. A number of researchers (see e.g. Bartlett, 1986, Ghoshal and Bartlett, 1990, Hedlund, 1986, Ghoshal and Nohria, 1989, Gupta and Govindarajan, 199 1, Nohria and Ghoshal, 1994, Prahalad and Doz, 1987, Rosenzweig and Nohria, 1994) have pointed to the fatt that units within multinational firms are not identical. According to Ghoshal and Nohria (1989, p. 323) the MNC is the quintessential case of the dispersed firm with different national subsidiaries often embedded in very heterogeneous environmental conditions (Robock, Simmons and Zwick, 1977). Thus, MNC urrits are located in different cultural milieus (Hofstede, 1980) and people with different nationalities, belonging to the same tirm. have to cape with each other. When people from different cultures work together, misunderstandings are likely to occur (Adler, 1986). Problems due to Gultural differentes are thus of special interest in such firms in which complexity, differentiation and variation in relations between the subsidiaries and HQ are characteristic features (Van Maanen and Laurent, 1993). As Hofstede (1983, p. 75) points out, cultural differentes do matter, and cultural differentes may become one of the most crucial problems especially for managements in multinational, multicultural firms.
Differentes in culture is thus a main factor causing friction between parties in MNCs as cultural differentes may lead to a communication gap. In order to get necessary information, individuals in different parts of the firm have to communicate and communication is largely influenced by cultural factors. Hence, people have culturally determined styles and ways of doing business, acquired primarily through their national culture but also through their business, corporate and individually based environments, and a reasonable hypothesis is that it is easier to communicate with people who share the same view of the world. Conflicts are also affected by cultural differentes as individuals may have veiy different approaches to conflict resolution. (Törnroas el ul, 1993)

Although there are cultural differentes between units belonging to the same firm, these differentes are not necessarily a handicap. On the contrary, cultural diversny represents one of the most valuable assets in an MNC as each culture has some contribution to offer (see e.g. Ekstedt et al, 1994, Laurent, 1991, Van Maanen and Laurent, 1993). A main objective should not necessarily be to strive for a shared, tommon culture. However, cultural differentes must be handled in such a way that they do not create too many problems in the relationship between HQ and subsidiaries. In order to function smoothly, there is a need for understanding between the units in the different cultnres. The parties must leam how to cape with the cultural differentes that exist.

In this paper cross-cultural differentes within MNCs are in focus and the relationship between headquarters and subsidiaries is studied. There is always a geographical distance but there is also one in a mental sense, between two firms and also hetween actors in the same organisation (Hallen and Wiedersheim-Paul 1979, 1984, italics added). The purpose here is to distuss when cultural differentes cause problems in the relationship between HQ and subsidiaries. A tommon hypothesis is that the greater the differentes between countries, the greater the difficulties in understanding each other. As a consequence, the propensity for cultural-related problems should increase with cultural distances. This Will be questioned in the following discussion and as an alternative explanation it Will be suggested that problems in the relationship between HQ and subsidiaries are more affected by operational interdependences between HQ and subsidiary than by the cultural differentes between them.

Theoretical background
According to a number of international business studies there are differentes in organisations and management practices between companies in different countries (Hofstede, 1980, Laurent, 1983, Sandström, 1990) and difficulties in international business caused by what has been designated as “culture” have frequently been discussed. What do we mean by “culture” then? The last decade has seen a rapidly growing interest in this subjett and a number of different definitions has appeared. Culture has been defined both as something an organisation is as well as something it has (Smircich, 1983, Sackmann, 1992). There is hence no consensus on the concept of culture (Czamiawska-Joerges, 1992, p. 160) and “(t)he organizational culture literature is full of competing and often incompatible views” (Smircich and Galas, 1987, p. 244ff). Although the concept of culture does not have one definition and meaning, a fundamental distinction can be made whether it is seen as a result of differentes

between countries or if by “culture” we mean something that can be created in order to hold a firm together. As pointed out by Ghoshal and Westney (1993) from either of these perspectives, the multinational firm is suitable for concept building and empirital research. “The multinational represents a theater of action at the intersection between two cultures: the cuiture or subcultures of the hINC organisation and the culture or subcultures of the different countries in which the MNC operates” (Ghoshal and Westney, 1993, p. 19).