Cognitive distance refers to the extent to which the organisational and cultural settings differ between the home and host country.

Question

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It can be rather challenging for multinationals to develop and manage strategic global suppliers because of the physical distance (geography) and cognitive distance (organizational and cultural). For example, The Japanese Toyota Motor Corporation finds it much easier to develop and maintain long-term and cooperative relationships with Japanese suppliers as they share the same culture and language.

Cognitive Distance Refers to the Extent to Which the Organisational