Question: Companies tend to begin their internationalization process in countries that are culturally very close. For instance, U.S based companies would enter Canada and/or the United

Companies tend to begin their internationalization process in countries that are culturally very close. For instance, U.S based companies would enter Canada and/or the United Kingdom first, before moving on to other countries. The so called psychic distance between the United States and Canada (or Britain) is small given that these countries are supposedly very similar. A recent survey, however, found that only 22 percent of Canadian retailers felt that they were operating successfully in the United States. Explain why culturally close countries are not necessarily easy to manage.

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