Language in International Business - Developing A Field - Mary Yoko Brannen, Terry Mughan (Eds.) - JIBS Special Collections, 1, 2017 - Palgrave Macmillan - 9783319427447 - Anna's Archive

JIBS Special Collections
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Rutgers Business School
State University of New Jersey
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Language in International
Business
Developing a Field
Edited by
Mary Yoko Brannen

University of Victoria, Canada
and
Terry Mughan
Royal Roads University, Canada
Editors
Mary Yoko Brannen Terry Mughan
University of Victoria Royal Roads University
Canada Canada
JIBS Special Collections

ISBN 978–3–319–42744–7 ISBN 978–3–319–42745–4 (eBook)
DOI 10.1007/978–3–319–42745–4
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Contents
List of Tables, Figures and Appendices vii

Acknowledgements ix
1 Introduction 1
Mary Yoko Brannen and Terry Mughan
2 Methodological Considerations in Cross-national
Consumer Research 20
Robert T. Green and Phillip D. White
3 Cross-cultural Interaction: The International
Comparison Fallacy? 33
Nancy J. Adler and John L. Graham
4 The Multinational Corporation as a Multilingual Community:
Language and Organization in a Global Context 59
Yadong Luo and Oded Shenkar
5 Language Policies and Practices in Wholly Owned Foreign
Subsidiaries: A Recontextualization Perspective 93
Vesa Peltokorpi and Eero Vaara
6 The Multifaceted Role of Language in International Business:
Unpacking the Forms, Functions and Features of a Critical
Challenge to MNC Theory and Performance 139
Mary Yoko Brannen, Rebecca Piekkari and Susanne Tietze
7 Re-considering Language within a Cosmopolitan
Understanding: Toward a Multilingual Franca Approach in
International Business Studies 163
Maddy Janssens and Chris Steyaert
8 Linguistic Gender Marking and Its International Business
Ramifications 194
Estefania Santacreu-Vasut, Oded Shenkar and Amir Shoham
9 Why and How Does Shared Language Affect Subsidiary
Knowledge Inflows? A Social Identity Perspective 209
B. Sebastian Reiche, Anne-Wil Harzing and Markus Pudelko
This chapter is licensed under a Creative Commons
Attribution-NonCommercial-NoDerivs 3.0 Unported License.
v
vi Contents
10 Fit, Misfit, and beyond Fit: Relational Metaphors and

Semantic Fit in International Joint Ventures 254
Leigh Anne Liu, Wendi L. Adair and Daniel C. Bello
11 Conclusion 293
Terry Mughan and Mary Yoko Brannen
Index 301
List of Tables, Figures and
Appendices
Tables
1.1 Historical review of language-related articles

published in JIBS 4
1.2 Thematic clustering of articles with strong
language centrality 7
3.1 Sample characteristics 46
3.2 Measures and descriptive statistics 48
3.3 Results (ANOVA) 49
5.1 Coding categories and examples 105
5.2 Characteristic language policies and practices, and
accompanying challenges 109
5.3 Contingency model of language policies and practices and
inherent challenges in wholly owned foreign subsidiaries 123
7.1 Three research approaches to the study of language
in international business 177
8.1 Data set extract 198
8.2 Correlation matrix 200
8.3 Indices variation 201
8.4 Percentage of females on boards 201
8.5 Logit regressions of management of large teams and
language gender marking 202
8.6 OLS regressions of presence of female in subsidiary
corporate boards 204
9.1 Sample distribution across subsidiary location, industry
and HQ location 223
9.2 Results of CFA for the survey measures 231
9.3 Means, standard deviations and correlations 233
vii
viii List of Tables, Figures and Appendices
9.4 Results of random-intercept regression analysis for

subsidiary knowledge inflows 235
9.5 Results of random-intercept regression analysis
for mediators 236
10.1 Interviewee profiles 265
10.2 Correlations 276
10.3 Alliance outcomes by IJV subgroups 277
10.4 IJV outcomes: regression analysis 278
Figures
4.1 Theoretic logic of global language design for MNCs 65

4.2 A model of global language design for MNCs 70
8.1 Intensity indices 198
9.1 Theoretical model 217
10.1 Metaphorical language and semantic fit in IJVs 272
10.2 Interactions between relational metaphors and equity
structure of IJVs 279
Appendices
3A Payoff matrices for Kelley’s [1996] Negotiation Game 53

3B Details of laboratory procedures 54
3C Questionnaire measures 54
5A Guiding questions in interview protocols for PCNS 137
5B Guiding questions in interview protocols for HCNs 137
5C Guiding questions in interview protocols for consultants 138
9 Measure of shared language 253
Acknowledgements
The editors would like to acknowledge the support of the Centre for
Asia Pacific Initiatives at the University of Victoria and of the Faculty
of Management at Royal Roads University with special thanks to Sarah
Easter, PhD, and Noriko Prezeau for their research assistance.
ix
1
Introduction
Mary Yoko Brannen and Terry Mughan
In one of the most influential and cited articles published in the Journal
of International Business Studies (JIBS), “The Internationalization Process
of the Firm: A Model of Knowledge Development and Increasing Foreign
Market Commitments,” Johanson and Vahlne state the following about
language:
We believe that lack of knowledge due to differences between coun-

tries with regard to, for example, language and culture, is an impor-
tant obstacle to decision making connected with the development of
international operations. We would even say that these differences
constitute the main characteristic of international as distinct from
domestic operations. (Johanson & Vahlne, 1977: 23–32)
Twenty years later, not a lot had been done to progress the field of
international business (IB) research in regards to language. Notably,
Marschan, Welch, & Welch (1997) then published a critical article dem-
onstrating the pervasive impact of language on every area of manage-
ment of an MNC drawing on their illustrative case study of the Finnish
multinational elevator company, Kone. This chapter put forth a rallying
call to the IB field claiming that language had become a “forgotten” issue
by IB researchers and should rather be considered a central strategic one.
IB entails frequent encounters for organizations and individuals with
numerous partners and clients from all over the world, all of whom have
their own native language and diverse foreign language proficiencies.
What’s more, individuals in today’s global organizations are often dis-
placed from their countries of origin, operating in complex cultural teams
and tasked to share knowledge (which is often tacit) for the benefit of com-
panies headquartered elsewhere, communicating in a lingua franca not
1
2 Mary Yoko Brannen and Terry Mughan
their own. Streams and sequences of decisions and resource commitments

characterize the day-to-day activities of multinational companies (MNCs).
Such decision-making activities encompass major strategic moves like
internationalization and new market entries or diversification and acqui-
sitions. Strategic decisions such as these are extensively framed, formu-
lated, and articulated in specialized language often developed by the best
minds in the company. Yet the language used in such deliberations and
in detailing and enacting the implementation strategy is usually taken for
granted and receives little if any explicit attention (Brannen & Doz, 2012).
MNCs have come to recognize the importance of language when it comes
to national language in deciding upon language policies and employing
the services of specialized interpreters in order to avoid Babel-like com-
munication inefficiencies. They have also understood the importance of
an official corporate language in regard to eliciting employee and investor
commitment around strategic initiatives. Carefully word-smithed state-
ments of strategic intent and corporate values in annual reports, internal
organizational documents, and plasticized pocket-sized value-statement
cards are just of few indicators of this. In addition, more and more com-
panies have begun to put in place implicit language guidelines for use
in virtual communication including e-mail, texting, WebEx, and video
conferencing in order to avoid misinterpretations. As such, the interplay
between language (corporate) and languages (natural and national) is a
significant challenge to IB theory and practice (Welch, Welch, & Piekkari,
2005). How can IB researchers rigorously investigate phenomena such as
knowledge transfer, intergroup communication, or human resource poli-
cies in today’s global context of business without serious consideration of
the profound impact language has on such activities?
We devote this volume of the JIBS Collection Series to formally develop-
ing the field of language in IB in an attempt to better inform and support
scholars in the broad IB research community who have an interest in this
concept. We do so by tracing the treatment of language in IB as represented
in JIBS, presenting the findings of a comprehensive survey of articles
appearing in the journal since its inception in the early 1970s that have
considered language as an element of IB education and research, pointing
out key historical inflection points where seminal publications changed
the vector and the status of language in the IB field, showcasing select
articles that exemplify these turning points, and situating these discussions
within the larger domain of language in social science research. Guiding
our survey were the following research questions: How has language as a
“main characteristic” of IB operations been represented in JIBS? What are
the conceptualizations of language that have been adopted (or ignored)?
And, how central is the concept of language to IB scholarship now?
Introduction 3
Here, in our introduction to this volume, we discuss our methodology

and present the findings of our study reviewing all JIBS publications
which have treated language as an important factor. We identify key
themes and subthemes in the IB literature with which language has
been associated and uncover the critical turning points around which
research on language has evolved. In the body of the book, we showcase
full versions of eight articles and one important research note that have
been published in JIBS, which we feel characterize the main themes
in the treatment of language in JIBS and as such have been the most
influential on the subject. In our concluding chapter, we assess the pro-
gress made in language research toward realizing Johanson & Vahlne’s
(1977) vision of its importance in the IB field and point to where there
still remain significant gaps and highlighting opportunities for future
research. In so doing, this JIBS collection provides a thorough historical
review of the research on language in business in the world’s leading IB
journal with guided readings of how language has been viewed in semi-
nal publications in the areas of strategy, marketing, and cross-cultural
management, and offers thoughts and suggestions for future research
topics and practice for language researchers in IB.
The survey methodology deployed for this JIBS language collection was
the following. We developed an initial list of articles in which language
was a central construct using specific search terms to cast a broad net to
capture any article related to language using it as a dependent or inde-
pendent variable or taking the concept up in its research methodology.
The search terms included the following: “language(s),” “communicate,”
“communication,” “meaning(s),” “(back)translate,” “(back)translation,”
“lingua franca,” “interpret(er),” “interpretation,” “multilingual,” “knowl-
edge sharing,” “discourse,” and a variety of longer strings combining
“language” with others in this list and with other mainstream terms in IB
research such as “marketing,” “brands,” and “information technology,”
or “method.” This initial search yielded a total of 49 articles taking up the
subject of language in some capacity published in JIBS between 1976 and
2015. In reviewing these articles we discovered a further number of articles
mentioning language in some cases that had been cited in the original 49
that had not appeared in the preliminary digital search. In many cases this
was because search tools work less reliably with earlier scanned versions of
articles, and as such, we reviewed scanned articles manually. By doing so,
we found 12 more articles taking up the notion of language reaching back
to 1976, thus expanding our sample of articles under review to 61 (Table
1.1). Whilst we did everything we could to make this search as thorough
as possible, it is possible that articles have eluded us. We apologize to any
authors who may feel their work has been overlooked.
4
Table 1.1 Historical review of language-related articles published in JIBS
Chronological listing of articles Language-related themes Citations Lang centrality
Brandt & Hulbert (1976) HQ-subsidiary commuication 55 0

Green & White (1976) Cross-national equivalence 190 5
Johanson & Vahlne (1977) Language & cultural differences 9407 2
Fischer & Berman (1979) R&D 58 0
Cosmas & Sheth (1980) Knowledge transfer 166 0
England & Harpaz (1983) National differences 62 0
Mascarenhas (1984) Manufacturing 79 0
Radebaugh & Shields (1984) Language capability of students 9 5
Ghoshal & Bartlett (1988) HQ-subsidiary innovation 797 0
Adler & Graham (1989) Cross-cultural effectiveness 548 4
Francis (1991) Intercultural adaptation 186 3
Adler & Bartholemew (1992) HR & knowledge 166 0
Kale & Barnes (1992) Marketing (sales) 250 0
Ueno & Sekaran (1992) Cross-cultural communication 146 0
Ball & McCulloch (1993) IB education 69 4
Luthans et al. (1993) Comparative management 165 1
Swarmidass (1993) Importing 105 0
Mullen (1995) Comparative management 678 3
Bresman et al. (1999) Knowledge transfer 1089 0
Heuer et al. (1999) Cross-cultural communication 95 1
Shaffer et al. (1999) International assignments 571 4
Globerman et al. (2001) E-commerce 76 0
Zaheer & Manrakhan (2001) ICT & strategy 156 0
Samiee et al. (2005) Marketing 260 4
Buck & Sharim (2005) Cultures & innovation 151 0
Dow & Karunuratna (2006) Psychic distance 414 3
Luo & Shenkar (2006) MNC strategy 187 5
DiRienzo et al. (2007) Corruption 87 0
Hung et al. (2007) Advertizing 86 0
Hult et al. (2008) Cross-cultural research methods 147 2
Tang & Koveos (2008) Cross-cultural research method 150 2
Kumar et al. (2009) Off-shoring 120 1
Noordehaven & Harzing (2009) Knowledge-sharing 202 0
Rangan & Sengul (2009) MNC theory 44 0
Su, Yanh, Zhuang & Zhou (2009) Channel communication 63 0
Kang & Kim (2010) Foreign acquisitions 64 4
Delmestri & Wezel (2011) Organizational forms 11 0
Peltokorpi & Vaara (2012) Language policy 34 5
Tenzer, Pudelko & Harzing (2014) Global teams & trust 37 5
Boussebaa, Sinha & Gabriel (2014) Corporate Englishization inequality 16 5
Brannen, Piekkari & Tietze (2014) Language centrality 37 5
Chidlow, Plakoyiannaki & Welch (2014) Translation 16 5
Haley & Boje (2014) Power & policy 11 5
Hinds, Neeley & Cramton (2014) Global teams 23 5
Holden & Michailova (2014) Translation 3 5
Jannsens & Steyaert (2014) Language policy 12 5
Kuznetsov & Kuznetsova (2014) Language policy 7 5
Peltokorpi & Vaara (2014) Knowledge transfer 14 5
Rasmussen, Ehrnrooth et al. (2014) Boundary-spanning 10 5
Santacreu-Vasut, Shenkar & Shoham (2014) Language & gender 15 5
Selmier & Newenham-Kahindi (2014) CSR 5 5
Śliwa & Marjana Johansson (2014) Power & inequalities 7 4
Volk, Kohler & Pudelko (2014) Cognition in organizations 6 5
Bordia & Bordia (2015) Language policy 5 5
Cuypers, Ertug & Hennart (2015) Linguistic distance & M&As 7 5
Jeanjean, Stolowy et al. (2015) Language policy 7 5
Joshi & Lahiri (2015) Lanuage interaction 5 5
Liu, Adair & Bello (2015) Internationalization of the firm 1 4
5
Luiz (2015) Power & policy 2 5

Reiche, Harzing & Pudelko (2015) Power & policy 15 5
Tenzer & Pudelko (2016) Media choice multilingual teams 0 5
We then read each of the articles and assessed them for whether they
considered language as a substantive conceptual or methodological
element ranking them on a scale of 1 (low) to 5 (high) in regard to lan-
guage centrality. Of the 61 articles read, 32 articles received a language
centrality score of 4 or 5 indicating that these articles met the criteria of
having language as a central focus of the research. We then coded these
articles by theme associated with language that emerged over time in
the IB field. This yielded four main themes around which the 32 articles
clustered: language as instrument, language and culture, language and
strategy, and language as distinct from culture. We then further analyzed
the thematic clusters of the articles searching for subthemes and possible
historical inflection points around which the nascent field of language
in IB was emerging. By inflection point, we mean places in time where
the direction of intellectual inquiry changed significantly, for example,
what was termed a “linguistic turn” in the humanities (cf. Rorty, 1967;
Wittgenstein, 1978, 2005). Table 1.2 is organized in a manner to high-
light these turns in the view of language in IB research, to underscore
the themes and subthemes we discovered, and also shows the degree to
which each theme has been revisited and enhanced over time.
We found the following trends with four clear inflection points: (1) an
initial interest in language as instrument—an important tool to include
in IB education and in an IB researcher’s toolkit particularly vis–à-vis
translation; (2) a preliminary inflection point indicating a turn toward
linking language with culture; (3) a second inflection point toward
linking language with MNC strategy; and (4) a more recent turn toward
understanding language as a central construct in IB theory. We also dis-
covered a conspicuous period of absence of language-related research in
IB between 2007 and 2012.
Language as instrument (1970s–1990s): IB education—preparing

students, researchers, and practitioners—capability, competence, profi-
ciency, and issues in translation and functional equivalence in research
methodology.
Language and culture (1990s–2005): HR, adaptation, language as arti-
fact of national culture.
Language and strategy (2006): Shift to language as a strategic tool,
MNC policy, innovation, marketing, psychic distance, corruption, and
FDI.
2007–2012—A void period with no articles with language centrality;
although there were articles which deployed language as an independ-
ent variable in predominantly marketing-related (with a splattering of
7
Table 1.2 Thematic clustering of articles with strong language centrality
Theme Authors in chronological order Sub-theme
Language as instrument
Green & White (1976)** Cross-national
equivalence
Radebaugh & Shields (1984) Lang capability of
students
Ball & McCulloch (1993) IB Education
Chidlow, Plakoyiannaki, & Welch Translation
(2014)
Holden & Michailova (2014) Translation
Language & culture
Adler & Graham (1989)** Cross-cultural
effectiveness
Shaffer et al. (1999) Int assignments
Samiee et al. (2005) Marketing
Haley & Boje (2014) Internationalization
of the firm
Luiz (2015) Language & cultural
measures
Language & strategy
Luo & Shenkar (2006)** MNC
Kang & Kim (2010) Foreign acquisitions
Peltokorpi & Vaara (2012) Language policy
Cuypers (2013) Governance
Bordia & Bordia (2014) Language policy
Jannsens & Steyaert (2014) Language policy
Jeanjean, Stolowy et al. (2014) Language policy
Joshi & Lahiri (2014) Language friction
Kuznetsov & Kuznetsova (2014) Language policy
Selmier & Newenham-Kahindi (2014) CSR
Śliwa & Johansson (2014) Language & power
Boussebaa, Sinha & Yiannis Gabriel Language & power
(2014)
Santacreu-Vasut, Shenkar, & Shoham Power & gender
(2014)
Liu, Adair & Bello (2015) Governance
Language as a central construct in IB
Brannen, Piekkari, & Tietze (2014)** Language as a central
construct
Hinds, Neeley, & Cramton (2014) Global teams
Tenzer, Pudelko, & Harzing (2014) Global teams & trust
Peltokorpi & Vaara (2014) Knowledge transfer
Rasmussen et al. (2014) Boundary spanning
Volk, Kohler, & Pudelko (2014) Cognition in
organizations
Reiche, Harzing, & Pudelko (2015) Knowledge transfer
Tenzer & Pudelko (2016) Global teams
**Inflection points of language in IB

strategy) areas of IB research, off-shoring, knowledge-sharing, corrup-

tion, foreign acquisitions, organizational forms, MNC theory.
Language as a central construct in IB (2012–2016): Opening up of
the field stemming from the JIBS Special Issue on Language (Brannen
et al., 2014) including critical perspectives on English as a Lingua Franca
in IB, gender marking, knowledge-sharing, team dynamics, trust, CSR,
cognition, and language policy.
Tasked with choosing a limited number of articles to include in this

collection, we used the thematic clusters and inflection points above as
our preliminary selection guide to showcase articles that have played an
influential part in establishing and advancing the field of language in
IB. In choosing our final set of articles, we used the following combina-
tion of factors. First we selected articles that were exemplary of each of
the major inflection points in how the IB field was viewing language,
and then we took into consideration the citation count of the articles
weighted by publication date.
1.1 Language as instrument
Chronologically, the single theme in regard to language that has been

present in JIBS publishing from 1976 till the present day is the concept
of language as an instrument. By “instrument” we mean conceptual-
izations of language as a skill or tool that facilitates or complicates IB
practice or research. Awareness of and reference to language as a code
system, which varies across national cultures, has long been present in
the IB research community.
Language as an instrument has manifested itself in a three main areas
of research; research methodology, language proficiency, and translation.
The earliest publication we include in this collection which is exemplary
of this view of language as instrument addressing its criticality to research
methodology is “Methodological considerations in cross-national con-
sumer research,” by Green & White (1976). This study focuses on areas of
difficulty in the execution of cross-national research including concepts
of functional equivalence and cross-national equivalence of phenomena
and translation of research instruments. Building on Brislin (1970), the
authors see large areas of potential error if these matters are not attended
to properly in research design and execution and warn that results may
be “rendered useless” otherwise. The process and limitations of transla-
tion and back-translation are discussed and this article made an early
cogent case for a deliberate consideration of cross-national differences in
language as a key element of good research practice.
Introduction 9
Several comprehensive reports addressing the importance of inter-

national expertise for American firms, emphasized foreign language
proficiency as an integral part of an international manager’s toolkit
and thereby an important consideration for inclusion in IB educa-
tion (Kobrin, 1984; Nehrt, 1977). In JIBS, Ball & McCulloch (1993)
express a conventional understanding of the place of language in IB
at the time, as a communicative skill. In a study designed to assess
the value attached to IB knowledge and skills to America’s 100 larg-
est multinational firms and 50 biggest exporters, “foreign languages”
was one of three curriculum areas assessed for their importance “when
hiring college graduates.” Foreign languages came second in the list,
ahead of “International investment, lending, trade, or related activi-
ties” and close behind “Business, (cross-cultural) or political relations
beyond the United States.” These results were more full and balanced
than those from previous similar empirical studies cited by the author.
Nonetheless, the interpretation of their significance was limited in its
range and depth. “As you would expect, there is a rather strong relation-
ship between the importance of languages and the geographical areas in
which the firm is interested” (p. 389).
Specific languages for specific markets is the conclusion, despite the
fact that many of these markets speak more than one native language
and the simultaneous involvement of many of the respondent com-
panies in a multiple number of these markets and the resource chal-
lenges this presents. There is no discussion of the inter-relationship
between the possession of these skills and the ability to demonstrate
knowledge and competencies in other curriculum areas, the levels
at which these skills might become effective for particular functions
and roles, nor the question of what happens when those skills are
not available to the company in a given location and situation. Fuller
consideration of these challenges is given by Radebaugh & Shields
(1984) in another JIBS article, which has unfortunately been cited
much less than Ball & McCullough. They found that translating
skills were the main requirements and that this task was usually car-
ried out by employees whose main job was in a “non-language area”
(p. 195). Valuable as language skills are to the international com-
pany, the treatment of their role and relevance to academic research
was very shallow for most of this period. Spanish, French, and other
national languages are seen as occasional, purely instrumental chal-
lenges in the organization which are hived off to a small number of
employees mainly employed to do something else and no account
is taken of issues of quality, productivity, or added value from good
language policy and practice.
The nature and form of translation, on the other hand, has been
extensively examined by scholars from across the social sciences in the
intervening period and JIBS itself has begun to publish work which
contests the instrumental approach and probes deeply into concepts
of meaning and communication that go to the heart of all interna-
tional research. For example, in their review of cross-language studies,
Chidlow et al. (2014) find that translation has been seen as a practice
of finding “equivalence” between languages rather than as a process
of interaction across cultures itself. The latter approach is truer to the
real nature of words across languages as they often mean something
different or are actually absent from one of them. The contextualiza-
tion approaches they explore offer real value to IB research because
they further the procurement of “theoretical insight” and “concep-
tual understanding” (p. 576) In this view, quality and meaning may
be found in the space between national languages rather than in the
process of simply replacing one with the other. Holden & Michailova
(2014) ground and elaborate on this line of thinking in their analysis
of Russia’s first Handbook of Knowledge Management. They take the very
theme of the book itself and explain why the term “knowledge sharing”
is, in itself problematic in translation as Russian organizations histori-
cally and culturally have no history or understanding of this practice.
Forcing terms from one language into the clothing of another language
leaves many cultural and psychological gaps and areas of doubt, even
if it may technically be considered as a good translation. Arguing for a
deeper formulation of what the academic and management communi-
ties means by “knowledge transfer,” the authors make the case for a
new form of language awareness in IB that links language and languages
with culture, knowledge, and organizations.
1.2 Language and culture
Cross-cultural management has been a critical subfield of IB research

from the inception of the field of IB and JIBS and has taken many
developmental turns of its own over time. The advent of intense
Japanese competition in manufacturing since the 1970s and the sub-
sequent surge in Japanese FDI in the late 1980s and 1990s catalyzed a
rise in cross-cultural management research during this period (cf. Black,
1988). The 1989 fall of the Berlin Wall and the Communist bloc with
the ensuing entry of East European countries into the global trading
bloc coupled with the ongoing entry of Pan Asian countries ushered in
the new Global Era leading to a series of aftershocks for management
Introduction 11
practitioners and scholars as they realized how structurally and cultur-

ally different these markets were from those of established trading econ-
omies. This in turn led to a rapid growth of interest in cross-cultural
management as an area of management theory, which until then had
made little impact on scholars in the areas of strategy, economics, and
trade (cf. Hofstede, 1983; Kogut & Singh, 1988). Cross-cultural manage-
ment became the go-to solution for researchers and consultants seeking
to understand and find solutions to obstacles to economic and business
development in powerful new markets such as Russia and China. JIBS
has reflected the growing importance of this lens on IB throughout
the 1990s in particular but on into the new millennium. The flood of
Western companies and consultants into these countries was faced with
massive linguistic as well as cultural challenges but the evidence from
JIBS suggests that the former figured much less in the assessment of
the new environment than culture did. Or, more likely, language was
conflated with culture, and as such, language as a separate construct
was not developed. In any case the number of studies published over
the period from the 1990s to 2006 with language as an element did not
increase, nor did the relative centrality of language within the studies
published.
Some scholars even opined that cultural modeling based on value
systems such as the work by Geert Hofstede (cf. 1984) substituted for
language-based communication. If so, this would have been in spite
of the message from an important piece of work by Adler and Graham
published in JIBS in 1989—the second piece we showcase here. In exam-
ining the process of cross-cultural negotiations, these authors find that
difference in native languages and language selection and use in these
encounters is critical and is therefore central to the skillsets needed for
cross-cultural effectiveness. This study, which used innovative simula-
tion methodology, is embedded in the rich traditions of intercultural
communication and international organizational behavior and pro-
vided a cogent conceptual and methodological basis for continuing
informed development of cross-cultural management theories. We
consider it to be an inflection point because of these innate strengths,
even though the volume of this kind of work published in JIBS in
the following years was disappointingly low. Indeed a fair number of
articles comprising cross-national studies published in JIBS through
this period (e.g. Mascarenhas, 1984; O’Grady & Lane, 1996; Su et al.,
2009) ignored language completely. Two rare exceptions to this over-
sight are Shaffer, Harrison, & Gilley (1999) and Dow & Karunaratna
(2006). In the former, the authors separate language proficiency from
culture as an important determinant of adjustment to international

assignment. In the latter, the authors separate the effects of language
from culture as two separate constructs, which contribute to the notion
of psychic distance.
1.3 Language and strategy
The antecedents in JIBs of our next selected piece to showcase are

harder to trace. Luo and Shenkar’s (2006) piece, “The multinational cor-
poration as a multilingual community: Language and organization in a
global context,” represents the single largest step forward for language
in the history of JIBS and for the realization of Johanson and Vahlne’s
vision. This is because it authoritatively and confidently states that lan-
guage is part of “the MNC’s international strategy, organizational struc-
ture and transnationality.” It recognizes the authentic and indisputable
nature of language as a strategic element of MNC operations and rejects
earlier formulations of language as a “pre-determined construct” in
favor of one, which is “deliberately selected and socially evolving.” It
goes on to assess the challenges involved in building “a globally inte-
grated language system” based on a review of strategy, marketing, and
FDI literature.
More than any other article, the Luo and Shenkar piece created a
disciplinary framework for language researchers in IB and provided a
base from which ambitious ideas could be formulated and researched.
We consider it an inflection point in the field because of the argued
justification of language as a strategic dimension of the MNC’s activities
and the radical shift away from the instrumental position, which had
predominated until this date. Although it took some time, this achieve-
ment would open up the door for a new wave of research efforts aiming
to substantiate this vision and position and this notably includes our
fourth selected text, “Language policies and practices in wholly owned
foreign subsidiaries: A recontextualization perspective” by Peltokorpi &
Vaara (2012).
Luo and Shenkar had called for studies of the “process of implemen-
tation that is crucial to global value creation,” in particular in the field
of global human resource management. Following this lead, Peltokorpi
and Vaara studied 101 subsidiaries in Japan and found that language
policies and practices from headquarters were recontextualized in four
different ways with varying emphases on the local and global axis. It
further explored the role of concepts such as praxis, hybridization, key
actors, power, and strategy in this process. This article broke the JIBS
Introduction 13
silence about language as a policy issue after the Luo and Shenkar piece
and made an important contribution to the field of IB of their design
model. It also has the distinction, along with Kang & Kim (2010) who
wrote on language issues in foreign investment corporate governance,
of making the cut in JIBS before the Special Issue on language, which
appeared in 2014.
1.4 The concept of “Linguistic Turn” and its significance

for the evolution of the language construct in IB
The role language plays in representing reality and mediating other

phenomena such as meaning and knowledge is deeply rooted in
philosophy, history, and the humanities in general. Until the late
nineteenth century, it was generally assumed that language described
reality objectively (Rorty, 1967) and this position is possibly the one
that underpins the view of language as an instrument that survives till
today in business and management literature. Around the turn of the
century, philosophers such as Frege (1884) and Wittgenstein (1922)
started to question the dominant logic of language and the notion that
language is not just a system of labels began to emerge. The role of cul-
ture in attributing meaning variously and the shared nature of language
use make language itself dynamic and therefore somewhat inconstant.
Language describes and reflects the complex nature of thought itself and
is therefore a subjective phenomenon. Twentieth century philosophers
such as de Saussure (1916) and Heidegger (1927) essentially proposed
that something cannot exist without our linguistic representations of it.
Whilst this movement contains many complex strands, it has come
to be known collectively as the “linguistic turn” and has massively
influenced most fields of the humanities and social sciences in the last
century. Language as a complex, contradictory, and dynamic concept
has to be grappled with and considered as an indispensable challenge
for the formulation of concepts, the process of communication and
thought and the very building blocks of knowledge.
The implications of this for business are considerable in that this
broader understanding of language complicates the pursuit of effi-
ciency and productivity, which are central to classical conceptions of
performance and success. For example, the adoption of English as a
business lingua franca for multinational organizations is, according to
this analysis, based on the assumption that language users will perceive
it as an objective code (a series of labels without cultural variability)
which will be understood in exactly the same way by all users. Recent
work in this field by Piekkari, Welch, & Welch (2014) and Yanaprasart
(2015) and others has demonstrated this to be flawed and that groups of
users, in a subjective fashion, create their own meaning system (such as
“Spanglish” or “Chinglish”) to accommodate variety and reflect emerg-
ing realities.
Language may for certain purposes act as an instrument, or have close
associations with national cultural characteristics, but it is much more
than that too. Over time, thanks to articles by Green & White (1976),
Adler & Graham (1989), and Luo & Shenkar (2006), showcased here
as critical inflection points in the evolution of the field of language in
IB, JIBS has given voice to challenging and, some might say, disturb-
ing evidence that what IB researchers have considered to be reliable
communications and data describing international phenomena may
be less accurate than they assumed and claimed. Growing awareness
of the potential implications of these observations for other areas of IB
research which coopt language as a mechanism, metric, or proxy with-
out considering the political, psychological, cultural, and semiological
dimensions of the phenomenon led to the advent of a special issue on
language in JIBS marking the IB field’s own linguistic turn.
1.5 Language as a central construct in IB
The final inflection point on language in IB is therefore given to this

linguistic turn in IB research and we mark this turn with our fifth
showcased article—the introduction to the special issue on language
(Brannen, Piekkari, & Tietze, 2014). This introductory piece laid the
groundwork for the re-engagement of IB scholars with conceptual and
methodological issues involving language going substantially beyond
translation and back-translation of research instruments, conflating lan-
guage with culture, or introducing language as one of many independ-
ent variables. The special issue acted as a catalyst for work in JIBS that
would extend the bandwidth of the field’s understanding of the role of
language in IB and encouraged IB researchers to begin to explore the
multifaceted dimensions of the language construct. As such, the Special
Issue itself and the subsequent flood of articles focused on language in
IB have gone far in bringing business and management research into
line with contiguous disciplines in the social sciences and humanities.
The four remaining articles that we showcase herein were chosen as
exemplars of the diverse ways in which IB research can be enriched and
broadened by using an interdisciplinary, multi-method perspective in
researching the multifaceted role of language in IB. Janssens & Steyaert
Introduction 15
(2014), “Re-considering language within a cosmopolitan understanding:

Toward a multilingual franca approach in international business stud-
ies,” take a sociolinguistics perspective using cosmopolitan theory to
debunk the notion of the necessity of a single lingua franca for MNCs
and advance the possibility of multilingual organizations allowing for
emancipatory politics through mixed language use. In a very important
research note, “Linguistic gender marking and its international business
ramifications,” Santacreu-Vasut, Shenkar, & Shoham (2014), analyze the
impact of language-based gender distinctions on female workplace out-
comes in IB and the over-arching effects of home country language on
subsidiary boards in MNCs. In “Why and how does shared language affect
subsidiary knowledge inflows?” Reiche, Harzing, & Pudelko (2015) utilize
an interdisciplinary approach merging sociolinguistics with a social-
identity perspective to argue that shared language is not a sufficient con-
dition for the successful transfer of tacit knowledge. In “Fit, misfit, and
beyond fit: Relational metaphors and semantic fit in international joint
ventures,” Liu, Adair, & Bello (2015) take this notion of shared language a
step further to underscore the importance of agreement around symbolic
language such as metaphor and imagery to the alignment of management
practices in international joint ventures and mergers and acquisitions.
The articles selected for inclusion in this collection have already
passed stern scrutiny in the form of the rigorous editorial process of the
JIBS. No other journal in the IB field has proven more open and recep-
tive to scholars of language and JIBS has demonstrated the readiness to
publish articles with a language perspective since 1976. The recent surge
of interest and activity in language is reflected well in this collection
and there are signs of the emergence of a critical mass of scholars neces-
sary to sustain and enhance this productivity and creativity in method
and theory-building.
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2
Methodological Considerations in
Cross-national Consumer Research
Robert T. Green and Phillip D. White
Introduction
The field of consumer behavior has evolved rapidly in a relatively

brief perod of time. The depth as well as the breadth of the research
on consumer behavior has been impressive. However, most of the
research in the area has one common limitation: it is culture bound.
Nearly all consumer studies have been conducted in the United States.
Thus, the principles which have been developed are associated only
with U.S. consumer behavior; the theories which have been derived
can legitimately be used to describe, predict, or understand consumer
behavior only in the United States.
The unicultural perspective that characterizes consumer research
places constraints on the development of the field. The natural con-
clusion to be drawn from the recognition of this current inadequacy
in consumer research is that more cross-national research should be
conducted.1 However, the conduct of cross-national research cannot
be viewed as a mere extension of domestic research. As soon as the
decision is made to conduct research in more than one nation, the
researcher is faced with a myriad of problems that often do not have
to be considered in the conduct of purely domestic research. Failure
to recognize these considerations can place severe limitations on the
potential contribution of a cross-national research project.2
Reprinted from Robert T. Green and Phillip D. White (1976) “Methodological

Considerations in Cross-national Consumer Research,” Journal of International
Business Studies (pp. 81–87). With kind permission from Palgrave Macmillan. All
rights reserved.
20
Methodological Considerations in Cross-national Consumer Research 21
The past five years have witnessed an increasing number of cross-

national consumer studies.3 Attention has been focused primarily on
the decision-making processes of ultimate consumers4 and of industrial
buyers.5 In addition, studies have been reported concerning product
perceptions,6 repeat buying habits,7 innovator characteristics,8 and
consumer information systems.9 There are also several cross-national
consumer research projects currently in progress.10 Presumably, the
results of these studies will provide a base for future studies conducted
in the area. Yet, many of the studies contain major drawbacks owing to
the methodological procedures they employed.
The primary objective of this paper is to identify and explain the
major methodological considerations which should be incorporated
into cross-national studies. An understanding of these issues is crucial to
the conduct of cross-national research because in many instances results
will be rendered useless if the investigators are unaware of the subtleties
involved. The secondary objective of the paper is to provide prospective
cross-national researchers with a set of sources to which they can refer
for detailed information about the individual issues.
Methodological considerations
The specific issues of concern to cross-national consumer researchers

include the functional equivalence of the phenomena being studied
across nations, the cross-national equivalence of the concepts and
research instruments being employed, the comparability of the samples
in each nation, and the translation of the research instrument into
different languages. These methodological issues are all highly interre-
lated, but for purposes of exposition are considered individually in the
following sections.11
Functional equivalence
“Obviously, if similar activities have different functions in different
societies, their parameters cannot be used for comparative purposes.”12
This statement provides a concise expression of the problem of
functional equivalence that confronts cross-national researchers. Some
of the most common variables and situations employed in consumer
behavior studies are not functionally equivalent across nations. Many
products tend to perform different functions in different nations; bicy-
cles provide basic transportation in some countries, but are essentially
22 Robert T. Green and Phillip D. White
recreational in others. The act of shopping does not always perform the
same function in all countries. In France shopping is reputed to be an
integral part of the housewife’s social life, whereas in the United States
shopping tends to be considered a chore. Thus, a cross-national study
which involves measurement of some aspect of consumer behavior
while purchasing a particular product or while shopping could be deal-
ing with functionally non-equivalent situations. Any differences ascer-
tained in responses could not automatically be attributed to national
differences on the variables being measured, since it may be equally
plausible that the differences were caused by the functional non-
equivalence of the product or the buying situation.
The issue of functional equivalence is particularly critical in the
cross-national testing of consumer behavior theory. The identification
of cross-nationally valid relationships which enable greater understand-
ing or prediction of consumer behavior demands explicit consideration
of the functional equivalence of all aspects of the research project.
However, the area of cross-national consumer behavior has probably
not reached the point where this type of hypothesis testing is possible,
since so little is known about the functional equivalence of purchasing-
related phenomena across countries. Therefore, a primary objective of
current cross-national consumer research may be the identification of
functionally equivalent and non-equivalent phenomena through basi-
cally descriptive studies. The results of such descriptive work can pro-
vide the input for future theory development.
Functional equivalence may not be a necessary requirement for
cross-national research conducted for primarily managerial purposes.
In many cases business managers may be concerned mainly with
purchase response under well-defined and relatively discrete conditions.
For instance, the manager may wish to know only whether consumers
in Country A respond to a certain advertising theme in the same way as
consumers in Country B. In this case, the manager would be interested
in discerning the effectiveness of the particular theme, and functional
equivalence may not be an issue. However, even then, identification of
possible functional differences may be a useful byproduct of the research.
Conceptual equivalence
Another consideration in cross-national research concerns the equiva-
lence of the concepts which are employed in the countries being
investigated.13 This consideration recognizes that many concepts are
culture bound and are inappropriate for use on a cross-national basis.14
The results from a cross-national research project may be uninterpret-
able if they are based upon concepts which apply in one way in some
countries and in a different way—or not at all—in others. Problems of

this type can arise from the conceptual base of a study. Similarly, con-
ceptual equivalence can be an issue in the selection of terms that are
employed to measure certain items (which will be discussed below with
respect to translation problems).
Problems in conceptual equivalence might arise in cross-national
consumer research when testing the role that certain sociological or
psychological constructs play in purchasing behavior. For instance,
a conceptual equivalence problem might arise if one were to employ
a cognitive consistency theory in a cross-national study of consumer
behavior. A primary assumption of cognitive consistency theories is that
people do not voluntarily hold discrepant attitudes. Such an assump-
tion may be valid in the United States but may not apply in other
nations. Thus, the concept of cognitive consistency may be culture-
bound, without conceptual equivalents in some other nations, and
inappropriate for use in some cross-national research.
The preceding discussion is not intended to imply that cross-national
research that employs social and behavioral science theories developed
in the United States should be avoided. The examples are used to illus-
trate the point that the concepts employed in a cross-national study
should be applicable in the nations being tested. Research that is basi-
cally exploratory or descriptive may not need to establish conceptual
equivalence in the design stages. However, this consideration should be
incorporated into the interpretation of any cross-national differences
uncovered by the research.
Instrument equivalence
The development of valid and reliable instruments that measure the
phenomenon being studied is a difficult task in any research project.
However, the additional variables which must be considered in the
conduct of cross-national research make instrument development
even more complex. The cross-national researcher should be careful
to employ measures which test the same phenomenon in each of the
nations being studied. The researcher should also ensure that the trans-
lation of the instrument into each language is as precise as possible.
While both of these issues appear straightforward, the problems they
present to the cross-national researcher can be difficult to resolve. The
following discussion addresses each of these issues individually and
presents the major considerations involved and the methods that have
been devised to overcome the associated problems.
Measurement Equivalence. Once functional and conceptual equiva-
lence has been established, the problem becomes one of devising a
research instrument which adequately measures the phenomena under

study in each of the nations being investigated. The validity problems
which arise when the phenomena are not appropriately measured in
each nation are obvious. Ideally, the researcher would construct a single
instrument that provides an equally valid measure of the phenomenon
under investigation in each nation. However, this is rarely possible.
Even if a phenomenon is functionally and conceptually equivalent
across nations, it is often the case that the phenomenon is manifested
differently in each nation.15 For instance, consider this problem with
respect to the cross-national measurement of affection, an idea fre-
quently expressed in promotional campaigns. While the concept of
affection is probably universal, and while the function affection per-
forms is probably similar across nations, the exact form which affec-
tion takes in each society differs considerably. Therefore, cross-national
instruments that employ the identical measures of such phenomena
may not provide data which permit reliable comparisons to be made.
The preceding discussion identifies one of the major problems asso-
ciated with the construction of testing instruments for use in cross-
national research. There is no ideal solution to this problem, but several
approaches exist to cope with it. Cross-national researchers may employ
one of two general types of measures in their studies: emic or etic.16 Emic
instruments refer to tests constructed to study a phenomenon only in
the context of a single society. Etic instruments are culture-free, and the
identical instrument (properly translated) can be employed in all (or a
number of) nations.17
The application of the emic approach to cross-national research
would require that individual instruments be constructed to measure a
particular aspect of behavior in each nation. The instrument employed
in each society would likely be different, since the object of investiga-
tion will probably be manifested in different ways across nations. Thus,
perfect cross-national comparison may be difficult; but the particular
aspect of behavior will have been isolated in its own national setting.
Virtually all instruments to date that have been constructed to measure
aspects of consumer behavior are emics. They have, for the most part,
been devised in the United States and have employed assumptions
that pertain to this country. The measurement of the same concepts in
other countries may require significant alterations in these instruments
in order to obtain reliable measurement of the phenomenon under
investigation.
An etic instrument is multinational in its application and permits
direct comparisons on the same variables across nations. The difficulties
involved in the development of etic instruments are manifold. The

problems surrounding the construction of “culture-free” (or, at least,
“culture-fair”) tests to be presented to different groups within a nation
are difficult to overcome.18 These problems are compounded when
developing a single test which applies across several very different
national societies.
Several methods are available which can be used to determine the reli-
ability and validity of cross-national instruments. For instance, Triandis,
et al., suggest that separate tests be developed in each nation to meas-
ure a phenomenon, and then to examine the correlations that exist
between scores on the instruments and other variables in the nations
being studied.19 Other cross-national researchers have employed factor
analysis to determine the reliability and validity of their instruments,
and factor analytic techniques have been developed which have poten-
tial applications for this purpose.20 However, factor analysis has also
been shown to have certain problems and limitations in this area.21
Further reliability and validity techniques are available from a number
of sources.22
Few standard tests have been developed that are appropriate for use
in more than one nation without modification. Those which have been
developed include Cattell’s 16PF,23 Gough’s California Psychological
Inventory,24 Osgood’s Semantic Differential,25 and certain social desir-
ability scales.26 However, none of these measures are universally appli-
cable. Consumer researchers engaged in cross-national studies will
probably have to rely upon instruments which could not be considered
etic, but which serve the purpose of identifying the similarities or dif-
ferences in the phenomenon being investigated. One possible strategy
in this regard is to employ the same test in all nations, even though it
was developed in only one of the nations, and to “tease” out the reasons
for differences which may be uncovered.27 Such an approach might be
criticized for being “pseudo-etic,”28 but the results obtained from such
an instrument could provide some basic understanding where none
existed before, or they could provide the basis for future hypotheses.
In most cases, however, research instruments will have to be altered
to some extent from nation to nation. At the very least, certain classifi-
cation items will have to be different in each nation, since educational
systems vary widely, income levels are highly discrepant, etc. Research
instruments may also have to consider such differences as might exist
in the availability of items (e.g., products) used in the study, in the
media which can be employed in each nation, and in the literacy
of the respondents. Thus, in most instances cross-national research
instruments will have to be somewhat individualized for each nation

(emic), a fact which can cause interpretation problems. However, the
results of such studies can provide valuable insights into cross-national
consumer behavior; but it is important that the limitations of this
approach be clearly understood and reported with the results.
Instrument Translation. The development of the instrument is generally
followed by translation into the languages of the nations in which the
instrument is to be administered. The achievement of instrument equiv-
alence depends upon proper translation. Thus, caution must be exer-
cised in the translation process. Caution is particularly necessary due to
the number of subtle pitfalls that exist in obtaining a good translation.
One problem frequently encountered is that terms cannot be directly
translated into another language and still retain their full meaning.29
For instance, the word “tough” in English may contain several nuances
in its use which makes perfect translation difficult to achieve. A related
problem may occur if an equivalent for a term does not exist in another
language. The Spanish term “machismo,” for example, is impossible to
translate into English because an equivalent term does not exist. Further
translation problems may arise from the use of idiomatic expressions
or if some terms employed in the instrument are outside the range of
experience of the sample. An example of the latter problem might be
found with respect to the term “supermarket.” While the term itself is
capable of being translated into several languages, it is probable that
many people in other countries have not been exposed to a supermarket
in the American sense of the term—if at all. Thus, such experiential dif-
ferences could influence the results obtained in a cross-national project
and must be considered in the translation process.30 The importance of
a good translation implies first that the original instrument should be
written in easily translatable English.31 It also suggests that researchers
should provide evidence to support claims that their instruments were
equivalent in all languages in order to avoid the plausibility of rival
hypotheses to explain the results obtained.32
Several methods of translation can be employed by cross-national
researchers, the most common of which is direct translation.33 In this
method a bilingual translator simply translates an instrument from
one language into another. Although it is the simplest, least time con-
suming, and least expensive method of translation, direct translation
is fraught with problems. Basically, the researcher who employs direct
translation cannot be certain about the quality of the translation. All of
the problems noted above may have occurred in the direct translation
unbeknownst to the researcher.
To overcome many of the problems of direct translation, cross-

national researchers often employ a process called back translation.34
In this process a research instrument is first translated into another
language by one bilingual translator, and then translated back into
the original language by a second bilingual translator. Back translation
allows the researcher to identify many of the problems that might arise
by noting the discrepancies between the original instrument and the
retranslated instrument. Corrections can be made where discrepancies
exist, and the back translation process may be repeated. Thus, back
translation is an iterative process which ends when the researcher is
satisfied that all forms of the instrument are equivalent.35 The success of
this process depends upon the use of skilled translators who are familiar
with the particular dialect of the sample to which the instrument is to
be administered.
Direct translation and back translation are generally used when
an instrument developed in one country is to be employed in other
countries. As noted previously such an approach is often labeled
“pseudo-etic” and subject to the problems of functional, conceptual,
and measurement equivalence. While a competent back translation can
overcome some of these problems, it will not resolve all of them. Werner
and Campbell suggest that the only way to completely overcome trans-
lation problems is to construct the instrument in all of the nations
included in the study and to incorporate items from each nation into
the instrument.36 This process is called decentering and usually results in
a considerably longer instrument.37 In addition, the time and expense
required to perform this process may be prohibitive to most research-
ers. However, it is perhaps the most highly regarded technique for the
development of a cross-national research instrument.
Sample selection
To help ensure against alternative explanations of differences in results,
the researcher should select samples in each nation that are as closely
comparable as possible.38 One way to achieve sample comparability is
to draw a truly representative sample from each nation under study.39
However, such a sampling procedure can be difficult and expensive
and often not feasible (judging from the infrequency of its use in even
domestic studies). In addition, consumer researchers may not be inter-
ested in surveying two entire populations, since large portions of those
samples may not be pertinent to the investigation. Also, representative
samples in each nation may exhibit extreme variation which could
make cross-national comparisons difficult.
A commonly employed sampling technique in cross-national studies

involves drawing the samples from an identifiable subgroup of the coun-
tries’ populations.40 For instance, samples of students in two or more
countries might be employed, or samples of middle-class housewives
might be drawn. The use of samples from subgroups of the populations
will limit the generalization of the findings but can provide an indication
of the types of similarities and differences which exist between nations.
However, when samples from subgroups are employed, the researcher
must exercise extreme caution to ensure that the subgroup samples in
each nation are comparable.41 If noncomparable samples are employed,
then differences found between the samples can be attributed to the dif-
ferences in the characteristics of the samples as well as to national factors.
The achievement of perfect sample comparability can be difficult. It is
virtually impossible to select samples in two or more countries that share
all the same traits. For example, middle-class housewives in the United
States and Mexico will differ in terms of their absolute level of income
and, perhaps, education. Salesmen in the United States and many other
countries may differ in terms of social class. Students in lesser developed
nations are likely to be drawn from higher levels of the social strata than
students in the more economically advanced countries. Thus, no matter
how hard the researcher works to achieve sample comparability, there
will usually be some types of differences between the samples. Manaster
and Havighurst suggest that cross-national researchers should attempt
to hold age, sex, social class, and rural-urban residence constant across
samples.42 It may be impossible to hold these factors constant all of the
time; but any lack of comparability in the samples should be reported
as a limitation and incorporated into the interpretations of the data.43
Conclusions
Emphasis on cross-national consumer behavior patterns is a natural

direction for international marketing research to take. It will have both
theoretical and practical benefits. However, the potential contribution
of these cross-national studies will be a function of the quality of the
research conducted. This paper has presented the most basic meth-
odological problems encountered by cross-national researchers and the
principal means of coping with these problems. In addition, a number
of references have been provided on each issue for those who want to
pursue individual aspects in greater detail. These considerations should
be incorporated into cross-national research projects to ensure reliabil-
ity of the findings.
Notes
1. J. Engel, D. Kollat, and R. Blackwell, Consumer Behavior (Second edition),
(New York: Holt, Rinehart and Winston, Inc., 1973).
2. The term cross-national is often used interchangeably with the term cross-
cultural in describing the type of research discussed in this paper. The former
term will be used here since the paper is concerned with consumer behavior
research conducted across national boundaries. Cross-cultural research can
refer to the study of two or more subcultures within a country as well as
research across countries.
3. Cross-national research projects are being defined as including: (1) stud-
ies conducted by the same authors in more than one country at roughly
the same point in time; (2) replications of previous studies by researchers
other than the author conducted in previous time periods; and (3) studies
conducted outside of the United States, the findings from which have been
inferred as being applicable to this country. In addition, consumer research
is considered to include studies of both industrial and ultimate consumers.
4. H. Davis, and B. Rigaux, “Perception of Marital Roles in Decision Processes,”
Journal of Consumer Research, Vol. 1, June 1974, pp. 51–62; D. Hempel,
“A Cross-Cultural Analysis of Husband-Wife Roles in House Purchase
Decisions,” Proceedings, Third Annual Conference, Association for Consumer
Research, 1972, pp. 816–829; D. Hempel, “Family Buying Decisions: A Cross-
Cultural Perspective,” Journal of Marketing Research, Vol. II, August 1974,
pp. 295–302; C. Safilios-Rothschild, “Family Sociology or Wives’ Family
Sociology: A Cross-Cultural Examination of Decision Making,” Journal of
Marriage and the Family, Vol. 31, May 1969, pp. 290–301; W. Silverman, and
R. Hill, “Task Allocation in Marriage in the United States and Belgium,”
Journal of Marriage and the Family, Vol. 29, May 1967, pp. 353–359.
5. H. Hakansson and B. Wootz, “Supplier Selection in an International
Environment—An Experimental Study,” Journal of Marketing Research, Vol. 12,
February 1975, pp. 46–51; D. Lehman and J. O’Shaughnessy, “Difference in
Attribute Importance for Different Industrial Products,” Journal of Marketing,
Vol. 38, April 1974, pp. 36–42.
6. J. Arndt, “Haire’s Shopping List Revisited,” Journal of Advertising Research,
Vol. 13, October 1973, pp. 57–61; I. Cunningham, R. Green, and W.
Cunningham, “The Effectiveness of Standardized Global Advertising: A
Cross-Cultural Study,” Journal of Advertising, Vol. 4, Summer 1975, pp.
25–30; A. Nagashima, “A Comparison of Japanese and U.S. Attitudes Toward
Foreign Products,” Journal of Marketing, Vol. 34, January 1970, pp. 68–74.
7. A. Ehrenberg and G. Goodhardt, “A Comparison of American and British
Repeat-Buying Habits,” Journal of Marketing Research, Vol. 5, February 1968,
pp. 29–33.
8. R. Green and E. Langeard, “A Cross-National Comparison of Consumer
Habits and Innovator Characteristics,” Journal of Marketing, Vol. 39, July
1975, pp. 34–41.
9. H. Thorelli, H. Becker, and J. Engledow, The Information Seekers, (Cambridge,
Mass.: Ballinger, 1975).
10. S. Comas and J. Sheth, “Cross-Cultural Measurement of Generalized
Opinion Leadership,” paper presented at the 82nd Annual Convention of
the American Psychological Association, New Orleans, September 1974;

H. Davis, “Cross-Cultural Comparison of Family Roles,” paper presented at the
5th Annual Convention of the Association for Consumer Research, Chicago,
November 1974; J. Plummer, “Comparative Life Styles of the Industrial
States,” paper presented at the 82nd Annual Convention of the American
Psychological Association, New Orleans, September 1974; J. Sheth and
S. Sethi, “Theory of Cross-Cultural Buyer Behavior,” Working Paper
No. 115, College of Commerce and Business Administration, University of
Illinois at Urbana-Champaign, 1973.
11. Cross-national research has a rich tradition in the fields of cultural anthro-
pology, psychology and social psychology, sociology, and political science.
However, due to the differences in the aspects of behavior with which each
discipline is concerned, there tend to be variations in the methods employed
and the problems encountered. Since the variables considered in consumer
research are most similar to those employed in psychological and socio-
logical research, this paper will be concerned mainly with the problems and
considerations of cross-national research in those fields.
12. N. Frijda and G. Jahoda, “On the Scope and Methods of Cross-Cultural
Research,” International Journal of Psychology, Vol. 1, No. 2, 1966, p. 116.
13. R. Sears, “Transcultural Variables and Conceptual Equivalence,” in Bert
Kaplan, ed., Studying Personality Cross-Culturally, Evanston, III.: Row, Peterson
and Company, 1961, pp. 445–455.
14. J. Berry, “On Cross-Cultural Comparability,” International Journal of Psychology,
Vol. 4, No. 2, 1969, pp. 119–128.
15. R. Sears, op. cit.
16. The terms emic and etic were coined by Pike (see K. Pike, Language in Relation
to a Unified Theory of the Structure of Human Behavior, The Hague: Mouton,
1966) and were derived from the linguistic distinction between phonemics
and phonetics. The study of phonemics examines the sounds employed
in a particular language, while phonetics “… attempts to generalize from
phonemic studies in individual languages to a universal science covering
all languages” J. Berry, op. cit., p. 123). For a discussion of the use of emic
and etic research in cross-cultural studies, see R. Brislin, W. Lonner, and
R. Thorndike, Cross-Cultural Research Methods, New York: Wiley, 1973; and
H. Triandis, R. Malpass, and A. Davidson, “Cross-Cultural Psychology,”
Biennial Review of Anthropology, Palo Alto: Annual Review, Inc., 1971.
17. R. Anderson, “On the Comparability of Meaningful Stimuli in Cross-Cultural
Research,” Sociometry, Vol. 30, June 1967, pp. 124–136.
18. N. Frijda and G. Jahoda, op. cit.
19. H. Triandis, R. Malpass, and A. Davidson, op. cit.
20. L. Gordon, “Comments on ‘Cross-Cultural Equivalence of Personality
Measures,’ “Journal of Social Psychology, Vol. 75, June 1968, pp. 11–19;
L. Tucker, “Some Mathematical Notes on Three-Mode Factor Analysis,”
Psychometrika, Vol. 31, September 1966, pp. 279–311.
21. D. Peterson and G. Migliorino, “The Uses and Limitations of Factor
Analysis in Cross-Cultural Research on Socialization,” International Journal of
Psychology, Vol. 2, No. 3, 1967, pp. 215–220.
22. L. Eckensberger, “Methodological Issues of Cross-Cultural Research in
Development Psychology,” in John R. Nesselroade and Hayne W. Ruse, eds.,
Life-Span Developmental Psychology: Methodological Issues, (New York: Academic

Press, 1973), pp. 43–64; H. Gulliksen, “Methods for Determining Equivalence
of Measures” Psychological Bulletin, Vol. 70, December 1968, pp. 534–44; G.
Manaster and R. Havighurst, Cross-National Research: Social-Psychological
Methods and Problems, (Boston: Houghton Mifflin Company, 1972);
A. Przeworski and H. Teune, “Equivalence in Cross-National Research,” Public
Opinion Quarterly, Vol. 30, Winter 1966, pp. 551–568; A. Przeworski and
H. Teune, The Logic of Comparative Social Inquiry, (New York: Wiley, 1970).
23. D. Butt and E. Signori, “Personality Factors of a Canadian Sample of Male
University Students,” Psychological Reports, Vol. 16, June 1965, pp. 1117–1121;
R. Cattell and F. Warburton, “A Cross-Cultural Comparison of Patterns of
Extraversion and Anxiety,” British Journal of Psychology, Vol. 52, February
1961, pp. 3–15; E. de Andrade, D. Alves, and J. Ford, “A Comparison of
North American and Brazilian College Students’ Personality Profiles on the
16PF Questionnaires,” International Journal of Psychology, Vol. 4, No. 1,1969,
pp. 55–58; B. Tsujioka and R. Cattell, “A Cross-Cultural Comparison of
Second-Stratum Questionnaire Personality Factor Structures–Anxiety and
Extraversion—in America and Japan,” The Journal of Social Psychology,
Vol. 65, April 1965, pp. 205–219.
24. H. Gough and H. Sandhu, “Validation of the CPI Socialization Scale
in India,” Journal of Abnormal and Social Psychology, Vol. 68, May 1964,
pp. 544–547; H. Gough, “Cross-Cultural Validation of a Measure of Asocial
Behavior,” Psychological Reports, Vol. 17, October 1965, pp. 379–387;
H. Gough, G. De Vos, and K. Migushima, “Japanese Validation of the
CPI Social Maturity Index,” Psychological Reports, Vol. 22, February 1968,
pp, 143–146; J. Levin and E. Karni, “Demonstration of Cross-Cultural
Invariance of the California Psychological Inventory in America and Israel by
the Guttman-Lingoes Smallest Space Analysis,” Journal of Cross-Cultural
Psychology, Vol. 1, September 1970, pp. 253–260; T. Nishiyama, “Cross-Cultural
Invariance of the California Psychological Inventory,” Psychologia, Vol. 16,
June 1973, pp. 75–84.
25. D. Heise, “Some Methodological Issues in Semantic Differential Research,”
Psychological Bulletin, Vol. 72, December 1969, pp. 406–422; L. Jacobovitz,
“Comparative Psycholinguistics in the Study of Cultures,” International
Journal of Psychology, Vol. 1, No. 1, 1966, pp. 15–37; C. Osgood, G. Suci,
and P. Tannenbaum, The Measurement of Meaning, Urbana, III.: University
of Illinois Press, 1957; C. Osgood, “Studies on the Generality of Affective
Meaning Systems,” American Psychologist, Vol. 17, January 1962, pp. 10–28;
C. Osgood, “Exploration in Semantic Space: A Personal Diary,” Journal of Social
Issues, Vol. 27, No. 4,1971, pp. 5–64; Y. Tanaka, T. Oyama, and C. Osgood,
“A Cross-Cultural and Cross-Concept Study of the Generality of Semantic
Space,” Journal of Verbal Learning and Verbal Behavior, Vol. 2, December 1963,
pp. 392–405.
26. P. Baltes, K. Eyferth, and K. Schaie, “Intra- and Inter-Cultural Factor Structures
of Social Desirability Ratings by American and German College Students,”
Multivariate Behavioral Research, Vol. 4, January 1969, pp. 67–78; C. Consalvi,
“An Item and Factor Analysis of Danish, Lebanese, and United States College
Student’s Responses to the Marlowe-Crowne Social Desirability Scale,”
Journal of Cross-Cultural Psychology, Vol. 3, December 1972, pp. 361–372.
27. N. Frijda and G. Jahoda, op. cit., p. 118.

28. H. Triandis, R. Malpass, and A. Davidson, op. cit.
29. R. Brislin, W. Lonner, and R. Thorndike, op. cit., A. Przeworski and H. Teune,
op. cit.
30. L. Sechrest, T. Fay, and S. Zaidi, “Problems of Translation in Cross-Cultural
Research,” Journal of Cross-Cultural Psychology, Vol. 3, March 1972, pp. 41–56.
31. R. Brislin, “Back-Translation for Cross-Cultural Research,” Journal of Cross-
Cultural Psychology, Vol. 1, September 1970, pp. 185–216; R. Brislin,
“Translation Issues; Multi-language Versions and Writing Translatable
English,” Proceedings, 80th Annual Convention of the American
Psychological Association, 1970, pp. 299–300; R. Fink, “Interviewer Training
and Supervision in a Survey of Laos,” International Social Science Journal, Vol.
15, No. 1, 1963, pp. 21–34; E. Nida, Toward a Science of Translating, (Leiden,
Netherlands: E.J. Brill, 1964); E. Scheuch, “The Cross-Cultural Use of Sample
Surveys: Problems of Comparability,” in Stein Rokkan, ed., Comparative
Research Across Cultures and Nations, (Paris: The Hague Mouton, 1968),
pp. 179–209; A. Treisman, “The Effects of Redundancy and Familiarity on
Translating and Repeating Back a Foreign and Native Language,” British
Journal of Psychology, Vol. 56, November 1965, pp. 363–379.
32. R. Brislin, W. Lonner, and R. Thorndike, op. cit.
33. L. Sechrest, T. Fay, and S. Zaidi, op. cit.
34. R. Brislin, op. cit.; R. Brislin, W. Lonner, and R. Thorndike, op. cit.;
O. Werner and D. Campbell, “Translating, Working Through Interpreters,
and the Problems of Decentering,” in Raoul Naroll and Ronald Cohen,
eds., A Handbook of Method in Cultural Anthropology, (New York: Columbia
University Press, 1973), pp. 398–420.
35. R. Brislin, op. cit.
36. O. Werner and D. Campbell, op. cit.
37. F. Berrien, “Cross-Cultural Equivalence of Personality Measures,” Journal
of Social Psychology, Vol. 75, June 1968, pp. 3–9; L Gordon and A. Kikuchi,
“American Personality Tests in Cross-Cultural Research—A Caution,” Journal
of Social Psychology, Vol. 69, August 1966, pp. 179–183; L. Gordon, op. cit.;
H. Triandis, R. Malpass, and A. Davidson, op. cit.
38. F. Berrien, “Methodological and Related Problems in Cross-Cultural
Research,” International Journal of Psychology, Vol. 2, No. 2, 1967, pp. 33–43;
R. Brislin and S. Baumgardner, “Non-Random Sampling of Individuals
in Cross-Cultural Research,” Journal of Cross-Cultural Psychology, Vol. 2,
December 1971, pp. 397–400; N. Frijda and G. Jahoda, op. cit. W. Lamber and
O. Klineberg, Children’s Views of Foreign Peoples: A Cross-National Study, (New
York: Appelton-Century-Crofts, 1970).
39. G. Almond and S. Verba, The Civic Culture: Political Attitudes and Democracy
in Five Nations, (Princeton: Princeton University Press, 1963); F. Frey,
“Cross-Cultural Survey Research in Political Science,” in Robert T. Holt and
John E. Turner, eds., The Methodology of Comparative Research, (New York: The
Free Press, 1970), pp. 173–294.
40. R. Brislin and S. Baumgardner, op. cit.
41. Ibid., R. Brislin, W. Lonner, and R. Thorndike, op. cit.
42. G. Manaster and R. Havighurst, op. cit., p. 161.
43. J. Berry, op. cit.
3
Cross-cultural Interaction: The
International Comparison Fallacy?
Nancy J. Adler and John L. Graham
Joint ventures, mergers and acquisitions, licensing and distribution

agreements, and sales of products and services—crucial aspects of all
such interorganizational relationships, are face-to-face negotiations.
As the proportion of foreign to domestic trade increases, so does the
frequency of business negotiations between people from different
countries and cultures. Perlmutter estimates that over 50% of an inter-
national manager’s time is spent negotiating.1 To successfully manage
these negotiations, businesspeople need to know how to influence and
communicate with members of cultures other than their own.
While a growing literature exists documenting international negoti-
ating styles, most studies are descriptive or comparative; that is, they
describe the behavior of managers in a particular country or compare
behaviors across a range of cultures [Adler 1983a].2 For example, there
are articles describing the negotiating behavior of French [Dupont 1982;
Plantey 1980], Russians [Beliaev, Muller and Prunett 1985], Mexicans
[Fisher 1980], Brazilians [Graham 1983, 1985a], Middle Eastern Arabs
[Wright 1981; Muna 1980], Chinese [Tung 1984; Pye 1983], and Japanese
[Van Zandt 1970; Tung 1984; Graham 1985a], along with a number of
multicountry studies [Weiss and Stripp 1984; Harnett and Cummings
1980; Adler et al. 1987; Campbell et al. 1988; Graham et al. 1988].
The worldwide negotiation literature fits within the tradition of
research on international organizational behavior. Unfortunately,
this tradition has focused on single-culture descriptive studies and
Reprinted from Nancy J. Adler and John L. Graham (1989) “Cross-cultural

Interaction: The International Comparison Fallacy?” Journal of International
Business Studies (pp. 515–537). With kind permission from Palgrave Macmillan.
All rights reserved.
33
34 Nancy J. Adler and John L. Graham
multiculture comparative studies, rather than studies investigating

cross-cultural interaction. In a survey of articles published in top
American management journals over the last decade, only 0.9% focused
on cross-cultural interaction [Adler 1983b]. As further exemplified in
the most commonly used label for the field, “comparative manage-
ment,” both the field’s earlier studies (c.f. Roberts [1970]; Roberts and
Snow [1973]; and Triandis [1972]) and the more recent research (c.f.
Hofstede [1980]; Bhagat and McQuaid [1982]; Sekaran [1983]; Roberts
and Boyacigiller [1982]; Ronen [1986]; and Adler and Doktor [1986])
have emphasized within-culture description and comparison. This
trend is not surprising given the field’s inception during the era of
international firms operating multidomestically rather than their cur-
rent increasingly global scope. While the field of international manage-
ment has included cross-national interaction studies, they tended to
emphasize macro-level organizational, structural, and financial issues,
not organizational behavior issues. The interaction of people within
and between organizations has remained the domain of comparative
management, thus casting most research in the light of single-culture
descriptions and multicountry comparisons.
Implicit in many of the descriptive and comparative studies is the
assumption that people behave similarly with their domestic colleagues
as they do with their foreign counterparts. That is, these studies suggest
that domestic negotiating styles predict international styles. Because
most international businesspeople need to know how to negotiate
with people from other cultures—not simply how foreigners negotiate
among themselves—the validity of this assumption is critical. If valid,
then the comparative literature can directly inform international mana-
gerial behavior; if invalid, we need to understand the ways in which
within-culture behavior differs from intercultural behavior. The ques-
tion, therefore, has both theoretical and practical importance.
To our knowledge, no other researchers have looked at the consist-
ency of negotiator behavior across intra-culture and cross-cultural
bargaining. In the present study, the behaviors of businesspeople from
four culturally distinct groups (i.e., 190 Americans, 72 Japanese, 100
Francophone Canadians, and 100 Anglophone Canadians) are com-
pared across intra-cultural and cross-cultural situations.
Theoretical background
In their seminal article regarding international negotiation behaviors,

Sawyer and Guetzkow were among the first to posit that negotiators’
Cross-cultural Interaction: The International Comparison Fallacy? 35
behaviors and outcomes can be influenced by situational constraints,

i.e., cross-cultural negotiations versus intra-cultural negotiations:
The face-to-face conduct of negotiations may be influenced by

behavioral discrepancies when persons of different cultural back-
grounds are brought together. [1965, p. 502]
Support for their supposition has come from a broad array of disciplines.
The cross-cultural communication and psychology literature suggests
that people behave differently with members of their own culture than
with members of foreign cultures. Research in nonbusiness contexts has
demonstrated that when individuals interact with people from differ-
ent cultures, the differences between them become salient [Bouchner
and Ohsako 1977; Bouchner and Perks 1971]. Moreover, when people
in interpersonal situations confront these actual differences, they tend
to exaggerate them [Sherif and Hovland 1961; Vassilious et al. 1972].
And, when differences become very apparent, some research sug-
gests that relationships among managers deteriorate [Stening 1979].
Perceived similarity, not difference, has been the important predictor of
satisfaction with work relationship [Pulakos and Wexley 1983; Wexley,
Alexander, Greenwalt and Couch 1980].
Mishler [1965] reports that in international exchanges: “The greater
the cultural differences, the more likely barriers to communication and
misunderstandings become.” Some researchers have even questioned
whether “managers from significantly different cultures such as Japan
and the United States can ever completely understand each other”
[Peterson and Shimada 1978]. Studies in the following five research
areas are particularly relevant.
Interpersonal orientation
Most of the literature summarized in later sections suggests that
negotiators will adjust their behavior from one situation to another.
However, Rubin and Brown [1975] imply that people with a low inter-
personal orientation (IO) will behave consistently across intra-and
cross-cultural situations. They suggest that a high (IO) person is “respon-
sive to the interpersonal aspects of his relationship with others. He is
both interested in, and reactive to, variation in the other’s behavior.”
Alternatively, a low IO is “characterized, first and foremost, by a non-
responsiveness to the interpersonal aspects of his relationship with the
other...” [Rubin and Brown 1975, pp. 158–159].
Thus, one might conclude that some people will behave in the same
way no matter who is on the other side of the negotiation table—
someone from the same culture or someone from a different culture.
Graham and Herberger [1983] carry this idea one step further when
they suggest that American negotiators naturally tend to be low IOs:
I am what I am. Few Americans take pride in changing their minds,

even in difficult circumstances. Certainly John Wayne’s character
and behavior were constant and predictable. He treated everyone
and every situation with his action-oriented, forthright style. He
could never be accused of being a chameleon.
Many American bargainers take the same attitude with them to
the negotiation table, but during international business negotiations,
inflexibility can be a fatal flaw. [p. 166]
So an explanation for ethnocentricity and obstinacy at the interna-

tional negotiation table is offered. However, most of the rest of the
pertinent literature argues that behavior differences will occur across
the two settings, and for a variety of reasons.
Negotiator similarity
The present study provides an excellent opportunity to test Evans’
[1963] “similarity hypothesis.” Evans’ ideas—“the more similar the par-
ties in a dyad are, the more likely a favorable outcome, a sale”—have
stimulated a series of studies investigating relationships between simi-
larity and a variety of negotiation outcomes. Weitz (1979), in his excel-
lent critical review of this stream of research, concludes that support for
Evans’ similarity hypotheses is weak, and in some cases, flawed by con-
founds. However, the previous work provides an important background
for the issues to be considered here.
McGuire [1968] cites a “considerable body of evidence” and posits the
mechanism underlying the influence of similarity:
Presumably the receiver, to the extent that he perceives the source to

be like himself in diverse characteristics, assumes that they also share
common needs and goals. The receiver might therefore conclude
that what the source is urging is good for “our kind of people,” and
thus change his attitude accordingly. [p. 187]
Mathews, Wilson and Monoky [1972] conclude that “perceived” simi-

larity leads to more cooperative behaviors during negotiations. Despite
the threats to internal and external validities of the Mathews et al. study
identified by Weitz [1979], their reasoning is consistent with Evans.
That is, similarity affects negotiation processes, such as the degree of
cooperation. So, negotiators in same culture dyads can be expected to
behave more cooperatively than negotiators in cross-cultural dyads.
Graham [1985a] provides empirical support for greater cooperation in
intra-cultural negotiations compared to cross-cultural.
Evans [1963], Davis and Silk [1972], and Bagozzi [1978] all discuss at
some length the relationship among similarity, attraction, and outcomes.
Implied in Evans’ work is a causal relation among the three constructs, with
attraction intervening: similarity → attraction → outcomes. Thus, negotia-
tors in same culture dyads might be expected to be more attracted to part-
ners and achieve higher negotiation outcomes—profits and satisfaction.
Communication problems
Closely related to the issue of negotiator similarity are cross-cultural
communication problems. Everyone writing in the area of international
negotiations reports substantial communication problems at the nego-
tiation table which often lead to undesirable outcomes for one or both
parties (cf. Sawyer and Guetzkow [1965]; or Rubin and Brown [1975]).
Condon’s [1974] views are most insightful—he classifies cross-cultural
communication problems into four categories:
1. Language and language behavior;

2. Nonverbal behavior;
3. Values;
4. Patterns of thought.
Condon adds that these categories might be considered in order of

ascending perplexity. That is, misunderstandings at the level of language
are often obvious and most easily corrected. Misunderstandings at the
lower levels are seldom obvious to the participants in an interaction.
Language is a system which can be studied, described and taught.
Our understanding of nonverbal behaviors and communication is, by
comparison, disorganized and incomplete. Unlike the first two catego-
ries, cultural values are not directly observable. Values, attitudes, and
other comparable terms are abstractions, broad concepts which provide
a basis for understanding otherwise apparently unrelated behaviors.
As such, values and their relation to communication are even more
difficult to investigate in a systematic way. Regarding the fourth category,
patterns of thought, Condon adds that cultural differences at this level
may result from a combination of differences in language and values.

Thus, “while one may come to understand or at least appreciate the vital
differences in cultural values, many have given up trying to understand
how another person ‘reasons’” [Condon 1974, p. 6]. In cross-cultural
negotiations, we might expect problems of communication caused not
only by what is said, but also by how what is said is interpreted.
Empirical support for Condon’s views is broad. Of particular interest
is a recent article by Graham and Andrews [1987] which describes in
depth how communication problems, at all four levels, result in undesir-
able outcomes for Americans negotiating with Japanese businesspeople.
It follows then that negotiation outcomes will be less favorable in cross-
cultural negotiations because communication problems are much more
likely to occur.
Reciprocity and interactional synchrony

A series of studies by social psychologists and sociolinguists suggests
that negotiators in a dyad tend to imitate one another’s behaviors and
balance individual negotiation outcomes. Gouldner [1960] explains
that a “reciprocity norm” establishes a stable set of mutual rewards
that guides interactions such as negotiations. Putnam and Jones [1982]
report that reciprocity is more evident in integrative message patterns
than in distributive strategies. Walton and McKersie [1965], Rubin and
Brown [1975], and Pruitt [1981] all describe a tendency of negotiators
to match one another’s bargaining strategies.
Even deeper than Gouldner’s reciprocity norm are the unconscious
influences of the sociolinguistic concept of interactional synchrony.
Condon [1968] and others have reported that a speaker’s body
movements are coordinated with one another and coordinated with
the articulation of speech. Moreover, these movements manifest a
hierarchical organization parallel to that of speech. That is, minor
body movements may be associated with phrase transition within
sentences, whereas grosser body movements may be associated with
thematic transition within a conversation. More significant is the
finding that listener’s back-channel verbal responses and body move-
ments (e.g., the use of the word “yes” or head-nodding to indicate
comprehension) are also coordinated in the same hierarchical way
with the articulation of another’s speech. Interactional synchrony has
been defined as the isomorphism of verbal and nonverbal behaviors
between speaker and listeners (i.e., “the precise ‘dance-like’ shar-
ing of micro-body-motion patterns of change between speakers and
listeners” [Condon 1968]).
Therefore, based on these concepts of reciprocity and synchrony,

negotiators in cross-cultural interactions might be expected to adapt
their usual intra-cultural behaviors to more closely reflect those of their
foreign counterparts. Likewise, outcomes of cross-cultural negotiations
may reflect a compromise between results typical of the differing intra-
cultural styles.
Acculturation theory
Acculturation theory suggests what might happen at the point of cul-
ture contact. That is, what will result from the mix of negotiation and
communication styles?
Acculturation theory is a “mature” paradigm in anthropology. It
received the most attention during the 1930s and 1940s. This atten-
tion was primarily a response to problems with Indian peoples in
the Americas and problems of British colonial rule. The questions
were: To what extent can indigenous peoples be assimilated into
“advanced” cultures, and how might this process of assimilation be
facilitated? The most widely accepted definition of acculturation is
that of Redfield, Linton, and Herskovits [1936]: “Acculturation com-
prehends those phenomena which result when groups of individuals
having different cultures come into continuous first-hand contact,
with subsequent changes in the original cultural patterns of either or
both groups.”
In most cases, including the above, the emphasis was on “what” hap-
pens when cultures meet. Secondarily (in keeping with the tradition
of anthropology), the “why” of the phenomena was investigated and
hypotheses formed. Consequently, most research into acculturation
is descriptive in nature. However, implicit in most reports is a causal
model: the dependent variable in most studies might be described
as some degree of acceptance of aspects of another culture. At one
end of such a “scale of acceptance” is the complete assimilation of
behaviors, traits, or values of another culture. At the other end of the
scale is “reaction,” that is, rejection of the aspects of the other culture.
Somewhere in the middle of the scale is adaption or syncretism—the
mixing of the two cultures, or as Beals puts it: “While the totality of
the emergent culture may be regarded as a syncretism, large areas of
the social structure may be essentially new” [Beals, 1953]. More com-
plex conceptions of the dependent variable have also been suggested
(e.g., Bateson [1966]).
Various explanatory variables have been posited, including types
of contact situations (e.g., friendly vs. hostile; inequalities in size,
complexity or power of groups; existence of force), processes of contact

(e.g., order and manner of presentation or cultural traits, resistances,
time constraints), and individual characteristics (e.g., class, role, status,
and personality differences). The degree of acceptance was hypoth-
esized to be functionally related to three classes of variables—situation,
process and individual characteristics; i.e., A = f(S,P,I). It should be noted
that power (or force) was the most commonly reported important influ-
ence on acculturation. Such a paradigm bears more than coincidental
resemblance to attitude change models and the social exchange theory
(described in a subsequent section of the paper). Only the dependent
variable is different—acceptance versus attitude change or specific
behaviors such as agreements.
Another difference between the acculturation paradigm and more
recent social-psychological models is the units of analysis. Acculturation
theory has really been applied in a macro sense, the units of analysis
being entire cultures. The units of analysis in social psychology have
been the individual or, at most, small groups.
Acculturation theory fits the specific situation of cross-cultural nego-
tiations very well. Acculturation theory is particularly useful if process
measures are selected as the dependent variable. That is, what factors
will determine which parties will adopt which negotiation and commu-
nication styles, given that these styles are culture specific?
Certainly, the most obvious example is language. What language will
be spoken during cross-cultural negotiations? Will one party adopt the
language of the other party? Given that the parties to the negotiation
are from cultures X and Y, there exist several possibilities or operational
definitions of the dependent variable, adoption of language:
1. Language X used;
2. Language Y used;
3. Language X used part of the time, language Y used the rest, by both
parties;
4. Interpreters used for translations;
5. A third language, Z, used; and
6. Combinations of the above.
As mentioned earlier, acculturation theory suggests three classes of

determinants—situation, interaction process, and individual character-
istics. Certainly one individual characteristic will be critical—linguistic
capability. The results of previous research also suggest that power dif-
ference will be another important determinant.
The circumstance of Japanese and American cross-cultural nego-
tiations seems to fit this theory. Most often, English is the language
spoken during the negotiations between Japanese and Americans.
Part of the explanation is that the Japanese possess greater linguis-
tic abilities than Americans. Japanese schools teach and emphasize
English. However, in the long term, the most important explanation
is the power-differential, both economic and military. The Japanese
emphasis on learning English can be attributed in large part to the
American occupation following World War II. Additionally, until
recent times, Japan has been economically dependent on the United
States. However, there are exceptions. For example, it is common
practice for high-level Japanese executives to use interpreters, even
though they may speak and understand English. Here the use of inter-
preters is expressive of the person’s power. Further, with the increasing
economic interdependence of the 1980s, changes are taking place.
Japanese businessmen now complain about Americans’ ignorance of
Japanese business customs.
In the case of negotiations between Canadians, one might also
predict a greater use of the English language, and for similar reasons
as those described regarding Japanese/American negotiations. That
is, Francophones (French speakers) make up only about 25% of the
Canadian population, and their per capita income is also lower than the
Canadian average, suggesting concomitant power differences.
Acculturation theory not only suggests how the process of nego-
tiation might vary—acceptance, syncretism, or reaction; but also the
theory provides clues to the determinants and associated mechanisms
of the variation. Acculturation theory can serve as a useful guide for the
investigation of the relation of cultural variation of the parties and the
process of cross-cultural negotiations.
Dependent constructs
Negotiation theory
Theory suggests that outcomes of business negotiations will be influ-
enced by three classes of constructs—bargainer characteristics, situ-
ational constraints, and process-related measures (cf. Bagozzi [1978];
Rubin and Brown [1975]; Sawyer and Guetzkow [1965]). The first two
constructs are exogenous and are determined before negotiations begin.

Process-related measures are endogenous constructs which may be
influenced by bargainer characteristics and situational constraints, and
which in turn may influence the outcomes of negotiations. The pre-
sent study investigates the influence of a situational constraint (intra-
cultural versus cross-cultural negotiations) on the processes (strategies,
interpersonal attraction, and duration), and outcomes (satisfaction and
profits) of business negotiations.
Negotiation process constructs

Problem-solving approach
The problem-solving approach (hereafter PSA) to negotiations involves
first an emphasis on questions and getting information from clients
about their needs and preferences. Second, once the client’s require-
ments and circumstances are fully understood, then the negotiator
accommodates the offering to the client’s needs. The focus is on coop-
eration and an integrative approach, wherein the needs of both parties
are honestly discussed and eventually satisfied (cf. Pruitt [1981]; Pruitt
and Rubin [1986]). For a discussion of the place of honesty in nego-
tiations, see Murray [1986]. A PSA then can be concisely defined as a
set of negotiation behaviors which are cooperative, integrative, and
information-exchange oriented. Such strategies tend to maximize the
number of alternative solutions considered, thus allowing negotiators
to optimize outcomes.
The relationship between a problem-solving approach and nego-
tiation outcomes has been frequently investigated during the last
twenty years. Different researchers have used various labels for
the PSA concept (e.g., integrative bargaining strategies—Walton
and McKersie [1965]; cooperative orientation—Rubin and Brown
[1975]; Williams [1983]; problem-solving orientation—Pruitt and
Lewis [1975], Menkel-Meadow [1984], Murray [1986]; representational
bargaining strategies—Angelmar and Stern [1978]; and direct/open
influence tactics—Weitz [1981]), but findings have been relatively
consistent. Generally, PSA has been found to positively influence
negotiation outcomes.
Interpersonal attraction
In addition to the bargaining strategy itself, interpersonal attraction (e.g.,
like/dislike, friendly/unfriendly feelings) can strongly influence current
negotiation outcomes and the success of future transactions. Rubin and

Brown [1975], in their review of the negotiation literature, conclude
that interpersonal attraction generally enhances bargaining outcomes
(cf. Berscheid & Walster [1978]; Benton [1971]; Morgan and Sawyer
[1967] and Swingle [1966]). McGuire [1968] explains that when people
are attracted to each other they will make sacrifices (i.e., concessions
in a negotiation) to preserve the gratifying personal relationship. Thus,
an individual bargainer may give up economic rewards for the social
rewards of a relationship with an attractive partner. To the extent that
one receives rewards from a relationship with an attractive partner, the
person will be more satisfied with the relationship (or in this case, with
the negotiated agreement).
It should be noted that interpersonal attraction might be conceived
as an exogenous construct—determined before negotiations begin, as
a part of the combination of the negotiators’ characteristics. It may
also be argued that attraction is a consequence of the negotiation, an
outcome construct. However, in this study, attractiveness is considered
a process-related construct. This is consistent with the views of Evans
[1963] and Zunin and Zunin [1972]. Evans suggests that similarity of
negotiators leads to more favorable negotiation outcomes. Zunin and
Zunin suggest that during the first few minutes of conversation “deci-
sions” are made about interpersonal attractiveness and whether to con-
tinue the interaction.
Time
In the cross-cultural negotiation literature, duration of the negotiations
is described as a key aspect of the process. For example, Tung [1984] and
Van Zandt [1970] report that negotiations with Chinese and Japanese
are exasperatingly long from the perspective of most American manag-
ers. Pruitt [1981] discusses at great length the pervasive influence of
time on negotiations. That is, time limits affect the qualities of the
aspirations, concession making, and negotiation satisfaction. Although
time limits per se are not varied in this study, negotiators from different
cultures may have different expectations about “appropriate” durations
(cf. Hall [I960]), which may in turn influence behaviors.
Time can also be thought of as an outcome construct. Indeed, Green
et al. [1967] considered duration of negotiations as such. This takes
into account the economic value of a negotiator’s time. However, Hall
[1960] has suggested that such a “time is money” view is peculiarly
American.
Negotiation outcomes
Profits and satisfaction
Researchers often find outcomes of business negotiations difficult to
measure and to compare. Various studies have used sale versus no
sale, an obvious measure of bargaining effectiveness (e.g., Pennington
[1968]), profits obtained by bargainers (e.g., Rubin & Brown [1975]),
and a combination of individual and joint profits (e.g., Dwyer and
Walker [1981]; Clopton [1984]). Beyond profits, negotiator satisfaction
is an important measure of success, especially if partners desire a con-
tinued relationship. Given the dual importance of task accomplishment
(profit) and relationship building (satisfaction), especially in interna-
tional negotiations (see Laurent [1983]), the present study uses both as
outcomes.
Hypotheses
The literature suggests a series of hypotheses to be tested, several of

which are conflicting. At the more global level, we find implied in many
comparative studies that negotiator behavior will not vary between
cross-cultural and intra-cultural situations. Rubin and Brown [1975] and
Graham and Herberger [1983] provide explanations for such obstinacy
or the null hypothesis.
HO Processes and outcomes in cross-cultural negotiations will be

no different from those in intra-cultural negotiations. That is, a
person from culture X will negotiate with a person from culture
Y in the same way as a person from culture X will negotiate
with a person from culture X (i.e., XY = XX).
Alternatively, the preponderance of research suggests that negotiators

adjust behaviors in cross-cultural negotiations, thus leading to varia-
tions in processes and outcomes.
HI Processes and outcomes in cross-cultural negotiations will

be different from those in intra-cultural negotiations (i.e.,
XY ≠ XX).
The research regarding negotiator similarity and cross-cultural com-

munication problems suggests behaviors and outcomes will vary across
cultural situations in the following manner:
Hla Cooperativeness (PSA), interpersonal attraction, satisfaction,

and profits will be lower and duration (time) longer in
cross-cultural negotiations than in intra-cultural negotiations

(i.e., when XY ≠ XX, then XY < XX).
The literatures on reciprocity and interactional synchrony also suggest

that variations in behaviors and outcomes will occur across situations.
However, the direction of variation will differ:
Hlb When cooperativeness (PSA), interpersonal attraction, time,

satisfaction, and profits differ from cross- to intra-cultural situa-
tions, the cross-cultural behaviors and outcomes will be similar
within the dyads (i.e., when XY ≠ XX, then XY = YX).
The reader will note that hypotheses Hla and Hlb are not mutually
exclusive.
Acculturation theory suggests that Japanese and Francophone nego-
tiators will adapt in cross-cultural settings to a greater degree than their
American and Anglophone counterparts. This last “hypothesis” cannot
be formally tested using this research design. However, it will be worth-
while to consider the results from this perspective.
Research methods
Negotiation simulation
The simulation, developed by Kelley [1966] and used by Pruitt [1981],
and Clopton [1984], involves negotiating for the prices of three com-
modities. Each bargainer receives an instruction sheet, including a
price list with associated profits for each price level. Participants were
given fifteen minutes to read the instructions and plan their bargaining
strategies, and up to one hour to negotiate. The simulation has both
competitive and cooperative characteristics; that is, negotiators can
attempt to maximize individual or joint profits. While simple enough
to learn quickly, the simulation usually provides enough complexity for
substantive interaction. Of the other negotiation simulations consid-
ered, Kelley’s appeared to simulate best the essential elements of actual
commercial negotiations as observed in preliminary research. Please see
Appendices 3A and 3B for more details.
Following the bargaining session, participants completed a question-
naire. To assure equivalence, the French and Japanese translations of
both the simulation instructions and the questionnaire were back-
translated into English by second translators; the original and back-
translated English versions were compared and discrepancies resolved.
While participants conducted within-culture negotiations in their
native language (English, Japanese, or French), the language of intercul-

tural negotiations was chosen by the pair negotiating.3
Since this study sought and measured negotiators’ “natural” behav-
iors, the methods described above depart significantly from traditional
experimental manipulations and associated checks. This departure not
only allows for a claim to greater external validity than the traditional
design, but more important, allows both negotiators to adapt their
behavior during the interaction. The present approach has proven use-
ful in simulating actual negotiator behavior [Graham 1985b, 1987].
Participants
One-hundred-ninety American, 72 Japanese, 100 Canadian
Francophones, and 100 Canadian Anglophones participated in the
negotiation simulation. Since students and businesspeople bargain dif-
ferently [Fouraker and Siegel 1963], the sample was limited to experi-
enced businesspeople. All had at least two years of business experience in
their respective countries and were volunteers from executive education
or graduate business programs. Their average work experience was 9.3
years and the average percent of inter-organizational contact was 48.1.
See Table 3.1 for more detail regarding each group. Participants were
randomly paired and randomly assigned to play the role of the buyer
or seller with either a same culture partner (80 American/American
pairs, 21 Japanese/Japanese pairs, 37 Anglophone/Anglophone pairs
and 37 Francophone/Francophone pairs) or different culture partners
(30 Japanese/American pairs and 26 Anglophone/Francophone pairs).
Table 3.1 Sample characteristics
Characteristics Mean (standard deviation)
United States Japan Canada

(N = 190) (N = 72)
Francophone Anglophone
(N = 100) (N = 100)
Age 32.7 (9.3) 33.6 (5.6) 31.9 (6.3) 32.4 (7.8)

Years work 9.4 (8.1) 10.7 (7.4) 8.3 (5.6) 8.8 (7.8)
experience
lnterorganizational 50.5 (30.8) 54.7 (22.9) 40.7 (28.7) 42.3 (26.7)
contact—Percent
of work involving
contact outside
company
Data collection instruments

Three process-related measures have been included in the analyses.
Each negotiation was timed. Cooperativeness (PSA) and interpersonal
attraction were measured using 5- and 3-item scales respectively. These
are included in Appendix 3C.
The study considered three negotiation outcomes—individual profits,
joint profits, and satisfaction. Profits are derived directly from the nego-
tiated agreement. Satisfaction with the negotiation was measured using
a 4-item scale on the post-simulation questionnaire. See Table 3.2 and
Appendix 3C for a detailed explanation.
The Japanese negotiatiors participating in intra-cultural interactions
completed a shorter questionnaire. Thus, only a 3-item measure of
cooperativeness and a 1-item measure of satisfaction were used for that
group. More detail is provided in Table 3.2 and Appendix 3C.
Results
Qualities of measures
As can be seen from the Cronbach α coefficients in Table 3.2, the reli-
ability of each measure used in the study is adequate (α > 0.65). Also,
the high correlations between the longer and the shorter scales (the lat-
ter used by some of the Japanese) suggest convergence.
Hypotheses tests
Analysis of variance was used to test for statistically significant dif-
ferences between groups. As indicated in Table 3.3, in the majority
of cases, no differences were found between intra-cultural and cross-
cultural situations. However, a few key differences are also evident,
particularly supporting H1. Americans reported higher satisfaction
(p < .05) in cross-cultural negotiations than in intra-cultural negotiations.
Japanese reported higher levels of interpersonal attraction (p < .05) and
achieved lower individual (p < .05) and joint (p < .10) profits in cross-
cultural negotiations. The Francophone Canadians used more coop-
erative (PSA) strategies (p < .05) in cross-cultural negotiations. The
Anglophone Canadians spent more time (p < .05) and achieved lower
joint profits (p < .05) in cross-cultural negotiations.
Recall that Hla stated that less effective processes and worse out-
comes would be associated with cross-cultural negotiations than with
intra-cultural negotiations (i.e., XY ≠ XX, XY < XX). This hypothesis is
supported in that the Japanese achieved lower profits (both individual
Table 3.2 Measures and descriptive statistics
Variable Description and Measure Mean lntercorrelations among Variables

48
(standard (Pearson Correlation Coefficients, All Groups Pooled)

deviation)
PSA5 PSA3 ATT TIME SAT4 SAT1 IP JP
Problem-Solving Self-rating of negotiation strate-

Approach gies along problem-solving/
(cooperativeness) individualistic continuum
(PSA5) 5 items, range = 5 to 25, 15.8 (3.7) 1
Cronbach α = .75
(PSA3) 3 items, range 3 to 15, 9.8 (2.6) .935** 1
Cronbach α = .71
Interpersonal Negotiator’s rating of attractive- 12.3 (2.3) .071 .126** 1
attraction (ATT) ness of partner 3 items, range =
3 to 15, Cronbach α = .73
Time (TIME) Time spent negotiating, range = 26.5 (13.5) −.195** −.154** .056 1
10 to 60 minutes
Satisfaction Negotiator’s reported level of
satisfaction with the negotiation
(SAT4) 4 items, range = 4 to 20, 14.9 (2.8) .126** .109** .212** −.200** 1
Cronbach α = .79
(SAT1) 1 item, range 1 to 5 3.9 (0.9) .140** .136** .216** −.204** .848** 1
Individual profits Negotiator’s individual profits 45.0 (10.1) −.034 −.055 .010 −.162** .414** .367** 1
(IP) associated with final agreement
in Kelley’s (1966) negotiation
simulation, range = 0 to 80
Joint Profits (JP) The sum of a negotiator’s and 89.7 (10.8) .256** .193** .018 −.282** .374** .360** .462** 1
his/her partner’s individual
profits, range = 56 to 104
**p < .05.

Table 3.3 Results (ANOVA)
Variables Mean (standard deviation)
United States Japan Francophone Anglophone
Intra-cultural Cross-cultural Intra-cultural Cross-cultural Intra-cultural Cross-cultural Intra-cultural Cross-cultural

(N = 160) (N = 30) (N = 42) (N = 30) (N = 74) (N = 26) (N = 74) (N = 26)
Problem- 16.5 (3.4) 16.3 (4.6) 10.3 (2.2)a 10.7 (1.7)a 14.7 (4.0) 16.7 (3.6)** 15.7 (3.5) 15.6 (3.3)
Solving
approacha
Interpersonal 12.0 (2.3) 12.5 (2.2) 12.0 (2.0) 13.2 (1.6)** 12.2 (2.5) 12.4 (2.5) 12.5 (2.2) 12.6 (2.2)
attraction
Time 27.7 (14.3) 32.0 (18.0) 28.9 (11.4) 32.0 (18.0) 25.8 (11.5) 28.3 (10.4) 18.1 (7.2) 28.3 (10.4)**
Satisfactiona 14.7 (3.1) 16.6 (2.1)** 3.8 (0.9)a 3.9 (1.0)a 14.6 (2.7) 14.3 (2.1) 14.9 (2.7) 15.3 (2.6)
Individual 44.9 (11.1) 48.2 (8.9) 47.9 (7.7) 43.5 (10.2)** 43.2 (9.3) 40.8 (9.0) 45.2 (10.0) 46.2 (9.8)
profits
Joint profits 89.1 (13.3) 91.7 (13.2) 95.9 (6.6) 91.7 (13.2)* 86.6 (6.6) 86.5 (7.6) 90.5 (7.7) 86.5 (7.6)**
*p < .10
**p < .05
a
Shorter scales were used for Japanese (see Table 3.2 and Appendix 3C), thus the reported means are concomitantly lower.
49
and joint) and the Anglophone Canadians took more time and achieved
lower joint profits in cross-cultural negotiations.
Similarities in processes and outcomes within cross-cultural dyads
were predicted in Hlb (i.e., XY ≠ XX, XY = YX). With Canadian nego-
tiators, the hypothesis is partially supported—no statistically significant
difference was found between Francophone and Anglophone PSA strate-
gies in cross-cultural situations. Likewise, no statistically significant dif-
ference was found between satisfaction levels of Japanese and Americans
in cross-cultural interactions (using the 4-item measure of satisfaction,
the mean for Japanese in cross-cultural negotiations = 15.7).4
Discussion
Concisely stated, the central question of the study has been: Are nego-
tiation processes and outcomes the same in cross-cultural interactions
as in intra-cultural interactions? The study has considered six important
negotiation constructs and tested for variation using four distinct cul-
tural groups. Changes in behavior and outcomes have been observed in
seven out of the twenty-four possible instances. The overall conclusion
of the study therefore must be that negotiators do indeed adapt their
behaviors in cross-cultural interactions.
Negotiatiors in each of the four cultural groups made changes.
Changes were also made in each of the six variables—processes and out-
comes. American negotiators were more satisfied in cross-cultural inter-
actions. The Japanese were more attracted to American negotiators than
their fellow Japanese, even though their profits were reduced when
bargaining with Americans. Francophone Canadians behaved much
more cooperatively with Anglophone Canadians. The Anglophone
Canadians spent more time and achieved lower joint profits in cross-
cultural interactions.
Consistent with Graham and Herberger’s [1983] comments, the
American negotiators appear to be the most obstinate. Their behavior
remained consistent across situations, only their post hoc expressions
of satisfaction changed from one circumstance to the next. Rubin and
Brown’s [1975] low interpersonal orientation (IO) label seems to fit the
Americans in our study, suggesting they did not heed their negotiation
partner’s behavior and made few adjustments to their own.
The lack of American adaptation also is consistent with accultura-
tion theory—the Japanese should tend to make more adjustments due
to their history of dependence on the American economy. Indeed, the
Japanese-American negotiations were conducted entirely in English.
While it is true that the data were collected in Los Angeles and none of
the Americans spoke Japanese, neither factor mitigates the basic find-
ing that the Japanese tend to adapt more. Indeed, Americans’ general
weaknesses in foreign language (cf. Graham and Gronhaug [1989])
reflects a societal level problem which manifests itself at the individual
level in our study. Although not specifically focused upon in this
research, all the conversations between Francophones and Anglophones
were conducted in English (i.e., as viewed on the subset that were
videotaped), even though data were collected in Montreal and many
of the Anglophones were bilingual. However, the results (as reported in
Table 3.3) show that both Canadian groups adapted in other ways.
Obviously, these issues raised by acculturation theory deserve further
attention, especially as global economic relationships continue to shift.
The literature in cross-cultural communication and Evan’s [1965]
similarity hypothesis indicate that cross-cultural negotiations will be
more difficult than intra-cultural negotiations, that both processes and
outcomes would be affected in a negative way. These views, summarized
in Hypothesis la, are supported in four of the seven change situations
discovered. The profits (both individual and joint) were reduced for
Japanese in cross-cultural negotiations. Cross-cultural negotiations took
longer for the Anglophone Canadians, and their joint profits were lower
when working with the Francophones.
The literature on reciprocity and interactional synchrony suggests
that negotiators will imitate or reflect one another’s behaviors, and
thereby adapt to differing cultural situations. In two cases, such views
(i.e., Hypothesis lb) are supported. The Americans raised their level of
satisfaction to that of the Japanese in the cross-cultural interactions.
And the Francophones increased their cooperativeness (PSA) to the level
of their Anglophone counterparts in the cross-cultural negotiations.
The only finding that cannot be explained by established theory is
that Japanese negotiators were more attracted to Americans than they
were to their fellow Japanese. We can think of two possible post hoc
explanations. First, perhaps the Americans were rated more attractive
because of a novelty factor. The questions used in the attractiveness
measure (see Appendix 3C) include the terms “interest” and “comfort.”
And, if the novelty factor was important, then the Japanese might rate
the Americans higher on the “interest” items and lower on the “com-
fort” items. However, an examination of the means of the individual
items fails to support such a conclusion.
The second explanation regards differences in behaviors and attitudes
between Japanese buyers versus Japanese sellers. Graham et al. [1988]
describe an unusual hierarchical relationship between Japanese buyers

and sellers, contrasted with a more egalitarian relationship between
American buyers and sellers. Thus, one might guess that Japanese sell-
ers facing American buyers (and the latter’s more egalitarian approach)
might express higher levels of interpersonal attraction. And this appears
to be the case—Japanese sellers rated American buyers more attractive
(X = 13.7) than Japanese buyers rated American sellers (X = 12.4), and
the difference was statistically significant (p < .05).
This latter finding, indeed all the results, indicate that much more
work needs to be done in this area. All we have been able to do in this
initial study is scratch the surface of an increasingly important phenom-
enon. We now have some indication that negotiators do change their
behavior in cross-cultural negotiations. And we therefore must be quite
careful when we interpret and suggest implications of comparative
studies. Moreover, some of the theories we have—interpersonal orien-
tation, similarity, communication problems, reciprocity, interactional
synchrony, and acculturation theory—seem to be applicable. But the
phenomena also appears to be more complex than our simple approach
warrants.
Limitations of the study

It is important to be aware of the limitations and shortcomings of the
research design. There are several such issues involved in this laboratory
simulation.
Perhaps the most important consideration is the validity of the
principal outcome measure, individual profits. Kelley’s negotiation
simulation [1966] and similar measures have been used in other stud-
ies, but how well the simulation represents actual business negotiations
remains problematic. Any laboratory experiment is open to criticism
regarding external validity—this research is no exception.
Additionally, much of the evidence supplied for accepting or reject-
ing hypotheses derives from participants’ self-reports and judgments.
In particular, the reliability and validity of the process measures depend
entirely upon the participants’ immediate post-negotiation memory
and impressions of the actual negotiation. Future studies should include
improvements in both these areas.
Finally, the most profound limitations of this and similar studies
may be the theories and methods themselves developed by American
behavioral scientists. Perhaps the American behavioral consistency
across intra- and inter-cultural negotiation situations reflects a similar
obstinacy in American theory building, or an artifact of the simulation
and measures used. Graham and Gronhaug [1989] discuss such issues at
length. Hofstede and Bond [1988] provide further evidence supporting

this final caveat in their comparisons of Chinese and several Western
cultures’ managerial styles. The latter report that three of the four pri-
mary dimensions that explain variations in Western managerial behav-
ior (power distance, individualism-collectivism, masculinity-femininity)
are salient to the Chinese while one Western dimension (uncertainty
avoidance) is irrelevant and one Eastern dimension (Confucian dyna-
mism) must be added. This “Eastern dimension,” Confucian dynamism,
was invisible to researchers using Western paradigms: it only emerged
when theory and measures were derived from empirical studies of the
Chinese. The help of foreign researchers and the use of more inductive
methods in foreign cultures will be needed to mitigate such limitations
in future studies.
Notes
1. Professor Howard Perlmutter of the Wharton School, University of
Pennsylvania, “More than 50% of international managers’ time is spent in
negotiating—in interpersonal transaction time influencing other managers.”
Statement made at the Academy of Management Meetings, Dallas, Texas,
August 1983.
2. The negotiation research reviewed, similar to all organizational behavior
research, is based primarily upon Americans [Adler 1983a].
3. The vast majority of the Canadian negotiators, as is true of a large percentage
of the Montreal business community, is bilingual.
4. The reader will note that Hlb cannot be tested with reference to either the
time variable or joint profits.
Appendix 3A
Payoff matrices for Kelley’s [1966] Negotiation Game
Prices Buyer Profits Seller Profits
Product 1 Product 2 Product 3 Product 1 Product 2 Product 3
A 40 24 16 0 0 0
B 35 21 14 2 3 5
C 30 18 12 4 6 10
D 25 15 10 6 9 15
E 20 12 8 8 12 20
F 15 9 6 10 15 25
G 10 6 4 12 18 30
H 5 3 2 14 21 35
I 0 0 0 16 24 40
Appendix 3B
Details of laboratory procedures
1. Each participant was allowed 15 minutes to read the written instructions (i.e.,
either a buyer or seller position sheet and appropriate payoff matrix) and plan
negotiation strategies. Questions of clarification were answered during this
time.
2. At the end of the fifteen-minute preparation period, the participants were
seated across from one another at a table, given final verbal instructions, and
left alone. A small sample of the negotiations was videotaped for detailed
analysis; and those results are in part reported in Graham [1985a].
3. The final instructions consisted in part of the following statements: “The
game usually takes about thirty minutes to complete.” “There is a one-hour
time limit.” “Once you have reached an agreement, do not discuss the game
further until you have completed the post-game questionnaire.”
4. When an agreement was reached or when one hour had elapsed the partici-
pants were given the post-game questionnaire.
Appendix 3C
Questionnaire measures*
Problem-Solving Approach
Cooperative Strategies
Rate your own bargaining strategies on the following scales:
1. Solving a mutual 5 4 3 2 1 Self-interested

problem
2. Exploitative 5 4 3 2 1 Accommodating
3. Honest 5 4 3 2 1 Deceptive
4. Informative 5 4 3 2 1 Persuasive
5. Unbiased 5 4 3 2 1 Biased
Interpersonal Attraction
6. How comfortable did you feel with the particular person with whom you
were paired?
Comfortable 5 4 3 2 1 Uncomfortable
7. How interested were you in the person with whom you were paired?
Interested 5 4 3 2 1 Uninterested
8. How interested would you be in seeing the person with whom you were
paired again?
Interested 5 4 3 2 1 Uninterested
Satisfaction
9. If an agreement was reached, how satisfied were you with that agreement?
Satisfied 5 4 3 2 1 Dissatisfied
10. How satisfied were you with the agreement relative to your pre-game
expectations?
11. How satisfied were you with your individual profit level?
12. How satisfied were you with your performance during the game?
*Questions 4, 5, 10, 11, and 12 were not completed by the participants in the
Japanese/Japanese dyads.
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4
The Multinational Corporation
as a Multilingual Community:
Language and Organization in a
Global Context
Yadong Luo and Oded Shenkar
Introduction
The need to balance a growing tension between multiple forces (geogra-

phy, product, market, and technology) across distant locations has been
an ongoing concern for the multinational corporation (MNC). Accelerated
globalization as well as attempts to capture higher synergies from far-
flung operations has called attention to the communication network
and internal knowledge flow within the MNC (Nobel and Birkinshaw,
1998; Govindarajan and Gupta, 2001). Situated in the midst of a diverse
discourse community, language is a key ingredient in this flow, which can
shape organizational change processes, information exchange, competi-
tive activities, global coordination, and intra-corporate value creation.
The MNC consists of diverse and geographically dispersed subunits,
which encounter language barriers when communicating with their
local business community as well as within their network (Triandis,
1982; Adler, 1983; Herbert, 1984; Ronen and Shenkar, 1985; Hofstede,
2001; Brannen, 2004). As an example, 60% of Citigroup employees
worldwide do not speak English, challenging the dissemination of head-
quarter policy, the communication of local concerns, and value creation
across subunit boundaries. Language barriers between the home and
host country are part of the liability of foreignness, an impediment to
Reprinted from Yadong Luo and Oded Shenkar (2006) “The Multinational
Corporation as a Multilingual Community: Language and Organization in a
Global Context.” Journal of International Business Studies (pp. 321–339). With kind
permission from Palgrave Macmillan. All rights reserved.
59
60 Yadong Luo and Oded Shenkar
effective negotiations and alliance evolution. Language can also have

an impact on conflict management in cross-cultural teams (Von Glinow
et al., 2004), headquarters–subsidiary relations (Gupta, 1987), training
effectiveness (Tung, 1982), knowledge transfer and diffusion (Ghoshal
and Nohria, 1989), and the efficiency of the global value chain
(Govindarajan and Gupta, 2001). It is via language that MNC executives
develop their strategies and policies, disseminate and implement them.
Previous research considered language use within an MNC network a
predetermined construct, and research efforts were directed at diagnos-
ing how language barriers adversely affect organizations or how such
barriers can be mitigated through staffing, training and development
(Von Glinow, 1988; Gibson and Hodgetts, 1991). Language, however,
has yet to be addressed in a strategic context. This is what we attempt in
the present paper, which views the MNC as a multilingual community in
which language, while socially evolving, is also deliberately selected and
structured as part of an international strategy, design, and organization.
We view language design as a strategic tool with which to align opera-
tions with MNC strategy across the shifting multiple environments in
which it operates. This design involves the development of a language
system in which parent functional language and subunit functional
languages are concurrently used and recursively related through the
MNC’s communication network. Proper language design can improve
intra-network communication, inter-unit learning, parent–subsidiary
coordination and integration, and intra-unit value creation within a
geographically dispersed network. To achieve these gains, however, an
MNC needs to build a globally integrated language system so that its
parent functional language aligns properly with its strategy, structure,
and level of internationalization, while each subsidiary’s functional lan-
guages configures with its strategic role, organizational positioning, and
expatriate deployment. We use the resource dependence perspective, in
conjunction with other theoretical lenses, to illustrate the strategic role
and organizational design of language systems and delineate implica-
tions for MNC strategy, operations and dynamics.
Theory development
Single-country language studies assume that language is predetermined,

static and exogenous, placing emphasis on communicative actions and
interpretive issues such as discourse and metaphor to facilitate mana-
gerially relevant processes and outcomes. In a global or multicultural
setting, though, languages evolve and, most importantly, become
The Multinational Corporation as a Multilingual Community 61
endogenous to the firms operating in those environments. This requires

MNC managers to decide language choice and usage within a corporate
communication system. Hence our point of departure is that language
systems in an MNC constitute a variable mechanism that needs to be
designed to balance global integration with local adaptation in line
with corporate strategy and an evolving global environment. The ability
to make and properly execute language design decisions will in turn
affect MNC operations and performance.
In the international strategy literature, language is generally por-
trayed as imposing barriers that impair market entry, local operations
and overall coordination (Brannen, 2004); however, the relation
between language design and global strategy is not addressed (Triandis,
1982; Graham, 1985; Hofstede, 2001). One reason for this vacuum is
that the language construct has no direct representation in the theoret-
ical frameworks that are currently employed to explain key MNC deci-
sions such as market entry and subsidiary control. In those frameworks,
language is at best implicit, a distant proxy for core theoretical con-
structs. In transaction cost economics, for instance, language diversity
can be said to add to the cost of a transaction that cuts across national
boundaries, though it is not clear how and to what extent. Language,
to the extent that it is acknowledged at all in the transaction costs argu-
ment, is embedded within the broader construct of cultural distance
(Kogut and Singh, 1988), itself a proxy for uncertainty in the organi-
zational environment. Language diversity within an MNC increases
the cost of transactions, from scanning host country information to
exchanging information with stakeholders such as customers, suppli-
ers, competitors, and regulators (Hymer, 1979; Kostova and Zaheer,
1999), which in turn affects MNC choices on whether to internalize
certain activities. The transaction costs approach does not consider,
however, the direct role that language plays in influencing corporate
communication and coordination across national boundaries. The
same is true for other theoretical frameworks. For instance, in agency
theory terms it may be argued that by using a different language an
agent will be able to escape monitoring by principals when one or both
parties are unable to decipher the other’s messages (Shenkar and Zeira,
1992). Yet in this theory too language, while not directly treated, would
be positioned as a handicap rather than as a deliberate strategic choice.
To deal effectively with the role of language in an MNC, an underlying
theory should make it possible to balance external diversity and evolu-
tion with internal demands for integration and control, rather than,
say, assume a scalar hierarchical fiat, as a transaction cost approach
would suggest, or focus solely on the potential conflict between entities,

as an agency approach would imply. Such a platform is available in the
resource dependence framework, which, while also largely silent about
the role of language, provides a base on which such a role can be con-
templated. The theory (Pfeffer and Salancik, 1978) views organizations
as dependent on their environments for critical inputs, indicating a
possible role for language beyond facilitating effective communications.
A corollary to the resource dependence perspective – the resource-based
theory of the firm (e.g., Barney, 1997) – is focused on the firm’s assets,
implying that the choice and execution of language systems underpin
global capabilities. Below, we describe how language can affect control,
strategy and performance.
Information, in the resource dependence framework, is a way to
control interdependencies. Organizational language affects the extent
to which MNC subunits are aware of their interdependencies, and
such awareness is a precursor for contemplating how to control those
interdependencies. Language choice and usage affect information
circulation, presentation, and interpretation, which in turn allows
corporate headquarters to control global planning and inter-unit coor-
dination. Language also influences the process of enactment in which
organizational members internalize environmental information (Daft
and Weick, 1984; Phillips et al., 2004). Individuals interact and make
interpretations within their cultural and linguistic context (Von Glinow
et al., 2004), with language serving as ‘a cultural system of signification’
(Brannen, 2004, p 597). Language also plays a role in the way seem-
ingly standard elements of the organizational environment are enacted.
For instance, Gibson and Zellmer-Bruhn (2001) show how members
of diverse cultures use different definitions of ‘teamwork’, while Von
Glinow et al. (2004) note that certain words, particularly those express-
ing emotions, do not have an equivalent in other languages. This lack
of equivalence can distort understanding of organizational strategies
(Schneider, 2002), while using the original language can serve to high-
light and preserve sensitivities to local variations. Using language as
a strategic tool implies that this decision, like other language design
choices, will be driven by MNCs’ strategy.
Language affects strategy because subunit language design influences
local responsiveness while parent language design influences global
integration. The resource dependence theory maintains that organiza-
tional design must cope with the firm’s external and internal depend-
encies (Pfeffer and Salancik, 1978). In a global setting, this dependency
is an increasing function of the requisite local adaptation and respon-
siveness (Prahalad and Doz, 1987), while interdependency is a positive
function of global integration (Bartlett and Ghoshal, 1989). The use of

appropriate languages at the subunit level helps an MNC establish legit-
imacy in, and remain tuned to, the various local environments in which
it operates, while the use of a uniform language at the parent level
enables it to manage the demands of key constituencies by controlling
access to communication channels. Using a language that members of
a given constituency do not master, or one that limits their ability to
converse, lowers their information access and hence power within the
organization. A constituency or subunit that is denied information on
the nature of a given dependency is deprived of the opportunity to
defend or hedge against it (Salk and Shenkar, 2001).
When a subunit faces greater local responsiveness requirements
(e.g., its role is to seek local market share, its ownership is shared with
a local partner, and/or its management is dominated by local talent),
it will depend more heavily on external resources in a host country
(Rosenzweig and Singh, 1991). Language design for this subunit (i.e.,
subunit functional language) should line up with a local language or use
a language that can facilitate local adaptation. In contrast, if a subunit
faces limited requirements for local adaptation but substantial require-
ments for global integration, its dependence on host country resources
weakens, and its functional language needs to align with a parent
language or use a language that supports global integration.
The resource dependence logic is that an organization’s dependency
on its internal (parent) resources buffers its dependency on external
(host country) resources. When resource sharing within a globally
diversified MNC is a must, a common language that promotes inter-
nal communications becomes critical to reducing hazards (Zaidman,
2001). Because resource sharing within an MNC is coordinated largely
by headquarters (Bartlett and Ghoshal, 1989), parent functional lan-
guage is crucial to intra-corporate collaboration and synergetic value
creation. This internal coordination is even more important when tight
global integration is planned. Therefore the design of the parent func-
tional language must align with the entire network’s strategic needs
for global integration as reflected in strategy, structure, and transna-
tionality (Cray, 1984; Herbert, 1984; Egelhoff, 1988; Von Glinow et al.,
2004). The need to simultaneously balance local responsiveness and
global integration (Bartlett and Ghoshal, 1989) requires integration of
parent and subunit languages so that these languages are concurrently
used and recursively linked through an intra-MNC communication
network.
Global language design affects corporate performance via several chan-
nels. First, it improves inter-unit and intra-network communication,
enhancing the accuracy, speed and effectiveness of intra-corporate

information exchange (Cossette, 1998; Varner, 2000). Second, global
language design improves coordination (March and Olson, 1982) and
integration, which are compounded by the use of multiple languages
and their cultural correlates (Donnellon, 1986; Sackmann, 1989). When
a language system is incorporated into a global information system,
headquarters can better calibrate local feedback and integrate globally
allocated activities.1 Coordination costs are reduced directly as a result
of lower translation requirements and indirectly via minimization of
the misinterpretations associated with linguistic barriers. Third, global
language design improves inter-unit learning, which is essential to cap-
turing synergies from inter-unit collaboration and knowledge transfer
(Sundaram and Steward, 1992; Schulz, 2001). This transfer is influ-
enced in part by the commonality of languages used by various subu-
nits, as well as the breadth and intensity of the functional language.
Knowledge-sharing and development between peer subunits necessitate
multi-directional information flows, which in turn requires strategic
planning of language system and language-related human resource
management (motivation, leadership, training, expatriate policy, and
learning). Finally, global language design improves intra-unit value
creation, encourages intra-unit business communication and socializa-
tion (Wiseman and Shuter, 1994) and reduces cultural distance between
managers (Zaidman, 2001). This is especially evident in cross-cultural
joint ventures in which personal and structural attachments play a criti-
cal role in building trust and collaboration (Luo, 2001).
Finally, we should note that language choice, as other strategic deci-
sions, is not made in a vacuum. Languages are constantly evolving,
infused with new vocabularies and language usages by flows of immi-
gration, trade and investment, creating new jargons and dialects that
represent mixtures of diverse languages. While language design is a
deliberate process underpinned by economic or strategic rationality, it
is also an evolutionary process, as we assume in the general framework
depicted below (see Figure 4.1). Language choice can be evolution-
ary and progressive over time to corroborate an MNC’s international
experience, strategic needs and globalization scale. As explained in sub-
sequent sections, such experience, needs and scale are reflected in an
MNC’s structure, strategy and transnationality. For instance, as the MNC
grows over time, its language choice may evolve from a home country
language to a global functional language that is more widely shared by
all subunits. The evolutionary pace, of course, varies. Some MNCs are
Evolutionary 1. Information Control

process 2. Power implications
Global 1. Global integration Strategic

Strategic
language 2. Local responsiveness implications
rationality
design
1. Intra-network communication
Bounded 2. Coordination effectiveness Performance
rationality 3. Inter-unit learning implications
constraints 4. Intra-unit value creation
Figure 4.1 Theoretic logic of global language design for MNCs
more deliberate in their strategic use of language design, while others

may muddle through toward a workable solution over time.
Moreover, language choice, like other strategic decisions, is made
in the context of bounded rationality, influenced by traditions, herit-
ages, experience and stereotypes. While senior executives have con-
siderable leeway over selecting, designing and implementing language
systems, such bounded rationality constraints language design choice.
For instance, Japanese MNCs are known to insist on using their home
language throughout their operations, largely because of their tradition
and culture, for example, their high need for control.
Figure 4.1 schematically links an MNC’s global language design with
its antecedent factors such as strategic rationality, evolutionary path
and bounded rationality constraints, and with its consequences such
as corporate control, strategy and performance implications within an
integrated model.
Language system in a multilingual community
Functional language
We begin by introducing functional language as the language formally
designated for verbal and written use by an MNC’s focal unit (head-
quarters or overseas subunit) within this unit and with the rest of the
MNC network. This is the language appearing in major organizational
documents (e.g., minutes of board meetings), used in major events (e.g.,

senior management forums), and required from managerial personnel
as a prerequisite for hire. Three scenarios on subunit functional lan-
guage can occur:
1. functional language is the local language2 (e.g., Siemens’s subsidiary

in the US uses English);
2. functional language is the parent’s language (e.g., Matsushita’s sub-
sidiary in the US uses Japanese); and
3. functional language is a third language (e.g., a Mexican subsidiary of
Airbus, headquartered in Toulouse, France, uses English).
In scenarios (2) and (3), functional language differs from the local
language.
It is possible, though not common, that the subunit’s functional
language, the local language, and the parent language will overlap
(Nokia’s subsidiary in the US uses English for all three purposes); or
that they will all vary (in Fujitsu’s joint venture in Brazil, English is the
functional language, Portuguese the local language, and Japanese the
parent language). More often, MNC subunits use the parent’s functional
language as their own. The probability of using the local language as
the functional language increases, nonetheless, as a function of subunit
localization – that is, the extent to which the subunit is strategically
designed to seek local market dominance by improving local adaptation
and legitimacy and utilizing local resources and talents. If a subunit is
jointly owned with a local partner, a shared common language such
as English may be designated as functional. On some occasions, some
cooperative ventures might use two functional languages – local or
shared language to communicate with the local partner, and parent
language to communicate with the rest of the MNC network.
At the parent level, functional language may (more often) or may not
be the same as the home language (language of the home country).3
Nokia’s home language, for example, is Finnish, but its parent func-
tional language is English. Similarly, Philips’s home language is Dutch
but it uses English as a functional language. Generally, parent func-
tional language is chosen to facilitate global coordination, streamline
intra-network communication, and bolster transferability of informa-
tion, knowledge, and expertise. Parents elect their functional language
to satisfy organizational need for internalization. If the functional lan-
guage is not the home language, parents will use a language that can be
shared by all subunits around the world. It is the functional language,
rather than home or local languages, that ought to be globally designed.

The functional language needs to be carefully selected for use in intra-
network communications because it is set to embody the concerns,
requests and knowledge of subunits with different national languages.
Language breadth and intensity

The functional language system concerns not only the functional
language choice (unit) but also the breadth and intensity of its use. In
an MNC’s headquarters, language breadth refers to how wide-spread
is the use of the parent functional language across geographically dis-
persed units. In a foreign subunit, breadth is about how widespread
the subunit’s functional language is in communications with other
corporate members (peer subunits, regional headquarters, and the head
office). Language intensity means how frequent and intense (e.g., con-
taining rich messages) is the use of a functional language by organiza-
tional members. At the parent level, language intensity refers to the use
of the parent functional language between headquarters and subunits
and among geographically dispersed subunits. At the subunit level, this
refers to the use of the subunit functional language between the focal
subunit and other corporate members.
When language breadth matches an MNC’s degree of internation-
alization (in terms of the number of countries of operations and the
volume of activities in those countries) and its integration level (in
terms of global planning, coordination and control by headquarters),
the functional language will foster network communication. If a
match is lacking, the firm will incur higher transaction costs or fail
to optimize information sharing. Language breadth matters because
MNCs are increasingly reliant on a coordinated, global value chain
(Govindarajan and Gupta, 2001). The global value chain, in turn, is
dependent on cross-border business teams (e.g., R&D units) and cent-
ers of excellence (e.g., a subsidiary in China serves as the OEM center
for the entire network) communicating via a harmonized functional
language. Meanwhile, offshore subunits are increasingly differentiated
internally (Ghoshal and Nohria, 1989), allowing different subunits to
play different roles in global integration. Breadth design can facilitate
the implementation of such differentiated roles.
At the headquarters level, language’s intensity will increase to meet
the needs for an MNC’s expanded globalization or heightened integra-
tion. At the subunit level, intensity will change in accordance with
local adaptation and strategic positioning. Intensity will increase if
subunits engage in more complex transactions, necessitating more
resource commitment from and monitoring by the parent firm and

requiring rich messages for explication and clarification purposes.
Creating dynamic capabilities (Zahra, 1999) requires intensified infor-
mation reporting, sharing, and internal exchanges within the MNC
community; however, escalating such exchange across the board will
raise coordination costs and create information jams and bottlenecks.
As a result, the intensity of using a functional language will vary based
upon the need for knowledge dissemination, information transfer, and
strategic positioning.
Parent and subunit languages

The MNC is a multilingual community because it contains a group of
subunits that are dispersed across a variety of national locales, each
with a workforce having its own native language, form of discourse and
cultural environment (Adler, 1983; Babcock and Babcock, 2001; Phillips
et al., 2004).4 Language boundaries are not clear cut; however, multiple
languages are often concurrently used within a subunit, between subu-
nits, and between subunits and headquarters.5 Subunits can take several
forms, such as wholly owned subsidiaries, branch or representative offices,
or joint ventures. Large MNCs, for example, Ford Motor Company, IBM
or Samsung, employ all of those unit types; moreover, those units vary
in their dependencies, producing variation in the strategic and organiza-
tional context for communications. The MNC’s language system consists
of parent functional language, whose role is to support global coordina-
tion, and subunit functional languages, geared towards the fulfillment
of subunit roles. These two levels are concurrently used and recursively
linked through a globally coordinated intra-organizational communica-
tion network. Functional languages at different levels are set to satisfy
the balance between global integration and local responsiveness and
facilitate the accomplishment of strategic objectives.
Although MNCs dispatch expatriates overseas, the majority of subu-
nit employees are host country nationals. For example, in 1997, Texaco
Indonesia had 6000 local employees and 15,000 local contractors but
only 80 expatriates. The indigenous workforce plays an increasingly
important managerial role as MNCs seek to cut costs and emphasize
localization and adaptation as part of their strategic response to a
globally competitive marketplace (Ely and Thomas, 2001; Hofstede,
2001). This reality produces a multitude of linguistic cultures, as
reflected in idiosyncratic communicative actions, discursive structures,
rhetorical enthymemes, and hermeneutic schemes (Donnellon, 1986;
Heracleous and Barrett, 2001; Zaidman, 2001). The extent and impact of
linguistic diversity are also determined by geographic spread (Wiseman

and Shuter, 1994) and level of transnationality as well as by industry
and product lines. For example, US publishers such as John Wiley and
Prentice Hall initially expanded within Anglo-Saxon countries, which,
though dispersed across multiple continents, share a language (though
not dialects, metaphors and underlying meanings).
Figure 4.2 summarizes the conceptual model in which an MNC’s
functional language system is positioned as an organizational variable
that reflects internal communication requirements among multiple
subunits embedded in their respective environments. The language
system requires global design, based on various contingencies, for the
unit, breadth, and intensity of functional language(s). Although these
levels may in some cases involve the same language (especially for
US-based MNCs), they often diverge, especially when subunits depend
on local resources or local partners, or where headquarters are based
in non-English speaking nations. MNC managers need to refine global
management information system (e.g., double-language book-keeping
system) and train key personnel who routinely deal with coordinating
and monitoring overseas subunits so as to accommodate the duality of
languages used in the network as a whole or in specific regions or subunits.
Organizational dynamics and parent language design
In this section, we explore how organizational conditions influence

internal language design within the MNC, suggesting how global
language design (unit, breadth, and intensity) within an MNC network
(parent and subunits) should be configured. Because a typical MNC is
composed of headquarters (parent) and foreign subunits, we address
this link at parent and subunit levels, recognizing that a parent firm
and its subunits do not share the same contingencies that influence
language design, because they operate in assorted environments with
different organizational dynamics and strategic missions. At the par-
ent level, global language design is shaped by international strategy,
organizational structure, and level of transnationality. A globally
harmonized language system (unit, breadth, and intensity) should
facilitate strategy implementation, streamline information flows, and
support globalization. At the subunit level, global language design is
shaped by subunit form, strategic role, and management make-up. The
language system for an overseas subunit should help control, fulfill its
predetermined role and minimize communication-related costs. At the
parent level, language design depends on the balance between global
Structure Strategy Transnationality
Parent functional
language
Functional
language system
Unit – Breadth – Intensity
Subunit functional
language
Subunit Strategic Expatriate

form role deployment
Figure 4.2 A model of global language design for MNCs
integration and local responsiveness as shaped by strategy, structure and

environment. International strategy influences how headquarters and
subunits are linked, which in turn determines how the language system
is structured to support this link. MNCs using a centralized, harmo-
nized, and integrated strategy will require a single functional language
throughout their network to support standardization and coordination.
Organizational structure establishes network channels for information
flows and reporting systems and determines the intensity and breadth
of each unit’s communication with the rest of the network. These, in
turn, establish the institutional framework for the design of parent
functional language. Finally, under high transnationality, pressure
towards the use of multiple languages builds, increasing the breadth
and intensity of functional languages. We detail these below.
MNC strategy
MNC parents use three core strategies to compete globally: multidomes-
tic, global, and hybrid or transnational (Bartlett and Ghoshal, 1989).
Multidomestic strategy focuses on competition within each country
and emphasizes the segmentation of foreign markets by national
boundaries. Strategic and operating decisions are delegated to subu-
nits in order to custom-tailor products and services to local markets.
The strategy creates pressure for using multiple functional languages,
implying that subunits in different language zones may be allowed
to use local or zone languages to communicate with the MNC net-
work. Because a multidomestic strategy requires high local adaptation
(Prahalad and Doz, 1987), using local or zone languages will improve
managerial efficiency and expedite decision-making within a subunit.
Using the local language may also promote competitive responsiveness
to the host market. When subunits within the same zone or region
use the same language to communicate with one another, information
exchange and sharing will be augmented (Ghoshal and Nohria, 1989;
Babcock and Babcock, 2001). Finally, a multidomestic strategy requires
less intra-network communication, coordination, and integration, and
thus weakens the demand for using a uniform language.
In contrast, global strategy assumes more standardization of products
across national markets. Foreign subunits are presumed interdepend-
ent, with headquarters focused on attaining integration among them
(Prahalad and Doz, 1987; Yip, 1995). This strategy leverages economy
of scale and opportunities for utilizing innovations developed at home.
A uniform functional language will better fit this strategy as it can
improve intra-network communication within a harmonized network
in which headquarters dictates operational strategies. Using a uniform
functional language enhances parent ability to design global produc-
tion and new investments, integrate global value-chain activities, avoid
translation-related costs, and combine information and reports. It also
improves the consolidation of financial statements across subunits,
facilitates transfer pricing, and streamlines internal risk-hedging policies
(Salter and Niswander, 1995).
The hybrid strategy is situated between the multidomestic and global

strategies. It seeks to achieve both global efficiency and local responsive-
ness, and requires a shared vision and individual commitment using an
integrated yet flexible network. In a hybrid strategy, language design
fulfills two key purposes: to minimize conflicts between integration
and localization, and to expand the discretion of foreign subunits. The
parent’s functional language may be either single or multiple. If a multi-
language system is adopted, the number of functional languages will
be less than under multidomestic strategy. This arrangement fits well
with a situation in which subunits must be sufficiently differentiated to
confront diverse cultures and markets. If global strategy denies subunits
a language choice, hybrid strategy provides them with some language
options or the concurrent use of dual languages.
Both the breadth and the intensity of using functional language
are expected to be lower in a multidomestic strategy and higher in a
global strategy, with hybrid strategy in between. Multidomestic strategy
involves establishing a complete value-creation chain in each major
national market. Accordingly, the firm focuses more on communication
with external customers than within the network, resulting in narrow
breadth and low intensity of functional language use. Headquarters
maintain lesser control over local units, reinforcing this tendency. In
contrast, MNCs using global strategy place different functions in differ-
ent locations, seeking operational synergies from inter-unit collabora-
tions in primary value-chain activities (Yip, 1995). This internalized
system, accompanied by intensified cross-subunit communication as
well as heightened subunit-headquarters communication, generates
high levels of intensity and breadth of language use. Firms using hybrid
strategy must transfer distinctive competencies within the network
while heeding pressures for local responsiveness (Bartlett and Ghoshal,
1989). Competence building and global learning do not reside in the
home country alone but can emerge in any of the MNC’s worldwide
operations. Consequently, MNCs maintain a multi-directional flow of
skills and information (i.e., from any unit to others). Under a hybrid
strategy, breadth and depth will fall between the other two strategies.
Thus:
Proposition 1: MNCs with a multidomestic strategy are likely to use

multiple functional languages, whereas those with global strategy
are likely to use a uniform functional language. MNCs with a hybrid
strategy are likely to use one or a few languages that foreign subunits
can choose from or concurrently use.
Proposition 2: The breadth and intensity of using functional lan-

guage are likely to be greater under global strategy than under multi-
domestic strategy, with hybrid strategy in between.
MNC structure
To organize international business activities, MNCs choose between
a departmental structure (an international division is in charge of all
foreign activities), a divisional structure (each product division man-
ages its own international activities), a matrix structure (headquarters
and product divisions co-manage foreign subunits), or a geographical
structure (regional headquarters manage all activities within a region).
Firms using geographic or matrix structures are generally more diversi-
fied and complex than those using divisional and departmental struc-
tures (Stopford and Wells, 1972; Herbert, 1984). Under geographic or
matrix structures, regional headquarters have the authority to plan and
monitor investments and production in their region. Consequently,
the MNC network may have multiple functional languages, reflecting
regionally dispersed business needs. A French MNC, for example, may
use French as functional language in the West African region, English
in North America, and Spanish in South America and the Caribbean
region. Each region constitutes an independent language zone using
a functional language that is shared by local subunits. This approach
mitigates language and cultural distances, and stimulates intra- and
inter-unit communication within the region. To consolidate informa-
tion from region-based language zones, MNC headquarters use either
home language or a commonly shared language such as English,
depending on the degree of transnationality. A French MNC may sub-
stitute English for French if the company is geographically diversified
and internationalized.
The geographic structure differs from the matrix structure in the
breadth and intensity of using a functional language. In a typical matrix
MNC, horizontal differentiation intersects product and regional divi-
sion. Responsibility for operational decisions is shared by both (Ghoshal
and Nohria, 1989). Individual subunits thus belong to two hierarchies.
This duality, present in the matrix but absent in the geographic struc-
ture, implies a broader scope for using the functional language. This is
reinforced when most information reported to one hierarchy is concur-
rently submitted to the other (Herbert, 1984). Moreover, direct commu-
nication between two hierarchies is more intense in a matrix structure
than in a geographic structure because of the need for bi-directional
coordination between the matrix dimensions.
Compared with regional and matrix structures, divisional and depart-

mental structures tend to be more centralized, which enables headquar-
ters divisions or departments to exercise greater control over foreign
operations (Sundaram and Steward, 1992). Under a divisional structure,
each product division is a self-contained, largely autonomous entity
with overall responsibility for its own global activities. In a departmen-
tal structure, international activities are grouped in an international
department, relegating country managers to a secondary role. The
common feature of these two structures is that global value-creation
activities are overseen by parent managers (Cray, 1984), who provide an
organizational context in which it is easier to consolidate and integrate
value-creation activities while realizing location and experience curve
economies (Stopford and Wells, 1972). Parent functional language tends
to be uniform to support consolidation and integration, for example,
harmonization of the informational and financial systems. Whether
this uniform functional language is a home language or a shared lan-
guage will depend on geographical diversity, language acceptance, and
communication requirements. When an MNC’s business is diversified
across foreign markets, English, as lingua franca, is likely to be used
whether it is the home language or not because it better fits market
diversity. If foreign markets are narrow, home language may be used,
because it would be easier for headquarters and expatriates to commu-
nicate in it.
Divisional and departmental structures may differ, however, in the
breadth and intensity of using the functional language. The divisional
structure is designed to underpin value-creation activities that take
place across nations, facilitating the transfer of core competencies
within a division’s worldwide operations. Competence transfer and
capability building necessitate a great deal of intra-network communi-
cation and coordination (Cray, 1984; Gupta, 1987; Prahalad and Doz,
1987). Several studies demonstrate that innovation under the divisional
structure is a positive function of the intensity of such communication
and coordination (Quinn, 1996; Nobel and Birkinshaw, 1998; Tsai and
Ghoshal, 1998; Ulijin et al., 2000; Schulz, 2001). Thus language inten-
sity is likely higher in a divisional than in a departmental structure. The
opposite, however, may be true for breadth. In a departmental structure,
worldwide activities are coordinated and integrated by the international
department. The functional language is used within every subunit,
between each subunit and headquarters, and between peer subunits. In
a divisional structure, breadth will be relatively narrow because subunits
communicate only with peer subunits in the same product division.
Cross-communication between different divisional subunits is rare.

Therefore breadth may be greater in a departmental than in a divisional
structure.
Proposition 3: MNCs using regional or matrix structure are likely

to use multiple functional languages throughout language zones,
but the breadth and intensity of each functional language will be
stronger in a matrix than in a geographic structure.
Proposition 4: MNCs using divisional or departmental structure are

likely to use a single functional language (home or shared language).
The intensity of using the functional language will be stronger in
divisional structures while breadth will be stronger in departmental
structures.
Transnationality
Transnationality is the extent to which an MNC has international-
ized its major businesses and diversified globally. The United Nations’
UNCTAD uses an index of transnationality that is the sum of three
ratios – foreign to total revenues, foreign to total assets, and foreign to
total employees: the higher the sum, the more transnational the firm.
(Other ingredients, for example, the extent to which the MNC operates
in culturally diverse environments, can be added.) Transnationality
shapes global language design in four ways. First, it affects language
selection and preference by foreign subunits, indicating a firm’s inter-
dependence with foreign markets and resources (Davidson, 1980;
Johanson and Vahlne, 1977), which, in turn, will pressure headquarters
to opt for multiple functional languages. Second, transnationality influ-
ences the extent to which language forms a communication barrier to
MNC managers: the larger the number of different cultures and nations
in which the firm operates the greater the potential language diversity
in the MNC network. Using a single functional language throughout a
culturally diversified network is difficult and probably counterproduc-
tive. Third, transnationality influences the global learning process and
knowledge-sharing within an integrated structure. Transnational firms
maintain greater inter-unit integration to jointly exploit existing knowl-
edge or explore new knowledge (Zander and Kogut, 1995), making
information sharing critical. Lastly, transnational firms depend more
on information and communication systems for coordination (Ghoshal
and Nohria, 1989), in which the language system plays a crucial part
(Leininger, 1997).
As MNCs become more transnational, pressures to consider multiple

functional languages increase. Firms may choose not to do so, however,
because of the need to balance global integration and local responsive-
ness. The decision will be influenced by international strategy and organ-
izational structure. For instance, transnational MNCs with a geographical
structure may adopt a multi-language system whereas those structured
by product may use a uniform functional language. Transnationality cre-
ates pressure towards using a functional language that can be shared by
subunits regardless of the MNC’s home base. For those based in English-
speaking countries, it is natural to use English to plan, coordinate, moni-
tor, and evaluate global businesses that are highly diversified, integrated,
and complex. For MNCs based in non-English-speaking countries, high
transnationality will trigger consideration of English or another shared
language. For instance, when Swedish MNCs become more transna-
tional, English becomes the only feasible functional language.
As transnationality increases, the breadth and intensity of using
functional language will grow. Diversity increases language breadth
while depth enhances intensity. When businesses are globally dis-
persed, the scope of intra-network communication is broader, widen-
ing the use of functional language (Victor, 1992; Wiseman and Shuter,
1994). In any organizational structure, global market diversity confers
greater coverage of intra-MNC transfer of information and resources
(Herbert, 1984; Dunning, 1995). To cope with this need, the functional
language will be shared by units associated with the same global value
chain (vertical) or with the same process or value creation function
(horizontal). When revenues or returns rely more on foreign markets,
enhancing dependence upon them, intra-network communication will
strengthen, increasing the intensity of functional language usage. The
more transnational the MNC, the more difficult it is for headquarters
to exercise control, whether output or bureaucratic (Cray, 1984; Roth
and Morrison, 1992). Consequently, MNCs will emphasize corporate
culture, information sharing, cross-functional coordination, and activ-
ity configuration (Sundaram and Steward, 1992) – each of which needs
intensified communication via a designated functional language.
Finally, the impact of transnationality on language usage will be
mitigated by a number of factors. One such factor is the staffing policy
undertaken by the MNC. An ethnocentric staffing policy that reserves
senior positions for members of the MNC’s home country (Perlmutter,
1969), typically found in cultures that are more concerned with value
homogeneity, score higher on power distance, and put less premium
on foreign language fluency (e.g., Japan, France), will veer towards
preference for home language beyond what its transnationality level

would suggest. This explains, for instance, why Japanese MNCs tend
to use Japanese throughout globally dispersed subsidiaries despite the
scarcity of locals fluent in the language. Hence:
Proposition 5: The more transnational the MNC, the more likely it

is to use a shared language as a parent’s primary functional language
except where firms have strictly ethnocentric staffing policies.
Proposition 6: The more transnational the MNC, the higher the

breadth and intensity of functional language use.
Organizational dynamics and subunit language design
So far we have discussed language systems at the parent level from a cor-
porate perspective. This top-down system is only a part of an MNC’s over-
all language system, the other being the subunit level. This is a bottom-up
system on which a specific subunit relies to foster communication within
the subunit and with the rest of the MNC network. The language used by
the subunit may or may not be the same as the parent’s functional lan-
guage (e.g., a Japanese MNC’s subunit in Singapore uses English but the
headquarters uses Japanese); nor is it necessarily the local language (e.g., a
Japanese MNC’s subunit in Puerto Rico uses English rather than Spanish).
Operating in a different environment, subunits and headquarters face
different organizational needs for communications, making subunit lan-
guage design contingent on unique organizational dynamics.
We argue that subunit language design is shaped by subunit form,
strategic role, and expatriate deployment. Subunit form refers to
governance type (wholly owned subsidiary, joint venture, or branch/
representative office); it influences language design by underpinning
the purpose and channels for communication. A subunit’s strategic role
determines its decision-making discretion, inter-organizational relation-
ships with the network, and dependency on local resources, all of which
can influence language design. Expatriate deployment, defined as the
proportion of expatriates in a subunit’s top management team, affects
human resource proficiency in and language preferences.6
Subunit form
Foreign subunits adopt different organizational forms and identities to
meet local government requirements and/or achieve various strategies
and objectives (Dunning, 1995). These forms can be broadly categorized
into wholly owned subsidiaries, cooperative or joint ventures, and

branches or representative offices (Root, 1994). These entities differ
in several ways, including decision-making autonomy and process,
ownership type and structure, and governance mechanisms (Hill et al.,
1990). The wholly owned subsidiary offers the MNC tighter control
and freedom of operation without having to consult a partner, reduc-
ing communication and transaction costs and being able to focus on
its own strategic objectives (Hill et al., 1990). The communication net-
work within the subsidiary depends largely on the parent firm’s needs.
We expect that a wholly owned subsidiary will use parent functional
language, utilized at headquarters or regional headquarters. Offshore
activities conducted by wholly owned subsidiaries are often internalized
within the MNC network, making them less reliant on local resources
and integrated with the rest of the MNC (Hill et al., 1990).
Branch or representative offices are simple extensions of home opera-
tions or services to a host country. The branch office offers a simple
and low-cost means for establishing or expanding a presence in a target
country. Its business scope generally replicates home activities. By law,
representative offices cannot directly engage in profit-making activities;
instead, they emphasize non-commercial services such as business com-
munication, market research, liaison, and local government contact.
Because of the relatively codified nature of those activities and the
limited responsibilities they entail, communication within a branch or
representative office and between these offices and the MNC network
is not a top priority. Generally, such offices need only to communicate
with headquarters or regional headquarters, with very few contacts
with peer subunits in other countries. These offices thus may use the
functional language of the parent’s headquarters or that of regional
headquarters as their functional language.
The cooperative or joint venture is a subunit form in which commit-
ments, profits, and responsibilities are assigned to each party according
to contract and/or equity share. Inter-partner communication barriers
are considered one of the fundamental reasons for the failure of many
ventures in both developed and developing economies (Tallman and
Shenkar, 1994). Ventures with better communications tend to be more
cooperative and maintain higher inter-organizational trust or boundary
spanner attachment (Luo, 2001). The choice of a functional language
will affect inter-partner communication as managers come from dif-
ferent nations, which implies different cultures, languages, modes of
discourse, and linguistic-related emotions or conflicts (Von Glinow
et al., 2004). In cooperative ventures, the functional language is selected
by agreement of multiple parties and is viewed as a control mechanism
(Root, 1994). According to the resource dependence logic, if a venture

uses party A’s native language as the functional language, party A will
be in a stronger bargaining position than party B in controlling infor-
mation and reporting systems and in influencing decisions. This lan-
guage-related dependence also empowers party A to control functional
management and administrative process through superior communica-
tions. Whether the venture actually uses party A’s language will depend
on its relative bargaining power vis-à-vis the other party. We expect that
if the local partner dominates the venture (via greater bargaining power
or higher equity ownership), the venture is likely to use local language
as the functional language. If the foreign party (MNC) dominates the
venture, the venture is likely to use English or other shared language as
the functional language.7
Parties from countries whose home language, most often English, is
most dominant will enjoy an advantage when their language is adopted
as the working knowledge of the venture. Salk and Shenkar (2001)
report a case of a British-Italian venture established in a third country
so as not to give an advantage to any of the party. English was chosen
as the functional language in this venture as a matter of convenience
because the Italians had some command of English while none of the
Britons spoke Italian. The adoption of English led to the importation
of multiple organizational practices (e.g., performance evaluation)
from the British parent because it had ready-made instruments in the
venture’s working language, contributing to the Italians’ viewing the
venture as being ‘taken over’ by the British.
We expect that the breadth and intensity of using a functional lan-
guage will vary among subunits according to form. The branch or rep-
resentative offices are likely to have the lowest breadth and intensity.
Compared with joint ventures, wholly owned subsidiaries generally
require greater coordination with headquarters and peer subunits, and
involve greater resource commitment and contribution from headquar-
ters. Further, value-chain integration with the MNC network is gener-
ally higher in wholly owned subsidiaries than in joint ventures. Because
of inter-party resource dependence and decision-making sharing, it is
less feasible for the MNC to integrate joint venture operations with the
global network as it does with a wholly owned subsidiary. This sug-
gests that the intensity and breadth of using functional language will
decrease from wholly owned subsidiary to joint venture. Thus:
Proposition 7: The functional language used by a wholly owned

subsidiary or a branch or representative office will be the parent’s
functional language used by headquarters or regional headquarters.
Proposition 8: The functional language used by a cooperative or

joint venture will be the local language if the local partner dominates
the venture, or a shared language such as English if the MNC domi-
nates the venture.
Proposition 9: The intensity and breadth of functional language use

will increase from branch or representative office to cooperative or
joint venture to wholly owned subsidiary.
Strategic role
The strategic role of foreign subunits has been classified into that of
global innovator, integrated player, and local market seeker (Gupta,
1987; Bartlett and Ghoshal, 1989; Gupta and Govindarajan, 1991; Root,
1994; Dunning, 1995). A global innovator serves as the fountainhead
of knowledge for other units, providing knowledge and expertise to
peer subunits while receiving little knowledge or expertise from them.
Such knowledge could be input (e.g., purchasing skills), throughout
(e.g., product designs), or output processes (e.g., marketing expertise).
The global innovator serves as a platform for developing and building
dynamic capabilities that can sustain the MNC’s competitive advantages
(Gupta, 1987). Integrated players also take a responsibility for creating
knowledge that can be utilized by other subunits. However, they are
not self-sufficient in fulfilling their own knowledge needs, relying on
knowledge inflows from either the parent or peer subunits. Their stra-
tegic focus is to facilitate value creation from global integration (Gupta
and Govindarajan, 1991). Lastly, local market seekers emphasize eco-
nomic benefits arising from local market development and concentra-
tion (e.g., market share, competitive position, long-term profitability).
They provide very little knowledge to peer subunits. Their activities are
intertwined with the local business community and are shaped by local
market conditions (Prahalad and Doz, 1987; Root, 1994).
Strategic role influences language design because it offers a framework
in which communication priority and channels are defined. For inte-
grated players, intra-network communication will be higher than for
global innovators and local market seekers. Integrated players engage
in knowledge creation of their own while relying on knowledge inflows
from a parent and sister subunits. To align with such bi-directional
dynamics, the functional language should promote internal commu-
nications and knowledge-sharing. As a result, an integrated player’s
functional language is likely to be the parent’s. If the parent decentral-
izes global business along major regions, then regional headquarters’
language will likely be its functional language. Similarly, consistency

with parent functional language is important for global innovators
who are assigned global mandates to develop the MNC’s new capabili-
ties (technologies, processes, and skills). Since they need to get market
requirements and feedback from peer subunits, and capital and human
resources from the parent, global innovators are closely interconnected
with headquarters and peer subunits by means of flexible and varied
coordination mechanisms and information systems (Govindarajan and
Gupta, 2001). Using the parent’s functional language can streamline a
global innovator’s knowledge development and dissemination. Finally,
local market seekers may adopt local rather than parent language.
Market motives include seizing market opportunities in foreign coun-
tries through investments (offensive motive) and protecting and hold-
ing the firm’s market power or competitive position in a host country
threatened by new rivals (defensive motive). Given these motives,
subunits must continuously adapt to changing market conditions and
remain responsive to heterogeneous consumer needs (Ghoshal and
Nohria, 1989). Using local language as the functional language avoids
the need to use dual languages (local and parent) in documentation
and reporting systems; it also helps internal communication between
managers with different lingual background and expedites subunit’s
decisions.
Strategic role also shapes the breadth and intensity of language usage.
Of the three roles, integrated players assume the broadest and strongest
communication with the MNC network. They play a key role in inte-
grating a global value chain and in leveraging cross-unit cooperation
(Bartlett and Ghoshal, 1989). As this chain involves both primary (verti-
cal integration with peer subunits) and supporting activities (horizontal
integration with parent functions), integrated players need to deal with
a wide scope of subunits, teams, divisions, and departments with inten-
sified coordination and communication. Internal use of the functional
language is also heightened because these players need to build an
effective and transparent information-sharing system across functions
(Zander and Kogut, 1995). In contrast to integrated players, local market
seekers are not closely linked to peer subunits, reducing the breadth and
intensity of network communication. When a subunit emphasizes local
responsiveness, normally equipped with strong power delegated by the
parent, its communication via the local language with headquarters
will be the lowest among the three roles. Global innovators maintain
stronger and wider communications with the network than local mar-
ket seekers as they assume a global mandate for knowledge outputs and
new innovations. They, nevertheless, maintain weaker and narrower

network communications than integrated players because they engage
in one-directional knowledge flow (provider) whereas the latter are both
providers and recipients of communications. Thus:
Proposition 10: Subunits with an integrated player or global inno-

vator roles will use parent functional language as their functional
language. Subunits with a local market seeker role are likely to use
local language as their functional language.

guage will increase from local market seekers to global innovators to
integrated players.
Expatriate deployment
We define expatriate deployment as the proportion of expatriate man-
agers in a subunit’s total number of senior and functional managers.
Expatriates are often necessary owing to the unavailability of local
talent that is crucial to achieving predetermined objectives and/or
for control purposes (Tung, 1982; Von Glinow, 1988).8 When expatri-
ates dominate subunit management, pressure builds towards using a
functional language that is consistent with the parent’s language. It
is logical that expatriates would prefer parent language as functional
language so as to more conveniently and effectively communicate with
the parent and network. Managerial dominance provides expatriates
with the power to opt for such choice. Other things being equal, the
greater the resource commitment to the subunit, the more important
the intra-network communication will be to ensure optimal allocation
and exploitation of committed resources (Wiseman and Shuter, 1994).
When local talent dominates subunit management, however, the local
language may be designated as functional language. First, managerial
dominance empowers local managers to select the functional language.
When the local language is used, local managers can better design,
monitor, and appraise internal organization and external operations.
Second, local dominance in subunit management is often the result of
an MNC’s localization strategy. Human resource localization through
such dominance becomes a common policy in many MNCs to improve
local responsiveness (Pucik, 1992; Zahra, 1999). MNCs allow, sometimes
even encourage, subunits to use local language as an expression of com-
mitment to adaptation. This commitment will likely be appreciated by
local management as well as by local authorities, buyers, competitors,
and regulators. Finally, using local language as functional language ena-

bles the subunit to recruit better local managers. If parent language is
used, high-caliber managers well versed in their professions but poor in
this language will be unlikely to get in (MacIntyre and Charos, 1996).
Finally, we expect that functional language will be more broadly used
in a subunit dominantly made up of expatriate managers rather than
of local managers. Dispatching expatriates overseas indicates an MNC’s
commitment to and control over globally dispersed transactions and
investments (Pucik, 1992). The dispatch becomes more essential when
subunits in various countries are operationally interlinked through
global value chain or financially interrelated through global transfer
pricing (Salter and Niswander, 1995; Manev and Stevenson, 2001).
Dispatching expatriates is an important part of cross-border transfer of
intangible resources needed for firm growth in a competitive environ-
ment (Yip, 1995; Ulijin et al., 2000). A subunit with more expatriates is
expected to maintain more frequent contacts with the parent and subu-
nits elsewhere. When management is localized, a subunit is presumably
less dependent on network or requires less communication with a broad
range of members within the same network. Hence:
Proposition 12: When subunit management is dominated by expa-

triates, parent language will be used as functional language. When
subunit management is dominated by local managers, local language
will be used as functional language.

guage will be higher for a subunit dominated by expatriates than for
one dominated by local managers.
Discussion and conclusion
This study addresses how MNCs design language systems to meet stra-
tegic and organizational requirements for coordination, integration,
and expansion. In line with the functional stream of language research,
language-based communications are considered in this study to be pur-
posefully utilized by actors to achieve their ends or meet their needs
(Ford and Ford, 1995; Heracleous and Barrett, 2001). To extend extant
research on language and communication, we focus on language in a
global context and discuss the link between language and organization
in a multilingual community (MNC). We cast language in a different
role than the one it has been traditionally assigned in the international
business literature. In its traditional role, language alternates as a con-

sideration in instrument design (e.g., questionnaire translation), as one
of many expatriate capabilities, and the like. What we propose is to treat
language as a macro variable within the broader context of the firm and
its environment. This also requires that language be decoupled from
the construct of culture with which it is undoubtedly correlated. Unlike
national culture, language is a strategic choice, however, embedded in
culture and evolving institutional realities.
While this paper has leveraged the resource dependence perspective
as a theory platform, it has potential ramifications for other theoreti-
cal perspectives. For instance, as noted earlier, language is a significant
component in the cost of transactions carried across national bounda-
ries (and in the case of multilingual societies, even within those
boundaries). This paper not only spells out this cost, but also suggests
that it is determined not only by the nature of a transaction but also by
the nature of the transacting parties, and, in particular, their strategy.
Similarly, this paper offers directions towards a better understanding of
agency problems associated with language differences across principals
and agents. For instance, it suggests that the probability of a player
becoming more of a principal than an agent, reducing monitoring costs,
is, among other factors, a product of a firm’s language strategy. The
paper also contributes to the resource-based approach by highlighting
the role of language in supporting key capabilities in global integration
and local adaptation that contribute to firm performance.
Suggestions for further research

There are several avenues for future research on the issue on language
in MNCs. First, the present study focused on design and did not address
the subsequent process of implementation that is crucial to global value
creation. Since language is a human medium, global human resource
management is inextricably linked with the process and practice of
language systems. Future research should diagnose how training, moti-
vation, recruitment and rotation, among others, can help improve the
effectiveness of language systems. Research should also examine the role
played by employee groups who bring into the affiliate different levels
of mastery of national languages as well as different proficiencies with
the terms and nuances of corporate functional language. For instance,
what impact on the language system is produced by the increasingly
widespread use of third country vs parent country expatriates?
Second, while we assume that language and information systems
are mutually reinforcing, we do not yet know how these two systems
intersect, nor do we fully understand the implications for corporate

strategy and structure. For instance, should MNCs harmonize their
entire management information systems that are differentiated across
divisions or functions if functional languages are unified? If dual
languages are to be used by headquarters or subunits, how would
management and accounting information systems be affected? And,
given the limited overlap between language and culture (Ryan et al.
(1999), is there a coordination and control risk involved in using a
common language that will have shared meanings for some but be mis-
interpreted by others? Is the risk greater for persuasive discourse (e.g.,
Johnstone, 1989) than for more informative exchange?
Third, a language is both context and content. While we have argued
that language systems are context-specific, hinging on organizational
dynamics at parent and subunit levels, we know very little about their
content aspects. Future research may ask whether different functions
such as marketing, accounting, finance, R&D, manufacturing, and sup-
ply chain present different communicative requirements and whether
such differences transcend cross-culturally. A related issue is the content
of the communications – for instance, its level of codification. Although
this study did not incorporate codification in the theoretical framework,
it merits further investigation to see how codification affects informa-
tion and knowledge diffusion within a culturally diverse community.
The rhetorical theory of diffusion (Green, 2004) holds that the more
codified the message, the less likely are misunderstandings relating to
the use of diverse languages. The level of codification becomes crucial
in the case of cooperative ventures, which are typically viewed as ideal
vehicles for the transfer of tacit knowledge. Similarly, early studies on
communication patterns identified task complexity as a key variable
determining the effectiveness of different communication networks
(e.g., Porter and Roberts, 1976). Future research should examine how
variably codified messages perform under the conditions described in
this paper.
Fourth, while we have discussed linguistic differences, we did not
attempt to measure such differences. While MNEs with global strategies
are likely to use a uniform language, the pressure to do so might be
lower when the languages used in diverse locations are less dissimilar
(e.g., French and Italian). In contrast, languages from different families
(e.g., English and Chinese) involve fundamentally different discourse
forms, which might undermine understanding even when an inter-
preter is used, and thus create much greater challenge for an MNE that
needs to transcend national boundaries. In a similar vein to measures
of cultural and institutional distance (Kogut and Singh, 1988; Kostova,

1999), West and Graham (2004) recently offered a measure of linguistic
distance based on their family trees. The global priority of a language –
that is, how important it is considered in economic and demographic
terms (Feely and Harzing (2003) – could also make a difference in that,
other things being equal, the higher the priority the more likely a
language is to be used as a functional language. A related issue is the use
of non-verbal communications. In cultures where non-verbal commu-
nications are paramount, intense interpersonal interaction is required
even if all subunits share the same language (e.g., Singapore, Taiwan,
and mainland China).
Related to the issue of ‘language distance’ is the evolution of bicultural
and multicultural enclaves where imported languages mix with a native
language to create a localized amalgam. A case in point is a city such as
Miami, where English and Spanish combine to create ‘Spanglish’, com-
bining inputs from both. The impact of such a mix on the MNCs that
base their headquarters or regional headquarters in that city remains to
be explored. For instance, does the use of such a mix (which is probably
limited to verbal communications) assist in the integration of regional
activities? Does it hamper integration beyond the specific region (Latin
America in this example)? How does the MNC adjust over times as such
mixes develop and incrementally gain legitimacy, or does this constrain
its language design choices?
Fifth, this study has taken a macro approach, focusing on organiza-
tional strategy and design. It is evident, however, that there are impor-
tant correlates at the micro level that affect as well as are influenced by
language design. For instance, Speitzer et al. (2002) discuss individual
differences among members of transnational teams that, unless prop-
erly tended, have the potential to erode the synergetic potential of such
teams (see also Von Glinow et al., 2004). It can be said that not only
is language one of the key differences, but also the choice of language
can impact on inter-member trust, which the authors pinpoint as a key
‘adhesive’ among members. The possibility, as well as other potential
macro–micro relations involving language, is yet to be explored.
Sixth, this study did not elaborate on institutional variables that may
influence the dynamics of language choice and their effectiveness. For
instance, certain languages have strong constituencies that tend to
view them as fundamental to national identity and hence are to be pro-
tected. France and the Canadian province of Quebec are cases in point
where language is considered of such importance that regulatory con-
straints are put in place to minimize usage of other languages. In those
locations, as well as in others, the use of a foreign language, particularly

English, is often considered ‘cultural imperialism’. In contrast, some
foreign languages are considered attractive because they embody desir-
able attributes, for example, modernity. How such attitudes affect the
efficacy of global language networks, as well as the impact of multiple
languages at the subunit level (e.g., Canada, Switzerland, Singapore), is
yet to be explored.
Finally, this study has touched on several practical implications for
MNCs (such as staffing), but did not extend to issues such as language
capabilities and training. The present study implies that, by virtue of
its combination of strategic and socializing roles, language is a key to
both local adaptation and global integration. From this perspective,
language proficiency is not only a critical organizational capability but
also a strategic career asset whose importance varies with organizational
strategy, structure and language design. To address this issue, future
research could target the firm and individual value of language training,
enabling, among other benefits, a more accurate cost–benefit analysis
of language training programs. The knowledge already available sug-
gests that, in a global business environment, foreign languages and
cross-cultural communications are a competitive imperative and should
become a requirement in business school curricula. A Wall Street Journal
(May 18, 2004, pp. B1–4) article based on interviews with MNC execu-
tives, quoted here as the ending remark of this article, clearly states such
imperative and requirement for parent and subsidiary languages:
… Failing to speak the native language of a parent company could

hamper a manager’s advancement and even his or her ability to do a
current job well. And whether at companies based in the US or over-
seas, executives can miss out on informal conversations or risk being
misinterpreted, literally, if they don’t speak the local knowledge.
Acknowledgements
We thank Professor Mary Ann Von Glinow and the anonymous review-
ers for their insightful comments.
Notes
1. CEMEX is a good example illustrating this. Founded in Mexico in 1906,
CEMEX has grown from a small regional player into a top global cement
company, positioned in the most dynamic markets around the world.
The company calibrates local feedback from various host countries by using
a standard template, especially for assessing potential merger and acquisition
targets. The use of these standardized reporting systems is one of the mecha-
nisms used to manage linguistic diversity.
2. In some culturally diverse countries, such as India and China, there are mul-
tiple different languages used by different ethnic groups within a single coun-
try. For the convenience of discussion, we assume one language in a nation in
this study.
3. In some countries there may be several official home languages. Singapore,
for example, uses English, Chinese, and Malay, while Puerto Rico uses Spanish
and English as home languages. This study refers the home language as the
primary one used by most people and institutions nationwide.
4. When an MNC simultaneously globalizes and localizes, it would be ideal to
have two or more languages as functional languages shared by the parent
firm and its overseas subunits. This, however, requires the majority of the
workforce, especially executives and managers, to be bilingual or even multi-
lingual, an ideal state that, however, has not been reached by most MNCs.
5. Some large MNCs also build and use regional headquarters. In this conceptual
part we did not separately address language design for regional headquarters.
Instead we treat a regional headquarters as the special case of an MNC’s
headquarters, which means in this case that an MNC may have ‘several’ head-
quarters that are largely independent. MNCs with such regional headquarters
generally use English as the functional language for the top headquarters. We
elaborate regional headquarters in the hypothesis sections.
6. In this study we did not include environmental conditions in subunit lan-
guage design. As functional language design focuses on intra-organizational
communication, rather than with external stakeholders (naturally via local
language), environmental conditions only indirectly affect language design.
For instance, we expect that local environments influence strategic role and
subunit form, which then affect language design.
7. When bargaining power maintained by each party is balanced, or when a
venture’s equity ownership is split into halves (50–50%), English or other
shared language is also expected to be designated as the functional language
used by the venture.
8. Research on expatriate deployment suggests that expatriate presence is a
function not only of the unavailability of local talents but also of the strate-
gic importance of a focal subunit, current performance and management of
this subunit, life cycle stage of subunit evolution (e.g., more expatriates used
in start-ups), and company and national tendencies to use personal control
(e.g., Japanese MNCs tend to use more expatriates to coordinate and control
offshore activities). We are indebted to a reviewer for this insight.
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5
Language Policies and Practices in
Wholly Owned Foreign Subsidiaries:
A Recontextualization Perspective
Introduction
As organizations expand internationally and their foreign operations

become more dispersed, differences in “natural” languages start to
influence communication within and beyond their boundaries. In
order to cope with these challenges, multinational companies (MNCs)
have implicit or explicitly formulated language policies for corporate
communication, documentation, and interaction (Marschan-Piekkari,
Welch, & Welch, 1999). Empirical research on MNCs has highlighted
various communication, staffing, and training-related challenges that
accompany language policies (Tietze, 2008). However, less is known
about the implementation of language policies and practices in for-
eign subsidiaries (Kingsley, 2010; Sharp, 2010). In particular, there is a
paucity of knowledge of the ways in which contextual factors affect this
implementation and the associated dynamics.
For more comprehensive understanding, the present paper draws
on the recontextualization perspective (Barthes, 1970; Brannen, 2004;
Fairclough, 2003; Thomas, 2003) to examine how language policies and
practices and the accompanying challenges are contingent on contextual
factors in foreign subsidiaries. Recontextualization has been described
as the transformation in meaning of cultural resources or practices as
they are received in a new cultural environment (Brannen, 2004).
Reprinted from Vesa Peltokorpi and Eero Vaara (2012) “Language Policies
and Practices in Wholly Owned Foreign Subsidiaries: A Recontextualization
Perspective.” Journal of International Business Studies, Vol. 43, No. 9 (pp. 808–833).
With kind permission from Palgrave Macmillan. All rights reserved.
93
94 Vesa Peltokorpi and Eero Vaara
Language, as the explicit artifact of culture, is both subject to and the

vehicle for such transformation of meaning – or semantic shifting – and
therefore ripe for analyzing through the lens of recontextualization.
Through a recontextualization perspective we can better understand
how MNCs’ language policies and practices gain new meaning as they
enter their new subsidiary and country context. In particular, it helps
us to understand the practical and symbolic implications of language
policies and practices that easily pass unnoticed in conventional studies
of MNCs and their subsidiaries.
In this paper, we draw from an extensive field study in Japan. In
contrast to previous research examining one or a few MNCs/subsidiaries
(Tietze, 2008), our material comprises 101 wholly owned foreign
subsidiaries. Based on data including 138 interviews with parent country
national (PCN) expatriates, host country national (HCN) employees and
executive search consultants (referred to as consultants hereafter), we
examine the recontextualization of language policies and practices, and
their accompanied challenges with a diverse sample of subsidiaries. As a
result of our analysis, we develop a contingency model that distinguishes
between four different types of recontextualization with specific
language policies and practices: developing/locally adaptive, developing/
globally integrated, established/locally adaptive, and established/
globally integrated. Our analysis shows how each of these four types
is accompanied with specific problems and challenges. In particular, it
highlights five important aspects of language implementation:
1. the emergence of language praxis from the interplay of headquarters

(HQ) strategies and local responses;
2. the hybridization of language practices;
3. the central role of key actors such as subsidiary presidents in
recontextualization;
4. the pervasive power implications of language policies and practices;
and
5. the multifaceted implications for strategic human resource
management.
By so doing, our analysis opens up new avenues for context-specific

and practice-oriented studies of language in MNCs.
The rest of this study is organized as follows. The following
section reviews the literature on language policies and practices MNCs
and subsidiaries, and outlines a recontextualization perspective on
language policies and practices in wholly owned subsidiaries. The
A Recontextualization Perspective on Language Policies/Practices 95
third section discusses the study sample and methodology. The fourth
section presents the main findings, and the fifth section discusses
the theoretical and managerial implications, limitations and suggestions
for future research.
Conceptual framework
Language policies and practices

MNCs consist of “diverse and geographically dispersed subunits, which
encounter language barriers when communicating with their local
business community and within their global network” (Luo & Shenkar,
2006: 321). In order to reduce these barriers, MNCs have explicit or
implicit language policies to determine the language(s) used in official
corporate communication, documentation, and interaction (Marschan-
Piekkari et al., 1999). Sociolinguistic scholars have described language
policies as a body of ideas, laws, regulations, rules, and practices used
to achieve planned language change in the society, group or system
(Kaplan & Baldauf, 1997). Building on this view, we define language
policies as the rules and regulations that govern language use in MNCs.
Language practices, in turn, are the concrete means through which
language policies are enacted in MNCs. As complex systems with glob-
ally dispersed subunits (Bartlett & Ghoshal, 1989; Luo & Shenkar, 2006;
Prahalad & Doz, 1987), MNCs use various practices, including language-
sensitive recruitment, training, language nodes (bi/multilingual peo-
ple), expatriation, and impatriation, as an operational part of language
policies (Harzing & Feely, 2008; Terpstra, 1978). Language policies and
practices are expected to provide numerous benefits in MNCs, such as
improved coordination, control, monitoring (Luo & Shenkar, 2006),
communication, knowledge transfer, mutual understanding, learning,
reporting, and collective identity (Tietze, 2008). They play a central role,
especially in radical organizational changes such as international merg-
ers (Vaara, Tienari, Piekkari, & Säntti, 2005) and joint ventures (Brannen
& Salk, 2000), to reduce language barriers.
The MNC-level official corporate language is not always the home-
country language. Several MNCs from non-English-speaking European
countries use English as their official corporate language (Lauring,
2008; Marschan-Piekkari et al., 1999). A study at Germany-based
Siemens shows also that MNCs can use two languages in corporate
communication and leave the issue of official corporate language
intentionally ambiguous to avoid negative reactions from dominant
language groups (Fredriksson, Barner-Rasmussen, & Piekkari, 2006).
At the subsidiary level, language policies can be designed in three

different ways (Luo & Shenkar, 2006). First, the official language is the
parent country language, such as Japan-based Panasonic’s subsidiary in
the USA, which uses Japanese. Second, the official language is the host-
country language, such as Siemens’ subsidiary in the USA, which uses
English. Third, the official language is a third language, such as France-
based Schlumberger in Saudi Arabia, which uses English. While the
MNC and the subsidiary-level corporate languages can differ, owing to
global integration and local adaptation pressures (Luo & Shenkar, 2006),
the MNC-level language is in the top position in the organizational
hierarchy of languages (Marschan-Piekkari et al., 1999). The MNC-
level corporate languages are used, for example, in official corporate
communication and reporting, meetings, and management training
(Marschan-Piekkari et al., 1999).
International business (IB) scholars have examined MNC-level
strategic and subsidiary-level contextual language policies. In the
former stream of research, characterized by a “mechanistic” perspective
of language strategies (Janssens, Lambert, & Steyaert, 2004), scholars
have seen language policies as a part of the MNC strategic orientation,
and have argued for language standardization (Dhir & Goke-Pariola,
2002; Luo & Shenkar, 2006; Maclean, 2006; Sharp, 2010; Van den Born
& Peltokorpi, 2010). In these studies stressing the communication and
control-related benefits of “shared” corporate languages, MNC language
policies are underpinned by economic and strategic rationality. In the
latter stream, case studies have shown that MNC-level language policies
seldom provide the intended results in subsidiaries (Blazejewski, 2006;
Harzing, Köster, & Manger, 2011; Lauring & Tange, 2010; Steyaert,
Ostendorp, & Gaibrois, 2011). For example, subsidiaries are managed
in a linguistically constrained environment where either no shared
language exists or where the HCNs have low proficiency in the MNC-
level corporate language (Andersen & Rasmussen, 2004; Buckley,
Carter, Clegg, & Tan, 2005; Park, Hwang, & Harrison, 1996; Peltokorpi,
2007). Top managers, increasingly socialized into the Anglo-American
management discourse in business schools (Tietze, 2004), can also be
disillusioned about English proficiency in lower echelons (Piekkari &
Tietze, 2011) and subsidiaries, limiting the use of language policies
as strategic tools. Top-management-formulated language design, a
“deliberate process underpinned by economic and strategic rationality”
(Luo & Shenkar, 2006: 324), can thus be regarded as “unrealistic, and
as such unproductive – perhaps even dangerous” (Barner-Rasmussen &
Aarnio, 2011: 288). These “cultural” perspectives on language strategies
(Janssens et al., 2004) have demonstrated how several languages are

simultaneously used in the MNC global network.
Despite increased usage and alleged benefits, to the best of our
knowledge only two scholars have focused on the implementation
of MNC-level language policies in subsidiaries (Kingsley, 2010; Sharp,
2010). For Kingsley (2010), the process takes place through three factors:
ideology (top management beliefs) influences mechanisms (management
devices), which affect practices (linguistic reality) in subsidiaries. While
the first two factors refer to top-down forces, the last one describes
bottom-up processes (language practices in subsidiaries). Sharp (2010), in
turn, conceptualized the implementation process through three stages:
instrumental use of language influences conversational use of language,
which affects internalization of language practices in the recipient
unit. During the first stage, the MNC-level corporate language use in
subsidiaries broadens as HCNs start to utilize it for work purposes. During
the second stage – the conversational use of language – HCNs start to
use the MNC-level corporate language on a social and professional
basis. While the implementation process is influenced by (1) social
context (institutional distance between home and recipient country),
(2) organizational context (organizational culture of the recipient unit),
and (3) relational context (attitudes of recipient coalition) (Kostova,
1999), HCNs are still assumed to accept and internalize the implemented
practices. That is, when HCNs start to trust and identify with the HQ,
they prefer their unit to become more similar to the HQ by adopting
deeper layers of the MNC-level corporate language. In the model, MNCs
actively manage the implementation process through various practices,
such as attitude surveys, language-sensitive recruitment, promotion,
training, employee rotation, and trust-building strategies.
Although the above models have provided important insights into the
implementation of language policies, we know little of the micro-level
dynamics of the implementation of language policies and practices, or
how they may differ across cases. Thus there is a need to extend this
stream of research by systematic analysis that takes into account both the
broader strategic aspects and the contextual processes of language praxis
in subsidiaries. This is why we now pursue a recontextualization approach.
A recontextualization perspective on language

policies and practices
A recontextualization perspective highlights the ways in which the
meaning of ideas, resources and practices change when they are adopted
in a new context. This perspective is rooted in landmark studies of
semiotics (Barthes, 1970; Kristeva, 1980; Saussure, 1916) and discourse

analysis (Bernstein, 1996; Fairclough, 2003), and has thereafter been used
in various ways in management studies (Brannen, 2004; Thomas, 2003).
In particular, Brannen’s (2004) semiotic model of recontextualization
provides a fruitful basis for our analysis, as it explains how the transfer
of firm assets (her focus) or policies and practices (our focus) is crucially
dependent on the meanings created. In the model, the transferred assets
go through cultural sense-making filters that attach pre-existing mean-
ings to them as they enter the new context. The meanings of assets
evolve and continue to undergo recontextualization as they are utilized
and made sense of in the new context. The meanings associated with the
firm assets can also be repatriated to the home context. Using the model,
Brannen described the Walt Disney theme park internationalization to
France and Japan as a recontextualization process in which the meanings
of specific assets were transformed while they were adapted from one
context to the other. The meanings created in local contexts were very
different, leading to a semantic fit or misfit, and ultimately to radically
different organizational processes and outcomes in France and Japan.
While building on Brannen’s model, our analysis focuses on concrete
organizational practices to highlight the ramifications of the imple-
mentation of corporate language policies and practices. Thus we seek
to link the recontextualization perspective with the practice theory
that has gained increasing attention in management research (Feldman
& Orlikowski, 2011; Vaara & Whittington, 2012). In particular, we
emphasize that the recontextualization of practices often triggers a
process where not only the very practice in question changes, but also
other practices are affected and new practices are developed. This means
that any practice can become something different when it is put into
use in a given context, often leading to a new kind of organizational
“praxis” – a term that refers to the ensemble of various practices.
Empirical research has shown how the transfer of organizational prac-
tices involves various kinds of local translations, and even leads to new
hybrid practices (Ferner & Quantinalla, 1998; Gamble, 2010; Shimoni,
2011; Yu & Zaheer, 2010). For example, Ferner and Quantinalla (1998)
described how globalization pressures have led to “Anglo-Saxonization”
of human resource management (HRM) practices, but owing to various
cultural and institutional factors, in a distinctive “German manner” in
German subsidiaries. In our case of language policies and practices, it is
thus important to focus attention not only on their meaning in local
context, but also on their implications for HRM practices and resulting
organizational challenges.
What are the contextual factors that influence this recontextualiza-

tion? We can infer from previous research that the strategic roles of
subsidiaries, PCN expatriate deployment, and host-country factors
affect language policies and practices in subsidiaries. First, language
policies are contingent with subsidiary strategic roles (Luo & Shenkar,
2006). MNCs with global strategies emphasize the standardization of
practices and interdependence among foreign subsidiaries (Bartlett &
Ghoshal, 1989; Prahalad & Doz, 1987). Because foreign subsidiaries
are closely linked to the MNC global network in terms of knowledge
and resource flows, HCNs are required to have certain proficiency
in the MNC-level language either by subsidiary or HQ management.
In contrast, MNCs with multi-domestic strategies focus on competi-
tion in each country, and relatively interdependent foreign subsidiaries
stress the economic benefits arising from local market development
and concentration. Providing little information to HQ and other units,
locally adaptive subsidiary activities are closely linked with the local
business community, and are shaped by local market conditions (Luo &
Shenkar, 2006). In them, HCNs are not required to be proficient in the
MNC-level language, because internal communication, documentation,
and reporting are conducted in the host-country language. The locally
adaptive language design is argued to enhance host-country legitimacy
of these subsidiaries (Luo & Shenkar, 2006). MNCs may thus allow, or
sometimes even encourage, subsidiaries to use host-country languages
as an expression of commitment and adaptation (Luo & Shenkar, 2006).
Second, language policies and practices can change over time as
subsidiaries became mature and more established in host countries.
For example, the proportion of PCN expatriates in the subsidiary labor
force decreases over time as subsidiaries become more integrated with
the local market (Fang, Jiang, Makino, & Beamish, 2010). Changes in
subsidiary staffing affect language requirements: the MNC-level corpo-
rate languages are more often used in subsidiaries dominated by PCN
than by HCN managers (Luo & Shenkar, 2006). Although the language
requirements are argued to be contingent with the proportion of PCN
expatriates in subsidiary top management and subsidiary strategic roles
(Luo & Shenkar, 2006), PCN subsidiary presidents are also found to give
special emphasis to language requirements because of their insufficient
host-country proficiency (Peltokorpi, 2010). It is thus not surprising
that proficiency in the corporate language is shown to provide power-
and career-related benefits to HCNs in subsidiaries (San Antonio, 1987).
In contrast, HCN managers are shown to place less emphasis on language
requirements in recruitment practices, especially in small subsidiaries
(Peltokorpi & Clausen, 2011). While one or a few bilingual HCNs can
be responsible for inter-unit communication in small subsidiaries, it is
feasible to assume that large/established subsidiaries need to have more
HCNs proficient in the MNC-level language because of increasing inter-
unit information flows (Gupta & Govindarajan, 2000).
Third, various host-country factors, including available labor profi-
cient in the corporate language, home- and host-country relations, and
the regulatory environment, can affect language policies and practices in
subsidiaries. For example, the average low foreign language proficiency is
shown to influence subsidiary operations in China (Buckley et al., 2005),
Japan (Peltokorpi, 2010), and Korea (Park et al., 1996). In Japan, recruit-
ers in Nordic subsidiaries were not either able or willing to use language-
sensitive recruitment practices, owing to the low English proficiency
and the misalignment of language and functional competencies among
HCN job applicants (Peltokorpi, 2010). Further, as shown in a study
in a Finnish-Swedish bank merger (Vaara et al., 2005), employees can
resist an official corporate language partly for historical reasons. While
regarded by the top management as a pragmatic decision based on cost
savings, the choice of Swedish as the corporate language reproduced
post-colonial identities among Finnish employees. The host-country reg-
ulatory environment can also influence language policies and practices:
for example, a US Fortune 100 MNC was fined US$ 800,000 for issuing
English language HR and benefits documents in France (Dowling, 2009).
The above subsidiary- and host-country-related factors can lead to con-
textual misfit, that is, the incongruence of adopted practices with the
surrounding cultural, linguistic, and institutional context. For example,
HCN and PCN managers may not be willing to implement contextually
misaligned language policies, since the surrounding institutional con-
text and its collective rationality determine the appropriate, legitimate
(accepted) practices (Brannen, 2004; Kostova, 1999).
While the above suggests that language policies and practices in sub-
sidiaries are subject to various contingencies, these issues have not been
examined in an in-depth manner. Thus this study seeks to answer to the
following three questions:
1. What contextual factors influence the recontextualization of lan-

guage policies and practices in wholly owned foreign subsidiaries?
2. What types of recontextualization can one distinguish in the imple-
mentation of language policies and practices?
3. What problems and challenges accompany the recontextualization
of language policies and practices?
In order to answer to these questions, we conducted a systematic

case-specific analysis of the recontextualization of language policies and
practices in 101 Western MNCs’ subsidiaries in Japan.
Methodology
Research design
We adopted a qualitative case study strategy that can be seen as an
appropriate approach, given the need to develop in-depth understanding
of a relatively unexplored area (Birkinshaw, Brannen, & Tung, 2011;
Miles & Huberman, 1994; Yin, 1989). In particular, it provides a means
to explore the fuzzy, nonlinear nature of language policies (Lauring
& Tange, 2010). More specifically, we aimed at cross-case analysis
that would help to develop understanding of the different types of
recontextualization types (Eisenhardt, 1989; Glaser & Strauss, 1967).
We conducted this study in Japan, for three reasons. First, the
low average English proficiency and HCNs’ preference for domestic
companies can influence language policies and practices in subsidiaries.
For example, the Japanese are identified as having one of the lowest
average Test of English for International Communication (TOEIC)
scores in the world, and Japan as ranking 180 out of 189 countries in
the Test of English as a Foreign Language (TOEFL) (Yoshihara, Okabe, &
Sawaki, 2001). Foreign subsidiaries can also find recruiting a high-
quality workforce in Japan challenging, since HCNs are not willing
to forgo the “lifetime employment security” offered in domestic
companies (Ono, 2007: 269). Domestic companies continue to be the
most desirable employers in annual surveys, and those who work in
foreign subsidiaries are perceived as a group of “maverick Japanese”
who “have misplaced loyalties or could not cope with the Japanese
environment” (Kang, 1990: 216).
Second, more language-related studies in foreign subsidiaries are
warranted because of the identified language-related challenges (San
Antonio, 1987) and their increasing role as employers in Japan (Ono,
2007). For example, the Japanese External Trade Organization ( JETRO)
estimated that foreign subsidiaries in Japan employed one million
people in 2002 ( JETRO, 2002).
The third reason is related to research design. The interviewers’
(first author and one collaborator) proficiency in English and Japanese
helped to increase the accuracy and richness of information acquired
during interviews (Welch & Piekkari, 2006). While focusing on Japan,
we aimed at developing a model that would – with due caution – also

be generalizable to other contexts (Yin, 1989).
Data
The empirical data are based on semi-structured interviews, field
notes, and annual reports. The interviews allowed us to give “voice”
to actors who implement, reinforce, and experience language policies
and practices in subsidiaries. We considered semi-structured interviews
as a more suitable way to collect data than participant observation
and action research, owing to the large number of subsidiaries in this
study, and the need to acquire systematic data for cross-case analysis.
The data were collected in Western MNCs’ subsidiaries because of their
dominance in the foreign company activities in Japan ( JETRO, 2004).
The selection criterion was HCNs and PCNs working in and consult-
ants having Western subsidiaries as their main clients in Japan. The
consultants were interviewed because of their extensive involvement in
the recruitment of and the dominance of mid-career recruits in foreign
subsidiaries in Japan (Ono, 2007). The contact details of informants
were obtained through chambers of commerce, snowballing, and
Internet search, and they were contacted by email/telephone. Most
individuals contacted accepted our interview requests. The following
interviews were conducted with 61 PCNs, 40 HCNs, and 37 consultants
in the Osaka and Tokyo regions between 2002 and 2010. The PCNs
worked as subsidiary presidents (n = 50) and managers (n = 11), and
the HCNs as subsidiary presidents (n = 10), managers (n = 8), and staff
(n = 22). Among the 101 PCNs and HCNs, 82 were male and 19 female.
Among the 37 consultants, 24 were foreigners, 13 Japanese, 27 male,
and 10 female. These consultants covered one or several industry areas,
including finance and insurance, information technology (IT), manu-
facturing, and pharmaceuticals. While not able to match the consult-
ants with all subsidiaries in the sample, because all interviewees were
assured full confidentiality, the consultants and PCNs/HCNs frequently
mentioned each other’s company names.
The average length of the digitally recorded interviews was 47 min.
All interviews were conducted face to face, largely in the workplace in
an area where interviewees could not be overheard. Following research
protocols (see Appendixes 5A and 5B), all interviews with HCNs/PCNs
started with a collection of descriptive data about the interviewees and
their companies, continuing by open-ended questions about language
policies and practices, factors influencing language policies and prac-
tices, and possible challenges to language policies and practices in their
companies. In line with Fielding (1993), the interviewers followed the

interviewees’ lead while controlling the main areas of interest. These
interviews were conducted in English and Japanese. The interviewers
met 10 of these PCNs later, through which additional information
could be obtained in informal settings. Because of their involvement in
recruiting, a different interview protocol was used with the consultants
(see Appendix 5C). The interviews were used to verify the findings, and
to provide additional information on language policies and practices in
subsidiaries. These interviews were conducted in English. All English-
language interviews were transcribed verbatim by the interviewers and
four research assistants. All non-English interviews were translated
verbatim into English by the interviewers and three bilingual research
assistants to ease data comparison.
The sample consists of 101 subsidiaries because only one HCN/PCN
was interviewed in each of them. These sales- and service-related sub-
sidiaries, with an average of 658 employees, operated in machinery,
such as cutting and machine tools (21), pharmaceuticals (12), IT (11),
consulting (10), finance/insurance (10), logistics (10), electronics (9),
wood/paper (6), and other (12) industries. Categorized based on size, 36
of these subsidiaries were small (<20 employees), 23 mid-sized (20–100
employees), and 42 large (>100 employees). Their parent MNCs repre-
sented 11 different home countries, the USA being the most common,
with 23% of the sample. Categorized by age (years of host-country
operation), 29 of the subsidiaries were new (<4 years), 36 mid-aged
(5–9 years), and 36 old (>10 years). The PCNs were a minority (<10%
of employees) in all these subsidiaries. More specifically, the PCNs com-
prised less than 5% of employees in 77 subsidiaries, and between 5 and
10% in 24 subsidiaries. The number of PCNs was lower in old subsidiar-
ies. While English was designated the MNC-level corporate language in
all subsidiaries, the interviews and annual reports suggest that none of
them had official, written language policies.
Analysis
Our analytic approach was inductive (Glaser & Strauss, 1967). That is,
we explored the cases in detail to develop a typology of the recontex-
tualization of language policies and practices. More specifically, our
analysis proceeded in an abductive manner (Eisenhardt & Graebner,
2007; Van Maanen, Sørensen, & Mitchell, 2007). Abduction “assigns
primacy to the empirical world, but in the service of theorizing”
(Van Maanen et al., 2007: 1149). Accordingly, we developed our theo-
retical ideas alongside increasingly detailed analysis of the cases. In
all this analysis, we used qualitative data analysis computer software,

NVivo 8, through the process of data reduction, display, conclusion
drawing, and verification (Miles & Huberman, 1994).
The analysis proceeded in three stages. First, we coded the interviews
into one broad category covering all language-related topics, so as not to
lose any relevant information. We then identified and coded more nar-
rowly context-specific recontextualization types, language policies and
practices in subsidiaries, and the accompanying challenges. Table 5.1
shows the coding categories, the number of HCNs and PCNs men-
tioning topics in these categories, and interview examples for these
categories.1
Second, we identified and coded factors contingent with the lan-
guage policies and practices, and the accompanying challenges. The
initial round of codification produced three overlapping subcatego-
ries: subsidiary (age, industry, and size), HCNs (hierarchical position
and functional areas), and PCNs (number, hierarchical position, and
host-country language proficiency). We reduced these overlaps first by
combining subsidiary age and size, owing to their interrelations and
similar outcomes. For example, 90% of new (<4 years) subsidiaries were
also small (<20 employees). Consistent with their size and length of
host-country operations, we labeled small/new and mid-sized/mid-aged
subsidiaries as developing subsidiaries, and old/large as established
subsidiaries. Language policies and practices were further related with
industry-specific strategic orientations. Drawing on seminal work on
the strategic roles of subsidiaries (Bartlett & Ghoshal, 1989, Prahalad &
Doz, 1987), we categorized subsidiaries based on their strategic orienta-
tion to globally integrated and locally adaptive subsidiaries. In glob-
ally integrated subsidiaries, HCNs were required to be more proficient
in English than HCNs in locally adaptive subsidiaries. Most globally
integrated subsidiaries operated in finance and insurance (8), pharma-
ceuticals (8), and logistics (7), and locally adaptive subsidiaries in paper
and wood, and machinery (19) industries. Among the 101 subsidiaries,
35 were developing/locally adaptive, 24 developing/globally integrated,
25 established/locally adaptive, and 17 established/globally integrated.
Despite some redundancies, age/size and strategic orientation allowed
us to develop a 2 × 2 typology of language policies and practices and
associated challenges in subsidiaries.
The remaining subcategories – HCNs (hierarchical position and
functional areas) and PCNs (number, hierarchical position, and
host-country language proficiency) – fit with the 2 × 2 typology. For
example, the number and hierarchical position of PCNs were higher
Table 5.1 Coding categories and examples
Categories Frequency of Examples

examples
Recontextualization Meaning of corporate 67 “English is a must. Our company policy is that we are
type language an international company.” (PCN president)
Degree of implementation 62 “In recruiting, I have to negotiate with the headquarters.
Employees need to speak English.” (HCN president)
Language policies Language-sensitive 45 “Some [HCN] employees can speak English but that has
and practices recruitment not been a criterion for employment.” (PCN president)
Language-sensitive 67 “If they [HCNs] don’t speak English, they cannot be
promotion promoted to higher levels.” (PCN president)
Company-sponsored 70 “In the beginning we had a few American guys who
language training would teach English on Saturday morning … last year we
hooked up with a more professional company.”
(PCN president)
Language nodes 42 “Half of [HCN] employees are not able to speak English …
I have to be an interpreter.” (HCN employee)
Task-based solutions 21 “Even though I prefer local employees to speak English,
they don’t have to because I can speak Japanese.”
(PCN president)
(continued)
105
106
Table 5.1 Continued
Categories Frequency of Examples

examples
Challenges Limited number of bilingual 83 “Basically, all Western companies plus a few Japanese
accompanying HCNs companies are fighting over a limited number of bilingual
language policies [HCN] employees.” (PCN president)
and practices Overreliance on language 25 “I realized that a lot of information was controlled by the
nodes [HCN] secretary. I could not get information because
I could not understand Japanese.” (PCN president)
Biased recruitment practices 22 “I hired several [HCN] candidates because I was comfort-
able in communication mainly because of language skills.
I was blinded to other aspects. It turned out that these
people had more difficulties than expected.” (PNC president)
Time- and motivation-related 18 “We have given [HCN] employees chances to study
barriers to language skill English but they are busy with their families and don’t
development want to.” (PCN president)
Biased promotion practices 18 “In the past, many [HCN] managers were chosen
because they had some knowledge of English. Then
they became managers. That did not mean that they had
any management skills.” (PCN president)
and their host-country language proficiency was lower in developing/

globally integrated subsidiaries. That is, PCNs with insufficient host-
country proficiency were often deployed from HQs or other foreign
units to start local operations. Language requirements for HCNs in
these subsidiaries were higher than in developing/locally adaptive
subsidiaries with fewer PCNs. Partly as a result of size differences,
functionally and hierarchically differentiated language requirements
for HCNs were also more clearly defined in established/locally adap-
tive subsidiaries than in developing/locally adaptive and globally
integrated subsidiaries. In established/locally adaptive subsidiaries,
HCNs in lower hierarchical ranks and localized functions were often
not required to be proficient in the MNC-level corporate language.
Lastly, the number and hierarchical position of PCNs were higher and
their host-country language proficiency lower in established/glob-
ally integrated subsidiaries than for their counterparts in established/
adaptive subsidiaries. Interrelations among the above subcategories
enabled us to develop a contingency model of four types of recon-
textualization in the case of developing/locally adaptive, developing/
globally integrated, established/locally adaptive, and established/
globally integrated subsidiaries.
Third, we developed and refined our recontextualization typology. At
this stage, we elaborated on the recontextualization types that consti-
tute the language praxis in the subsidiaries in question. In the analysis,
we focused attention on the meaning of corporate language policies and
the degree of integration. For example, our interviews showed that the
MNC-level language policies in developing/locally adaptive subsidiar-
ies are regarded as guidelines, not necessarily to be followed (mean-
ing of corporate language policies) because of limited resources and
challenges to recruit bilingual HCNs. The MNC-level language policy
and practice implementation were limited in these subsidiaries. We
then concentrated on the characteristic features of the praxis in each
type (language-sensitive recruitment, language-sensitive promotion,
company-sponsored language training, language nodes, and task-based
solutions). We also examined in more detail the challenges inherent in
the language praxis in the four types. This led us to identify challenges
related to HR processes, career implications, communication networks,
and identity issues. These challenges are related to the coding categories
in Table 5.1. For example, communication networks include the over-
reliance on language nodes, and biased recruitment and promotion
practices. In this analysis, we examined in more detail specific examples
to develop in-depth understanding of these issues.
We made special efforts to establish validity. In particular, in line

with construct validity recommendations (Miles & Huberman, 1994),
the findings presented in the following section were evaluated and
viewed favorably by two PCN presidents, two HCN employees, and two
consultants.
Findings
In this section, we elaborate on our findings on: (1) recontextualization

types; (2) praxis with characteristic language policies and practices; and
(3) challenges accompanying language policies and practices for four
different subsidiary types. Table 5.2 provides a summary of the main
findings.
Developing/locally adaptive subsidiaries

In this subsidiary type, MNC-level language policies and practices were
general guidelines that do not necessarily need to be followed. The
subsidiary presidents were usually in a key position in interpreting and
enacting the language policies and practices. For example, a PCN presi-
dent reasoned: “Their [HCN employees] English language skills have
not been the main criteria for me … if their English seems a bit awkward
toward people at Headquarters, so be it.” The MNC’s language policies
were implemented to a limited degree or not at all, as the emphasis was
on localized operations. The host-country labor market situation, the
limited resources of these developing subsidiaries, and the PCN profi-
ciency in Japanese were used as justifications for this lack of implemen-
tation. As one HCN president put it: “Why our sales personnel have to
speak English? No reason. The same thing applies to other staff but our
headquarters does not think so. For me there is no good reason.”
Praxis
The recruiters in developing/locally adaptive subsidiaries were often
not able or willing to recruit bilingual HCNs. In addition to the limited
supply of bilingual HCNs in Japan, they explained that the applicants
seldom had both strong functional and language competencies. Usually,
recruiters valued HCNs’ functional competencies and social capital
more than their proficiency in the corporate language. For example,
one PCN president reasoned: “We often have to accept that they [HCN
employees] do not speak English.” HCN/PCN presidents also considered
the higher compensation costs needed to recruit and retain bilingual
HCNs as a waste of scarce resources in localized operations. These
Table 5.2 Characteristic language policies and practices, and accompanying challenges
Recontextualization Examples (quotes) Praxis: characteris- Examples (quotes) Challenges accompa- Examples (quotes)
type tic language poli- nying language
cies and practices policies and practices
Developing/ Meaning of corporate “The big decisions Language-sensitive “Last year, we recruited HR processes: “Weakness is that they
locally language policies: are coming from recruitment: Mid- six people. Those employ- Practical problems in [HCNs] don’t speak English.
adaptive Guidelines that do the headquarters career recruitment; ees are totally Japanese. various areas; special Especially, accountant had
not necessarily need but we are very focus on HCNs; They have never worked solutions such as communication problems
to be followed independent. The functional skills for foreign companies translators or extra and I had to hire a new
head office does emphasized and don’t speak English.” personnel needed person who can write and
Degree of imple- not interfere at (PCN president) speak English with account-
mentation: None or all as long as you Language-sensitive Career implications: ing knowledge.” (HCN
limited, emphasis deliver [sales tar- promotion: “His [promoted HCN’s] Limited career president)
on locally con- gets] according to Functional skills English is not the best. opportunities for
gruent practices; objectives … we emphasized We just finished writing HCNs within the “The biggest problem is to
host-country labor have managers Company-sponsored a business plan for next subsidiary or the be small. We can provide
market, limited without English language training: year. Even though his MNC global network them [HCNs] nice work
resources, and PCN language skills.” Training provided English is not good, I environment but limited
president Japanese on an as-needed could not care less. The Communication training and promotion
(PCN president) networks: Boundary
language profi- basis language can always opportunities.” (PCN
ciency used as a “I need to modify be worked out.” (PCN spanners hold cru- president)
justification things because I Language nodes: president) cial positions in
don’t have the Intra-unit communication, “We have a sales manager
needed resources. communication “For people in key posi- both increasing their who is basically the only
That is why all primarily in tions, we try to teach power and putting person to whom local people
employees are not Japanese. Language them English by having a great deal of pres- report. They don’t tell me
required to be pro- nodes used if general lessons.” (PCN sure on them anything. All information
ficient in English.” needed president) comes from the sales man-
Task-based solutions: Identity issues: ager.” (PCN president)
(PCN president) “All things, such as Internal division:
Focus on operations
and tasks; commu- managerial meetings, are HCNs (and some “One expatriate is working
nication dealt with conducted in Japanese. PCNs proficient in here at the moment … the
separately If there are things Japanese) identify problem is that he cannot
I don’t understand,
(continued)
Table 5.2 Continued
type tic language poli- nying language poli-
cies and practices cies and practices
I stop the meeting and with the host- understand Japanese, and
they explain it again in country environ- this limits his interactions
Japanese in simpler way or ment, whereas PCNs with Japanese employees. He
my secretary brings bring without sufficient is mainly communicating
me up to issue later after Japanese proficiency with people in headquar-
the meeting is over.” (PCN identify with the ters.” (HCN manager)
president) MNC; disconnects
between these “In comparison to many
“Their [HCNs’] English groups of people other European managers
language skills are not that here, I am adopting many
important to me because things to local ways.” (PCN
I am doing a large part of president, proficient in
the contacts to headquar- Japanese)
ters.” (PCN president)
“I am the president. We
also have a Japanese
operational manager. He is
in charge of the Japanese-
speaking side of the orga-
nization.” (PCN president)
Developing/ Meaning of corporate “My job is to come Language-sensitive “There is no recruitment HR processes: Problems “I have three types of can-
globally language policies: to Japan and teach recruitment: Mid- without English capability. in attracting/recruit- didates: A, B, and C. The
integrated Norms that are to them some things career recruitment; That is tough when you are ing bilingual HCN class A candidates have top
be followed; means from the global per- English proficiency recruiting at lower levels.” talent; language- education … and excellent
to develop the sub- spective. To bridge emphasized (PCN president) biased recruitment English skills. You cannot
sidiary as part of the head office and practices get them to work for start-up
MNC Asia region on cer- companies at all. They won’t
tain issues.” (PCN Career implications: consider.” (Consultant)
president) Limited career
Degree of implemen- “I would be wor- Language-sensitive “They don’t know how opportunities within “We have problems with
tation: Extensive, ried about com- promotion: English to write proper business the subsidiary turnover because we did
emphasis on further plete Japanese proficiency letters. We test this now. some mistakes in recruiting
integration through company if I were emphasized They have to spend a few Communication net- … They seem perfect on
“shared” language sitting in the head- hours to summarize a text works: Homogeneous paper, but it is very difficult
quarters. Because Company-sponsored in 20 lines. More than communication to get behind that.” (PCN
there is a danger language training: 50% of applicants have networks; bilin- manager)
of going local in Language-enabled failed this test.” (PCN gual HCNs often
the sense that you functional training president) recruited from “We don’t have manage-
have to argue a foreign-owned comment positions in this com-
Language nodes: “Consideration is naturally panies; have weak pany. We have talent-seeking
lot with the head- Intra-unit com-
quarters. English the language. They need ties with domestic scheme … if there are posi-
munication pri- to be bilingual people. The business community tions somewhere else people
and understand- marily in English.
ing headquarters big office infrastructure is can apply. But Japanese are
Language nodes not available in our Japan Identity issues: Self- not really interested moving
culture gives you used if needed identification as a
an advantage to office. So they need to abroad.” (PCN president)
be self-sufficient.” (HCN “Japanese foreigner”;
explain things to Task-based solutions: low organizational “All people here are bilin-
the headquarters.” president)
Focus on English identification gual, which means that I
(PCN president) proficiency in “We send them all for five have chosen to work in a
adjusted staffing days to training in our bilingual and international
practices regional office that is con- environment. From that
ducted in English.” (PCN point, I don’t have any only
president) “We speak Japanese-speaking tradi-
English internally and tional people around.” (PCN
our Japanese counterparts president)
speak English. HCN-san
speaks Japanese with “I like to use English in my
them. And PCN X is tak- job … This is my fourth
ing Japanese classes now [foreign-owned] company. On
and maybe he will do that the average, I have stayed for
in the future. Some of the one year in these companies.”
supplies are more comfort- (HCN employee)
able with Japanese.
You can sometimes get
(continued)
Table 5.2 Continued
better prices if you speak “If they [HCNs] have good

Japanese.” (PCN president) English skills, they will get jobs
“We have a factory in in foreign companies. Even if
China. We have two guys they have a bad body odor,
who are Chinese, having they can change jobs every
been to a Japanese univer- year.” (Consultant)
sity, being bilingual or tri-
lingual.” (PCN president)
Established/ Meaning of corporate “Of course we Language-sensitive “We don’t require [HCN] HR processes: “We have problems with
locally language policies: have company recruitment: Entry- entry-level employees Practical problems communication. To a certain
adaptive Guidelines that values from the level/mid-career to have specific English in localized extent, this is a thing we
do not have to headquarters recruitment; focus skills.” (PCN president) functions and lower have to overcome. We are
be followed; through the sub- on HCNs; no organizational doing that with training
limited role in the sidiary president. English proficiency “If the core competencies echelons; low English … but that is a slow
established unit We also have a needs at entry level are not there, then who motivation to process.” (PCN president)
culture common manual or in localized cares about English? That develop English
but it is at the functions is our philosophy.” (HCN proficiency “We have given an
Degree of president) opportunity for staff to
higher level.” (PCN
implementation: Language-sensitive Career implications: improve their language
manager) “Even though I would like
Partial, not promotion: English Limited career skills but they don’t use this
implemented if “We have already proficiency to, I can’t promote them. advancement chance.” (PCN president)
clashes with local made some emphasized It starts with language. opportunities with
needs changes that have Company- The first piece of that insufficient English “[Language-sensitive
not worked. That sponsored language capacity is that you have proficiency within promotions] were especially
is OK. When you training: Training proficiency in English.” the subsidiary; bad for older employees
make changes here opportunities (PCN president) limited career who were not able to speak
you have to be provided to all advancement English. They were not able to
“We offer English advance in the company.
flexible to reverse employees opportunities for
teaching to all staff to
them.” (PCN Language nodes: make sure that everyone local recruits in the That is why they have
president) Intra-unit com- has the opportunity if they MNC global network quit the company.” (HCN
munication pri- want to work and grow manager)
marily in Japanese. with the company.” (PCN Communication
Language nodes president) networks: Intra-unit “They switch to a foreign
used if needed communication company and think that they
Task-based solutions: “Half of employees are able conducted primarily can use their English and
Focus on Japanese to speak English. Many in Japanese; boundary travel abroad, and it doesn’t
proficiency in people over 40 cannot spanners play a crucial happen. They use Japanese,
adjusted staffing speak English … it is hard role in linking PCNs don’t have any decision-
practices for them to communicate to Japanese speaking making power because all
with foreign executives organization decisions are taken in the
because they cannot head office overseas or in the
speak Japanese. I have to Identity issues: regional level, which usually
be an interpreter.” (HCN Internal division is not Japan.” (Consultant)
employee) between HCNs
and PCNs; low “Email communication is
“Our controller speaks organizational mostly in English. Other
Japanese and has been identification than that, I don’t really
here for many years. And among HCNs feel that I am in a foreign
the general manager has with insufficient company.” (HCN employee)
also been here for seven proficiency in the
years and speaks passable corporate language “Language is certainly the
Japanese. For hands-on biggest challenge because the
managers, language is English level of most people
important. They need to in our company is not quite
speak Japanese.” (PCN good.” (PCN president)
president) “We faced a lot of problems
with the older employees not
being able to speak English.
Because, at the moment, at
the middle management
level, you need to speak
English.” (PCN president)
(continued)
Table 5.2 Continued
114
Established/ Meaning of corporate “In this company Language-sensitive “Even the temporary staff HR processes: “The pool of the valuable
globally language policies: it is [our] duty to recruitment: Entry- need to speak English Problems in attract- people for many years has
integrated Norms that are an speak English.” level/mid-career fluently. When they inter- ing/recruiting been limited. So we, for
essential part of the (HCN employee) recruitment; view, it will be held in bilingual HCN tal- example, who wanted to
culture and identity “They [HCN English proficiency English. They are check- ent from first-tier develop our business in
of the MNC employees] get emphasized ing all the skills.” (HCN Japanese companies; Japan so it’s difficult to and
overwhelmed by employee) challenges to create get people from Nomura or
Degree of implemen- the need for coor- Language-sensitive the needed identi- from a typical Japanese firm.
tation: Extensive; dination with the promotion: English “Naturally, English lan- fication and retain So what we tend to do is go
emphasis on global managers in our proficiency guage skills are a prereq- bilingual top talent and chase and poach the
integration through Tokyo office and emphasized uisite for promotions.” people from other foreign
“shared” language; the headquarters.” (PCN president) Career implications: firms.” (PCN president)
low tolerance for Company-sponsored PCN expatriate
(PCN president) language training: “In the firm there are a
deviation deployment to “Most candidates prefer to
Language-enabled lot of training courses all strategic positions stay in Japan. There are a few
functional training year around. They send us prevents bilingual candidates who are inter-
internal memos. Classes, HCN talent career ested in international career
Language nodes: courses are available. They progression to top development possibilities.
Intra-unit com- call outside vendors, management ranks But that percentage is very
munication pri- instructors to improve
marily in English. low.” (Consultant)
personal skills and lan- Communication
Language nodes guage skills, such as how networks: Expected/ “We have a 60-year-old
used if needed to write business letters, forced language manager in this organization,
or things like that, or usage around Japanese, being in this com-
Task-based solutions:
how to do presentations.” PCN expatriates; pany for 30 odd years. He, by
Focus on English
(HCN manager) hesitancy to com- right, seeks my chair. He has
proficiency and
municate in English been passed over for three
functional skills in “When foreigners meet among locals times. He asked me, ‘Why do
adjusted staffing important customers, we Identity issues: Low we need a foreigner, why do
practices have interpreters to help organizational we need you?’ … This
them.” (HCN employee) identification company has a career policy
“It is difficult to find good that says that general manag-
traders, good salespeople. ers will normally be expatri-
If you go to the 20th ate managers not from the
floor, you will see that country in which they oper-
32% of all employees are ate.” (PCN president)
foreigners. I don’t know
why, but we have difficul- “Employees around them
ties to find quality traders [expatriates] need to speak
in Japan.” (PCN president) English to communicate.”
(HCN employee) “In this
office, it is difficult to get
the competencies out in the
meetings. If is often that if
you speak bad English, you
are labeled as less intelli-
gent.” (PCN president)
“I am not patient have not

stayed in any company
more than four years. I am
getting bored so soon.”
(HCN manager)
non-standardized language requirements enabled developing/locally

adaptive subsidiaries to increase the limited pool of potential HCN
applicants. Company-sponsored language training was provided on an
“as needed” basis. For PCNs without sufficient Japanese proficiency,
these non-standardized language policies and practices required exten-
sive usage of language nodes and task-based solutions. For example, one
PCN president explained: “Five [HCN] employees in this subsidiary are
able to speak good English. They are my right and left arms.” HCN/PCN
presidents were also in charge of most, if not all, HQ and other MNC
unit communication.
Challenges
Despite the advantages, the non-standardized policies and practices
were accompanied by various challenges. For example, because of
the low emphasis on English proficiency in recruiting, 11 HCN and
PCN presidents had to make language-based replacements. These
replacements were initiated by subsidiary presidents and the HQs.
Developing/locally adaptive subsidiaries had also challenges to retain
bilingual HCNs because of limited career advancement opportunities.
In addition, PCN presidents without sufficient Japanese proficiency had
to rely on (or were at the mercy of) HCN language nodes strategically
positioned in the middle of organizational communication networks.
This dependence enabled language nodes to gain power and control
information flows. In 14 subsidiaries, PCN presidents explained that
HCN managers were acting as language nodes to filter, delay, and block
the information flows between them and HCNs. A PCN president
complained: “The information from the departmental manager is
subjective. The information is filtered on the way. That is why I
sometimes do not know where we are going.” PCNs proficient in
Japanese, in turn, often identified with HCNs and local norms, and
were able to interact efficiently with HCNs. In addition, HCNs and eight
PCNs proficient in Japanese identified closely with the host-country
environment rather than the MNC. As a PCN president explained:
“I came here in 1993 and graduated from a Japanese university. When
I started to work here I felt that I was Japanese.” These people were
usually not motivated to implement MNC-level policies and practices
in subsidiaries.
Developing/globally integrated subsidiaries

In this subsidiary type, MNC-level language policies and practices
were norms to be followed and means to develop the subsidiary as an
integrated part of the MNC. For example, one PCN president reasoned:
“[HCN] employees are required to be proficient in English because it
is our company’s official language.” Instead of following direct HQ
mandates, PCN presidents initiated and reinforced informal language
policies and practices, partly because of the developing nature of the
subsidiaries. Expatriated from HQs or other MNC units, these PCNs
played a crucial role in transferring company values to subsidiaries.
For them, informal language policies and practices ensured that intra-
and inter-unit language barriers would not occur as subsidiaries were
becoming more established. Taking a more pragmatic approach, HCN
presidents emphasized the need for all employees to interact efficiently
with HQs, other MNC units, collaborators, and customers in other
countries. In general, the interviews show that the implementation of
language policy and practice was extensive in developing/globally inte-
grated subsidiaries.
Praxis
In addition to the local–global integration needs, PCN presidents
sought to recruit bilingual HCNs because of their insufficient Japanese
proficiency, market knowledge, and social capital. One of these PCNs
reasoned: “For me it is fundamental that I can communicate with
these people. If I need to pay more, it is not a big issue.” In these
subsidiaries, the recruiting channels were used to increase the chances
that HCN applicants had some English proficiency. For example, six
PCN presidents said job advertisements were placed in local English-
language newspapers to act as an initial screening device, because those
newspapers are read by HCNs with substantial English proficiency. In
these advertisements, a certain TOEFL or TOEIC score was required.
In managerial and professional employee search, conducted often with
executive search companies, English proficiency was included as a part
of the search requirements. Several subsidiaries also adjusted their staff-
ing practices. For example, six IT-related subsidiaries, partly as a result of
a shortage of functionally and linguistically competent HCNs, recruited
third-country nationals (TCNs) on either a full-time or a contract basis.
In addition, nine subsidiaries had recruited TCNs educated in Japan
and/or who had worked in other foreign subsidiaries. The consultants
and PCNs explained that developing/globally integrated subsidiaries
further target the competent but underutilized female labor segment
in Japan. In addition to being more willing to work for foreign-owned
companies, women were seen by consultants and HCN/PCN presidents
as possessing better language and communication competencies than
their male counterparts. These language-sensitive recruitment practices

reduced the need for company-sponsored language training, and pro-
vided a sufficient pool of linguistically competent HCNs who could be
promoted to higher organizational echelons. Bilingual HCNs were also
used as language nodes to facilitate interactions with local customers
and collaborators.
Challenges
In addition to their limited recognition and attraction among HCNs,
the low average English proficiency in Japan influenced these subsidi-
aries’ ability to recruit functionally competent, bilingual HCNs. As an
indication of the large demand–supply gap of bilingual HCNs in Japan,
one consultant estimated that 80–90% of subsidiaries initially screen
HCN applicants based on English proficiency, but only 5% of the
Japanese population have the required skills. It is thus not surprising
that language-sensitive recruitment practices increased the functional
and language competence misalignment. A PCN president explained
this phenomenon: “If you speak English well, you can get your foot in
the door. You may not have much in your head, but if you are smooth,
you are over one of the big hurdles.” The same topic was also brought
up by 20 consultants who stated that PCN recruiters placing emphasis
on English proficiency usually do not have an accurate understanding
of candidates’ knowledge, skills, and abilities. Illustrating the challenges
encountered, six PCN presidents admitted biases in their recruitment
decisions. One of them recalled: “I hired several candidates because
I was comfortable in communication mainly because of language skills.
I was blinded to other aspects. It turned out that these people had more
difficulties than expected.” Part of the difficulty with bilingual HCNs
educated abroad and/or recruited from other subsidiaries is their lack
of the social capital needed to establish business with first-tier domestic
companies. The limited career advancement opportunities meant that
these subsidiaries also had special challenges with talent retention. For
example, two PCNs put it as follows: “It is difficult to keep them [HCNs],
because we need to hire people with extensive backgrounds and who
speak good English,” and “If they [HCNs] are good, they will not stay …
turnover in our operations is 25%.” Having low identity towards their
employers and taking advantages of their foreign language skills, these
HCNs managed their own careers, often by opportunistic job-hopping.
The interviews indicate that foreign subsidiaries contribute to the job-
hopping phenomenon, because they prefer to poach bilingual HCNs
from each other. Finally, the people involved often saw themselves as
“Japanese foreigners,” which implied relatively low identification with
the MNC organization.
Established/locally adaptive subsidiaries

In this subsidiary type, MNC-level language policies and practices were
considered as guidelines that did not have to be completely followed
in all functional areas; they had a limited role in the established unit
culture. Internal communication in these subsidiaries was conducted
mostly in Japanese. For example, one PCN president described the
linguistic reality in his subsidiary as follows: “The company language
here is Japanese. The global language of our company is English.”
Established/locally adaptive subsidiaries had more extensive inter-unit
interactions in the MNC-level corporate language than in developing/
locally adaptive subsidiaries. However, regardless of their nationality,
all subsidiary presidents in established/locally adaptive subsidiaries
emphasized the importance of host-country legitimacy, created and
maintained with locally adaptive operations. One PCN reasoned:
“Having a lot of expatriates gives an image of a non-Japanese company.
Some of our customers don’t know that we are a foreign company.”
In traditional industry sectors with strong host-country competitors,
foreignness in terms of image and language was regarded as a liability.
Because of the local adaptation needs, language policy and practice
implementation in these subsidiaries was partial, limited often to
promotions and international functions.
Praxis
In contrast to their smaller and less well-known counterparts, estab-
lished/locally adaptive subsidiaries, thanks to their larger size, internal
resources, and career paths, were able to attract and recruit HCNs
with higher functional competencies. For example, the consultants
and HCNs explained that HCN applicants usually do not distinguish
between established/locally adaptive subsidiaries, such as IBM, and
their domestic rivals. In these subsidiaries, functional and host-country
language competencies were emphasized in lower organizational
echelons and localized functions. HCN/PCN/TCN language nodes
were used to facilitate interactions through language boundaries
within and beyond the subsidiary boundaries. However, English
proficiency was considered as a precondition for lateral movement
to international functions and promotion into management ranks.
For example, a PCN president reasoned: “No matter how good you
are in marketing or another function, you need to speak English. All
correspondence is in English. And our language competencies here are
so poor. Even though I have intelligent employees, I cannot promote
them.” In all established/locally adaptive subsidiaries, HCNs were
able to improve their proficiency in the corporate language through
company-sponsored training. Twelve PCN presidents explained that
company-sponsored language training had an important motivational
impact, because it provides equal career advancement opportunities
for all employees.
Challenges
Although company-sponsored language training was extensively used,
and was enhancing upward mobility, the interviews showed that it
was an unreliable method for removing language barriers, owing to
the time and motivational limits on language proficiency develop-
ment. For example, an HCN president recalled: “We hired a person
eight years ago. Because he was not able to speak English we sent
him to a language school. The company paid all expenses during
the first year and half of the expenses during the second year. Rather
than improving his language skills, he left our company.” For HCNs
seeking to speak English in an international environment, working in
established/locally adaptive subsidiaries was often a disappointment.
In fact, three HCNs had moved from established/locally adaptive to
established/globally integrated subsidiaries because the former were
considered to be too “Japanese.” Because of the non-standardized
language requirements in recruiting, PCN presidents without suffi-
cient Japanese proficiency had to rely on language nodes, and faced
language barriers when communicating with HCNs in lower echelons
and localized functions. Creating a boundary for career advancement,
language-based promotion practices also increased perceptions of
unfairness and voluntary turnover in 18 subsidiaries. The interviews
indicate, for example, that HCNs recruited from universities had not
been aware of language-sensitive promotion practices. Not surpris-
ingly, HCNs with insufficient proficiency in the corporate language
were the least attached to their organizations.
Established/globally integrated subsidiaries

In this subsidiary type, MNC-level language policies and practices
were norms – an essential part of the culture and identity of the MNC.
Regarded as globally shared standards and signs of professionalism, the

degree of language policy and practice implementation was extensive,
with little tolerance for deviation. Consequently, regardless of the
location, language policies and practices were established to develop
uniform communication competencies among employees in the MNC
global network. PCNs were deployed to strategic positions in estab-
lished/globally integrated subsidiaries, in part to reinforce these shared
language standards. The shared standards played a crucial role, owing
to frequent communication within the MNC network, as well as various
international clients and collaborators. For example, a PCN explained
this integration as follows: “We have to communicate worldwide. This
means a lot of discussions with country A, country B, country C, coun-
try D, and in this region. We have many meetings in Taiwan and Korea.
Also, many informal meetings and contacts by mail and phone at all
levels.”
Praxis
Because of their host-country legitimacy, high salaries, and career
advancement opportunities, established/globally integrated subsidiaries
were able to attract and recruit bilingual HCNs, usually with the needed
functional competencies. Thanks to their internal resources and HR
personnel, these subsidiaries simultaneously used several recruitment
sources, such as college recruiting, referrals, and executive search con-
sulting companies to attract and recruit bilingual HCN talent. For exam-
ple, all 37 consultants explained that their HCN bilingual candidates
preferred large, established subsidiaries in prestigious, high-income
sectors (e.g., consulting and finance). In these subsidiaries, HCN
employees had often received their university education overseas (either
the whole degree or a part of it). Because there was a larger pool of
bilingual applicants, HCNs in consulting and finance companies were,
according to 24 consultants, on average more proficient in English
than their counterparts in engineering companies. In line with these
consultants, a PCN president in a finance company summarized: “They
[HCN employees] are articulated, well educated, and they speak several
languages, two at least, Japanese and English.” If there was a short-
age of functionally competent HCNs, established/globally integrated
subsidiaries were able to hire and integrate TCNs efficiently, owing
to the shared corporate language. The standardized language policies
and practices were important, because employees often participated in
international teams, and were sent overseas for meetings and training.
Challenges
While well-known internationally, the consultants and HCN/PCN
managers explained the challenges to recruit bilingual HCN talent
from first-tier domestic companies. For example, a PCN manager in a
prestigious US-based consulting company explained: “We cannot really
get the best and brightest [HCNs] because in the past ten years all the
Japanese companies have sophisticated retention programs.” Eight
HCNs with overseas university degrees also explained that they applied
to first-tier foreign companies only after unsuccessful job search abroad
and in domestic companies. One of them recalled: “I started with inter-
views with Japanese companies, such as Dentsu and Hakuhodo. I went
through many interviews but didn’t make it to the last. In the mid-
dle, I also took interviews with American financial firms because they
offered bigger pay. They were my second option.” In addition to low
motivation to develop their careers in the MNC global network, HCNs
were concerned about the low chances of advancing to top manage-
ment, owing to PCN deployment to strategic positions in subsidiaries.
Considered as a sign of intelligence and professionalism, several HCNs
were also hesitant to communicate with native speakers in English.
In meetings, PCNs thus dominated discussions. Albeit less prevalent
compared with their smaller counterparts, HCNs in established/globally
integrated subsidiaries showed relatively low identification with or loy-
alty to their MNC. Identifying themselves as foreign-minded Japanese,
these HCNs tend to move from one established/globally integrated
subsidiary to another, attracted by better benefits.
Discussion
By adopting a recontextualization perspective, we have elaborated on

the dynamics in the implementation of language policies and prac-
tices in wholly owned subsidiaries. In contrast to previous studies on
language policy implementation (Kingsley, 2010; Sharp, 2010), our
analysis shows that language policies and practices, and the accompa-
nying challenges, differ depending on the subsidiary type in question.
In particular, our contingency model helps to identify considerable
variation across four types of cases: developing/locally adaptive, devel-
oping/ globally integrated, established/locally adaptive, and estab-
lished/globally integrated subsidiaries. In each of these four subsidiary
types, language policies and practices are recontextualized in specific
ways and make up a distinctive praxis with its own challenges (see
Table 5.3).
Table 5.3 Contingency model of language policies and practices and inherent challenges in wholly owned foreign subsidiaries
Developing/locally adaptive Developing/globally integrated
Recontextualization type Recontextualization type

Meaning of corporate language policies: Guidelines that do not Meaning of corporate language policies: Norms to be followed;
necessarily need to be followed means to develop the subsidiary as part of the MNC
Degree of implementation: None or limited; emphasis on Degree of implementation: Extensive; emphasis on integration
locally congruent practices through “shared” language
Praxis: policies and practices Praxis: policies and practices
Language-sensitive recruitment: Mid-career recruitment; Language-sensitive recruitment: Mid-career recruitment;
functional skills emphasized English proficiency emphasized
Language-sensitive promotion: Functional skills emphasized Language-sensitive promotion: English proficiency emphasized
Company-sponsored language training: Training provided on Company-sponsored language training: Language-enabled
an asneeded basis functional training
Language nodes: Intra-unit communication primarily in Language nodes: Intra-unit communication primarily in
Japanese; language nodes used if needed English; language nodes used if needed
Task-related solutions: Focus on operation and tasks; commu- Task-based solutions: Focus on English proficiency in
nication dealt with separately adjusted staffing practices
Challenges Challenges
HR processes: Problems in communication; task-related HR processes: Problems in attracting/recruiting bilingual
solutions needed HCN talent; language-biased recruitment practices
Career implications: Limited career opportunities within the Career implications: Limited career opportunities within the
subsidiary or the MNC global network subsidiary
Communication networks: Bilinguals hold important Communication networks: Homogeneous communication
positions in communication, both increasing their power networks. Bilingual HCNs often recruited from other foreign
and putting pressure on them subsidiaries; have weak ties with domestic business community
Identity issues: Internal division and disconnect, based on Identity issues: Self-identification as a “Japanese foreigner”;
language differences low organizational identification
123
(continued)
Table 5.3 Continued
Established/locally adaptive Established/globally integrated

124
Recontextualization type Recontextualization type

Meaning of corporate language policies: Guidelines that do not Meaning of corporate language policies: Norms; an essential
have to be followed; limited role in the established unit culture part of the culture and identity of the MNC
Degree of implementation: Partial; not implemented if clashes Degree of implementation: Extensive; emphasis on global inte-
with local needs gration through “shared” language; low tolerance of deviation
Praxis: policies and practices Praxis: policies and practices
Language-sensitive recruitment: Entry/mid-career recruitment; no Language-sensitive recruitment: Entry/mid-career recruitment;
English proficiency needs at entry-level or in localized English proficiency emphasized
functions Language-sensitive promotion: English proficiency emphasized
Language-sensitive promotion: English proficiency emphasized Company-sponsored language training: Language-enabled func-
Company-sponsored language training: Training opportunities tional training
provided to all employees Language nodes: Intra-unit communication primarily in
Language nodes: Intra-unit communication primary in Japanese; English; language nodes used if needed
language nodes used if needed Task-based solutions: Focus on English proficiency and func-
Task-based solutions: Focus on Japanese proficiency in adjusted tional skills in adjusted staffing practices
staffing practices
Challenges Challenges
HR processes: Problems in communication in localized func- HR processes: Problems in attracting/recruiting bilingual
tions and lower organizational echelons; low motivation to HCN talent from first-tier domestic companies; challenges
develop English proficiency in creating the needed identification and retaining bilingual
Career implications: Limited career advancement opportuni- talent
ties with insufficient English proficiency within the subsidi- Career implications: PCN expatriate deployment prevents
ary and local recruits in the MNC global network bilingual HCN talent career progression to top management
Communication networks: Intra-unit communication con- ranks
ducted primarily in Japanese; boundary spanners link PCNs Communication networks: Expected/forced language usage
to Japanese-speaking organization around PCN expatriates; hesitancy to communicate in
Identity issues: Internal division between HCNs and PCNs; low English
organizational identification Identity issues: Low organizational identification
Our analysis elucidates five crucial aspects of language implementation:
1. the emergence of language praxis from the interplay of HQ strategies

and local responses;
2. the hybrid nature of language practices;
3. the central role of key actors such as subsidiary presidents in
recontextualization;
4. the pervasive power implications of language policies and practices;
and
5. the multifaceted implications for strategic HRM.
First, our recontextualization model shows that the implementation

of language policies and practices is not simply a matter of top-down
HQ strategy (Sharp, 2010), nor does it stem from local specificities
alone (Kingsley, 2010). Instead, the emerging language praxis is a result
of the interplay of HQ strategies and local responses. Through the
model, we can better understand that the language praxis is linked with
the strategic role of the subsidiary (Bartlett & Ghoshal, 1989; Luo &
Shenkar, 2006; Prahalad & Doz, 1987) – as enacted in context (Balogun,
Jarzabkowski, & Vaara, 2011). Indeed, both our analysis and previous
research (Balogun et al., 2011; Brannen, 2004; Kostova, 1999) sug-
gest that subsidiary managers’ and employees’ interests are not always
aligned with those of the MNC. This is especially the case in language
policies and practices that are subject to employees’ language compe-
tencies and host-country contingencies. By taking into account the
interplay of HQ strategies and local responses, we can comprehend
the differences across cases: for example, how developing/locally adap-
tive cases differ radically from established/globally integrated ones.
In addition, this model helps to explain why the implementation of
language policies and practices may often seem to lead to failure from
the HQ perspective; this is often due to local responses, as in the case
of limited implementation in developing/locally adaptive subsidiaries.
Second, related to the previous point, our analysis underscores
the hybrid nature of language practices. Similar to other studies on the
hybridization of management practices (Ferner & Quantinalla, 1998;
Gamble, 2010; Shimoni, 2011; Yu & Zaheer, 2010), our findings show
that language policies and practices are hybridized precisely because they
reflect both HQ and local practices. Our analysis adds to previous studies
by showing large variations in this hybridization. For example, despite
facing similar host-country constraints, developing/locally adaptive
and globally integrated subsidiaries placed very different emphasis on
HCNs’ corporate language proficiency in recruitment and promotion

practices. Because of the low average English language proficiency in
Japan, foreign subsidiaries have to compete for a limited amount of
bilingual HCN talent. Not surprisingly, these HCNs often preferred
established subsidiaries in prestigious and high-income sectors. Owing
to resource constraints and low host-country legitimacy, developing/
locally adaptive and globally integrated subsidiaries emphasized the
difficulty of attracting, recruiting, and retaining bilingual HCN talent
in Japan. This finding adds to the previous studies suggesting general
“liabilities of foreignness” in terms of foreign company attractiveness
to HCN job applicants in the USA (Newburry, Gardberg, & Belkin,
2006) and in Scandinavia (Aperia, Bronn, & Schultz, 2004). However,
despite efforts to implement language policies and practices, especially
in globally integrated subsidiaries, several languages were concurrently
used in all subsidiaries. Further, our contingency model shows that
language policies and practices do not remain the same, but evolve
as subsidiaries become larger and more established in host countries.
For example, whereas task-based solutions are used extensively in
developing/locally adaptive subsidiaries to cope with intra- and inter-
unit language barriers, established/ locally adaptive subsidiaries use
language-sensitive promotion practices, owing to their more complex
host-country operations.
Third, our analysis highlights the crucial role of key actors such as
subsidiary presidents in recontextualization. In contrast to the MNC
strategy frameworks (Bartlett & Ghoshal, 1989; Prahalad & Doz, 1987)
and the strategic perspectives of MNC language policies (Dhir & Goke-
Pariola, 2002; Luo & Shenkar, 2006; Maclean, 2006; Sharp, 2010; Van
den Born & Peltokorpi, 2010), our findings suggest that language
policies and practices are seldom transferred as such from HQs or other
MCN units, but are to a large extent subject to the discretion of key
actors, such as subsidiary presidents. That is, when subsidiary presidents
as boundary spanners make sense of MNC-level language policies
and practices, the process is both enabled and constrained by pre-
existing systems of signification, including their host-country language
proficiency and identification. For example, PCN presidents proficient
in Japanese often did not impose strong language requirements in
developing/locally adaptive subsidiaries. In line with previous studies
(Black & Gregersen, 1992; Peltokorpi, 2010), our findings suggest
that these PCNs had dual identities, and prioritized local adaptations
over MNC global integration. These findings challenge the assumed
commitment of subsidiary managers and the eventual alignment of MNC
and subsidiary-level languages (Sharp, 2010). In contrast, PCN presidents

in developing/globally integrated subsidiaries implemented informal
language policies and practices, partly because of the developing nature
of host-country operations, and partly to overcome their insufficient
host-country language proficiency.
Fourth, our analysis highlights the pervasive power implications
of language policies and practices. By so doing, we add to the rare
analyses of power in and around language policies and practices in
MNCs (Blazejewski, 2006; Janssens et al., 2004; Vaara et al., 2005).
Blazejewski (2006) and Janssens et al. (2004) stressed the competition
and importance of status and power relationships of languages in
MNCs. Language policies and their implementation processes are thus
accompanied by the process of influence, persuasion, and resistance.
Vaara et al. (2005), in turn, emphasized the multiple power implications
of official corporate language policy. Our study extends these views
by explaining how the power implications emerge from the practices
themselves – a view that is consistent with advanced analyses of power
in organizations (Clegg, 1989; Clegg, Courpasson, & Phillips, 2006).
This is important, because it helps in understanding that problems
and dilemmas related to power are not issues that could be dealt with
separately, but are something inherent to the language policies and
practices. Our model also elucidates different dimensions of power
among HCN and PCN employees, and how the power implications differ
across four types of cases. In developing/locally adaptive subsidiaries, for
example, English proficiency provided HCN language nodes with power
to control information flows between HCNs with insufficient English
proficiency and PCNs with insufficient Japanese proficiency. This
example illustrates not only how power relations influence language
policies and practices in subsidiaries, but also how language policies and
practices affect power relations among HCNs and PCNs in subsidiaries.
Fifth, our analysis underscores the multifaceted implications for
strategic HRM in MNCs. In contrast to the often assumed alignment
between corporate strategies and HRM practices (Huselid, 1995; Lepak
& Snell, 1999; Wright, Dunford, & Snell, 2001), our contingency
model enables us to demonstrate that the praxis in each four
subsidiary types creates specific challenges related to HR processes,
career advancement, communication networks, and identity. For
example, while non-standardized language policies in developing/
locally adaptive subsidiaries enabled them to place emphasis on HCNs’
functional competencies in recruitment and promotion, they reduced
intra-and inter-unit communication, and isolated PCNs with insufficient
host-country language proficiency. In these subsidiaries, language

nodes often linked PCN and HCN employees. Echoing the findings of
previous research (Lauring, 2008; Vaara et al., 2005), language further
acted as a strong determinant of social categorization among HCNs
and PCNs, especially in developing/locally adaptive subsidiaries. Social
categorization can also influence with whom and how much HCNs and
PCNs communicate (Larkey, 1996). Furthermore, while standardized
language requirements in developing/globally integrated subsidiaries
enhanced intra- and inter-unit communication, the organizations
had to find alternative staffing practices to ensure sufficient internal
competencies in the corporate language. These standardized language
requirements were also linked to higher compensation costs, biased
recruiting practices, and challenges in retaining bilingual HCN talent.
Moreover, distinctive challenges occurred in developed locally adaptive
and globally integrated subsidiaries, the former subject to hierarchy/
function-based language barriers, unfairness perceptions, and language-
based social categorization, and the latter to challenges in recruiting
bilingual HCN talent from first-tier domestic companies, and turnover
accompanied by low organizational identification. Finally, our analysis
demonstrates that identification with the MNC and the subsidiary
varied in the four subsidiary types, posing special challenges for
each case.
Our findings also indicate that proficiency in the corporate language
provides HCNs with important career-related benefits. Acting often as
language nodes in locally adaptive subsidiaries, bilingual HCNs were
found, in line with a previous study (San Antonio, 1987), to have
access to PCNs and information beyond their formal organizational
roles. Bilingual HCNs are also more likely to be recruited and promoted
by PCNs, especially in globally integrated subsidiaries. Thanks to the
high demand for English-speaking personnel, bilingual HCN talent
can also relatively easily improve their salaries, organizational rank,
and company status by calculated moves in foreign subsidiaries in
Japan. In stark contrast to the low voluntary turnover in domestic
companies in Japan (Graen, Dharwadkar, Grewal, & Wakabayashi,
2006), bilingual HCNs in particular acted as “free agents,” having low
organizational attachment to and short tenures in foreign companies.
This is problematic, because these HCNs often have important roles as
language nodes. While this high turnover might be partly due to low
employment security (Ono, 2007) and internal promotion opportunities
in foreign subsidiaries in Japan (Peltokorpi & Clausen, 2011), our
findings suggest that HCNs’ foreign language proficiency contributed
to this job-hopping phenomenon. Although not as strongly aligned

with foreign language proficiency, limited internal career advancement
opportunities, combined with low organizational attachment and
external job opportunities, are also shown to contribute to high
voluntary turnover rates in foreign subsidiaries in Singapore (Reiche,
2007). Bilingual HCNs’ low willingness to relocate creates additional
challenges for talent management in subsidiaries. In particular, our
findings show that HCNs are most unwilling to relocate to other Asian
countries. While bilingual HCNs regarded their language proficiency
as an important part of their career capital, and accepted language
policies and practices in subsidiaries, HCNs with insufficient proficiency
resisted, and perceived a loss of their status when language policies
were changed. Career-related benefits and acceptance of language
policies were therefore unequally distributed in subsidiaries. Our
findings consequently do not provide support for the argument that
HCN employees would, over time, be increasingly inclined to adopt
deeper layers of the MNC-level corporate language on a social or
professional basis (Sharp, 2010). In all, these findings also extend the
career literature in MNCs that focuses on PCN expatriates, and assumes
HCNs to be proficient in the corporate language (Collings, Scullion, &
Morley, 2007).
Conclusion
While previous studies have highlighted various challenges that

accompany language policies in MNCs (Tietze, 2008), our knowledge
of the implementation of language policies and practices in subsidiaries
is still limited. We therefore examined language policy and practice
implementation in wholly owned subsidiaries from a recontextuali-
zation perspective. The main contribution of this study is the contingency
model of language policies and practices in subsidiaries. It highlights the
differences across four types of recontextualization – developing/locally
adaptive, developing/globally integrated, established/locally adaptive,
and established/globally integrated – and explains the reasons for these
differences. The model demonstrates that the challenges of language
policy implementation are inherent to the type at hand. This finding
has important theoretical implications for research on language policies
and their implementation. Our analysis suggests that, to dig deeper
into the challenges involved, one should move from “functionalist” or
“strategic” analyses to studies that highlight the context, its practices,
and the emerging praxis. Our analysis specifically shows how language
policies and practices are linked with a web of HR, task-based solutions,
and other practices that together form a praxis characteristic of the
subsidiary in question. Our analysis also underscores the agency of key
actors, such as subsidiary presidents, in the interpretation process and
hybridization of language policies and practices in subsidiaries. Instead
of being regarded simply as the receiving end, our analysis describes
how subsidiary presidents, taking account of multiple, often conflicting
firm- and host-country-related factors, make sense of MNC-level
language policies and the nature and extent of their implementation in
subsidiaries. In this way, our study elucidates the dynamic individual
and unit-level interactions of recontextualization processes.
Our analysis also adds to studies of recontextualization in MNCs
more generally. In particular, it extends Brannen’s (2004) semiotic
recontextualization model in several ways. Our analysis shifts the focus
from positive or negative evaluations at the receiver end to the multiple
ways in which policies and practices may be institutionalized and
made sense of. In our model, this becomes evident when comparing
recontextualization in the four subsidiary types. Our study also
highlights the close linkage of meaning and practice – which becomes
salient through the notion of praxis, and the agency of key actors
such as subsidiary presidents. Finally, our analysis demonstrates that
practice-based analyses of recontextualization do not have to focus
on individual cases (Brannen, 2004; Gertsen & Zølner, 2012; Vaara
et al., 2005), but can deal with a large number of cases to distill more
generalizable characteristics and patterns.
Practical implications
Our study provides practical insights for managers. First, the model
shows that the challenges are radically different in the four types
of subsidiaries. By identifying the key characteristics of their case,
managers should be able to deal better with these issues. At the same
time, however, the model indicates specific challenges in all these four
types, and there is no optimal solution that would solve all issues.
Second, our analysis shows that subsidiary presidents have crucial
roles in language policy and practice implementation. Therefore, as
also advocated by Luo and Shenkar (2006), MNCs can benefit from
deploying PCNs to subsidiaries with important strategic roles in the
MNC global network. However, locally adaptive subsidiaries can be
staffed by HCNs and PCNs with strong host-country culture and
language competencies. In support, HCN managers are more effective
than PCN expatriates in locally adaptive subsidiaries, partly because
they share the same language and culture with local customers
(Fang et al., 2010).
Third, in order to decrease the language-based selection bias and
staff subsidiaries with the best available employees, PCNs can engage
consultants, and HCN managers and employees in the selection
process. For example, one consultant said that PCNs “hire people
based on their English speaking skills instead on what the person can
do ... sometimes they miss the opportunity to find a talented executive
because they many not interview well in English.” For improved
assessment, several consultants recommended that PCNs conduct
job interviews and evaluate candidates with HCN employees and
managers. In support, a study of international joint ventures in China
shows that HCN managers are able to detect some nuances about
HCN job applicants through their language and behavior (Björkman &
Lu, 1999).
Fourth, our findings suggest that communication barriers were partly
created by different communication styles. For example, PCNs could
have dominated meetings in subsidiaries partly because of their higher
proficiency in the corporate language, and partly because Japanese tend
to refrain from disagreeing publicly with those higher in the hierarchy
(Peltokorpi, 2010). Training can help employees to understand and
empathize with the culture-related differences and develop efficient
communication strategies.
Limitations and future research

This study has limitations that should be taken seriously. First, our
analysis has focused on Japan – a country that undoubtedly has unique
features. Thus our findings should be interpreted with caution. However,
our main contribution – the contingency model – is an analytical
generalization that should be with due caution also be applicable in
other contexts. Nevertheless, future research should be expanded to
other countries. On the one hand, it would be especially interesting to
focus attention on East Asian countries such as China (Buckley et al.,
2005) and South Korea (Park et al., 1996) that may be similar to Japan,
for example in a relative lack of bilingual HCN employees. On the other
hand, it would be important to contrast these findings with contexts
such as Europe, where bilingual HCN employees are more available
(Lauring, 2009).
Second, this study cannot establish causal claims for language policies
and practices in subsidiaries. Linking our findings with strategic HRM
research (Huselid, 1995; Lepak & Snell, 1999; Wright et al., 2001), for
example, we expect that uniform language policies and practices can

provide communication- and performance-related benefits in globally
integrated subsidiaries. Thus the present findings could be validated
and extended by statistical analyses.
Third, although we have highlighted the importance of power and
politics, our analysis is limited by our data and methods. In particular,
we were not able to provide a detailed analysis of HCNs’ and PCNs’
perspectives on how conflicts and power relations emerge and evolve
over time. Future research could use interviews and observations
similarly to previous studies to provide more in-depth insights into one
or a few subsidiaries (Lauring, 2008, 2009; Vaara et al., 2005).
Fourth, several career-related aspects of the present findings warrant
more in-depth future research. A longitudinal examination of language
proficiency related career advancement would be an interesting area for
future research.
Despite its strong impact on MNC global operations (Luo & Shenkar,
2006; Terpstra, 1978), language has played a marginal role in the IB
literature. Contributing to this important but neglected area of research,
the present study has disentangled language from the larger “culture
box” and applied a recontextualization perspective on language policy
and practice implementation. Challenging the strategic perspectives
of language policies as objective, neutral tools with assumptions of
a shared corporate lingua franca, our analysis at the receiving end
demonstrates that language policies are something that individuals in
subsidiaries make sense of and enact in daily practices. Instead of being
subject to top-down transfer from HQ or other MNC units, our findings
demonstrate how various firm-specific factors, social interactions, and
individuals’ competencies and social positions together shape the web
of practices that forms the language praxis in subsidiaries. By so doing,
our analysis advances practice-based theorization and methods in IB
research. We hope that our study paves the way for future work on
language-related matters in foreign subsidiaries that would elaborate
on the context-specific problems and challenges of language policy
implementation.
Acknowledgements
We thank the very helpful anonymous reviewers and especially Deputy

Editor Mary Yoko Brannen and Area Editor Paula Caligiuri for incisive
comments on earlier drafts of this study. We also thank Fabian J. Froese
for collaboration.
Note
1. We established inter-rater reliability by having one research assistant code
20 randomly selected transcripts independently on language policies and
practices in subsidiaries, and the accompanied challenges. The coding was
compared with the coding conducted by one interviewer based on the same
sets of transcripts. The agreement coefficient (0.94) was above the suggested
minimal threshold (0.70) (Cohen, 1960).
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Appendix 5A
Guiding questions in interview protocols for PCNS

1. May I have your name and position in this subsidiary? How many people are
working in this subsidiary? How many expatriates are working in this subsidi-
ary? How many years has this subsidiary been operating in Japan?
2. Does your company have any language policies and requirements? What
kinds of language policies and requirements are in your company? If
your company does not have any language policies or requirements, how
does your company seek to cope with language barriers? How are these
language policies and requirements implemented and reinforced in your
company? Are these language policies and requirements extended to all
employees?
3. What kind of external factors, if any, influence language policies and require-
ments in your company?
4. What kind of internal factors, if any, influence language policies and require-
Appendix 5B
Guiding questions in interview protocols for HCNs

1. May I have your name and position in this subsidiary? How many people are
working in this subsidiary? How many expatriates are working in this subsidi-
ary? How many years has this subsidiary been operating in Japan?
2. Does your company have any language policies and requirements? What
kinds of language policies and requirements are in your company? If your
company does not have any language policies or requirements, how does
your company seek to cope with language barriers? How are these language
policies and requirements implemented and reinforced in your company?
Are these language policies and requirements extended to all employees?
3. What kind of external factors, if any, influence language policies and require-
4. What kind of internal factors, if any, influence language policies and require-
Appendix 5C
Guiding questions in interview protocols for consultants

1. May I have your name, industry sector covered, and position in this
company?
2. What language requirements do foreign companies have for job candidates?
What kind of differences, if any, have you experienced in language require-
ments within and among foreign companies?
3. What kinds of challenges, if any, are related to language requirements in for-
eign companies in Japan?
6
The Multifaceted Role of Language
in International Business:
Unpacking the Forms, Functions
and Features of a Critical Challenge
to MNC Theory and Performance
Mary Yoko Brannen, Rebecca Piekkari and Susanne Tietze
Language lies at the heart of international business (IB) activities. It is

a necessary constituent of ongoing sequences of decisions and resource
commitments that characterize day-to-day organizational life. Such
decision making draws on extensive discussion and debate that is
framed, formulated and articulated in language developed and, to a cer-
tain extent, shared by corporate, functional and other in-group users. As
firms internationalize and enter new markets, whether as “born globals”
or more traditionally, they must navigate across countless language
boundaries including national languages. Operating internationally
means having to interact with transcontinental intermediaries, distinct
government agencies and foreign institutions, which reside in different
language environments. Yet language as a key construct in the field of
IB has not been sufficiently articulated or theorized to reflect the par-
ticularity of the field. Forms of language such as national, corporate,
technical or electronic, its functions in terms of defining hierarchies,
exercising power or facilitating integration, as well as its features such
as the use of mixed syntax or gender-marking are emerging as critical
phenomena for global business.
Reprinted from Mary Yoko Brannen, Rebecca Piekkari and Susanne Tietze (2014)
“The Multifaceted Role of Language in International Business: Unpacking the
Forms, Functions and Features of a Critical Challenge to MNC Theory and
Performance.” Journal of International Business Studies, Vol. 45, No. 5 (pp. 495–507).
With kind permission from Palgrave Macmillan. All rights reserved.
139
140 Mary Yoko Brannen et al.
The purpose of this special issue is, therefore, to catalyze and set a
course for the development of a new domain that originates from an
explicit focus on language and languages. We believe that the field
of IB is now sufficiently mature to become more sophisticated in its
understanding of the multifaceted role of language in today’s global
business realities. This domain may draw on fields such as anthropol-
ogy, communication, linguistics and social psychology to explore the
nature and complexities of language in contexts where IB is played out.
Such research would thereby go beyond the etic, culturally neutral,
outsider view of language to the generation of deep, contextual, emic
understandings of language in IB which represent a locally grounded
perspective (cf. Pike, 1967).
Whereas the IB field has long recognized the importance of lan-
guage barriers in firm internationalization and in conducting empirical
research, the interplay between languages in the daily activities of inter-
national management remains opaque and poses a critical challenge
to IB theory and practice (Welch, Welch, & Piekkari, 2005). Corporate
language is built over time around domain-specific usages of words,
acronyms and stories that often reflect the industry context and the
national language environment in the country of origin (Brannen &
Doz, 2012). While such specialized language is usually clear to insid-
ers, it is not to outsiders who lack the shared experience of the for-
mer. Moreover, speakers attach invisible meanings to the information
exchanged in English as they draw on the language systems and inter-
pretive frames of their respective mother tongues (Kassis Henderson,
2005). This makes it difficult to achieve purposeful communication and
significantly complicates knowledge transfer across distance and differ-
entiated contexts. In semiotic terms, transferring the linguistic signals
alone across borders does not ensure that the meaning is transferred
as intended (Brannen, 2004). Shifts in meaning occur frequently in
international encounters as the linguistic codes sent through electronic
media are subject to sense-making in dispersed cultural contexts.
The widespread use of English as lingua franca in most international
organizations has further exacerbated the language conundrum. It
gives an illusion that by controlling for national language diversity the
transfer of meaning becomes relatively unproblematic. Lingua franca
was originally conceived as a neutral form of communication without
cultural or political bias. There have also been other lingua franca before
English that served to integrate the discourses of distinct domains such
as French in diplomacy, German in medicine and Latin in scholarship.
However, English, as the official language of several of the world’s
Multifaceted Role of Language in International Business 141
leading economies including five members of the G-20 and the medium
through which MBA programs globally are taught, is far from neutral.
Its status adds another layer of complexity and calls for sensitivity when
attempting to uncover hegemony, ideology and manipulation of mean-
ing in multilingual situations (Archibugi, 2005; Tietze, 2004, 2008).
It is important to note that the very discipline of IB has grown out of
articulation and dialog predominantly in the English language. At the
systemic level, the institutional machine of academia in general (inter-
national conferences, teaching at the major business schools worldwide
and so on) as well as publishing (the field’s major journals, text books,
practitioner publications) functions in English. Tietze and Dick (2013)
take a critical look at the lack of reflexivity in regard to the use of English
in IB and international management scholarship. They note that from
the perspective of the individual researcher, having English as a second
or third language is mostly seen and felt as a handicap, something to be
overcome, rather than as a potential resource. In fact, one motivation
for writing this introduction is that we as guest editors share the early
childhood developmental experiences of growing up bilingual in non-
English-speaking environments and believe it is important to note that
such backgrounds provide the opportunity for reflection. Experiencing
mixed formative linguistic backgrounds, as many people do these days,
draws attention, immediately and unavoidably, to foreignness and dif-
ference, both of which trigger reflection about points of reference, the
relativity of meanings and comparability. In this regard, our own biog-
raphies influence the choice of topic for this special issue and inform
the conceptualization of organizations as multilingual realities.
In this introduction, in order to help set the course of a new domain,
we first define “language” as a multifaceted, multilevel construct for IB
research. Here we draw on the contributions made by language-sensitive
researchers within as well as outside of the field of IB. We then trace
the development of the emergent language stream of research in IB and
also integrate highlights from articles in this special issue. In doing so,
we underscore theoretical advancements, synthesize the key issues fac-
ing the field in terms of understanding the multinational corporation
(MNC) as a multilingual meeting ground and provide the beginnings
of a protocol for conducting language research in IB. We should note,
however, that our aim is not to offer an exhaustive coverage of the lit-
erature, but rather a more selective review that emphasizes the develop-
ments we judge to be most relevant and important. We conclude with
an overview of the articles that have arisen out of our call for papers for
the special issue.
Defining language as a multifaceted and multilevel

construct for IB research
Disciplines define language in their own distinctive ways. For example,

in linguistic anthropology language is considered “a cultural resource”
that (re)produces the social world (Duranti, 1997; see also SanAntonio,
1987). Within organization studies, language is generally defined as
a communicative system of shared meanings that is central in con-
structing organizational, social and global realities (Astley & Zammuto,
1992; Daft & Wiginton, 1979). This echoes speech act theorist Austin’s
(1962) view that language has “performative power”, and thus using
language becomes equivalent to “acting in the world”. Communication
researchers also appreciate language as a constitutive force of organizing
(Cooren, Kuhn, Cornelissen, & Clark, 2011), but they focus primarily
on the role of discourse, frames and narratives in sense-making and
sense-giving rather than on multiple and different languages per se (see,
Logemann, 2013, for an exception).
Likewise, IB scholars share an interest in the performative aspects of
language(s) and its role in constituting, enabling and, in some cases,
debilitating MNC networks. Embracing different conceptual trajectories
to inform their work, IB scholars take diverse approaches to language,
reflecting its multifaceted and multilevel nature. Some have begun to
engage with the notion of MNC executives using the English language
both to create and put into motion hegemonic language strategies
(Vaara, Tienari, Piekkari, & Säntti, 2005). Researchers have also observed
the co-existence of English alongside a multitude of other languages in
the MNC where their relative order is “linguascaped” in an on-going
process of negotiation (Steyaert, Ostendorp, & Gaibrois, 2011). Others
have seen the potential of English as a more neutral communica-
tive tool available for global business (Louhiala-Salminen, Charles, &
Kankaanranta, 2005).
The notion of the common corporate language is a particularly
fruitful point of departure in IB as it consists of elements from both
specialized and national language – the two facets of language that
frequently come up against each other in global business (Fredriksson,
Barner-Rasmussen, & Piekkari, 2006). Corporate language is at once an
organizational artifact of how thoughts are formulated as well as how
they are communicated and discussed. It becomes important in regards
to eliciting employee and investor commitment around strategic initia-
tives. Carefully word-smithed statements of strategic intent and corpo-
rate values in annual reports, internal organizational documents and
plasticized pocket-sized value-statement cards are just a few indicators

of this. In addition, more and more companies have begun to put in
place implicit language guidelines for virtual communication including
email, texting, webex and video conferencing in order to avoid misin-
terpretations. Thus, the language used by decision makers both shapes
and bounds what the firm focuses on and how it articulates its strategic
options (Brannen & Doz, 2012). In this special issue, Kuznetsov and
Kuznetsova contribute further to this line of research, focusing on the
nexus of ties between national language, corporate language (which
they term “professional discourse”) and the English language. Their
decade-spanning study shows that a lack of specialized language con-
stitutes a “linguistic hazard” in the context of transformational, post-
communist economies which should be included in risk assessment of
the MNC.
The analysis of language-in-context has produced typologies of idi-
oms used in the MNC that reflect the inner workings of this organiza-
tional form. While Luo and Shenkar (2006) distinguish between parent
and subsidiary functional languages, Marschan-Piekkari, Welch, and
Welch (1999a) refer to parent country, subsidiary and common corpo-
rate languages as mentioned above. Moreover, an internal hierarchy of
languages has been identified which orders and separates the privileged
home country language and the official corporate language from other
less prestigious languages employed in the MNC (Marschan-Piekkari
et al., 1999a).
In addition to its treatment as an organizational-level construct,
language in IB is researched as an individual- and team-level property
in line with the traditions of diversity research (Boxenbaum, 2006).
Focusing on the individual level of analysis, Piekkari (2008) treats
language as a skill and part of an individual’s career capital. Klitmøller
(2013) in turn investigates the individual’s degree of fluency in the
common corporate language of the MNC. At the team level of analysis,
Brannen, Moore, and, Mughan (2013) show how fluency in English as
the corporate language of Tesco plc. and identification with its corpo-
rate culture had differential effects on task performance.
In our current special issue, language takes on a variety of distinct
focuses, which underscore its multifaceted and multilevel nature.
Tenzer, Pudelko and Harzing use language diversity to describe the
distribution of differences among the members of a global team, while
Hinds, Neeley and Crampton take language in teams a step further by
showing how language asymmetries act as a lightning rod which cre-
ates faultlines around power and emotions and generates subgroup
formation. The team level as an intermediate level of analysis reveals

the social character of language and shows how its use is collectively
performed with consequences that reach beyond the individual lan-
guage user. Peltokorpi and Vaara focus on the positive and negative
effects of language-sensitive recruitment around proficiency in the lin-
gua franca on knowledge-sharing, while Janssens and Steyaert explore
variations on such a language strategy including the possibility of a
multilingual franca approach.
In sum, language-sensitive researchers in IB embrace multiple and
diverse facets of their subject, reflecting their disciplinary backgrounds
as well as their underlying philosophical preferences. A researcher who
subscribes to social constructivism views language very differently from
someone who is more oriented toward a representationalist or objective
language paradigm – the former yielding a more emic analysis, the lat-
ter more etic. In this regard, this special issue reflects different research
paradigms and approaches, while drawing them together thematically
around the topic of language. Given the dominance of quantitative
research in IB (Birkinshaw, Brannen, & Tung, 2011), language has his-
torically been researched from an etic perspective, for example, measur-
ing and quantifying language difference in terms of distance (Dow &
Karunaratna, 2006; West & Graham, 2004). These contributions have
advanced our understanding of language influences from a bird’s eye
view of macro-organizational outcomes such as trade flows between
countries. This special issue takes a more contextually grounded emic
approach and strives to provide an “up-close and personal” (Brannen
& Doz, 2010) understanding of the language phenomenon, aiming to
capture in situ how language differences shape the lived experience of
those who work for today’s global organizations.
The development of “language in IB” as a research stream
Early foundations
The field of IB has addressed the role of language(s) since the 1970s.
Research in international marketing and exporting has emphasized
the importance of language considerations when selecting foreign
markets and selling to overseas customers (Crick, 1999; Hagen, 1999;
Holden, 1998; Johanson & Wiedersheim-Paul, 1975; Leonidou, 1995;
MacDonald & Cook, 1998; Mughan, 1988, 1990; Reeves, 1986; Swift,
1991). Johanson and Wiedersheim-Paul (1975) viewed language as
one of the key factors of psychic distance that prevented information
about the target market from reaching organizational decision makers
(see also Dow & Karunaratna, 2006). Mughan (1990) showed that British
exporters suffered from a loss of business because they were not able to
serve their customers in the customer language. These early studies paid
attention to the language spoken in the target market when evaluating
the attractiveness and accessibility of this market. In the field of indus-
trial marketing and purchasing, suppliers’ language skills were seen to
influence their ability to establish trustful relationships with foreign
buyers (Turnbull & Cunningham, 1981; Turnbull & Welham, 1985). In
service marketing such as health services (Betancourt, Green, Carrillo, &
Park, 2005) and tourism (Cohen & Cooper, 1986; Leslie & Russell,
2006; Martin & Davies, 2006), linguistically aligned services have been
regarded as a means to increase foreign market share and create a source
of competitive advantage.
This early work went far in elucidating the critical aspects of language
as an important factor in the external environment of the international-
izing firm. However, the fuller theoretical ramifications of the language
construct in regards to the internal day-to-day functioning of the
global firm had yet to be explored (Holden, 1987). A seminal article by
Marschan, Welch, and Welch (1997) entitled “Language: The forgotten
factor in multinational management” shifted the focus from thinking of
language as a problematic externality to surfacing language issues within
the everyday internal contexts of managing the large MNC. Drawing
explicit attention to the multilingual reality of MNCs, Marschan et al.
(1997) studied subsidiary responses to what they called “language
standardization by headquarters”, that is, the introduction of a lingua
franca such as English as a common corporate language. Since then,
terms such as anglicization, Englishization (Dor, 2004), Englishnization
(Neeley, 2012) and corporate Englishization (Boussebaa et al., 2014) have
been proposed to describe how and why English is imposed on manag-
ers and employees of the MNC. The decision to mandate a lingua franca
such as English is a strong force that shapes organizational processes of
inclusion and exclusion. It tends to privilege certain voices and render
particular bodies of knowledge more valid than others, which cannot
be expressed in English (Welch & Welch, 2008). This research has led to
a more circumspect position toward the role of languages in IB and its
influence on global organizational realities.
Recent developments
The development of the language stream in IB has taken three formative
turns: (1) the decoupling of language from culture, (2) the shift of level
of analysis from that of the individual to the organization and (3) the
joining together of dispersed studies about language(s) into a recogniza-

ble, legitimate field of study in the late 1990s and early years of the mil-
lennium. While researchers in other fields such as linguistics (Räisänen,
2013) and sociology (SanAntonio, 1987) have also taken up particular
discipline-specific interests in language, what makes the development
of this research stream among IB scholars distinct is that it stems from
a dual engagement with both the broader business context and the
different language environments in which IB activities take place. This
in-depth contextual understanding of languages and business provides
IB scholars with the resource to be responsive to the new domain.
Let us start from the first formative turn. In IB research, cross-
cultural complexity has typically been addressed through a culture lens
(Brannen & Doz, 2010; Hofstede, 1984) where the language construct
has been tightly linked to that of national culture (Hofstede, 1986;
Kara & Peterson, 2012). Similarly, scholars in other disciplines have
made language central to the way in which nation states are governed
and construct their identity (Anderson, 2006; Gellner, 2008). However,
as Stahl, Maznevski, Voigt, and Jonsen (2010) showed in their meta-
analysis of cultural diversity in teams, there is an important distinction
between language-based similarity and similarity originating from a
shared national culture (see, also Mäkelä, Kalla, & Piekkari, 2007). And,
as recent work on people with mixed cultural origins has pointed out,
bicultural and multicultural does not automatically mean bilingual and
multilingual (Brannen & Thomas, 2010). Thus, while language is clearly
related to culture as a concept, the first important step in developing
the stream of language in IB has been to disassociate it and study it in
its own right (Klitmøller & Lauring, 2013).
The second development relates to the shift from viewing language
exclusively as a skill that resides in the individual to considering it as a
constitutive, collective force contained in the MNC. The performative
potential of languages to unite, disrupt, form and disable flows of knowl-
edge between different parts and units of the networked MNC began
to capture scholarly attention, and IB researchers started to theorize
about language as an organizational-level concept (Barner-Rasmussen,
2003; Brannen & Doz, 2012; Fredriksson et al., 2006; Marschan-Piekkari
et al., 1999a). More specifically, IB researchers sought to capture organi-
zational dynamics in multilingual headquarters – subsidiary and inter-
subsidiary relationships as well as inter-organizational settings such as
international joint ventures (Brannen & Salk, 2000) and mergers and
acquisitions (Brannen & Peterson, 2009; Piekkari, Vaara, Tienari, &
Säntti, 2005; Vaara et al., 2005). Importantly, the consequences of
language for individual and organizational identities, for constellations

of MNC relationships and the exercise of power were important themes
that arose from more recent studies (Vaara et al., 2005).
In the past decade, conceptual contributions also began to emerge
which drew heavily on semiotics and translation studies (Brannen,
2004; Janssens, Lambert, & Steyaert, 2004). Critical contributions used
the notion of “linguistic imperialism” to understand how language
can be a hegemonic force shaping bodies of knowledge impacting on
(management) knowledge workers themselves (Tietze & Dick, 2013).
Thematically, the relationship between the English language as a
dominant language over “other” languages has been researched, raising
issues of dominance and the hierarchizing of relationships by language
ability (Barner-Rasmussen & Aarnio, 2011; Heikkilä & Smale, 2011;
Steyaert et al., 2011). Most recently, the field has begun to employ cul-
tural and political models of translation to understand the transforma-
tion of meaning in global contexts (Janssens et al., 2004; Logemann &
Piekkari, forthcoming; Piekkari, Welch, Welch, Peltonen, & Vesa, 2013).
Since the late 1990s, the stream of language-sensitive approaches
in IB has been growing with increasing alacrity. This growth has been
spurred by dedicated conference streams (Academy of International
Business, 2013; Academy of International Business, 2014; Critical
Management Studies, 2007; European Group of Organization Studies,
2010; European Group of Organization Studies, 2013) and special issues
of journals (International Studies of Management & Organization, 2005;
Journal of World Business, 2011) which have raised the field’s awareness
about the existence and influence of languages in internationally oper-
ating companies.
Set against this background, the third development was to join the
scattered studies undertaken by individual researchers into a recogniz-
able body of language-sensitive perspectives on the operations of the
MNC. Scholars on both sides of the Atlantic had investigated language
from a variety of perspectives for many years. Researchers based in
northern Europe (Andersen & Rasmussen, 2004; Barner-Rasmussen,
2003; Marschan et al., 1997; Marschan-Piekkari et al., 1999a, 1999b),
the United Kingdom (Holden, 2002, 2008; Feely, 2003) and Australia
(Feely & Harzing, 2003; Harzing & Feely, 2008; Maclean, 2006; Welch
et al., 2005; Welch & Welch, 2008) started to pull the momentum
together into a distinct stream of research in IB. In the United States,
Brannen (2004) coined the term “semantic fit” and brought it to bear
on the transfer of assets in a multinational context; Luo and Shenkar
(2006) put forth the notion of the MNC as a “multilingual community”
whose members used a range of languages to interact with each other.

Interestingly, the relative elevation of language as a topic of strategic
importance was anticipated by Maclean (2006: 1379), who saw the shift
in the status of languages “from being both too complex and too simple
an issue” to becoming “a question of strategic importance worthy of
attention by executives and researchers alike”. Yet, as in other streams
of research, the work undertaken by US-based researchers, on the one
hand, and scholars in Australia and Europe, on the other, largely devel-
oped in isolation with limited dialog between the two communities
at the time. In this regard, the present special issue further assists in
consolidating the growing body of research that has been conducted
in various geographical locations and different language environments.
Thus, taken together, the above three developments form the founda-
tion of a stream of research which today is known as “language in IB”.
Current issues and suggested protocols

Today, this stream of research has established itself as a legitimate and
distinct field of inquiry. First, as a community, it has developed a special-
ist vocabulary which helps to define the boundaries of the new domain
within IB that is distinct from research on related constructs such as
culture or communication. For example, instead of focusing on expatri-
ates as cultural boundary spanners, language-sensitive researchers have
begun to talk about them as “language nodes” (Marschan-Piekkari et al.,
1999b). Alongside notions of social capital, language-sensitive research-
ers are surfacing the concept of “language capital” (Welch & Welch,
2008), and next to cultural distance, language-sensitive researchers have
begun to theorize and measure “language distance” (West & Graham,
2004). Further protocols in regards to nomenclature would include
researchers paying careful attention to the terms they use to describe
in more detail the specific aspects of language they are studying. This
could involve distinguishing between national language, corporate lan-
guage, lingua franca and technical language, for example.
Second, particular methodological challenges associated with multi-
lingual research projects have been articulated. For most IB researchers,
fieldwork is not a monolingual experience. Rather, IB research is char-
acterized by linguistic plurality that necessitates ongoing interpretation
and translation (Xian, 2008). IB scholars typically collect and analyze
data in one or several languages and then write up their findings in yet
another language, typically English for publication in English language
journals (Welch & Piekkari, 2006). Survey instruments are constructed
in multiple languages, and considerable attention is paid to equivalence
of meaning and back translation of research instruments (Green &

White, 1976; Mullen, 1995; Peng, Peterson, & Shyi, 1991; Usunier,
2011). Language can also act as a type of psychological priming that
then affects survey responses (Harzing, 2005). The contribution by
Chidlow, Plakoyiannaki, & Welch (2014) provides a good example of
how this work can be taken forward through the development of greater
sensitivity to the challenges associated with equivalence and furthering
the use of context-sensitive approaches to translation in IB research and
scholarship.
Third, related to the above, in IB scholarship, language is rarely
tackled systematically as a part of the entire research process. Rather, it
is often reduced to a procedural necessity around translating research
instruments, interviews or the final research paper itself. In other words,
translation is treated as a technicality that accounts for the mechanical
process of replacing empirical data expressed in a non-English language
with their equivalents in English. Yet both theoretical (Janssens et al.,
2004; Steyaert & Janssens, 2013) and empirical accounts (Xian, 2008)
point to the transformative power of translation. The act of translat-
ing data – whether quantitative or qualitative – is subject to language-
related decisions, which in turn are influenced by cultural, political
and institutional context. The resultant text may therefore be imbued
with unintended, and in many cases, equivocal or erroneous meaning
(Brannen, 2004). These acts of transformation are rarely made visible
and discussed in published work. The contribution by Chidlow et al.
(2014) in this issue provides an intellectual trajectory to capture the
transformation of data beyond assumptions of equivalence.
Fourth, there are no established protocols for writing up and publish-
ing research projects in English that were originally conceived within
non-English research traditions and are based on foreign language data.
Some reflective accounts exist in reports on international collabora-
tive research, providing evidence that language and translation matter
(Thomas, Tienari, Davies, & Meriläinen, 2009). They include attending
to the multiple languages that researchers bring to bear on the research
process from data gathering to interpretation. Ignoring the interplay
between languages during the research process may lead to what some
have referred to as premature “closure of meaning” (Meriläinen, Tienari,
Thomas, & Davies, 2008: 587), or the silencing of non-English speakers’
perspectives and experiences. Going forward, protocols might include a
systematic account of how deeply and intensively translators or inter-
preters have been involved at different stages of the research process,
a discussion of problems associated with translating or interpreting
particular local expressions or phrases into English and reproduction of

some key data in the original local language in the research account. IB
journals could be at the forefront in institutionalizing such protocols as
best practice.
Looking ahead
The alignment of vocabularies and methodological approaches has

shaped the identity of this new community of IB researchers and encour-
aged its members to engage in a dialog with other linguistically infused
fields.1 In management scholarship, we currently see two distinct
communities that have similarly focused on language issues – organi-
zation theorists and IB researchers (Janssens et al., 2004). However, to
date these two communities exist in parallel. Organization theorists
have embraced discourse, rhetoric and narrative analysis and explored
themes such as “strategy and strategy making”, formation of identity
(e.g., gender, postcolonial, professional) as well as organizational and
institutional change (Alvesson & Kärreman, 2000; Knights & Morgan,
1991; Phillips, Lawrence, & Hardy, 2004). Despite the undisputable
merits of these efforts, from the viewpoint of IB scholarship, a monolin-
gual worldview seems to underlie them, as if day-to-day organizational
life would be conducted in one language only – English. Steyaert and
Janssens (2013) point to the paradox of monolingual scholarship in a
multilingual world. For an increasing number of IB researchers, global
realities are indeed constructed through a multitude of languages
(Piekkari, Welch, & Welch, 2014; Tietze, 2010). This will be increasingly
evidenced with the growing importance of BRIC economies and increas-
ing importance of their languages Spanish, Chinese and Russian.
There are several contributions from our call for papers on language
in IB that unite these hitherto separate research communities of organi-
zational theorists and IB researchers and take the first steps toward
developing a shared research agenda. Boussebaa et al. apply a postcolo-
nial perspective from organization theory to understand relationships
of power and hegemony in global services. Janssens and Steyaert (2014)
in this issue develop the notion of the lingua franca and add more differ-
entiation to its multifaceted manifestations including the concept of a
multilingual franca. Santacreu-Vasut, Shenkar, and, Shoham (2014) pro-
vide an example of how gender as a major research theme in organiza-
tion theory is highly relevant for the domain of language and languages
in IB around comparing the career trajectories of women in countries
with languages that do or do not utilize gender-marking.
Another example of shared research interests is encapsulated by the

MNC. There is an on-going dialog, perhaps even a debate, between
IB scholars and organizational theorists about whether MNCs differ
from domestically operating organizations in degree only or also in
kind (Ghoshal & Westney, 1993; Roth & Kostova, 2003). The argument
concerning the degree of difference between these two types of firms
is relatively easy to make. The sheer number of countries that an MNC
operates in adds to the complexity of the management task. However,
the question of whether the MNC differs in kind is harder to answer.
Roth and Kostova (2003: 895) explicitly mention language as a trait
that renders the MNC conceptually distinct and makes it an attractive
research site for theory development.
As we have discussed, all firms – domestic or otherwise, monolin-
gual or otherwise – operate across diverse language contexts. However,
firms in bilingual or multilingual societies such as Canada, Finland or
Switzerland often define their identity through their linguistic nature2 –
either through their bilingualism or multilingualism. Curiously, the
MNC does not. Some US firms, in which the official corporate lan-
guage and the home country language coincide, impose a monolingual
English-only policy marking their identity (SanAntonio, 1987), and
they are met with resistance as a large number of their employees based
in non-English-speaking countries do not subscribe to what they see as
an imposed identity. In other instances, English as the business lingua
franca (Louhiala-Salminen et al., 2005) together with the corporate or
technical language (Brannen & Doz, 2012) become unifying codes for
the MNC that help navigate the complex language landscape of their
geographically dispersed global operations. Thus, in degree, MNCs dif-
fer from domestic firms in terms of the diversity of language frontiers
they have to cross and manage on a daily basis. In kind, they differ in
terms of the nature and influence of the language resources that MNCs
can draw on in their day-to-day operations.
Taking further stock of the research to date on language in MNCs, IB
scholars have rarely explored the impact of language on organization-
based performance directly. Instead, they have made explicit the indirect
link between language diversity, management processes and MNC per-
formance. In their conceptual article, Luo and Shenkar (2006: 324) write
that “[g]lobal language design affects corporate performance via several
channels” such as communication, coordination, knowledge sharing
and value creation. Previous empirical findings show that the adop-
tion of a common corporate language changes headquarters–subsidiary
relationships (Marschan-Piekkari et al., 1999a), affects cohesion within
the MNC (Barner-Rasmussen & Björkman, 2007) and affects the ability
of the MNC to exercise control over its foreign subsidiaries located in
different language environments (Björkman & Piekkari, 2009). Unlike
diversity research, where the focus of the extant research has been on
the diversity–performance link (Stahl et al., 2010), IB researchers have
primarily devoted their attention to the “intervening variables” and
processes between language as an input and performance as an output.
The challenge of capturing language implications for individual-
based or organizational-based performance offers the opportunity to
engage in interdisciplinary blending and scholarship. Experimental
studies in cross-cultural psychology, for example, suggest that cognitive
processes such as judgment and decision making are affected when an
individual uses a foreign language that she/he has not mastered well
(Keysar, Hayakawa, & An, 2012; Takano & Noda, 1993). In such situa-
tions an individual’s ability to process thoughts in a logical, sequential
manner may temporarily decline (Takano & Noda, 1993), and decision
biases are reduced (Keysar et al., 2012). Keysar et al. (2012) argue that
decision makers are able to emotionally distance themselves from the
issue at hand when they use a foreign language and, therefore, the effect
of framing manipulation disappears. A study on the decision making of
Dutch students, for example, demonstrates that when students make
decisions “in English” they also identify with aspects of Anglophone
culture such as masculinity, performance and assertiveness (Akkermans,
Harzing, & Van Witteloostuijn, 2010).
Extrapolating the findings and logics of these papers, there are poten-
tial implications for many decision-making bodies in MNCs. For exam-
ple, corporate boards are “talking” in one language (frequently English)
but “thinking” in another, which may well affect how problems get
framed in the first instance and, consequently, how decisions are made.
Many Swedish, Norwegian, Finnish and Danish MNCs have changed
the working language of their corporate boards from a national Nordic
language to English after the entry of the first foreign board member.
There is evidence of what Piekkari, Oxelheim and, Randøy (2013) call
“the silent boards” in which the introduction of English impoverishes
the quality of discussions in board meetings. One can speculate how the
language change, at least initially, influences board effectiveness and
company performance.
Despite these efforts and contributions, the multiple forms, func-
tions and features of language in MNCs have so far not been fully
appreciated or researched. This special issue goes far in extending the
existing body of research on language in providing papers that advance
the state of the art with methodological innovations, new theoretical

ideas and research questions. While some of the articles make novel
contributions through interdisciplinary pollination, others take up
well-established IB phenomena and re-examine current IB models and
frameworks through a language lens, and others offer a re-engagement
of IB scholars with methodological issues involving language that goes
beyond translation and back-translation of research instruments. In
addition to educating the understanding of language in IB, we hope
that our special issue will catalyze a more reflexive reporting and
discussion of these methodological issues and open new horizons for
theorizing in future IB research.
Overview of the special issue
Our call for papers generated 78 submissions. This, in and of itself, is a

testament to the growing interest in the multifaceted conceptualization
of language in the field of IB. Out of these submissions a total of 12
articles were accepted for publication in JIBS by the time we had to go
to print. Due to page limit constraints, only six out of these accepted
papers are included herein, and the remaining articles are slated for
publication in forthcoming issues (and at the time of going to press
five of these are already available on the Advance Online Publication
section of the JIBS website). In total, these 12 papers cover a wide range
of aspects of language in IB including level of analysis, focal points and
theoretical contribution that go far in illuminating the multifaceted
role of language that our special issue aims to bring to light and set as
the course for a new research domain in IB.
The first two papers focus on language issues as they impact global
teams. In “The impact of language barriers on trust formation in
multinational teams”, Helene Tenzer, Markus Pudelko and Anne-Wil
Harzing argue that language barriers produce cognitive and emotional
reactions among team members, affecting team members’ perceptions
of trustworthiness and intentions to trust. Their work draws on 90
interviews with team members, team leaders and senior managers in
15 multinational teams in three German automotive companies. Based
on this comparative multiple case study, Tenzer et al. propose language
as a distinct dimension of diversity and distinguish between deep-
level and surface-level diversity offering propositions and a theoretical
model for future testing. They further delineate trust formation as a key
team process that has important implications for team efficiency and
performance.
In “Language as a lightning rod: Power contests, emotion regulation,

and subgroup dynamics in global teams” using qualitative methodol-
ogy, Pamela Hinds, Tsedal Neeley and Catherine Cramton induce a
model that captures how asymmetries in language fluency contribute
to an “us vs them” dynamic that often transpires in global teams. Their
findings extend IB theory on subgroup dynamics in global teams by
adding language as a potential faultline, showing how power struggles
activate such faultiness and are in turn reinforced. They also document
the emotion regulation processes triggered by subgrouping and enacted
through language-related choices and behaviors.
In the third paper, “Translation in cross-language international busi-
ness research: Beyond equivalence”, Agnieszka Chidlow, Emmanuella
Plakoyiannaki and Catherine Welch analyze cross-language studies
published in four key IB journals (International Business Review, Journal
of International Business Studies, Journal of World Business, Management
International Review). The authors demonstrate that the overall approach
taken by IB scholars is based on a technicist view of translation, which
assumes that equivalence of meaning between languages exists and
that it can be accounted for in research studies by following cursory
protocols of back-translation. In contrast, the authors advocate a turn
to contextualized translation theories, viz. skopos theory and cultural
politics, to inform future cross-language IB research as based on explicit
acknowledgment and treatment of translation as social practice. Thus,
translation itself can be treated as data and as a source of contextual
insights and conceptual understanding.
In “Building professional discourse in emerging markets: Language,
context and the challenge of sensemaking”, Andrei Kuznetsov and Olga
Kuznetsova focus on the notion of professional discourse among busi-
ness and management practitioners and academics and investigates the
consequences if such professional discourse is lacking or underdevel-
oped. Located in several former post-communist Soviet economies, the
retrospective-observational study employs a sense-making framework
and shows that a lack of a professional language leads to “communica-
tive disengagement”, which increases the “liability of foreignness” – the
additional cost or risk a firm operating in non-domestic market incurs.
The authors propose that the lack of professional discourse constitutes
a linguistic hazard for a foreign firm and that it should be factored into
business strategies of MNCs. The use of English as lingua franca does not
fully resolve the lack of professional discourse, as it cannot compensate
for the constrained terminological capacity of the native professional
language.
In “Knowledge transfer in multinational corporations: Productive

and counterproductive effects of language-sensitive recruitment”, Vesa
Peltokorpi and Eero Vaara focus on the productive and counterproduc-
tive effects of language-sensitive recruitment on knowledge transfer
in MNCs. To examine these effects, the authors used a mixed method
triangulation, first deploying qualitative case studies of 101 foreign
subsidiaries to inductively develop a model on the communication
competence, network, identity and power-related effects of language-
sensitive recruitment. Then they utilized survey data to validate the
results of the qualitative analysis. The findings show an inverted
U-shaped relationship between language-sensitive recruiting and
knowledge transfer.
In “Re-Considering Language Within A Cosmopolitan Understanding:
Towards A Multilingual Franca Approach In International Business
Studies”, Maddy Janssens and Chris Steyaert apply sociolinguistics and
cosmopolitan theory to conceive language as a social practice and posit
globalization as the entanglement between universality and particu-
larity in linguistic traditions. Combining these linguistic and global
assumptions, the authors offer a nuanced understanding of the various
approaches to lingua franca in MNCs global work settings: monological
lingua franca, monological multilingualism, and multilingual franca. As
the latter approach is unexplored, the authors contribute strongly to the
IB field offering a novel option to the challenge of managing languages
in an international business.
In addition to the six articles included in this issue, the following
forthcoming papers have been accepted at JIBS as a result of our call
for papers on language in IB: “Englishization in offshore call cen-
tres: A postcolonial perspective,” by Mehdi Boussebaa, Sinha Shuchi
and Gabriel Yiannis, “A more expansive perspective on translation
in IB research: Insights from the Russian Handbook of Knowledge
Management”, by Snejina Michailova and Nigel Holden; “Brain drain:
The cognitive neuroscience of foreign language processing in mul-
tinational corporations”, by Stefan Volk, Tine Köhler and Markus
Pudelko; “Linguistic gender marking and its international business
ramifications”, by Estefania Santacreu-Vasut, Oded Shenkar and
Amir Shoham; “Cultural and language skills as resources for bound-
ary spanning within the MNC”, by Wilhelm Barner-Rasmussen, Mats
Ehrnrooth, Alexei Koveshnikov and Kristiina Mäkelä; and “How non-
native English speaking staff are evaluated in linguistically diverse
organizations: A socio-linguistic perspective”, by Marjana Johansson
and Martyna Śliwa.
Acknowledgements
We would like to acknowledge our three anonymous reviewers, and the

EIC, John Cantwell, for their helpful comments on earlier drafts of this
introduction. We also thank Bea Alanko of the Aalto University for help
in formatting and finalizing the manuscript. Final thanks go to Trixie
Brannen for patiently standing by while this Special Issue was put to bed.
Notes
1. Rorty (1992) has termed this phenomenon in which diverse disciplines began
taking up language as a central construct a linguistic turn in the evolution of
theory development in a field of research.
2. We owe this insight to Eleanor Westney (personal communication, 25
October 2013). The linking of language to national identity has been made
in multiple disciplines – cf. noted work by Anderson (2006) in anthropology,
Gellner (2008) in political science and Babha (1990) in literary criticism.
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7
Re-considering Language within
a Cosmopolitan Understanding:
Toward a Multilingual Franca
Approach in International
Business Studies
Maddy Janssens and Chris Steyaert
Introduction
Much of the literature on language in international business (IB) has

sought either to lay out the advantages of a common language or lingua
franca that crosses the linguistic boundaries of a multinational company
(MNC) (Harzing, Köster, & Magner, 2011; Luo & Shenkar, 2006), or to iden-
tify the imperialistic and hegemonic effects of using such lingua franca –
which mostly turns out to be English – on actors in local subsidiaries
(Piekkari, Vaara, Tienari, & Säntti, 2005; Tietze, 2008). In our view,
looking into the relationship between globalization and language(s)
is more complex than simply pointing at the proliferation of English
and the effects of its linguistic imperialism within one global market
place. Actually, there is within every process of globalization simultane-
ously a genuine concern about issues of localization and contextualiza-
tion (Appadurai, 1996; Bauman, 1998). Also, increased mobility has
provided people access to very fragmented and incomplete language
repertoires, often consisting of spoken, vernacular and accented varie-
ties of different languages in which they have differentially developed
literacy skills (Blommaert & Dong, 2010). Such complexities between
Reprinted from Maddy Janssens and Chris Steyaert (2014) “Re-considering Language
within a Cosmopolitan Understanding: Toward a Multilingual Franca Approach in
International Business Studies.” Journal of International Business Studies, Vol. 45, No. 5
(pp. 623–639). With kind permission from Palgrave Macmillan. All rights reserved.
163
164 Maddy Janssens and Chris Steyaert
globalization processes and linguistic repertoires raise the question of

how, until now, studies on language in IB tend to approach the notion
of language itself and how they (often implicitly) think about the rela-
tionship between universality and particularity when studying language
within globalization processes.
The purpose of this paper is therefore to pose questions about the
way research on language in contemporary forms of global organizing
is conducted. We aim to uncover the normative assumptions (Sandberg
& Alvesson, 2011) that guide current language research in IB and, by
doing so, to open up possibilities for an alternative research approach.
Relying on recent thinking in sociolinguistics (Blommaert, 2010; Heller,
2007; Martin-Jones, Blackledge, & Creese, 2012), we first inquire into the
assumption on the conception of language(s) itself. Sociolinguists argue
that the complexities of language in globalization require scholars to think
of languages not as clearly bounded, unified systems but rather as trans-
lingual practices (Pennycook, 2007) in social and political contexts where
speakers mobilize multiple linguistic resources in complex ways to express
voice. Bringing in these conceptual ideas challenges IB scholars to no
longer think of language as a given variable, influencing other phenom-
ena under study, but rather to understand language as a social practice.
Second, we draw attention to assumptions regarding globalization. If
we are to understand language and multilingualism in contemporary
forms of global organizing, we argue it is critical to be explicit about how
universality and especially its relation to particularity are understood in
our era of globalization (Ives, 2010). Relying on cosmopolitan theory, a
rich field that has debated questions of how to live and work together
at times of global connectivity (Beck, 2002; Delanty & Inglis, 2011;
Vertovec & Cohen, 2002), we present three different images (Janssens &
Steyaert, 2012) of the relationship between universality and particularity,
each having its own approach toward language issues in a global context.
The images that we identify are: (1) precedence given to universality,
(2) particularity underscored in reaction to a perceived overemphasis on
universality in the global world discourse and (3) universality and particu-
larity are seen as intertwined. As, in our assessment, studies on language in
IB tend to privilege an understanding of the first two images, we are espe-
cially interested in considering the possibilities of the third one that chal-
lenges the taken-for-granted assumption that the global and local could
be viewed as separate entities. Rather, the third image posits an inherent
inseparability between the global and local, claiming that we can only
understand the global through the local and, simultaneously, that in our
globalized world, there is no local which is not global (Appadurai, 1996).
Re-considering Language within a Cosmopolitan Understanding 165
Explicating the linguistic and global assumptions that derive from

sociolinguistics and cosmopolitan theory, we arrive at three different
research approaches to study language in IB. As the lingua franca and
multilingual approaches characterize most studies (Luo & Shenkar, 2006;
Tietze, 2008), we propose and elaborate a multilingual franca approach
(Makoni & Pennycook, 2012), which is based on the idea that the global
and local in the current global context are entwined, and underlines an
understanding of language that focuses on language use as the mobili-
zation of multiple linguistic resources rather than language as a discrete
entity. To illustrate its potential and uniqueness, this research approach
is then applied to the study of language in global teams. We show how
a multilingual franca approach seeks to understand not so much how
people talk about language but how global team members’ use of lan-
guage is linked to the ongoing productivity of their subjectivity and the
establishment of a “glocal” English or another hybrid, mixed language.
Such an approach also has important practice implications, as setting
up a corporate language policy along this line of thinking allows for
hybridity in language use, thereby disrupting hegemonic language prac-
tices and providing space for social and political change.
Language: social practice rather than discrete entity
To inquire into the assumption of the notion of language itself, we

turn to sociolinguistics where scholars are reflecting and debating on
how to conceptualize language in the changing political and economic
landscape of different regions of the world (Martin-Jones et al., 2012).
Throughout this literature, which remains under-explored in IB, there
is a strong tendency to move away from a conception of language as
a discrete, unified pre-existing entity to a more critical approach that
“privileges language as social practice, speakers as social actors and
boundaries as products of social action” (Heller, 2007: 1). Central in
this shift is the realization that language is a scholarly invention that
has codified local linguistic chaos into phonetic, grammatical and lexi-
cal forms and systems, divorced from the social context in which the
speech is being uttered (Nakata, 2007; Makoni & Pennycook, 2012).
For instance, studies of colonialism have shown how many names
for languages have been invented only when colonialists entered ter-
ritories and attempted to sort out which language(s) was spoken by
whom (Makoni & Pennycook, 2012). For example, Mannheim (1991)
documented that the Quechua people in Peru did not have a concept
for what they were speaking prior to the Spanish invasion.
This process of invention is seen as transforming dialogical and heter-

oglossic material into monological texts (Blommaert, 2008) and its focus
on the formal aspects of a language “fundamentally separates the lan-
guage from the people; it falsely separates the act of speaking from what
is being spoken” (Nakata, 2007: 37). Therefore, the notion of language
as a monolithic system, as Bybee and Hopper (2001: 3) argue, has to
“give way to that of a language as a massive collection of heterogeneous
constructions, each with affinities to different contexts and in constant
structural adaptation to usage”. The critical issue here is to understand
the process through which people use language, which is no longer con-
sidered a discrete, preformed and independent object. A simple, but very
recognizable example that illustrates this fundamental shift well is the
re-interpretation that the act of children learning to speak is not about
teaching language or verbal behavior as such, but rather about teaching
appropriate social behavior during interactions (Schiefflien, 1990).
With this focus on language use, the emphasis is no longer on the study
of the code of language but shifts to how speakers use a set of linguistic
resources. The notion of language as a fixed basis of analysis becomes one
of dubious validity. Rather, practices and context make the social ground-
ing of human interaction central. Or, as Makoni and Pennycook (2012:
441) call it, the difference between language as a code vs a social activity
is that of a “language-centered multilingualism as opposed to a human-
centered multilingualism”. Languages must be “dis-invented” (Makoni &
Pennycook, 2012), so that one comes to understand how people mobi-
lize diverse linguistic resources to speak. Or, as Heller (2007: 2) explains,
language figures as “a set of resources which circulate in unequal ways
in social networks and discursive spaces, and whose meaning and value
are socially constructed within the constraints of social organizational
processes, under specific historical conditions”. Focusing on multilingual
speakers – note that most people in the world are bi/multilingual (Makoni
& Pennycook, 2012) – Garcia (2009) claims that there are no clear-cut
boundaries between the “languages” that these people draw on when they
communicate with one another. To move away from the focus on the lan-
guage itself, he therefore proposes the term “translanguaging”, referring
to the multiple discursive practices in which these speakers engage as they
draw on the resources within their communicative repertoires.
Different language assumptions within three different

cosmopolitan understandings
If we are to engage with new ways of studying language(s) in contem-

porary forms of global organizing, we argue that it is equally important
to explicate the assumptions about globalization and to link different

assumptions about the universality – particularity relationship with the
ways of thinking about language as distinguished by sociolinguistics.
We turn here to cosmopolitan theory, which deals explicitly with issues
of globalization and offers a framework that scholars from different
disciplines have interpreted as a new ethos, suitable for twenty-first
century global life (Featherstone, 2002). We distinguish three different
ways of how universality is understood – especially how particularity
is recognized in relation to universality – and discuss how language is
thought of within each cosmopolitan image.
One lingua franca within one universal community

Cosmopolitanism as world citizenship over local affiliation
In cosmopolitan thinking, the most prominent way of conceiving
the relationship between universality and particularity is that of giv-
ing precedence to universality. For many scholars, the whole idea of
cosmopolitanism precisely resides in the idea to overcome parochial,
local views and interests and to take a shared normative-philosophical
commitment to the primacy of world citizenship over all national,
religious, cultural, ethnic and other parochial affiliations. This view
is mostly seen as originating in ancient Greece. “Cosmopolitan” is
derived from the Greek word kosmopolites and literally means “citizen
of the world”. It was expressed by Diogenes the Cynic, the first person
to declare himself a “citizen of the world”, a rebel against the city-
state system. Opposing to people defining themselves by their local
belongingness, he defined himself as a “kosmopolites”, signifying a
more universal definition of the human being (Nussbaum, 2010). This
idea was later developed by the Stoics and Kant, for whom locality
is seen as constraining humans and their abilities to understand the
boundaries of certain rules, convictions and predispositions (Held,
2002; Nussbaum, 2010).
In our era of global connectivity, this orientation toward world
citizenship with its emphasis on universality came to the foreground
through the much-discussed essay on patriotism and cosmopolitanism
by Nussbaum (1994). Nussbaum’s cosmopolitan idea urges us all to be
citizens of the world, creating a worldwide community of humanity that
should be the source of moral obligations and that eliminates the “acci-
dent of birth” or the undoing of the original local conditioning. It refers
to a philosophy that emphasizes inclusive humanitarian aspirations and
commitment to common values with an openness toward others whose
origin is non-local (Nussbaum, 2010; Vertovec and Cohen, 2002).
A similar emphasis on universality is found in thinking about cos-

mopolitical democracy where the discussion is focused on the creation
of institutions that permit a “cosmopolitan right” or the possibility of
people to have a voice in global affairs, irrespective of their home com-
munity (Held, 2002). Notions of world polity (Held, 1995) or cosmo-
politan democracy (Archibugi, 1995) have revived the Kantian notion
of a cosmopolitan world order of republic states and taken globalization
as the basis for a new conception of a transnational democracy beyond
the nation-state. The argument here is that the international nature of
problems like environmental crises, economic instability or crime and
terrorism are beyond the capacity of individual states to control. As
the state system is no longer able to meet the increasing demands of
growing global interdependence, democratic activity can no longer be
restricted to nation-states, giving responsibilities to many stakeholders,
not least to multinational organizations.
One lingua franca as the communication vehicle in a cosmopolitan world

Within this understanding of cosmopolitanism as one universal com-
munity to which individuals can connect and in which they engage in
political activities, the question of how to speak has remained mostly
implicit with scholars presupposing a single shared linguistic medium
of public communication (Fraser, 2007; Ives, 2010). The theme in this
understanding of cosmopolitanism is that the world needs a common
language, which could be filled by any language, but pragmatically
English is able to fulfill this need (Ives, 2006). This perspective implic-
itly conceives of language as most fundamentally a neutral vehicle for
conveying ideas.
Some authors do reflect on language issues, but then do not provide
any details of how communication would need to occur to permit “cos-
mopolitan democracy” (Ives, 2010). For example, Held (1998) notes
how English has spread as the dominant language of elite culture in
business, computing, law, science and politics but, in advocating the
institutional arrangements that advance democracy at the global level,
he does not address the problem of elitism and the way to facilitate
the ability of non-elites to participate. Also Habermas (1999) rarely
addressed the issue of what specific language or languages should be
used in a “public sphere”. Reflecting over an EU constitution, he writes:
“Given the political will, there is no a priori reason it cannot create the
politically necessary communicative context once the constitutional
basis for such a context has been laid down. Even the requirement of a
common language – English as a second first language – ought not to be
an insurmountable obstacle given the existing level of formal school-

ing” (Habermas, 1999: 161).
The most explicit discussion on language and cosmopolitanism is
presented by Archibugi, who places “the language problem” at the core
of the project of cosmopolitan democracy not only because “the variety
of languages emerges as a major practical hurdle” but also for the more
profound political reason that “language is just the most evident side of
mutual understanding” (Archibugi, 2005: 546). As his cosmopolitanism
hinges upon the understanding that cosmopolitans are less inclined to
consider the advantages and disadvantages of various (national) groups,
establishing a common language provides advantages to all commu-
nities and learning a “common language” is part of global citizens’
democratic participation. Democratic politics, according to Archibugi
(2005: 537), relies on “the willingness of all players to make an effort to
understand each other” and a “willingness to overcome the barriers of
mutual understanding, including linguistic ones”. He further proposes
Esperanto as a metaphor, an artificial new language to make communi-
cation accessible to everyone. Such universal language forms a positive
Utopia and is “the” key to cosmopolitan citizenship.
Overall, a common language is seen here as facilitating the imagi-
nation and construction of a worldwide community. It is a linguistic
medium to emphasize uniformity and cohesion. Or, as Pratt (1987: 50)
wrote: “Our modern linguistics of language, code and competence pos-
its a unified and homogenous social world in which language exists as
a shared patrimony – as a device, precisely, for imagining community”.
Language is constructed as an emblem of people and social groups or
as a discrete, pre-existing system that acts as a communication vehicle.
This focus on a common language, though, is argued to be a position
that can be none other than an advocacy of global English which
implies the sidestepping of the political dynamics of language, omit-
ting consideration of those whose identity is connected to non-English
languages and those with a history of political struggle with English-
speaking communities (Ives, 2010).
Multilingualism reflecting a plurality of cultures

Cosmopolitanism as openness to other cultures
For other scholars, the idea of cosmopolitanism resides in the appre-
ciation of the plurality of cultures made inevitable by globalization
(Featherstone, 2002; Hannerz, 1990), thereby emphasizing the particu-
larity and value of each culture. Within this understanding, cosmo-
politanism represents a cultural orientation to the world, characterized
by open-mindedness to difference and the Other, and an interest in

engaging with people from other cultures. A cosmopolitan person is
in the first place a cultural figure who is uniquely adapted to recognize
the different cultures in a global world. This meaning is represented
by the anthropologist Hannerz (1990: 239), who regards “genuine
cosmopolitanism” as “an orientation, a willingness to engage with the
Other” which in his view entails “an intellectual and aesthetic open-
ness towards divergent cultural experiences, a search for contrasts rather
than uniformity”. A cosmopolitan openness does not negotiate with
the other culture but accepts it as a “package deal”, an attitude which
Hannerz (1996) completely misses in the intercultural training industry,
which he labels a “culture shock prevention industry” where culture is
conceived as something to be managed.
Along with this orientation, cosmopolitanism can be a matter of
competence, marked by “a person’s ability to make one’s way into other
cultures, through listening, looking, intuiting and reflecting” (Hannerz,
1990: 239) as well as by a built-up skill of maneuvering through sys-
tems of meaning. Friedman (1994: 204), too, sees cosmopolitanism as
characterized by a mode of behavior that “in identity terms is betwixt
and between without being liminal. It is shifting, participating in many
worlds, without becoming part of them”. For Waldron (1992), it is such
partial cultural competencies that comprise “the cosmopolitan self”. If
we live the cosmopolitan life, he says, “we draw our allegiances from
here, there and everywhere. Bits of cultures come into our lives from dif-
ferent sources, and there is no guarantee that they will all fit together”
(Waldron, 1992: 788–789).
In relation to the central focus on particularity and otherness,
postcolonial scholarship has problematized the representation of the
Other and emphasized the inherent political dimension by pointing
at the hierarchies that are inscribed when relating with different con-
texts. Cultural analysis often follows a Eurocentric direction, giving
little space to make visible different historical experiences of former
colonized states, ethnic groups or global diasporic communities. It has
pointed out how many constructions of the Other are orientalist (Said,
1978), marking the difference with the West as inferior, and raising the
question whether and how the Other can be known and represented
(Rhodes & Westwood, 2007). Whether drawing upon Said’s analysis or
on other explorations of otherness, such as Bhabha’s (1994) notion of
the completely Other and Spivak’s (1993) idea of absolute alterity, post-
colonialism deconstructs self-other relations as hierarchical. Aiming to
resist global domination and to favor heterogeneity, cosmopolitanism
is here equated with the condition of hybridity and, more generally,

diversity (Delanty & Inglis, 2011).
Monological multilingualism: an inclusive approach to coexisting

linguistic systems
Within this understanding of cosmopolitanism as an openness to the
particularity of the many cultures in a global world, the focus in terms
of language turns to multilingualism, or the parallel coexistence of
linguistic systems. Language is no longer neutral but connected to an
understanding of local worlds and their particular linguistic systems
(Ives, 2010). It is seen as a tool for the construction of locality by pro-
viding cultural meanings and positions of power during interaction
(Blommaert, 2010). This conception is present in writings on linguistic
globalization, in particular on linguistic imperialism and hegemony,
and the preservation of minority languages.
Following the argument that the more globalization, the more the
issue of global English is politicized locally (Sonntag, 2003), scholars
have analyzed the global dominance of English and its corresponding
linguistic practices such as locational masking and accent neutralization.
They are guided by the theoretical framework of linguistic imperialism,
which is posited as a “subtype” of cultural imperialism and defined as the
establishment and continuous reconstitution of structural and cultural
inequalities between English and other languages (Phillipson, 1992). An
example of such analyses, often conducted in the call center industry,
refers to the effectiveness of using the American television show Friends
for learning “American English” conversational practice, in addition to
accent and grammar training, in attempts by American firms to “erase”
the “national identity” of Indian call center workers (Poster, 2007).
The related conceptualization of linguistic hegemony (Sonntag, 2009)
similarly points to the global spread of English but with more emphasis
on the agency of the subalterns circumscribed by hegemony. Cowie’s
(2007) study of Indian call centers, for instance, shows how many of
the accent trainers promoted “educated Indian English” rather than
American English as the prestige variety and linguistic goal for agents to
achieve. The subtext here is that Indian English can be equally authen-
tic, and that it is “between the established Indian elite and the emerging
vernacular elites that competing claims to ownership and originality are
made” (Sonntag, 2005: 17). Such examples show how language is not a
neutral vehicle of communication but rather informs the dynamics and
relations between different cultural groups, not necessarily only between
the dominant and minority group but also among minority groups.
Having a different focus, but also touching upon the connection

between language and local cultures within centralizing nation-states,
are studies on the maintenance of minority languages and the language
revitalization movements of the 1960s in Europe and North America.
Studies on multilingualism have examined, for example, language
identities or the vitality of the language of an ethnic group within a
majority society (Extra & Verhoeven, 1999; Gibbons & Ramirez, 2004).
Within this approach, it is emphasized how language is taken up as an
empowering factor as well as a key symbol for group mobilization and
solidarity.
Overall, language is seen here as something that anchors people in a
local context. It is described as belonging to a particular environment
and locked into local meanings and interactional dynamics (Blommaert,
2010). To maintain the rich meanings of multiple codes, the concept of
a lingua franca is abandoned in favor of a multilingualism that aims to
include a range of coexisting linguistic systems, thereby realizing the
crucial role of language for culture. Ironically, though, in challenging
the monolingual order imposed by one dominant language, languages
are also represented as clearly bounded systems, albeit on a smaller
scale (Heller, 2011; Jaffe, 2007). Therefore, this conception of multilin-
gualism still reflects a monological understanding of language as it is
approached as highly ideologized views of coexisting linguistic systems
where the multiplicity of language systems is central to the analysis.
Rather than replacing monolingualism with multilingualism, Makoni
and Pennycook (2012: 439) point out that “both concepts emerge from
the same intellectual context” as both stick to the idea of language as
a discrete, hermetically sealed unit. They therefore label this view to be
monological multilingualism or plural monolingualism.
Multilingual franca within globalized localities

Cosmopolitanism as the entanglement of universality and particularity
A third image within cosmopolitanism conceives the relationship
between universality and particularity as entwined or indistinguishably
related. In contrast to the two previous understandings where either
universality or particularity is privileged, it perceives both as constitu-
tively entangled in everyday, global life. This conception is to be found
in recent critical studies on cosmopolitanism that focus on the everyday
meaning experience of cosmopolitan interdependence. These studies
follow the call of Beck (2004) for the empirical study of a lived cos-
mopolitanism and its complex consequences and positionings, or “the
processes by which the cosmopolitan perspective replaces the national
in people’s everyday lives” (Beck, 2004: 139). Such an understanding

moves away from a normative stance often present in the two previous
images of cosmopolitanism and emphasizes instead “cosmopolitaniza-
tion” or the social process that results in the awareness – whether one
likes it, fears it or hates it – of being part of the world and at the same
time being part of a particular, locally and historically grounded place
or situation (Beck & Sznaider, 2006). To illustrate this understanding,
we will now present two notions that represent the universality and
particularity in the same register. What is particularly valuable about
these notions is their way of challenging and transcending the con-
ventional distinction and of not slipping into a limiting dualism that
treats universality and particularity as distinct (even if interacting)
phenomena.
A first notion is that of “rooted cosmopolitanism” which underscores
the enduring significance of connections to place and culture, even for
the cosmopolitan in mobility. Rather than typifying the cosmopolitan
as the detached, de-situated and disembodied idealization of the global
citizen, this notion recognizes the “inescapabilities and particularities of
places, characters, historical trajectories and fate” (Rabinow, 1996: 56),
putting forward accounts of cosmopolitanism that are geographically
grounded, historically situated and embedded in material everyday
practices. Examples are Ong’s (1999) discussion of flexible citizenship,
which describes a form of Chinese cosmopolitanism, Appiah’s (1998)
description of his father’s distinctively Ghanaian version of cosmopoli-
tanism and Molz’s (2006) empirical study on round-the-world travelers.
In the latter study, Molz (2006) demonstrates the cosmopolitan ability
to simultaneously fit in anywhere and adapt to a series of cultural envi-
ronments. This is achieved, in part, by what these travelers consume
and the way they dress, wear their hair, or accessorize their bodies. The
rooted cosmopolitan appreciates the world as a whole, and yet contin-
ues to be situated in one or more specific cultural, political or social
spheres.
A second notion is that of “cosmopolitan imagination” in which
Delanty (2006) emphasizes the learning process or internal transforma-
tion that takes place as a consequence of world openness. This notion
privileges neither the universal nor the particular; rather, it concerns
processes of self-reflection and self-transformation through moments of
openness when the self or the local comes in contact with the other or the
global. It conceives a relational understanding of a cosmopolitan moment
which “happens” in everyday practices as a creative combination of dif-
ferent forces – the center and periphery, the local and global. An exam-
ple of such cosmopolitan understanding is presented in Regev’s (2007)
discussion of esthetic cosmopolitanism where he argues against the

dichotomous distinction between a “culture of our own” and “cul-
tures of others”. Conversely, he illustrates how contemporary cultural
uniqueness is produced through choosing, selecting and extracting ele-
ments from the plethora of expressive components available at a global
level. It is precisely the interplay between the self and the global other
through which cultural products are constructed, a manifestation of
what Robertson (1995) has called “glocalization”: the (re)construction
of locality in response to and the under influence of globalization.
Multilingual franca as a social practice

Such a conception of globalization changes the way of thinking about
language(s) in global organizations. It moves beyond the notion of
monolingualism, or a common lingua franca, as well as multilingual-
ism, or the parallel existence of different linguistic systems and their
adherent ideologies (Jaworski & Thurlow, 2010). Instead it highlights a
negotiated, situated approach to English as lingua franca and other lan-
guages where speakers use multiple linguistic resources in complex ways
to express voice (Heller, 2007; Higgins, 2009; Makoni & Pennycook,
2012). In this regard, Makoni and Pennycook (2012) propose, in a
manner that may at first seem paradoxical, to envisage a new sense
of monolingualism that has at its heart an understanding of diversity
that goes beyond a monological norm. In particular, these authors view
multilingualism in terms of a lingua franca in which diverse features
are blended together, reflecting each speaker’s personal experiences. In
such lingua franca multilingualism or, in short, in a multilingual franca,
“languages are so deeply intertwined and fused into each other that the
level of fluidity renders it difficult to determine any boundaries that
may indicate that there are different languages involved” (Makoni &
Pennycook, 2012: 447).
This conception of multilingual franca is present in recent writings on
bi- and multilingual studies – often conducted in postcolonial and urban
contexts – that aim to understand how language users manipulate the
multilingual resources they have available to them. Studies on popular
culture in Africa, for example, show how sampling of sounds, genres,
languages and cultures is the norm (Pennycook, 2007). As another
example, language use in parts of South Africa may be interwoven with
kwaito (a version of South African hip-hop). Or, young people, caught up
in the transition of a colonial to a postcolonial situation that included
rapid urbanization, want a way to express this new “ethnicity” which
give rise to new language varieties such as “Sheng”, a Swahili/English
hybrid which gives young people a global urban ethnicity, namely “the
urbanite: sophisticated, street smart, new generation, tough” (Bosire,
2006: 192). As these hybrid languages emerge in urban or metropolitan
neighborhoods and grassroots contexts, this form of multilingualism
is also named urbi- or metrolingualism, featured by a language use
through which people of different and mixed backgrounds use, play
with and negotiate identities through language, challenging ethnic and
language orthodoxies through the possibilities of a new “ethnic cool”
(Maher, 2005).
This linguistic approach means a reconsideration of the relationship
between language and national identity and even a disconnection.
One “language” does not straightforwardly index one subject position;
rather, speakers use linguistic resources in complex ways to perform a
range of subject positions, sometimes simultaneously. It is no longer (if
it ever was) sufficient to view linguistic diversity in terms of “ethnicity”
or country of origin; instead, other factors come into play – differential
immigration statuses, gender, age, race, economic mobility, social
class/caste, locality and sexuality – which result in complex blending,
mixing and reallocation processes, in which the differences between
“languages” are just one factor. Blommaert (2010: 196) argues that “we
need to develop an awareness that it is not necessarily the language you
speak, but how you speak it, when you can speak it, and to whom it
matters. It is a matter of voice, not of language”. For instance, Harissi,
Otsuji, & Pennycook (2012) discuss the language use of a young man,
born in Australia to a mother of Turkish descent and a father of Anglo-
Saxon background, disaffected with his Turkish-Australian identity and
finding more commonalities with Japanese culture. In their analysis of a
conversation with his female Japanese supervisor, these authors examine
how this young man’s fluid language use – mixing English and Japanese,
and using in-group informal Japanese language – attempts to claim a
new form of identification, a fluid way of being through which he is
simultaneously “the same” and “different”: claiming a Japanese identity,
but as an outsider, not showing deference to his supervisor. The authors
reject assumptions about pregiven speakers’ identities and show how
subjectivities are being made in the repeated acts of linguistic doings,
with new possibilities for a Japanese-speaking Turkish Australian.
Overall, language within globalized localities is seen as a social
practice in which speakers blend the multilingual resources they have
available to them. We find here an understanding of linguistic behavior
which is not about code-switching but has more to do with momentary
playing with possibilities, with performing certain subject positions
in the doing. As such, this conception truly moves beyond the mono-
logical norm as found in monolingualism as well as multilingualism.
Assumptions about the national, regional, ethnic, cultural or linguistic
characteristics of particular “groups” of users are set aside (Blommaert,
2010). Rather, language becomes a heterogeneous process of “trans-
languaging” which forms spatial and temporal trajectories across glo-
balized localities. On the basis of the use of vernaculars that leak into
one another, language use is transmodal as it evolves by interweaving
and mixing other resources, styles and intonations.
Language studies in IB and their assumptions
Combining the linguistic and global assumptions as discussed in

sociolinguistics and cosmopolitan theory, we arrive at three different
research approaches to study linguistic performances within global
work settings: monological lingua franca, monological multilingualism and
multilingual franca. The first approach gives precedence to universal-
ity and adopts the idea of an ideal language situation with one lingua
franca. The second approach emphasizes particularity together with
its multiple local languages. Although different in their assumptions
regarding globalization, they are founded on similar linguistic assump-
tions as they both conceive language as a monological, discrete system.
The third approach, in contrast, underlines language as a social practice
within a socio-political context where global and local are seen as insep-
arable. Table 7.1 presents an overview of the three research approaches
and their assumptions regarding the conceptions of language and
globalization processes. Reviewing language studies in IB along these
three research approaches, we notice that the two first approaches char-
acterize most studies, whereas the third one remains unexplored. As, in
our view, the potential of a multilingual franca to understand language
within current globalization processes is high, we envision in the final
section how this research approach would look.
Monological lingua franca: common corporate language and

language barriers in IB
Reviewing research on language in IB, many studies hold a monologi-
cal lingua franca approach, focusing on a common language as a vehicle
to address the barriers of linguistic diversity in a MNC. Indeed, a large
share of the interest in languages in IB has focused on the formation
of often formal language policies which seek to develop a universal
or overall community which individuals can connect to and engage
Table 7.1 Three research approaches to the study of language in international business
Research approaches
Monological lingua franca Monological multilingualism Multilingual franca
Main assumptions
Language Language as discrete, unified, Language as discrete, unified, Language as social practice
pre-existing system pre-existing system
Globalization Universality is given precedence Appreciation for the particularity of Entanglement of universality and
over particularity multiple cultures within the universal particularity
Understanding linguistic performances in global work settings
Conception Global community in which Space where individuals are adapted Site where local practices reflect
of global work individuals connect and engage to recognize the different cultures global embeddedness and where
setting the global cannot be thought of
without the local
Conception of Lingua franca as a unifying code Multiple local languages as multiple Language use or speakers’ bricolage
language codes of multiple linguistic resources
Conception Preference is given to a common Preference to parallel, coexisting Translingual practices as the inten-
of multiple lingua franca as it is the evident linguistic systems and their adherent tional use of multiple language
languages side of mutual understanding ideologies to overcome the danger of varieties for purposeful, multivocal
and the way to overcome lin- linguistic imperialism and hegemony effect
guistic diversity
Conception of Language is a neutral vehicle to Language is connected to cultural Language is negotiated, situated
communication communicate meaning and power position practice to express voice within
socio-political context
Conception Strategic lingua franca policy Inclusive policy of recognizing multi- Emancipatory politics through
of corporate ple local languages allowing mixed language use
language policy
177
in (Tietze, 2008). The adoption of a common corporate language and

its parallel focus on English as lingua franca (Frederiksson, Barner-
Rasmussen, & Piekkari, 2006) are many times seen as a management
tool with the aim to develop a mutual understanding so that MNCs’
global operations can run in an efficient way. Other benefits of language
policies that have been mentioned are learning, reporting and collec-
tive identity (Tietze, 2008). To reach these benefits, MNCs can rely not
only on the choice of a common language but also on other practices,
such as adjusting mode of communication, hiring bilingual employees
and offering language training, which have been identified as part of a
comprehensive language policy (Harzing et al., 2011).
As the adoption of English is taken as unproblematic (Frederiksson
et al., 2006), we find a similar utopian assumption and normative
expectation that language diversity is something which can and should
be “managed” or “organized”, and which is mainly driven by top
management’s decisions and strategic choices (Luo & Shenkar, 2006).
Taking such an instrumental view on language as a neutral vehicle
to communicate (Janssens, Lambert, & Steyaert, 2004), these studies
tend to approach multiple languages as a factor complicating com-
munication processes within MNCs and thereby acting as a barrier or,
as we would add, preventing a universal, imagined community from
occurring. Consequently we can identify a similar discourse to that in
the cosmopolitan literature that speaks of language issues in terms of
“barriers”. For instance, Luo and Shenkar (2006: 321) approach MNCs
as consisting of “diverse and geographically dispersed subunits, which
encounter language barriers when communicating with their local busi-
ness community and within their global network” and Harzing et al.
(2011: 279) argue how “language is an important barrier, slowing down
and increasing the cost of decision-making”. Furthermore, language dif-
ferences are seen as providing a distortion in the ways knowledge can
be passed on (usually called “transfer”), suggesting that language policy
aims “to surmount the language barrier and ensure that knowledge is
seamlessly transferred across multiple language environments” (Welch,
Welch, & Piekkari, 2005: 23).
However, this belief in the power of formal language policies is some-
times in conflict with studies’ empirical results, which scholars then tend
to counter by emphasizing the need for a strategic language approach.
As an example, one of the earlier empirical studies (Marschan-Piekkari,
Welch, & Welch, 1999b) started from MNCs’ practice of language
standardization and found how in two Finnish MNCs this language
choice triggered a wide range of continuing language problems such as
communication, staffing and training-related challenges. Despite the

acknowledgment of the authors that some of these challenges were a
consequence of the common language itself, which seems to cause more
problems than solve them, the belief in a common language to address
communication problems mainly guided the authors’ recommendation
to ensure language a more strategic position so that language needs and
policies could be coordinated and overseen, emphasizing the assump-
tion that a lingua franca can be considered as a discrete and unified
pre-existing system. This emphasis on the strategic nature of language
to reach a universal community is similarly found in Luo and Shenkar’s
(2006) theoretical model, in which they argue the need to align lan-
guage systems with organizational strategy and dynamics as a way to
improve MNC communication, coordination and knowledge-sharing.
In conclusion, we notice how language research in IB reflects to a
large extent the main idea of a monological lingua franca approach.
As researchers subscribe to the belief in a lingua franca to form a uni-
versal community of mutual understanding, they take the concept of
language for granted as a pre-existing system and conceive linguistic
performances within global work settings in a universalistic way.
Monological multilingualism: cultural and political reactions

against linguistic imperialism in IB
The second research approach, monological multilingualism, which
emphasizes particularity and coexisting multiple languages, is very
much reflected in studies on languages in IB that favor a language
contextualization approach. In contrast to language standardization,
contextualization suggests that language use is very much context
dependent and therefore difficult if not impossible to dictate by general
policies (Piekkari & Tietze, 2011). This conceptual change from language
standardization to contextualization is partially instigated by contextual
observations that many times MNCs do not seem to have a formalized
language policy or opt for an intentionally emergent approach as docu-
mented in the study by Frederiksson et al. (2006). Or, when a formally
adapted language choice is present, it is often complemented by more
complex language practices and performances allowing for a parallel use
of local languages so that “introducing a common corporate language
will not render the firm monolingual ... nor does it make it shared
throughout the organization” (Frederiksson et al., 2006: 409, 407).
Underlying these descriptions, we notice an understanding of MNCs as
spaces where individuals and groups are able to adapt to and recognize
the differences among cultures by adopting and using multiple codes.
What further has instigated a focus on contextualization are inter-

view-based case studies which have clearly demonstrated that language
standardization sets several, sometimes very severe, reactions in motion
which are both cultural and political in nature. The cultural considera-
tions against a common lingua franca mainly rely on the argument that
language is key to understanding foreign cultures ( Janssens et al., 2004)
and that through the process of recontextualization, language practices
take on new meanings in distinct cultural contexts as language is only
the signifier and not the signified (Brannen, 2004). Efforts to manage
or steer language and communication flows through the prescription
of a designated company language can therefore be seen as a simplistic
step in dealing with language diversity (Welch et al., 2005). It is sim-
plistic since it does not acknowledge that practicing English (or another
lingua franca) does not automatically bring along a shared framework of
understanding; there always remains a variation of cultural frameworks
through which language is understood. For instance, Henderson Kassis’
(2005) study on multicultural teams shows how team members using
English as the working language experience miscommunication because
they are under the false impression that they are sharing the same con-
text, further effecting socialization and trust building within the team.
Or, Peltokorpi and Vaara (2012) show how language policies are some-
thing that people in subsidiaries make sense of and enact through vari-
ous practices. Numerous firm-specific factors, social interactions and
individuals’ competences and social position together shape the web of
practices that forms the language praxis in subsidiaries.
Power and politics are also important reasons why the adoption of a
common language is not the integrative measure that companies hope
to achieve. A formal standardized language policy may bring along
disintegrative patterns of communication and relations as it neglects
that the import of English as a common language brings along certain
control effects and power imbalances ( Janssens et al., 2004; Piekkari &
Zander, 2005). Several interesting studies on international merg-
ers and acquisitions (Welch et al., 2005; Piekkari et al., 2005; Vaara,
Tienari, Piekkari, & Säntti, 2005) have shown the political play and the
colonial aspects of power associated with language issues. They have
documented how the common corporate language decision raises ques-
tions and emotions about national dominance, discussing the issue of
power in terms of employees’ lack of fluency in the lingua franca, social
exclusion of local staff and the isolation of entire groups of subsidiar-
ies. Neeley’s (2013) study on status loss of nonnative English-speaking
employees further confirms the crucial impact of language skills on
intrapersonal and interpersonal dynamics in a global organization with

English as lingua franca. In a related vein, other scholars have pointed
to the emergence of a hierarchy of languages. Marschan-Piekkari et al.
(1999a), for example, showed how language distance between head-
quarters reveals a hierarchy of languages, imposing its own structure
on communication flows and personal networks. Such emphasis on
(non)recognition of local languages then further implies that people
should have the possibility to speak and to invest in learning multiple
local languages, as this respects the premise that language is connected
to the ongoing negotiation of meaning.
In summary, much IB research with its focus on contextualization
closely adopts the assumptions of monological multilingualism by
emphasizing its appreciation for the particularity of multiple cultures
within the universal. Researchers favor a concept of multilingualism
that shows a preference for parallel, coexisting linguistic systems and
their adherent ideologies. Rather than to invest in a common lingua
franca as ideal of equality, this second approach sees one lingua franca
as a danger of linguistic imperialism and hegemony and poses that a
democratic, inclusive approach can only be adopted when everyone
invests in learning to speak other languages and respects the rights of
minority languages. However, while scholars tend to view this as an
alternative to lingua franca, they still conceptualize multilingualism in
a monological way, approaching each language as a pre-existing entity.
Envisioning a multilingual franca approach to

the study of language in IB
To show the potential and uniqueness of a multilingual franca approach,

we now envision how this approach toward studying language in con-
temporary forms of global organizing would look. We first present the
main characteristics of a multilingual franca approach, together with its
methodological and practice implications. We then apply the research
approach to one particular setting of globalized localities: multicultural
global teams.
Conceiving a multilingual franca approach

The essence of a multilingual franca approach is that researchers would
focus on the “doing” of language within globalized localities. The
underlying premise is that language is a social practice, taking place
in contexts where linguistic and cultural hybridity and complexity
are present. Multicultural global teams are such an example; so are
expatriate assignments, IB negotiations or mergers of global companies.

These are all contexts where local realities reflect global embeddedness
and where the global cannot be thought of without the local. Within
these settings, scholars would consider the creative ways in which
language users are resourceful speakers, crossing linguistic and cultural
boundaries to express their voice and form new linguistic and cultural
possibilities (Harissi et al., 2012; Otsuji & Pennycook, 2011). Rather
than investigating how people talk about language, they want to under-
stand the accomplishment of “translanguaging” and “voicing” through
examining sets of conversations in which people use and mix elements
of their language repertoires.
In this performative view of language, research focus and analytical
attention would go to micro-variation. This micro-variation is typical
to the context of globalization, as people have, through their increased
mobility, moved across languages, accents and speech varieties as well
as learned that what works well in one place can backfire elsewhere
(Blommaert & Dong, 2010). In contrast to the strategic conception
of the lingua franca approach which tends to take a bird-eye view of
HQ-subsidiary relationships, and also to the multilingual approach
which examines actors’ (individuals, groups or subsidiaries) cultural
and political reactions against linguistic hegemony, a multilingual franca
approach zooms in on the micro-processes through which individuals
enact the social situation of globalized localities. In line with the idea of
human-centered multilingualism, central are speakers’ language use or
the way they bricolage or even manipulate the linguistic resources they
have available to them.
With the focus on micro-variation and the ongoing accomplishment
of “translanguaging” and “voicing”, methodological approaches would
need to be altered. Heretofore, language studies in IB are mainly based
on surveys and interviews, methods that provide material on how
people talk about language. They miss out on the living performance
of language use, the conversations and interactions that involve the
mixing and bricolage of linguistic resources. So, what is needed are stud-
ies in an ethnographic format that allows observing and audiotaping
speakers so that one can study how voices are positioned by switching
languages, parodying accents, dialects, intonations, mixing (social)
media, silences and so on.
To fully understand the linguistic performance of actors within
globalized localities, however, audio-recorded naturally occurring
workplace conversations alone are not sufficient. In keeping with
Heller’s (1988) original vision of “multilevel” critical ethnographic
sociolinguistics research, the focus is not only on the lived dynamics

of everyday communicative life but also on the ways in which eve-
ryday practices and literacies are embedded in wider social, cultural
and historical processes. To capture the socio-political and historical
context, other data sources are needed such as interviews relating to
speakers’ biographical backgrounds and follow-up interviews with the
participants regarding their position within the global organization, as
well as archival material providing information on the broader context.
This variety of data sources will allow researchers to fully interpret the
various ways in which people disrupt, claim and construct cultural and
language ideologies and identities to express voice within the socio-
political context under study.
Whereas the emphasis of a multilingual franca approach is on the fluid
process of language use, it is crucial to note that speakers, in relying on
multilingual resources, also will draw on relatively fixed understandings
of language, culture and identity to convey their voice. For instance,
Harissi et al. (2012) show how bilingual Greek/English adolescents
employ, in their bilingual conversation, a Greek phrase and Greek
accent to articulate a particular Greek prejudicial view of “gypsies”.
Scholars will therefore need to account for the interplay of fixed and
unfixed language elements, cultural identifications and social relation-
ships within fluid language use. According to Harissi et al. (2012: 539),
the core angle of a multilingual franca approach is “to understand the
relationship between fluid language acts participants engage in while at
the same time also deploying fixed, stable and sometimes stereotypical
images of languages, people and cultures”.
As a consequence, this multilingual franca approach has the poten-
tial to conceive a corporate language policy which is emancipatory in
nature. Whereas a monological lingua franca and monological multi-
lingualism reflect a language policy – whether strategically or inclu-
sively – that is premised on the notion of relatively fixed and stable
borders between discrete languages (cf. Otsuji & Pennycook, 2011), this
approach puts forward a language policy that acknowledges the fluidity
and hybridity of language use. In particular, such a policy would allow
mixed language use where individuals can draw from multiple linguis-
tic resources without having to accommodate to any singular norm –
whether this would be the lingua franca or the local language(s). It
would explore a new way of understanding “multilingualism”, one that
overcomes monolingual blindness by supporting translingual practices.
Further, just as in monological multilingualism, such a policy would
support individuals’ investment in their multiple linguistic resources.
The difference, though, would be that a multilingual franca policy would

aim to be non-normative, moving beyond any singular norm which
inevitably leads to a particular form of social exclusion. In particular, it
would emphasize the creativity and dynamism of the mixed language
use which effectively undermines hegemonic linguistic practices and
produces new possibilities of speaking and communicating (cf. Otsuji
& Pennycook, 2011), thereby providing opportunity and latitude for
social and political change from below (Makoni & Pennycook, 2012).
A multilingual franca approach to the linguistic

performance of global teams
We now apply the general idea of a multilingual franca approach to the
setting of global teams. Global teams are not only an often studied topic
in IB (Brett et al., 2006; Stahl et al., 2010) but, in our view, especially
fruitful to study because they constitute so-called “intersections”, the
spaces where bi- and multilingual individuals with different (national,
cultural, functional, organizational) backgrounds encounter each other
and are in a position to negotiate the languages they use and interweave.
In our discussion of this globalized locality, we elaborate on two possible
research foci: first, subject positioning of team members and, second, the
position of lingua franca English (LFE) within a mixed language context.
Language use and subject positioning

A multilingual franca approach might be very suitable to examine how
global team members’ linguistic performance is linked to the ongoing
productivity of their subjectivity. This approach rejects the assumption
that team members can be a priori labeled as, say, Danish or Australian,
and instead allows scholars to consider the processes by which language
and identity are constantly being remade. As mentioned earlier, Harissi
et al. (2012) show the example of a young Turkish-Australian man who,
through language use in which he interweaves English and in-group
informal Japanese, creates a new space of identification. These scholars
emphasize that when studying bi- or multilingual speakers who are
comfortable moving in and out of two or more languages, the main aim
is not to identify a reason for the move from one language to another
(such as no equivalent term in one language to express a particular
idea). This would be premised on the assumption about languages as
discrete codes and the need to explain movement from one to the other.
Rather, the main focus is on understanding how resourceful speakers,
through their translanguaging practices, try out, resist and change iden-
tity categorizations (Harissi et al., 2012).
Similarly, in the case of global teams, one can assume that global team
members create identities in the performance of language. So, whereas
the two other research approaches tend to neglect identity-related
issues, or a priori link identity to the national characteristics of particular
groups, scholars following this line of inquiry assume a different take
on the construction of identities. They would reject, in the words of
Harissi et al. (2012: 527), “assumptions about pregiven speaker identi-
ties behind the utterances in favor of a view of subjectivities being made
in the repeated acts of linguistic doings”. Such an approach to language
and subjectivity would entail a study of global teams that explores the
conversations among team members and with outsiders, aiming to
understand how team members, through the interweaving of multiple
language resources, position themselves in particular ways. For instance,
having observed and audiotaped global team meetings, scholars may
study how a team member from Australia resists his position as a low-
status member because he comes from a small subsidiary and creates
an alternative categorization through talking not only English but also
bringing in Danish, the “mother tongue” of a dominant coalition in
the global company. Scholars may further examine the emancipatory
nature of such language use and subject positioning in terms of the
new possibilities it creates for the team member as well as the team as
a whole.
As emphasized in bilingual studies (Harissi et al., 2012; Otsuji &
Pennycook, 2011), parody and stylization are important ways in which
people try out, resist and change identity categorizations. This would
suggest that scholars, when interpreting the empirical material, should
attend to the parodic use of accents, caricatured English-sounding
accents, repetitive word plays or other forms of stylization to under-
stand the ongoing constructions of subjectivity. One might notice, for
example, how the team member from Australia pronounces the Danish
word “Smørrebrød” with a caricatured Australian accent which is aimed
at Danish team members’ perceptions of how Australian colleagues per-
ceive and articulate aspects of Danish. Doing so, this team member’s lin-
guistic behavior momentarily plays with possibilities, trying out certain
identity meanings in the doing and thereby aiming to express voice.
We further emphasize, as mentioned above, that scholars should
attend not only to the fluid language use in the data (mixing English
and Danish vocabulary, Australian and English accents) but also to
the use of relatively fixed understandings of language, culture and
identity (Harissi et al., 2012; Otsuji & Pennycook, 2011). The Danish
word “Smørrebrød” is used as a marker of stereotypical Danish but
paradoxically, the fixity of this word and its meaning is changed and
opened up for critical examination the moment that the team mem-
ber from Australia uses it. Overall, in applying the multilingual franca
approach to understand global team members’ subjectivity, scholars
would be interested in how team members are resourceful multilin-
gual speakers who play with their different linguistic resources as well
as mobilizing fixed understandings of national (or regional, ethnic,
cultural) identities to create a fluid way of being and construct their
subjectivity in the performance. In short, an analysis of language use
in global teams might thus reveal what Otsuji and Pennycook (2011:
249) call “the push and pull between fixity and fluidity, the capacity to
mobilise and critique essentialised identity ascriptions”.
Multilingual franca use and LFE

Another possible research focus within global teams is to re-interpret
the position of LFE. A multilingual franca approach assumes that a lin-
gua franca does not necessarily need to consist of one language (e.g.,
English) but might consist of the mixing of two languages – while also
possibly drawing upon other languages, including professional and
functional ones. Otsuji and Pennycook (2011) mention the example of
a company in Sydney where a mixed Japanese/English code has become
the lingua franca of the workplace. They emphasize that the main focus
is on the enactment of this bilingual policy, not by claiming some kind
of plural coexistence of two (or more) languages but by zooming in
on the everyday translanguaging and its mixing of various linguistic
resources. Moreover, if global teams choose to use English as their lingua
franca, one can assume that a more complex pattern of language mix-
ing will emerge, increasingly so when one acknowledges that English is
itself not homogeneous. So, whereas the two other research approaches
consider English to be a readily available (and a priori existing) lingua
franca which everyone can join to talk, or a symbol of linguistic hegem-
ony, scholars following this line of inquiry assume a different take on
the meaning and position of English. They would argue, in the words of
Canagarajah (2007: 91), that LFE “does not exist as a system out there”;
rather, it “is constantly brought into being in each context of commu-
nication”. Quite provocatively, English becomes a “glocal” language, a
hybrid language enacted in a social process.
Such re-conceptualization of LFE would entail a study of global teams
that explores the micro-variations of English as a multilingual franca. It
would aim to understand how communication in the team is enacted
through a multi-vocalized and hybrid understanding of language,
where the boundary between English and other languages and between
different forms of English are less and less clear as it is concocted from
a variety of resources. This idea is also reflected in the work of Higgins
(2009), who studied English as a local and multivocal language in East
Africa, in the process destabilizing some of the dominant conceptual-
izations of English. Instead of seeing English as a distinct code or as a
global language, she suggests that we need to address the implications
of the hybridity and linguistic bricolage in which English so often takes
part. The focus is thus on the language use of English as a transmodal
trajectory, which would imply that we need to incorporate social activ-
ity, location, movement, interaction and history, as well as, wherever
possible, various users’ perspectives. The inclusion of users means that
practicing English is a relational process that shifts as team members
enter into contact with different groups or persons. For instance, lan-
guage users might be ironic about the “bastard” English they use or
make a parody of their own pronunciation of English or their incon-
sequential translations, depending on whom they are interacting with
(e.g., a colleague speaking Oxford English, or a Russian or Brazilian cli-
ent). Related to this, scholars may attend to how team leaders allow or
even stimulate such mixed language use. They may inquire into how
the conditions are set by management to provide space for the creation
of a lingua franca that incorporates a variety of linguistic resources.
To illustrate such a multilingual franca approach we can turn to the
study by Steyaert, Ostendorp, and Gaibrois (2011) on English as lingua
franca in a MNC. Rather than approaching the issue of lingua franca in
a monological, fixed way, the authors see it as a negotiating process,
and identify a range of discursive practices that people draw upon to
legitimize the language in which they conduct their meetings or com-
municate with a particular colleague or client. Here, English features as
“globish”, a hybrid and living language where the idea of being native-
English speaker is questioned as, for instance, British and Australian
colleagues make sense of each other’s accents and where non-native
English speakers mock their own unsophisticated use of British English.
As this study is based mostly on interviews, and thus misses out on
the living performance of hybrid English, one could imagine further
developing such a study in an ethnographic format by following (and
audiotaping) the members of a multicultural team, and examining the
multilingual complexity of their communication with each other and
outsiders. Data could be generated during team and bilateral meetings,
emails and Skype conferences, occasional encounters and more formal
setups such as performance appraisals or planning meetings. The “unit”
of analysis would be the transcripts of mixed language use to interpret

how team members use their multilingual resources and with what
implications. One might consider studying, as Otsuji and Pennycook
(2011) do, how team members both draw upon essentialized under-
standings of language (and identity) and also play with or critique the
meaning of words as they translate for each other.
In short, a multilingual franca approach argues that the predominant
consideration of English or bilingual language use in IB research is
too often premised on a notion of relatively fixed and stable borders
between discrete languages (which may or may not have a commod-
ity value). Instead, this alternative approach urges researchers to zoom
in on the potentially overlooked creative, dynamic and transgressive
language practices of today’s glocal work teams to more accurately
document the entwined relationship between fixed and fluid notions of
language and identity and the emergence of novel enactments of power
relations that are produced by such hybrid language use.
Conclusion
Heretofore, language studies in IB have steered between the Scylla of

a lingua franca and the Charybdis of (monological) multilingualism.
Relying on sociolinguistics and cosmopolitan theory, we have shown
how both options, while treated as opposites, emerge from the same
linguistic and global assumptions as both approach the idea of lan-
guage as a discrete, pre-existing entity and both consider universality
and particularity to be separate notions. We further have highlighted
how changing both assumptions can facilitate a research approach that
conceives language as a social practice in globalized localities. In our
view, this third option, the multilingual franca approach, offers language
scholars in IB a fascinating route because of two main advantages. First,
by conceiving MNCs as sites where the global and the local co-produce
each other, it has the advantage of capturing the current complex
global reality of MNCs (or, for that matter, global organizations of any
other type). Second, by conceiving language as a social activity, it high-
lights how users mobilize multiple linguistic resources to express voice,
thereby importing at its heart diversity that truly goes beyond any kind
of monolingualism.
In this line of inquiry, the question for language scholars in IB is no
longer whether MNCs are supposed to be monolingual or multilingual;
rather, the question becomes how to understand linguistic performance
within global work settings as a heteroglossic and hybrid process where
fluid and fixed elements of language, identity and social relationships

are interwoven. In our view (Steyaert & Janssens, 2013), choosing
this route will allow IB scholarship to become more thoughtful of the
various pre-given and statist conceptions they infuse in their research
projects, such as language, nationality and culture. Also, scholars, espe-
cially those promoting multilingualism, might become less idealistic
about claiming a “happy hybridity” (Otsuji & Pennycook, 2011) as they
pluralize and reify many languages or simply reinstate English as many
Englishes without showing how they are related and practiced in an
ongoing series of conversations. Thus, we suggest to those interested
in the study of languages in IB that they might learn to dis-invent lan-
guages and to study the “living translanguaging”, a paradoxical practice
co-constituted by globality and locality, singularity and hybridity, fix-
ity and fluidity. We further believe that such a line of thinking has the
potential to offer space and latitude for social and political change, as
a corporate language policy aligned with a multilingual franca approach
moves away from any singular norm. Through allowing mixed language
use, new possibilities may be produced that undermine hegemonic lin-
guistic practices and are emancipatory in nature.
Acknowledgements
We are grateful for the constructive comments we received from the

anonymous reviewers and M.Y. Brannen. We also received useful sug-
gestions from the convenors and members of the EGOS-subtheme on
“The power of language(s): A linguistic perspective on organizational
realities” in Montreal, 2013.
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8
Linguistic Gender Marking
and Its International Business
Ramifications
Estefania Santacreu-Vasut, Oded Shenkar and Amir Shoham
Introduction
Darwin (1859) considered language a form of memory that stores

information in a genome-like mode. Grammar, according to cognitive
science research (Boroditsky, Schmidt, & Phillips, 2003), impacts a speak-
ers’ cognitive framework and mental representation of social reality.
Gender is among the most stable grammatical features (Wichmann &
Holman, 2009), and comparing languages is valuable for understanding
their social role (Corbett, 2011). Such research should have significant
value for international business (IB), where national variations are of focal
interest but where the study of linguistics has mostly been relegated to
a subset of culture. Culture-based research currently relies on aggregate
values-based measures of culture (e.g., Hofstede, 1980, 1998; Hofstede,
Hofstede, & Minkov, 2010; House, Hanges, Javidan, Dorfman, &
Gupta, 2004), making it susceptible to endogeneity problems, and con-
temporaneous to gender outcomes. In contrast, a language’s grammati-
cal structure is a stable feature inherited from the distant past, unbiased
by present social, political and economic forces.
Literature and hypotheses
The Value-Belief Theory (Triandis, 1995) suggests that values and beliefs
held by a culture’s members influence behavior and its legitimacy
Reprinted from Estefania Santacreu-Vasut, Oded Shenkar and Amir Shoham

(2014) “Linguistic Gender Marking and Its International Business Ramifications.”
Journal of International Business Studies, Vol. 45, No. 9 (pp. 1170–1178). With kind
permission from Palgrave Macmillan. All rights reserved.
194
Linguistic Gender Marking and Its International Business Ramifications 195
(Barnouw, 1979; Freytag & Thurik, 2007); for instance, culture has been
shown to influence economic behavior (Stevenson & Lundström, 2001;
Mueller & Thomas, 2001). The study of gender is embedded in cultural
research (Boserup, 1970; Fernandez, 2010).
To generativist linguists, languages are part of human biology, funda-
mentally equal in structure with only minor local differences (Chomsky,
1980), but a new scholarly stream considers languages to be as institu-
tions that are part of a society’s cultural heritage, therefore differing and
evolving in complexity (Sampson, Gill, & Trudgill, 2009) together with
culture, history and geography (Christiansen & Kirby, 2003; Evans &
Levinson, 2009). Language is more than a transmission device because
it shapes and influences thought (Whorf, 1956).
The imprint of inherited cultural values in a language’s grammar is
rooted in the impact of language on cognition, forcing speakers to encode
selectively and shaping their mental representation of social reality,
which yields outcomes that include attitudes towards saving and health-
related behavior (Chen, 2013). A fundamental way in which societies vary
is the extent to which they prescribe and proscribe different gender roles
(Adams & Flynn, 2005; Burke & Mattis, 2000). Santacreu-Vasut, Shoham,
and Gay (2013) show how language gender marking influences gender
quotas in politics, while Givati and Troiano (2012) explore the impact of
gender marking in pronouns on maternity leave laws. Linguistic expres-
sion of gender may capture values shown to produce persistent gender
outcomes, for example, corporate board presence (Wright, Baxter, &
Birkelund, 1995). Grosvold and Brammer (2011) find female board repre-
sentation higher in cultures with low gender differentiation.
Female/male distinctions in a language are very stable features of
grammar (Wichmann & Holman, 2009), which are inherited from the
distant past. Linguistic research ( Johansson, 2005) suggests that evolu-
tionary pressures related to tool making, reproduction and the division
of labor explain languages’ origins. Language variations in gender mark-
ing may therefore reflect cultural variations in gender roles, which are
reinforced by the cognitive impact of grammar on the speakers’ repre-
sentation of reality (Boroditsky et al., 2003). Thus:
Hypothesis 1: Female/male distinctions in a country’s dominant lan-

guage will have a negative effect on females’ presence on corporate
boards.
The literature suggests that females’ labor market outcomes and pro-
fessional advancement depend on family obligations that reduce human
196 Estefania Santacreu-Vasut et al.
capital investment and limit career progress (Miller, 2011). Hofstede

(1980) expects cultures with high femininity ratings to produce higher
ratios of female executives. Emrich, Denmark, and Den Hartog (2004)
claim that societies with high scores on GLOBE’s Gender Egalitarianism
will have more females in authority positions. Where gender differ-
entiation is low, females are likely to assume senior posts (Javidan &
House, 2001). Moore and Shackman (1996) found that culture impacts
women in managerial positions. The size of the teams a manager
leads is a key expression of managerial level (Lambert, Larcker, &
Weigelt, 1991). Thus:
Hypothesis 2: Female/male distinctions in a country’s dominant

language will have a negative effect on the size of female-managed
teams.
As a formal way to control and coordinate processes, language has a

major impact on the MNE (Welch, Welch, & Piekkari, 2005). Luo and
Shenkar (2006) view the MNE as a multilingual community with a strong
impact of the HQ (headquarter) language. Language also has an impact
on HQ-subsidiary relations (Gupta, 1987; Tenzer, Pudelko, & Harzing,
2014) and language diversity can highlight differences between loca-
tions in an MNE (Hinds, Neeley, & Cramton, 2014). Wu, Lawler, and Yi
(2008) claim that an MNE home-country’s cultural attitude concerning
female roles has a strong impact on the use of criteria that discriminate
against women in a subsidiary. Brock, Shenkar, Shoham, and Siscovick
(2008) show a relationship between hierarchical preferences in a HQ’s
home culture and its probability of assigning expatriates to subsidiaries;
we expect a similar impact of HQ home country gender marking on
female representation at the subsidiary level, independent of the gender
marking host country. Thus:
Hypothesis 3: Female/male distinctions in a dominant language of

an MNE’s home country will have a negative effect on females’ pres-
ence on a subsidiary’s boards.
Method
To measure the presence and intensity of female/male distinctions

we use the four grammatical structure variables explicitly related to
gender in the World Atlas of Linguistic Structures (WALS; Dryer &
Haspelmath, 2011). Following Encyclopedia Britannica (2010), we
define the dominant language of a country as the one with the high-
est percentage of speakers. A language’s gender system may or may
not be linked to biological sex; for example, Danish and Swedish make
distinctions that are not. This leads us to build the Sex-Based Intensity
Index (SBII), a dummy variable = 1 for languages with a sex-based
gender system.
Gender systems can and do vary in the number of types of nouns that
have different agreements (how many different genders exist). While
French has two genders “feminine/masculine,” English includes “neuter”
as a third. Other languages with multiple genders lack sex-related dis-
tinctions. We hence build a Number Gender Intensity Index (NGII), a
dummy variable = 1 for two-gender languages.
A gender assignment system provides a set of rules to help speakers
connect between nouns and defined genders. Assignment may or may
not depend exclusively on the meaning of the noun (semantic assign-
ment). For example, “table” is neuter in English since the language
assigns gender only on semantic grounds. However, it is feminine in
French which assigns gender to nouns that do not have a biological
gender. To capture these differences, we build the Gender Assignment
Intensity Index (GAII), a dummy variable = 1 for languages whose
gender assignment system is both semantic and formal.
Finally, languages differ in the extent to which they distinguish gen-
der in pronouns, for example, in English the pronominal system uses a
sex-based gender system with three singular pronouns, “she,” “he” and
“it.” Some languages have a sex-based gender system but lack sex-based
pronouns. Hence, we build the Gender Pronouns Intensity Index (GPII),
a dummy variable = 1 for languages with gender distinction in third,
first and/or second person pronouns.
The maps in Figure 8.1 show the intensity indices distribution for
each country’s dominant language.
The four variables reflect different features of grammatical gender and
capture different aspects of the usage intensity of male/female distinc-
tion. We form an aggregate index for each language as the sum of its
individual indices. Our Gender Intensity Index (GII) is calculated as
GII = NGII + SBII + GAII + GPII where GII €{0;1;2;3;4}.
For English, GII = 1 because the grammatical system of gender does
depend on female/male distinctions (SBII = 1). It has three genders
(NGII = 0), assigns gender only to nouns with an actual biological gen-
der (GAII = 0) and distinguishes gender only in third person singular
pronouns (GPII = 0).
Number of Genders Sex-Based
Gender-Assignment Gender-Pronouns
Figure 8.1 Intensity indices

Note: Black countries Dummy = 1.
Table 8.1 Data set extract
Country Language NGII SBII GAII GPII GII GIIv1 GIIv2
Argentina Spanish 1 1 1 1 4 3 3
Armenia Armenian 0 0 0 0 0 0 0
Australia English 0 1 0 0 1 1 1
Austria German 0 1 1 0 2 2 1
Azerbaijan Azerbaijani 0 0 n/a 0 n/a n/a 0
We construct two additional aggregate sub-indices, GIIv1 and GIIv2, as

follows:
GIIv1 = NGII + SBII + GAII and GIIv2 = NGII + SBII + GPII
GIIv1 is a robustness check because information pertaining to its indi-

vidual components comes from the same researcher, Corbett. GIIv2 is
built to overcome sample size limitations of our GII index since we lack
information on GAII grammatical variable for many countries. Table 8.1
presents a data set extract that includes the seven indices.
We use four individual variables and three indices since (a) they con-
tain different and complementary information; for example, only 34%
of languages have SBII = 1 and GPII = 1; and (b) because using different
variables allows a bigger sample and different samples, as robustness
checks.
Table 8.2 shows the correlation between our seven indices is positive
but imperfect, confirming that languages vary in gender marking inten-
sity for different grammatical features, justifying index construction.
Also noticeable is a very high correlation between GII and GIIv1, GIIv2,
which was built as robustness check. The correlation between the gram-
matical gender structure variables and Hofstede/GLOBE scores is very
low, which may be a result of endogeneity in the latter.
Table 8.3 shows intensity indices across linguistic families and
within the Indo-European subfamily. NC denotes the number of coun-
tries for which the dominant language belongs to the family and NL
denotes the number of different languages in the family. Linguistic
structures are shown to vary widely across and within families. Thus,
grammatical gender structures capture more than geographical or his-
torical forces.
Findings
Female board presence

To test for female presence on the boards of large, globally exposed
firms, we analyze two data sets collected in different years for dif-
ferent firms. The GMI 2012 Ratings of Women on Boards (http://
library.constantcontact.com/download/get/file/1102561686275-86/
GMIRatings_WOB_032012.pdf) has data on 4300 firms in 45 countries;
our data includes 41 of those. The data covers 2009–2011, and we use
an average of 3 years per country in our analysis. We use GIIv2 because
it allows us to maximize the sample size. Table 8.4 presents the mean
percentage of females on boards and committees in countries with low
gender marking in the dominant language, captured by GIIv2 = {0, 1}
and in countries with high gender marking in the dominant language,
captured by GIIv2 = {2, 3}.
As shown in Table 8.4, the average percentage of female presence on
boards and committees is higher in countries with low gender mark-
ing than in those with high marking. In five of the six, the percentage
is significant. We obtain similar results with data from the European
Professional Women’s Network Rankings of Board, Woman Monitor
2008 for female board presence in the top 300 European companies in
200
Table 8.2 Correlation matrix
NGII SBII GAII GPII GII GIIv1 GIIv2 GEASIS
SBII 0.50***
GAII 0.64*** 0.54***
GPII 0.76*** 0.42*** 0.59***
GII 0.91*** 0.78*** 0.82*** 0.86***
GIIv1 0.89*** 0.83*** 0.84*** 0.74*** 0.97***
GIIv2 0.90*** 0.75*** 0.68*** 0.86**** 0.97*** 0.93***
GEASIS −0.05*** 0.16*** −0.04*** −0.09*** 0.01*** 0.02*** 0.005
MAS −0.14*** 0.06*** 0.04*** −0.04*** −0.05*** 0.002 −0.07*** 0.09***
***p-value < 0.01.

Table 8.3 Indices variation
NC NL NGII SBII GAII GPII
Family
Indo-European 67 34 0.48 0.91 0.79 0.30
Afro-Asiatic 23 5 1 1 1 0.95
Niger-Congo 10 10 0 0 0.86 0
Altaic 7 7 0 0 0 0
Austronesian 7 7 0.2 0.2 0 0
Indo-European
Romance 25 5 0.92 1 1 0.79
Germanic 16 7 0.13 0.88 0.36 0
Slavic 12 10 0 1 1 0
Iranian 3 3 0.33 0.33 0.5 0
Table 8.4 Percentage of females on boards
GIIv2 = 0, 1 GIIv2 = 2, 3 p-value
Boards 11.32 7.29 0.036

At least 1 61.98 47.78 0.044
At least 3 11.80 6.21 0.097
Audit committee 12.51 6.74 0.019
Governance/nominating 10.73 6.40 0.041
committee
Remuneration committee 0.42 0.35 0.392
17 countries. In Europe, which is a relatively homogeneous, integrated

institutional environment, gender marking linguistic variables exhibit
significant, high correlations. This supports Hypothesis 1.
Size of female managed teams

To test the likelihood of a female manager leading a large team when
speaking a language with high gender marking, we use the last three
waves of the World Value Survey (1994–2007) (http://www.worldval-
uessurvey.org/). Our dependent variable is a dummy variable = 1(0) if
a female manages a team larger (smaller) than 10 employees. Table 8.5
presents odd ratios of logit regressions; these ratios capture how often a
female leads a large team. An odd ratio smaller (bigger) than 1 implies
that a factor predicts a decrease (increase) in behavior likelihood.
On the basis of Miller (2011), we control for marital status, educa-
tion, age and number of children. Following Sen (1999), we control
for income. Robust standard errors are clustered at the country level to
202
Table 8.5 Logit regressions of management of large teams and language gender marking
1 2 3 4 5 6 7 8 9 10 11 12 13
NGII 0.34***
(0.10)
SBII 0.71
(0.30)
GPII 0.28***
(0.08)
GAII 0.33***
(0.07)
GII 0.66*** 0.60*** 0.55*** 0.54***
(0.05) (0.04) (0.05) (0.07)
GIIv1 0.61***
(0.07)
MAS 1.02** 1.01 1.01
(0.01) (0.01) (0.01)
GEASIS 0.65 1.38 1.24
(0.32) (0.50) (0.86)
Observations 3512 3284 3284 3249 2170 2167 2170 3243 2182 2170 1632 1716 1427
Pseudo R2 0.036 0.068 0.042 0.063 0.098 0.101 0.097 0.064 0.084 0.043 0.130 0.124 0.132
χ2 49 113 45 84 79 133 111 80 58 35 150 134 116
***p-value < 0.01, **p-value < 0.05.

Note: Robust SE clustered at country level are in parenthesis.
capture that females living in the same country may share unobservable
elements. We also control for survey wave. We do robustness checks for
distance from the equator (Hall & Jones, 1999) and control for Spanish/
British colonization (Acemoglu, Johnson, & Robinson, 2001). Following
Weber (1930), we control for religion, with unchanged results. We do
not display coefficients of control variables to focus on gender gram-
matical variables.
Table 8.5 shows that the indices have coefficients that are significant
and lower than 1, suggesting gender intensity lowers the probability
that a female will manage a large team. We perform similar regressions
using measures that capture gender role as defined by GLOBE (House
et al., 2004) and Hofstede (1980). Gender egalitarianism (GEASIS), the
degree to which an organization or a society minimizes gender role
differences while promoting gender equality (Emrich et al., 2004), is
inserted for comparison. We also analyze the impact of Hoftstede’s
Masculinity measure (MAS).
Column 1 shows the baseline regression using the set of controls.
The R2 increases the most when adding GII. MAS coefficient is signifi-
cant, but equal to 1, which means that MAS does not correlate with a
likelihood of managing a large team. The GEASIS is insignificant.
Columns 11–13 show that once we include both GII and MAS or/and
GEASIS, the latter becomes insignificant while GII remains significant
and lower than 1. This strongly supports Hypothesis 2.
Females on MNE boards

We study a sample of MNEs in the micro finance industry (MFI), using
MIX Market data (www.mixmarket.org) to analyze a sample of MFI
multinational companies (excluding NGOs) for 2010 (only year with
data regarding female on boards). This allows us to investigate the
impact of gender intensity of the language spoken in the HQ coun-
try on female presence on subsidiary boards, even after taking into
account host country language gender intensity. We construct four
dummy variables for the possible configurations of home-host lan-
guage gender intensity: low–low (L–L), low–high (L–H), high–low (H–L)
and high–high (H–H). L–L = 1 if the dominant languages spoken in
both countries have a GIIv2 < 2. L–H = 1 if the host country language
has GIIv2 < 2 and the home country GIIv2 > = 2. We construct H–L
and H–H similarly. This allows us to analyze the impact of HQ language
gender intensity while considering subsidiary’s language. Table 8.6
shows regressions with female percentage on a subsidiary’s board as a
dependent variable.
204
Table 8.6 OLS regressions of presence of female in subsidiary corporate boards
1 2 3 4 5 6 7 8 9 10 11
L–L 0.17** 0.18*** 0.18*** 0.19**

(0.05) (0.06) (0.06) (0.07)
H–H −0.15** −0.15* −0.18*** −0.19**
(0.07) (0.08) (0.06) (0.09)
L–H −0.20*** −0.22*** −0.18*** −0.18**
(0.04) (0.07) (0.05) (0.08)
H–L 0.16** 0.17** 0.18** 0.18**
(0.06) (0.08) (0.06) (0.07)
GEASIS −0.11 0.03 −0.026 0.05 −0.07
(0.12) (0.16) (0.16) (0.18) (0.20)
MAS 0.003** 0.001 0.001 0.001 0.001
(0.001) (0.001) (0.001) (0.001) (0.001)
Observations 97 76 76 85 93 68 73 66 68 73 66
R2 0.06 0.15 0.15 0.05 0.10 0.13 0.20 0.18 0.14 0.20 0.18
***p-value < 0.01, **p-value < 0.05, *p-value < 0.1.

Note: Robust SE are presented in parenthesis.
Our control variables include MFI log size measure as the number of
active borrowers, non-profit status dummy variable and whether the
MFI is mature. Given the link with economic development (Rajan &
Zingales, 1998), we control for per capita income and financial develop-
ment. Results are robust to further control for colonization (Spanish/
British), geography (distance from equator), religion and continent
dummies.
Column 2 (3) shows that the impact of low (high) gender marking
at HQ is always positive (negative) for female board presence in a sub-
sidiary regardless of subsidiary language gender intensity, supporting
Hypothesis 3. Further, Columns 4–11 show language markers outper-
forming GEASIS and MAS.
Conclusion
This research note confirms that gender intensity in a language’s gram-

mar is associated with lower female presence on firms’ boards, in MNE
subsidiary boards and in leadership positions. The findings suggest that
language is not merely a derivative of culture, and that it should be con-
sidered an IB variable in its own right. The findings have ramifications
for theories in which culture plays a role, for example, internationaliza-
tion, where linguistic differences are a singular component of “psychic
distance” ( Johanson & Vahlne, 1977), and transaction cost economics
(Williamson, 1975), where language may be viewed as a special transac-
tion barrier, uniquely positioned to impact inter-party communications
and hence governance choices. Grammatical features of language have
been shown here to be viable substitutes for aggregate values-based
measures of culture, which should deflect criticism of national variation
as based on “soft” measures or changeable over time, challenging the
convergence thesis (Webber, 1969). Finally, on the practical side, rather
than wait for the European Commission 2012 draft (mandating 40%
of board seats to be filled by women) to be ratified, companies would
do well to take action now, for instance, by offering gender-sensitivity
training for executives hailing from high gender marking nations to
host nations that are low on the measure.
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9
Why and How Does Shared
Language Affect Subsidiary
Knowledge Inflows? A Social
Identity Perspective
B. Sebastian Reiche, Anne-Wil Harzing and Markus Pudelko
Introduction
Over the past decades, multinational enterprises (MNEs) have increased

their exposure to foreign markets, both in terms of the number of coun-
tries they operate in and the scope of activities they perform abroad.
This has resulted in increased levels of globally distributed work and
cross-national collaboration (Hinds, Liu, & Lyon, 2011) whose effec-
tiveness is contingent on the exchange of locally imprinted knowledge
from one context to another (Bhagat, Kedia, Harveston, & Triandis,
2002). Because a large part of the knowledge in MNE units is contex-
tual and tacit in nature (Gupta & Govindarajan, 2000), the transfer of
knowledge depends on actors adequately conveying and making sense
of its meaning (Argote & Ingram, 2000).
Recently, scholars have therefore started to point to the role of shared
language for tacit knowledge flows in MNEs (e.g., Mäkelä, Kalla, &
Piekkari, 2007; Peltokorpi & Vaara, 2014). In MNEs, different units may
share a language either because their members are proficient in the native
Reprinted from B. Sebastian Reiche, Anne-Wil Harzing and Markus Pudelko (2015)
“Why and How Does Shared Language Affect Subsidiary Knowledge Inflows? A
Social Identity Perspective.” Journal of International Business Studies, Vol. 46, No. 5
(pp. 528–551), doi: 10.1057/jibs.2015.3. An open access copy of this article can be
downloaded from the Journal of International Business Studies website, released under
a Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 Unported
License (http://creativecommons.org/licenses/by-nc-nd/3.0/).
209
210 B. Sebastian Reiche, et al.
language that is spoken in the respective other unit, or they may share a
common corporate language that the organization has defined (Marschan-
Piekkari, Welch, & Welch, 1999a). Indeed, an increasing number of MNEs
have started to implement shared language policies, usually in the form
of a mandate for English as a common corporate language, leading to sig-
nificant improvements in communication, coordination and control, and
in turn performance (Harzing & Pudelko, 2014; Neeley, 2012). However,
given the many challenges that MNEs face as multilingual entities (Luo &
Shenkar, 2006), surprisingly little research has systematically examined
the link between shared language and MNE knowledge flows.
While shared language and knowledge exchange, and tacit knowl-
edge exchange in particular (Argote & Ingram, 2000), are inherently
relational concepts, existing theoretical approaches have tended to
study the characteristics of the exchange actors and those of the knowl-
edge itself as the focal determinants of MNE knowledge flows (e.g.,
Fang, Jiang, Makino, & Beamish, 2010; Simonin, 2004; Yang, Mudambi,
& Meyer, 2008). Research integrating these determinants with the rele-
vant shared properties between the exchange actors (such as language) or
the underlying transfer mechanisms (such as organizational practices)
has however been scarcer (Michailova & Mustaffa, 2012; Song, 2014). In
addition to shared structural elements such as social ties, scholars have
highlighted the importance of relational elements that include shared
trust and identity (Nahapiet & Ghoshal, 1998). Social identity theory
(Tajfel & Turner, 1986; Turner, 1982) provides a theoretical rationale
for studying the link between shared language and MNE knowledge
flows because (1) it offers an alternative reason for why tacit knowl-
edge exchange may occur between particular sets of actors and (2) it
helps explain how, that is, through which mechanisms actors’ language
characteristics in relation to those of their counterparts translate into
knowledge flows.
Specifically, we conceptualize the transfer of tacit knowledge as an act to
construct a shared identity because it provides the deep contextual under-
standing that allows individuals to do so (Ashforth, Harrison, & Corley,
2008; Bucholtz & Hall, 2005; Ochs, 1993). This is particularly important
in MNEs where individuals are dispersed across units with distinct social
identities (Reade, 2003; Vora & Kostova, 2007). To focus on one specific
social group within MNEs, we follow Kostova and Roth (2002) in con-
sidering the MNE subsidiary as the main knowledge recipient and study
how shared language among subsidiary and headquarters (HQ) managers,
operationalized at the aggregate subsidiary level, affects subsidiary knowl-
edge inflows from HQ as an act to develop a shared HQ identity. Given the
Why and How Does Shared Language Affect Subsidiary Knowledge Inflows? 211
relevance of tacit knowledge for constructing a common identity, we focus

on procedural knowledge such as R&D or distribution know-how rather
than more operational information.
While social identity theory suggests several sources that can act as
markers for social identification, including gender, ethnicity, race and
culture (Tajfel & Turner, 1986; Turner, 1982), in this study we focus
on language as one particular determinant. Language is possibly an
even more important determinant for social identification than other
attributes as it is an acquired characteristic that sets clear functional
and psychological barriers to social interaction (Giles & Johnson, 1981).
Although scholars of sociolinguistics and the social psychology of lan-
guage have long recognized the role of language in this respect, it is
less clear how exactly shared language translates into a social identity
(Lauring, 2008; Ochs, 1993) and hence into knowledge transfer as an
act to construct a shared identity. We propose that subsidiary managers
sharing a language with HQ managers will be able to properly under-
stand knowledge from HQ and apply it to construct a common social
identity with HQ if they share the HQ goals and vision (Brannen, 2004;
Orton & Weick, 1990). Further, they will be motivated to acquire HQ
knowledge to construct a common social identity if the MNE makes
HQ identification more rewarding by centralizing Human Resources
(HR) decisions (Ellemers, de Gilder, & Haslam, 2004; Pratt, 1998).
Finally, compared with foreign greenfields we expect the ability- and
motivation-related mediators to be more salient in foreign acquisitions
because managers in these units will have less previous knowledge of
and feel less socially integrated with HQ (Gupta & Govindarajan, 2000;
Stahl & Voigt, 2008).
Our study draws on a large-scale sample of 817 subsidiaries in 9 dif-
ferent countries/regions that are headquartered in 36 different countries
to make four contributions. First, we open the black box of the relation-
ship between shared language and subsidiary inflows of tacit knowledge.
While scholars have highlighted the role of shared language for MNE
knowledge flows (e.g., Mäkelä et al., 2007; Nahapiet & Ghoshal, 1998;
Slangen, 2011), little research has provided (1) empirical support for
the proposed positive relationship, or (2) theoretical arguments for how
exactly shared language would affect MNE knowledge flows. Our study
delivers empirical evidence for the assumed positive relationship by con-
ceptualizing a moderated mediation model to tease apart the theoretical
mechanisms through which shared language among subsidiary and HQ
managers affects subsidiary knowledge inflows. By drawing on social
identity theory and the literature on socio-linguistics, we also expand
the theoretical bases underlying research on MNE knowledge flows

(Michailova & Mustaffa, 2012). Second, we develop a new subjective
measure of shared language between subsidiary and HQ managers,
which reflects the aggregate language commonalities perceived at the
subsidiary level. Our measure of shared language is not limited to one
specific language and addresses several limitations of objective country-
level measures currently available (e.g., Dow & Karunaratna, 2006).
While existing measures may be appropriate for country-level studies,
our findings challenge their use for examining subsidiary-level knowl-
edge flows.
Third, we contribute to social identity theory and the literature on
sociolinguistics by examining how shared language affects shared
identity. The link between language and social identity has been char-
acterized as “sociolinguistically distant” (Ochs, 1993: 288), suggest-
ing mediation by other variables. We conceptualize both ability- and
motivation-related mediators of the relation between shared language
and tacit knowledge receipt for constructing a common identity and,
in doing so, also address calls for studying in more detail how social
identification occurs (Ashforth et al., 2008). Fourth, we contribute to
the international human resource management (HRM) literature by
explaining when centralized HR decision making is beneficial for MNE
knowledge transfer. While HRM is considered the most localized of
functions, there is evidence for country-of-origin and dominance effects
(Edwards & Kuruvilla, 2005; Pudelko & Harzing, 2007). Our findings
suggest that MNEs not only centralize HR decisions to leverage home
country approaches or converge to universal best practices, but also to
motivate subsidiary managers to receive knowledge and construct a
shared HQ identity.
Theoretical background
Social identity theory (Tajfel & Turner, 1986; Turner, 1982) holds that
any individual’s self-concept is based not only on his or her personal
identity but also on his or her group identity. Group identity can be
derived from a large variety of social categories based on groups that
individuals classify themselves into (e.g., gender, profession, ethnicity).
Tajfel and Turner (1986) indicate that even trivial, ad hoc intergroup
categorization can lead to in-group favoritism and discrimination
against the out-group. When social identities are salient, stereotypes
develop, relations between groups become competitive and mistakes

or violations of social rules by members of another group are met with
less tolerance (Hogg & Terry, 2000). Strong attachment to the in-group,
combined with current conflicts and/or a history of conflicts between
the groups, will intensify these effects.
Although social identity theory is well established in social psychol-
ogy, scholars have only begun to apply it to the MNE context. A first
stream of research has adopted an individual level of analysis to exam-
ine the antecedents and consequences of the identities that subsidiary
managers hold vis-à-vis the local subsidiary and the wider MNE (Reade,
2003; Vora & Kostova, 2007). At the team level, studies have focused on
the factors that explain the salience of identity-based sources of categori-
zation and their implications for intra-group cooperation (e.g., Hinds &
Mortensen, 2005; Salk & Brannen, 2000). At the organizational level,
social identity-based mechanisms for inter-unit interaction and coop-
eration in MNEs have mainly been investigated in the form of cog-
nitive social capital that concerns the extent to which actors share
values, codes, norms and goals with one another (Reiche, Harzing, &
Kraimer, 2009; Tsai & Ghoshal, 1998). Some scholars have pointed to
potentially negative implications of having a shared social identity,
including resistance to organizational change (Bouchikhi & Kimberly,
2003). However, common to the above research streams are a number
of benefits resulting from a shared social identity among actors both
within and between MNE units, especially with regard to the exchange
of knowledge.
While the limited international business (IB) literature has examined
a common social identity as an antecedent to knowledge flows (e.g.,
Björkman, Stahl, & Vaara, 2007; Hinds & Mortensen, 2005), social iden-
tity scholars have also pointed to common knowledge as a prerequisite
for developing a shared identity. For example, providing organizational
members with firm-specific knowledge serves as a form of sensegiving
to facilitate social identification (for a review, see Ashforth et al., 2008).
Similarly, subsidiaries’ acquisition of HQ knowledge will make them
more similar to HQ, fostering a common identity (Kostova & Roth,
2002). The knowledge required for social identification is strongly
rooted in interaction with other group members (Bucholtz & Hall,
2005), and involves an understanding of and commitment toward often
unconscious conventions in the social group (Ochs, 1993). Because
such knowledge is difficult to codify and mainly built from experi-
ence, it is tacit in nature (Argote & Ingram, 2000). Drawing on these
arguments, we conceptualize subsidiary receipt of tacit knowledge as an

act to construct a common identity with HQ.
MNE knowledge flows may occur in multiple directions, vertically
between the HQ and a subsidiary, and horizontally between differ-
ent subsidiaries (Noorderhaven & Harzing, 2009; Yang et al., 2008).
However, while subsidiaries’ contributory roles depend on a specific set
of subsidiary resources or the overall MNE strategy (e.g., Birkinshaw,
Hood, & Jonsson, 1998), virtually all subsidiaries receive knowledge
from HQ. Our interest lies in disentangling the specific mechanisms
that explain how shared language affects subsidiary knowledge inflows.
Therefore rather than comparing conventional top-down and reverse
bottom-up knowledge flows or investigating the possibility of lateral
flows, we focus on tacit knowledge that flows from HQ to subsidiaries.
Further, implicit to our arguments is that MNE knowledge flows have
positive performance implications. However, given that the relation
between subsidiary knowledge inflows and subsidiary performance has
already been established (e.g., Chang, Gong, & Peng, 2012; Fang et al.,
2010), our aim rather is to examine shared language-related predictors
of tacit knowledge receipt in subsidiaries.
Shared language should facilitate the development of a common
social identity between HQ and subsidiary managers. Various interper-
sonal and intergroup determinants affect, and may interact in affecting
the development of a shared identity (Tajfel & Turner, 1979), includ-
ing the degree to which the HQ and subsidiary national cultures dif-
fer (e.g., Björkman et al., 2007) or shared racial or ethnic background
(e.g., Mehra, Kilduff, & Brass, 1998). We realize that a specific focus
on shared language, as any specific focus on a particular determinant,
provides a limited perspective on social identity, a concept that is so
complex that it can only be fully understood when considering the
interplay of all determinants together. Our decision to focus on shared
language is motivated by both conceptual and methodological rea-
sons. Conceptually, language should be a more salient source of social
identity than, for example, national culture or ethnicity because it sets
stronger functional and psychological barriers to social interaction
(Giles & Johnson, 1981). Indeed, without language commonalities it is
difficult if not impossible to interact and share knowledge, and hence
construct a social identity, regardless of how close the respective cul-
tures or ethnicities are. Further, especially in MNEs whose workforce is
diverse and internationally mobile (Hinds et al., 2011), the national cul-
ture or ethnic composition of a country in which individuals are based
(i.e., HQ or subsidiary countries) might be relatively less important as a
source of their social identity. In particular, a large part of MNEs’ world-

wide HQ–subsidiary interactions take place within the ethnically rather
homogeneous Western world. By contrast, language is an acquired
attribute whose acquisition intentionally facilitates interaction.
Given the methodological problems with objective measures of dis-
tance, particularly regarding culture, scholars have called for subjective
assessments (e.g., Shenkar, 2001), which would also favor a linguistic
focus. Specifically, it is more reasonable to ask subsidiary informants
to assess HQ managers’ linguistic capabilities, as this is something they
experience directly and explicitly in their communication with HQ
managers, than asking subsidiary managers to subjectively assess HQ
managers’ cultural capabilities or, given the prevalence of virtual com-
munication in the MNE context, their ethnic background.
Despite these arguments, scholars have highlighted that the relation
between shared language and social identity is far from deterministic.
For example, poststructuralist conceptions view social identity as a
site of struggle that is diverse and potentially contradictory, a notion
that is especially relevant in the case of second language learning and
use (Peirce, 1995). Similarly, rather than being explicitly encoded by
language, social identity entails social meaning that is inferred based
on a person’s understanding and interpretation of linguistic construc-
tions (Ochs, 1993). Scholars have also argued that language can be used
strategically in identity formation (Lauring, 2008). Common to these
arguments is that the link between shared language and social identity
is not direct but mediated by more immediate constructs.
Specifically, although a shared language may trigger a process of iden-
tity construction (Bucholtz & Hall, 2005), it is not a sufficient condition
for developing a common identity. For example, the development of
a common social identity requires that individuals share economic,
political, cultural or other social histories and conventions for display-
ing socially recognized behaviors and attitudes, and associating these
with the focal social identity (Ochs, 1993). This notion highlights the
role of ability in constructing a common identity. In addition, social
identity theory holds that individuals can maintain multiple identi-
ties according to their affiliation with different groups (Tajfel & Turner,
1986) and the conception of social identity as manifold is also reflected
in sociolinguistic research (e.g., Bucholtz & Hall, 2005; Ochs, 1993).
Although the various identities may not necessarily be incompatible,
in a context of power inequalities, such as between non-native and
native language speakers (e.g., Peirce, 1995) or representatives from dif-
ferent MNE units (e.g., Vaara, Tienari, Piekkari, & Säntti, 2005), research
suggests that members with majority and minority status have different
identity preferences. While majority members are motivated to preserve
a single collective identity, minority members prefer to maintain their
own distinct identity within the overall collective (Dovidio, Gaertner, &
Saguy, 2009; Mehra et al., 1998). These arguments highlight motivation
as another factor for constructing a common identity.
Similarly, the literature has highlighted the unique challenges associ-
ated with the receipt of tacit knowledge, often referred to as internal
stickiness (Szulanski, 1996). Language differences are a potential cause
of such stickiness because tacit knowledge is difficult to articulate and
requires extensive personal interaction and effort between exchange
parties (Argote & Ingram, 2000). However, even if both parties speak
the same language, subsidiary managers may not necessarily acquire
HQ-specific knowledge, for example, because they lack the cognitive
structures to understand the knowledge, do not trust the sender or
simply resist the transfer (Kostova & Roth, 2002). Specifically, scholars
have argued that a recipient unit requires both an ability to properly
understand and make sense of the transferred knowledge, and a moti-
vation to source, accept and adopt knowledge from other MNE units
(Gupta & Govindarajan, 2000; Minbaeva, Pedersen, Björkman, Fey, &
Park, 2003). While existing conceptualizations and operationalizations
of both recipient ability and recipient motivation differ and there is
debate whether these two factors influence knowledge receipt additively
or interactively (Michailova & Mustaffa, 2012; Song, 2014), they are
widely considered to be key predictors.
Below, we develop a moderated mediation model at the subsidiary
level that theorizes about how shared language among subsidiary and
HQ managers influences subsidiary inflows of tacit knowledge from HQ
as an act to construct a shared HQ identity (see Figure 9.1). In brief, we
propose that shared language positively affects tacit knowledge receipt
(e.g., Mäkelä et al., 2007), but that the relationship is mediated by two
additional factors. First, subsidiary managers require an ability to under-
stand the HQ knowledge, which we conceptualize as the extent to which
subsidiary managers share the HQ goals and vision (Orton & Weick,
1990), hence possessing similar frames of reference to interpret and
make sense of the knowledge (Argote & Ingram, 2000; Brannen, 2004).
Second, subsidiary managers require a motivation to gain HQ knowledge,
which we conceptualize as the extent to which HR decision making is
centralized in the MNE (Bowen & Ostroff, 2004; Pratt, 1998), thereby
making HQ identification more rewarding to subsidiary managers
(e.g., Newburry, 2001; Reiche, 2007).
Shared HQ
goals and vision
H2
Subsidiary
Shared H1
knowledge
language
inflows from HQ
Centralization of
HR decisions
H3
Indirect effects
H4a-b
Subsidiary type
Figure 9.1 Theoretical model
Finally, we consider subsidiary type as a condition under which the abil-

ity- and motivation-related factors are more or less salient in mediating
the relation between shared language and subsidiary knowledge inflows.
Specifically, we expect managers in foreign acquisitions sharing a language
with their HQ counterparts to require greater levels of ability and motiva-
tion to develop a shared HQ identity through tacit knowledge receipt. This
is because managers in foreign acquisitions have relatively less knowledge
of the HQ context (Gupta & Govindarajan, 2000) and are more likely to
resist social integration with the parent (Stahl & Voigt, 2008). Hence, sub-
sidiary type moderates the indirect relationships between shared language
and subsidiary knowledge inflows through shared HQ goals and vision
and centralization of HR decisions, respectively.
Hypotheses development
Shared language and subsidiary knowledge inflows

For two reasons we would expect subsidiary managers to more likely
receive tacit knowledge from HQ to construct a shared identity when
sharing a language with their HQ counterparts. First, the transfer of
tacit knowledge requires an articulation process that renders the per-
sonally held knowledge accessible to others, which makes language a
fundamental prerequisite for knowledge transfer (Welch & Welch, 2008).
As most tacit knowledge transfer involves several individuals (Argote &

Ingram, 2000), the more subsidiary and HQ managers share a language,
the higher the likelihood that subsidiary managers can access tacit knowl-
edge from HQ. In the case of tacit knowledge, the lack of a shared lan-
guage also increases the risk of misunderstandings (Slangen, 2011), which
will make it more difficult for subsidiary managers to develop accurate
perceptions of the HQ identity and construct a shared identity based on
the acquired knowledge. Second, the more subsidiary and HQ managers
share a language, the easier it will be for subsidiary managers to consider
the HQ as part of the same language-based in-group (Mäkelä et al., 2007).
As a result, they are more likely to invest in developing a sense of belong-
ing toward and identification with HQ (Kostova & Roth, 2002). One way
to achieve this is by receiving knowledge from HQ that allows them to
understand HQ conventions (Ochs, 1993) and hence operate in line with
HQ. Empirical research indeed suggests that language commonalities
positively affect knowledge flows, even when controlling for differences
in culture (e.g., Schomaker & Zaheer, 2014). Taken together, we propose:
Hypothesis 1: Shared language among subsidiary and HQ managers

will be positively related to subsidiary knowledge inflows from HQ.
Shared HQ goals and vision as a mediator

Despite sharing a language with their HQ counterparts, subsidiary man-
agers may not be able to understand the tacit HQ knowledge to construct
a shared HQ identity. From a social identity perspective, scholars have
pointed out that the development of a common social identity requires
individuals to share economic, political, cultural or other social histories
and conventions for displaying socially recognized behaviors and atti-
tudes, and associating these with the focal social identity (Ochs, 1993).
In the MNE context, research suggests that subsidiary managers who
have relatively less familiarity with the MNE as a whole are less likely to
develop a shared identity with other MNE units (Vora & Kostova, 2007).
One way in which HQ can actively help subsidiary managers to bet-
ter understand the HQ knowledge and apply it toward the construction
of a shared HQ identity is to establish clear goals and vision that are
commonly understood and accepted across the MNE. In general, com-
mon goals are thought to bind together loosely coupled and spatially
dispersed parts of an organization and facilitate inter-unit cooperation
(Orton & Weick, 1990). Common goals and vision also increase the
relatedness of frames of reference, interpretational schemas and systems
of understanding (Argote & Ingram, 2000; Brannen, 2004). This will
allow subsidiary managers to better understand the intricacies of the

HQ’s knowledge context and derive meaning from it for their identity
construction, particularly in the case of tacit knowledge (Bhagat et al.,
2002). Sharing HQ goals and vision may also reduce subsidiary managers’
uncertainty regarding the value of tacit HQ knowledge because they
feel more confident that they can properly understand and apply the
knowledge in their own context (Nahapiet & Ghoshal, 1998).
Similarly, the literature has suggested that MNE knowledge flows
benefit from establishing a dominant logic for decision making (e.g.,
Verbeke, 2010). A dominant logic concerns the frames of reference and
mindsets that managers have developed over time as a result of inter-
preting and experiencing organizational situations and allows managers
to act in a unified manner and make consistent decisions (Prahalad &
Bettis, 1986), and is therefore conceptually related to shared HQ goals
and vision. Because a shared language provides common lexical,
syntactical and phonetic structures to express and understand each
other (Tenzer & Pudelko, 2012), it forms the basis for subsidiary manag-
ers to adopt a dominant logic from HQ. In turn, this should also assist
subsidiary managers to receive tacit HQ knowledge for constructing a
common HQ identity and applying this dominant logic in line with HQ.
Empirical evidence further supports our argument that shared lan-
guage relates to tacit knowledge receipt through common goals and
vision. First, language commonalities among subsidiary and HQ man-
agers have been found to facilitate the emergence of a shared vision
(Barner-Rasmussen & Björkman, 2007). Second, a shared understanding
of the organization’s goals allows knowledge senders and recipients
to communicate with fewer misunderstandings when discussing firm-
specific practices and routines (Tsai & Ghoshal, 1998).
Hypothesis 2: The extent to which subsidiary managers share HQ

goals and vision will mediate the positive relationship between
shared language among subsidiary and HQ managers and subsidiary
knowledge inflows from HQ.
Centralization of HR decisions as a mediator

Despite sharing a language with their HQ counterparts, subsidiary
managers may also not be motivated to acquire tacit HQ knowledge
to construct a shared HQ identity. From a social identity perspective,
research on second language acquisition (e.g., Peirce, 1995) suggests
that language learners want to speak not only to exchange informa-
tion but also to make sense of contextual knowledge about how they
relate to their social context. Speaking a shared language thus requires

a commensurate return on one’s investment in the second language,
for example, by becoming part of an attractive social identity (Peirce,
1995). In the MNE context, evidence suggests that subsidiary managers
need to be motivated to receive tacit HQ knowledge (e.g., Minbaeva
et al., 2003), necessary for constructing a shared HQ identity. We
therefore propose that subsidiary managers’ motivation to acquire
HQ knowledge should also mediate the relationship between shared
language and subsidiary knowledge inflows.
One way in which HQ can motivate subsidiary managers to construct
a shared HQ identity by receiving tacit HQ knowledge is to increase the
relative salience of the HQ identity. This is because individuals that hold
multiple identities strive for self-enhancement, which requires group
identification to be rewarding (Pratt, 1998). Increasing the salience of
the HQ identity does not necessarily diminish subsidiary managers’
local identity (Vora & Kostova, 2007). However, research suggests that
group members with minority status, as in the case of subsidiary man-
agers within the wider MNE, often prefer to preserve their own distinct
status within the overall collective (Dovidio et al., 2009; Mehra et al.,
1998). Hence only if subsidiary managers believe that identification
with the superordinate HQ group is rewarding, will they be motivated
to acquire the tacit knowledge from HQ necessary to construct a shared
HQ identity.
HQ can make subsidiary managers’ HQ identification rewarding by
centralizing HR decision making. In general, scholars have pointed
to HR practices as an important source of identification (Ellemers
et al., 2004). While some HR-related decisions are a function of the local
institutional environment, there is substantial leeway in how much
centralization is possible in MNEs (Schuler, Budhwar, & Florkowski,
2002). In general, centralization carries potential drawbacks as it may
lead to inertia, stifle creativity and reinforce structural inequalities in
the distribution of power (e.g., Mudambi & Navarra, 2004; Vermeulen &
Barkema, 2001). However, and for our study more importantly, evi-
dence also suggests a positive relationship with subsidiary inflows of
tacit knowledge (Gupta & Govindarajan, 2000). In the case of HR deci-
sion making, there are further important benefits of centralization. For
example, when decisions about performance appraisal, training and
development, promotions or compensation are made centrally rather
than locally, subsidiaries are less detached from the wider MNE, leading
subsidiary employees to perceive greater career prospects in the entire
organization (Newburry, 2001). Scholars have also argued that the
centralization of pay practices and the management of a central roster
of talent within the MNE will provide subsidiary managers with more
opportunities for international mobility (Festing, Engle, Dowling, &
Sahakiants, 2012; Reiche, 2007).
Related research supports our prediction that shared language affects
subsidiary knowledge inflows through centralization of HR decisions.
Specifically, a shared language is thought to make the diffusion and
implementation of centralized decisions easier (Marschan-Piekkari
et al., 1999a). Similarly, evidence suggests that the design of HR prac-
tices directly influences cross-unit inflows of tacit knowledge (Yamao,
De Cieri, & Hutchings, 2009). Scholars have also highlighted the role of
employee consensus toward HR decisions for a number of positive out-
comes, including knowledge transfer (Bowen & Ostroff, 2004). In cross-
unit knowledge exchanges, such consensus requires a centralized HR
system rather than the experience of different HR systems across units.
Hypothesis 3: The extent to which HR decisions are centralized will

mediate the positive relationship between shared language among sub-
sidiary and HQ managers and subsidiary knowledge inflows from HQ.
Subsidiary type as a moderator

Finally, we propose that subsidiary type will moderate the indirect rela-
tionships between shared language and subsidiary knowledge inflows
through shared HQ goals and vision, and through centralization of HR
decisions, respectively. It has been common to differentiate subsidi-
ary type according to the MNE’s mode of entry into a foreign country,
distinguishing between foreign greenfield investments and foreign acqui-
sitions (e.g., Harzing, 2002). Subsidiary type should affect the salience of
the ability- and motivation-related mediators of the relation between
shared language and subsidiary inflows of tacit knowledge because man-
agers in foreign greenfields and foreign acquisitions are likely to have dif-
ferent identity preferences (Vora & Kostova, 2007). Specifically, as foreign
acquisitions have existed as a collective unit before acquisition they are
more likely to maintain a social identity that is unaligned with that of
HQ compared with foreign greenfields (Vaara et al., 2005). We therefore
expect managers in foreign acquisitions sharing a language with their
HQ counterparts to require greater levels of ability and motivation to
develop a shared HQ identity through tacit knowledge receipt.
First, compared with foreign greenfields it will be more important for
managers in foreign acquisitions to be able to receive tacit knowledge from
HQ. This is because foreign acquisitions have relatively less overlapping
knowledge bases with HQ (Gupta & Govindarajan, 2000; Vermeulen &
Barkema, 2001) and, hence, managers in foreign acquisitions possess
relatively less tacit knowledge of the HQ context that would be neces-

sary to construct a shared HQ identity. As outlined above, HQ can enable
subsidiary managers to better understand and apply HQ knowledge by
establishing shared HQ goals and vision. Therefore we expect that the
mediation of shared HQ goals and vision will be stronger in foreign
acquisitions compared with foreign greenfields.
Hypothesis 4a: Subsidiary type will moderate the positive and indi-
rect relationship between shared language among subsidiary and
HQ managers and subsidiary knowledge inflows from HQ through
shared HQ goals and vision. Specifically, the mediation of shared HQ
goals and vision will be stronger in foreign acquisitions compared
with foreign greenfields.
Second, compared with foreign greenfields it will also be more impor-
tant for managers in foreign acquisitions to be motivated to receive tacit
knowledge from HQ. According to social identity theory (Tajfel & Turner,
1986; Turner, 1982), individuals are particularly prone to maintaining
a positive social identity by idealizing their own group and denigrating
the other group under conditions of perceived external threat, as is the
case in a foreign acquisition. Research indeed suggests that managers in
foreign acquisitions will have weaker attachment toward HQ managers
(Li, 1995) and are more likely to resist social integration with the parent
compared with foreign greenfields (Stahl & Voigt, 2008). Hence making
HQ identification rewarding through a centralization of HR decisions
will be more salient in foreign acquisitions. In sum, we also expect the
mediation of centralization of HR decisions to be stronger in foreign
acquisitions compared with foreign greenfields.
Hypothesis 4b: Subsidiary type will moderate the positive and indi-
rect relationship between shared language among subsidiary and
HQ managers and subsidiary knowledge inflows from HQ through
centralization of HR decisions. Specifically, the mediation of cen-
tralization of HR decisions will be stronger in foreign acquisitions
compared with foreign greenfields.
Method
Sample and procedure

To test our hypotheses, we collected data through both online and
paper questionnaires in nine different countries/regions (see Table 9.1
for an overview). In Australia/New Zealand, China, Japan, the United
Table 9.1 Sample distribution across subsidiary location, industry and HQ

location
Subsidiary location Number of Industry Number of

respondents respondents
Australia/New Zealand 92 Banking & insurance 20

China 91 Business services 78
France 70 Chemicals 129
Germany 125 Food & beverages 55
Japan 80 Industrial machinery 130
Korea 118 Measuring & analysing 30
instruments
Nordic countries 71 Motor vehicles & parts 138
Spain 82 Paper & allied products 33
United Kingdom 88 Pharmaceuticals 73
Rubber & plastics 60
Other 71
HQ location Number of Official corporate Number of

respondents language respondents
(<10 respondents omitted) English 552

Austria 14 None 193
Belgium 14 Japanese 35
Denmark 14 German 13
France 67 French 10
Finland 19 Chinese 6
Germany 107 Korean 3
Italy 18 Italian 2
Japan 89 Czech 1
Netherlands 35 Hebrew 1
Norway 11 Spanish 1
Singapore 13
Sweden 28
Switzerland 42
United Kingdom 56
United States 222
Other 68
Total 817 Total 817
Kingdom, Spain and Germany, we mailed the surveys locally and in

collaboration with local universities. Surveys to France and the Nordic
countries (Denmark, Finland, Norway, Sweden) were mailed from the
United Kingdom. Respondents received an initial mailing and one
reminder, although budget limitations meant that we could only send
reminders to a third of the companies in the United Kingdom. We had
initially hoped to collect all data online, but soon realized that some
respondents were uncomfortable with this. Thus we decided to offer a
paper version as an alternative in most countries. To account for poten-
tial differences in data collection methods (Simsek & Veiga, 2001), we
ran t-tests for all variables in our study for those countries in which both
paper and online questionnaires were used. In most countries, no signif-
icant differences were found between the two versions. Although minor
differences appeared in the United Kingdom, Australia/New Zealand,
Germany and Spain, these were most likely caused by over- or under-
representation of culturally and linguistically closer HQ countries for
one of the versions. Overall, we can therefore assume that the method
of data collection did not significantly affect our results.
As questionnaires in English can conceal national differences by
reducing variance (Harzing et al., 2005), we translated our questionnaire
into the respective local language of the subsidiary country. The Nordic
countries were the only exception because we expected the English lan-
guage capacity of our respondents to be sufficiently high to provide reli-
able responses in English. Overall, we translated our survey instrument
into Chinese, Japanese, Korean, German, French and Spanish. Bilingual
research assistants conducted the initial translation under the supervi-
sion of the project coordinator. In a subsequent step, we organized focus
group interviews that involved both the translator and two or three
other bilingual students to discuss the translated questionnaire. These
focus groups consisted of first asking the bilingual students to carefully
review each translated item one by one and assess whether the text
appeared “natural” to them. They were then asked to review the original
English item and indicate whether it was equivalent to the correspond-
ing native version. Whenever at least one student considered an item to
be not entirely equivalent the translator prompted a discussion between
the participants to arrive at a better translation. The project coordina-
tor attended each focus group to explain the meaning of the items
where necessary. The entire process lasted a minimum of 3 h per lan-
guage, while the Asian languages usually required three sessions lasting
up to 8 h in total.
We mailed the questionnaires to the Head of HR of all majority
owned subsidiaries with more than 100 employees. We pre-selected the
set of industries included in our sample such that they would have a
sufficient representation across both home and host countries to avoid
attributing industry differences to home/host country distribution
effects. Addresses for all countries were acquired from D&B (formerly
Dun & Bradstreet). The choice of HR managers as our respondents was
motivated by several reasons. First, we expected HR managers to most

likely be knowledgeable about the variety of topics in our study. Second,
most surveys to MNE subsidiaries are targeted at managing directors
which is why we expected a survey directed to a functional manager to
result in a higher response rate, while also entailing less risk that some-
one else would fill out the survey on behalf of the intended respondent.
Third, out of all functions we expected HR managers to most likely be a
local manager. This helped to reduce the potential bias of having a mix
of host country nationals and expatriate respondents, which is particu-
larly important for a study about subsidiary perceptions of shared lan-
guage and social identity regarding HQ. Our results showed that 95% of
the HR managers were host country nationals, a higher share than any
of the other functions. Finally, previous research suggests that HR man-
agers’ assessments of subsidiary knowledge inflows are highly consistent
with the assessments of other subsidiary executives (Chang et al., 2012).
After eliminating undeliverable surveys, we achieved an overall
response rate of 13.83%. This response rate is fairly common for multi-
country studies (Harzing, 1997). The response rates in our study varied
from 4.0% for China to 47.6% for Korea. The latter is likely to reflect
the different data collection method employed in this country (given
the lower amount of foreign subsidiaries in Korea we commissioned an
agency to call and prompt subsidiary executives to fill out our question-
naires). To test for the possibility that the use of an external agency for
data collection may bias our results, we also analyzed our data with-
out the Korean sample. As none of the substantive results change, we
decided to retain the Korean sample. The low response rate in China
was probably caused by the fact that China was the only country in
which we did not use paper questionnaires. Response rates in China
were further reduced due to a government policy of restricting access to
foreign websites with Chinese page titles. As a result, once our website
was blocked, we received no further responses in our initial mailing
in China. However, as we had expected a relatively lower response
rate in China, we sent the highest number of questionnaires in this
country, achieving a satisfactory response at least in absolute terms.
The United Kingdom and France also obtained low response rates. In
the United Kingdom, this might have been caused by the lack of a full
reminder and the result of our data being collected in the height of
the Global Financial Crisis. In multi-country studies France commonly
belongs to the countries with the lowest response rates (see Harzing,
1997). Although we included a recommendation letter from one of
France’s most prestigious business schools to alleviate this concern,
not being able to conduct the mailing locally might have negatively
affected our response rates.
We conducted two sets of analyses to test for the potential of non-
response bias. First, we compared the size and age of the subsidiaries
that responded with those that did not respond. We found no signifi-
cant differences for either subsidiary size in terms of number of employ-
ees (581.25 vs 586.15, p = 0.96) or year of establishment (1982.53 vs
1984.42, p = 0.123). Second, for each country we compared respondents
to the initial mailing with those that reacted to the reminder for all
study variables. Late respondents are often considered to be more rep-
resentative of non-respondents than early respondents (Armstrong &
Overton, 1977). Again, we found no systematic significant differences
for any of our variables. As a result, non-response bias does not seem to
be a problem in our study.
We obtained substantial sample sizes in each of the nine countries/
regions that our study included, and a good coverage of industries.
Table 9.1 presents the final sample by subsidiary and HQ location,
industry and official corporate language use. With regard to subsidiary
characteristics, the mean for the year of establishment was 1989, its
median 1996. On average subsidiaries had 602 employees, while the
median was 192; 41% of the subsidiaries were foreign greenfields and
59% foreign acquisitions.
Measures
All variables were measured on 7-point Likert scales. We used different
scale anchors for each of our substantive variables to reduce the poten-
tial of common method bias.
Independent variable
To operationalize shared language among subsidiary and HQ managers, ide-
ally we would have liked to measure the shared language between each
actual knowledge sender and recipient. However, for an organization-
level study that spans a large number of MNE subsidiaries and countries,
the collection of data on each individual instance of tacit knowledge
transfer and its subsequent aggregation would not have been feasible.
We therefore developed a subjective measure at the subsidiary level
consisting of four questions (see also the Appendix), asking respond-
ents to assess the language capability of (1) subsidiary managers in the
language spoken in the HQ country, (2) subsidiary managers in the
official corporate language, (3) HQ managers in the language spoken in
the country the focal subsidiary is located in and (4) HQ managers in
the official corporate language (1 = very poor, 7 = native speaker). We then

summed up the scores of all four variables per respondent to create an
aggregate score at the subsidiary level. To aid with the interpretation, we
transformed our measure into a metric ranging from 0 to 1 by dividing
the measure by its maximum score of 28.
Our subjective measure of shared language has a number of advan-
tages over objective, country-level measures used in previous research
(e.g., Dow & Karunaratna, 2006; Slangen, 2011). First, not having to
rely on country scores means we do not have to assume that language
competencies are homogenous throughout the countries in question.
Instead, we tap directly into the language competencies available in
the particular companies. Second, our measure reflects a conceptual-
ization of shared language that is not limited to one specific language
as it potentially captures up to three languages: the home country
language, the host country language or the corporate language. In
this vein, our subjective measure also implicitly accounts for the use
of English as a second language because in many cases English serves
as the official corporate language (in 68% of the cases in our sample,
see Table 9.1).
Third, objective measures of shared language draw on the notion that
the closer languages are to each other the more people can understand
each other. However, even reasonably close languages may prevent
communication unless the counterparts either have knowledge of their
counterparts’ language or can revert to a third, common language.
For example, Germany and the Netherlands are relatively close to each
other in terms of their objective language proximity scores (Dow &
Karunaratna, 2006), yet that does not mean their native speakers can
necessarily communicate with each other better than individuals from
Germany and Spain, who are more distant.
Fourth, objective measures of shared language (e.g., Slangen, 2011)
do not necessarily account for language fractionalization (e.g., Alesina,
Devleeschauwer, Easterly, Kurlat, & Wacziarg, 2003). Our subjective
measure implicitly accounts for fractionalization because respondents
can choose the language that is most relevant in their context. For
example, our item “How would you assess the language capability of
HQ managers in the language spoken in the country the focal subsidi-
ary is located in” would lead a respondent to choose German if the HQ
was located in the Germanic part of Switzerland, and French if the
HQ was located in the French part of Switzerland. Fifth, we argue that
a subjective language measure is also more appropriate in the specific
context of our research. As we are adopting a social identity perspective,
which is based on subjective phenomena such as impressions, attitudes

and feelings, what ultimately matters are subjective evaluations of
shared language and not objective measures.
Mediator and moderator variables

To measure shared HQ goals and vision, we constructed a 3-item scale
based on Tsai and Ghoshal (1998): “Managers in this subsidiary are
enthusiastic about pursuing the collective goals of the whole organiza-
tion,” “This subsidiary’s managers have the same ambitions and vision
as managers at HQ” and “This subsidiary’s organizational culture and
management style is very similar to that at HQ” (1 = strongly disagree,
7 = strongly agree). We averaged all items to form a scale score (α =
0.80). We measured centralization of HR decisions with six items. We
asked respondents “Who would normally have the decision-making
authority regarding the following HR functions?” (1 = subsidiary alone,
7 = HQ alone) and provided them with a list of the following six differ-
ent HR functions: recruitment and selection, training and development,
performance appraisal, compensation, promotion and general HR strat-
egy. Again, we averaged all six items to create a scale score (α = 0.89).
We operationalized subsidiary type through a dichotomous variable (0 =
foreign acquisition, 1 = foreign greenfield).
Dependent variable
To operationalize subsidiary knowledge inflows from HQ, we built on
Gupta and Govindarajan’s (2000) measure of tacit knowledge flows.
Accordingly, we asked respondents to what extent their subsidiary
receives knowledge from HQ in the area of (1) R&D, (2) manufacturing,
(3) distribution/logistics, (4) marketing/sales, (5) HRM and (6) service
delivery (1 = not at all, 7 = very much). All six items were averaged to
form a scale score (α = 0.85).
Control variables
We controlled for several variables to improve our model estimation.
We included measures for subsidiary size, operationalized as the loga-
rithmic transformation of the number of employees and subsidiary age
(in years). We also asked respondents to indicate the subsidiary’s func-
tion (R&D, manufacturing, sales/marketing, distribution/logistics, ser-
vice, national/regional HQ). As many subsidiaries served several of these
functions we controlled for whether the subsidiary serves any of
these functions within the MNE (0 = No, 1 = Yes). In addition, we con-
trolled for two aspects of the relational context in which the knowledge
flows take place (Szulanski, 1996). First, we controlled for the ratio of
expatriates that were working in the subsidiary at the time of data col-
lection relative to total subsidiary staff as expatriates contribute to cross-
unit knowledge flows (Reiche et al., 2009). Second, given that direct
interactions between sender and recipient are thought to particularly
facilitate the receipt of tacit knowledge (Argote & Ingram, 2000), we also
controlled for frequency of face-to-face interactions between subsidiary
and HQ managers (Mäkelä & Brewster, 2009). Specifically, we asked our
respondents to rate the frequency of subsidiary managers’ interactions
with HQ staff in four contexts, including business trips to HQ, participa-
tion in committees and task forces, participation in training programs,
and participation in meetings and conferences (1 = never or hardly ever,
7 = weekly or more). Subsequently, the four items were averaged to create
a scale score (α = 0.82).
To explicitly test for the superiority of our subjective measure of
shared language over existing objective measures, we also controlled
for country-level language proximity by computing proximity scores
between each respective native language of the HQ and the subsidiary
country, building on the composite scale of language distance devel-
oped by Dow and Karunaratna (2006). To interpret our results in terms
of closeness rather than distance, we subsequently transformed the
scale into proximity scores. Further, given that English might be used as
a lingua franca (e.g., Planken, 2005) even if English is neither the official
corporate language nor one of the home or host country languages, we
also controlled for the similarity in country-level capabilities in English
between the HQ and subsidiary countries. In line with previous research
(Slangen, 2011), we took the scores reached by examinees from each
of the HQ and subsidiary countries included in our sample on the Test
of English as a Foreign Language (TOEFL), the most widely accepted
test of spoken and written English in the world. We used the average
TOEFL scores that each respective group of examinees achieved on the
paper-based test in 2008, the year in which our data collection began.
For countries whose native language is English, we used the average test
score of native English speakers. To arrive at our measure of proximity
of English capabilities, we computed proximity scores between the aver-
age test scores of the subsidiary and the HQ countries.
Finally, we examined possible response differences across the nine
subsidiary locations. To do so, we computed the ICC score for our three
endogenous variables (shared HQ goals and vision, centralization of
HR decisions, subsidiary knowledge inflows) to assess the within- and
between-group variance. The ICC(1) scores have values of 0.018 for
shared HQ goals, 0.094 for HR centralization and 0.065 for knowledge

inflows, respectively. Although these scores are moderate, two are above
the recommended value of 0.05 (see Bliese & Hanges, 2004), point-
ing to the need to explicitly account for our data being nested within
countries. We also probed for a possible nesting of our data with regard
to industry affiliation. The corresponding ICC(1) scores are – 0.007 for
shared HQ goals, 0.018 for centralization of HR decisions and 0.011 for
knowledge inflows, respectively, suggesting that industry effects are not
an issue in our data set. Still, we included industry affiliation as a fixed
effect in our analyses.
Results
Preliminary analyses
To evaluate the discriminant validity of all multi-item variables meas-
ured in the survey (shared language, shared HQ goals and vision,
centralization of HR decisions, subsidiary knowledge inflows), we first
conducted a series of confirmatory factor analyses (CFAs) with AMOS
(Arbuckle & Wothke, 1999). As shown in Table 9.2, the fit indices reveal
that the hypothesized four-factor model fits our data well and, impor-
tantly, is significantly better fitting than any of the alternative nested
models, indicating support for the distinctiveness of our constructs.
To assess the quality of our survey translations, we tested for invari-
ance of our measures across the seven survey language groups (English,
Chinese, Japanese, Korean, German, French and Spanish). The relatively
low sample size in some of the language groups did not allow us to con-
duct more sophisticated tests for language equivalence across all groups
simultaneously. However, separate multi-group CFAs of our four-variable
measurement model for each of the seven survey language groups showed
acceptable fit (survey language group-specific RMSEAs ranged from 0.05
to 0.09) and were significantly better fitting than any of the alternative
nested models specified in Table 9.2. In addition, we detected no sys-
tematic bias in the survey language group-specific reliability coefficients,
and the reliability coefficients of our three multi-item scales for each of
the seven survey language groups, except for subsidiary knowledge flows
in China (α = 0.67), were all above the threshold level of 0.70. To test
for the possibility that the lower reliability of our dependent variable in
the Chinese subsample may bias our results, we also analyzed our data
without the Chinese data. As none of the substantive results change, we
decided to retain the Chinese sample. Taken together, we conclude that
our data does not suggest any evidence of substantial language variance.
Table 9.2 Results of CFA for the survey measuresa
Model χ2 df TLI CFI RMSEA
Four-factor model 709.49 146 0.89 0.92 0.06

Three-factor model: Shared HQ 863.74 147 0.86 0.89 0.07
goals and vision and centralization
of HR decisions combined
Three-factor model: Shared 1012.59 147 0.83 0.87 0.08
language and shared HQ goals
and vision combined
Two-factor model: All three 1114.03 149 0.81 0.85 0.09
predictors combined
One-factor model 1165.57 152 0.81 0.85 0.09
a
TLI is the Tucker–Lewis index; CFI: the comparative fit index; and RMSEA: the root-mean-
square error of approximation; n = 817.
Given our perceptual data, we took several preventive measures to

minimize the potential of common method bias (Podsakoff, MacKenzie,
Lee, & Podsakoff, 2003), including the separation of items for the inde-
pendent and dependent variables into different sections of the ques-
tionnaire and the use of different scale endpoints. It is important to
note that common method variance acts as a main effect. As a result, it
only inflates zero-order correlations but does not inflate the possibility
of falsely detecting moderator variables (Podsakoff et al., 2003). Before
testing our hypotheses, we also performed two sets of preliminary
analyses to assess the potential for common method bias in our sample.
First, we performed Harman’s single-factor test (Podsakoff et al., 2003)
and inspected the unrotated solution of an exploratory factor analysis
with items of our five substantive variables. The first factor accounted
for only 24.26% of the variance, compared with 64.41% of the variance
explained by all five factors.
Second, we followed Lindell and Whitney’s (2001) recommendations
to test for common method bias by introducing a marker variable. Such
a marker should be measured by the same instrument as the scales used
in the analysis and should be theoretically unrelated to the substantive
variables in the study. For our purposes, the variable “perceived subsidi-
ary staff morale and retention relative to the subsidiary’s local competi-
tors” (2-item scale, a = 0.79) was chosen as a marker variable because we
did not use this variable in our analyses, we did not expect a theoretical
relationship to the other substantive variables and because it was meas-
ured in a similar way as most of our other variables. When examining
the partial correlations between all perceptual variables, controlling

for perceived subsidiary staff morale and retention, we found that all
significant correlations in Table 9.3 remained significant. Overall, these
tests provide confidence that common method bias is unlikely to be
an issue in our study. Table 9.3 reports means, standard deviations and
correlations among the variables in this study. The correlations are low
to moderate, further suggesting that common method bias is unlikely
to be a major issue.
Finally, we tested for the possibility that shared language is endog-
enously determined. Specifically, it is possible that shared language is a
function of whether or not a firm has an official language mandate and
that the latter variable may have led to sample selectivity in our study.
Accordingly, we ran a two-stage Heckman correction analysis (Heckman,
1979) with STATA 10.0 (Rabe-Hesketh & Skrondal, 2008). In the first-
stage logit model, the dependent variable is a dummy that takes the
value 1 if the firm has an official corporate language and 0 otherwise.
This is regressed on various firm-specific and industry variables that
could affect the firm’s decision to have an official corporate language.
The first stage of the Heckman procedure yields a propensity score of the
decision to have an official corporate language. This score is then used to
obtain estimates of the correction for selectivity, or λ, which corresponds
to the inverse Mill’s ratio (Cameron & Trivedi, 2009). The second-stage
regression is similar to the original regression of subsidiary knowledge
inflows on our control and substantive variables except that it includes
an additional control variable that is instrumental for the dummy of offi-
cial corporate language, and hence corrects for selectivity (λ). The results
indicate that the coefficient of λ is nonsignificant (λ = 0.53, s.e. = 0.74, p
> 0.05), suggesting that sample selectivity based on whether or not a firm
has an official corporate language is unlikely to be an issue in our study.
Tests of hypotheses
To test our hypothesized relationships, we conducted a set of random-
intercept maximum likelihood regression models using STATA 10.0. For
each regression, we estimated a random-intercept model to account
for the fact that our data are nested within countries. In addition, we
accounted for industry affiliation as a fixed effect using 14 dummy vari-
ables. To reduce the potential of multicollinearity that may arise when
creating interaction terms from two other predictors and to make the
coefficients easier to interpret, we centered the substantive independ-
ent and moderator variables before creating interaction terms (Aiken &
West, 1991).1 Tables 9.4 and 9.5 summarize the regression results for
subsidiary knowledge inflows and the mediator variables.
Table 9.3 Means, standard deviations and corelationsa
Variable Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1 Shared language 0.56 0.21

2 Shared HQ goals 4.53 1.32 0.12**
and vision
3 Centralization of 2.98 1.44 0.17** 0.03
HR decisions
4 Subsidiary type 0.41 0.49 −0.06 0.09* −0.15**
5 Subsidiary knowl- 4.07 1.30 0.14** 0.32** 0.19** 0.24**
edge inflows
6 Subsidiary age 19.89 21.07 −0.05 0.07 −0.07 0.18** 0.02
7 Subsidiary size 5.37 1.42 −0.02 0.04 −0.06 0.02 0.07 0.08*
8 R&D function 0.35 0.48 0.03 −0.12** 0.01 −0.21** −0.18** 0.02 0.11**
9 Manufacturing 0.73 0.45 −0.05 0.03 0.03 −0.03 −0.03 −0.02 0.06 0.20**
function
10 Sales/marketing 0.57 0.50 0.03 −0.03 0.02 −0.05 −0.08* 0.10** −0.03 0.37** −0.02
function
11 Distribution/ 0.38 0.49 0.00 −0.06 0.07 −0.22** −0.15** 0.02 −0.01 0.45** 0.24** 0.48**
logistics function
12 Service function 0.36 0.48 0.11 −0.08* 0.01 −0.09* −0.10** −0.01 0.03 0.29** −0.18** 0.31** 0.36**
13 National/regional 0.29 0.46 −0.01 −0.04 −0.06 −0.16** −0.10** 0.07 0.03 0.25** −0.04 0.31** 0.35** 0.32**
HQ function
14 Frequency of face- 3.61 1.27 0.15** 0.16** 0.20** −0.05 0.18** 0.00 0.12** 0.11** −0.01 0.03 0.06 0.09* 0.10**
to-face interaction
15 Expatriate ratio 0.01 0.03 0.05 −0.01 0.03 0.18** 0.12** −0.05 −0.20** −0.10** −0.21** −0.08* −0.13** 0.04 0.02 0.04
16 Language −0.20 1.15 0.27** −0.02 0.03 −0.16** −0.11** 0.03 −0.05 −0.02 −0.02 −0.00 0.07 0.09* 0.09* 0.02 0.01
proximity
17 Proximity 18.32 14.33 0.22** −0.00 0.01 −0.06 −0.03 0.01 −0.01 −0.02 0.00 −0.02 0.05 0.05 0.04 0.02 0.01 0.34**
in English
capabilities
a
AII correlations two-tailed, n = 817.
*p < 0.05; **p < 0.01
To test Hypothesis 1, we regressed subsidiary knowledge inflows on

12 controls (subsidiary age, subsidiary size, six subsidiary functions,
frequency of face-to-face interaction, expatriate ratio, language proxim-
ity, proximity in English capabilities) while accounting for the industry
dummies (entered in Step 1), and shared language (entered in Step 2).
As shown in Table 9.4, Model 2, shared language was significantly posi-
tively related to subsidiary knowledge inflows, supporting Hypothesis 1.
To test Hypotheses 2 and 3, we conducted a formal significance test
of the indirect relationships between shared language and subsidi-
ary knowledge inflows through shared HQ goals, and between shared
language and subsidiary knowledge inflows through centralization of
HR decisions. To avoid power problems due to asymmetric and other
non-normal sampling distributions of an indirect effect (MacKinnon,
Lockwood, & Williams, 2004), we computed bootstrapped confidence
intervals (CIs). Bootstrap results (bootstrap sample size = 5000) of the
formal two-tailed significance test, controlling for centralization of HR
decisions, showed a significant indirect effect of shared language on
subsidiary knowledge inflows through shared HQ goals (Value = 0.29,
bootstrapped s.e. = 0.07, z = 3.94, p < 0.01), with a bootstrapped 95% CI
around the indirect effect not containing zero (0.15, 0.43). Controlling
for shared HQ goals, we also found a significant indirect effect of shared
language on subsidiary knowledge inflows through centralization of HR
decisions (Value = 0.09, bootstrapped s.e. = 0.05, z = 2.05, p < 0.05),
with a bootstrapped 95% CI around the indirect effect not contain-
ing zero (0.01, 0.18). Further, according to Table 9.5, Models 2 and 6,
shared language was significantly positively related to both shared HQ
goals and centralization of HR decisions. In addition, as demonstrated
in Table 9.4, Model 3, both shared HQ goals and centralization of HR
decisions positively and significantly related to subsidiary knowledge
inflows once shared language was taken into account. Taken together,
these results support Hypotheses 2 and 3.
Hypotheses 4a–b predicted that the indirect and positive relation-
ships between shared language and subsidiary knowledge inflows
through both shared HQ goals and centralization of HR decisions would
be weaker in foreign greenfields compared with foreign acquisitions.
As this proposed moderated mediation effect implies a direct mod-
eration of subsidiary type, we first simultaneously tested for the pos-
sibility of direct, first-stage and second-stage moderation of subsidiary
type (Edwards & Lambert, 2007). Controlling for centralization of HR
Table 9.4 Results of random-intercept regression analysis for subsidiary knowl-

edge inflowsa
Variables Subsidiary knowledge inflows
Model 1 Model 2 Model 3 Model 4
b s.e. b s.e. b s.e. b s.e.
Intercept 4.15** 0.28 4.07** 0.28 4.08** 0.28 4.05** 0.28

Subsidiary age 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subsidiary size 0.08 0.04 0.09* 0.04 0.10* 0.04 0.10* 0.04
R&D function −0.44** 0.11 −0.45** 0.11 −0.24* 0.11 −0.25** 0.11
Manufacturing −0.13 0.13 −0.10 0.12 −0.12 0.12 −0.14 0.12
function
Sales/marketing 0.11 0.11 0.11 0.11 0.00 0.11 0.01 0.11
function
Distribution/ −0.15 0.13 −0.17 0.12 −0.12 0.11 −0.13 0.12
logistics function
Service function −0.08 0.12 −0.13 0.12 −0.07 0.12 −0.07 0.11
National/regional −0.11 0.11 −0.07 0.11 0.07 0.11 0.08 0.11
HQ function
Frequency of face- 0.23** 0.04 0.21** 0.04 0.13** 0.04 0.13** 0.04
to-face interaction
Expatriate ratio 4.52* 1.80 4.14* 1.77 2.64 1.73 2.78 1.72
Language −0.04 0.05 −0.09 0.05 −0.06 0.05 −0.06 0.05
proximity
Proximity 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
in English
capabilities
Shared language 0.90** 0.23 0.61** 0.23 0.61** 0.22
Shared HQ goals 0.26** 0.03 0.26** 0.03
and vision
Centralization of 0.19** 0.03 0.20** 0.03
HR decisions
Subsidiary type 0.48** 0.10 0.45** 0.10
Centralization × −0.15* 0.06
subsidiary type
ΔR2 0.03** 0.19** 0.02*
R2 0.22 0.25 0.44 0.46
Standard deviation 0.23** 0.20** 0.20** 0.20**
of random effect
χ2 99.04** 114.70** 199.12** 205.39**
a
Unstandardized coefficients are reported, n = 817. Controls for industry affiliation are
included but not reported.
*p < 0.05; **p < 0.01.
Table 9.5 Results of random-intercept regression analysis for mediatorsa
236
Variables Shared HQ goals and vision Centralization of HR decisions
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
b s.e. b s.e. b s.e. b s.e. b s.e. b s.e.
Intercept 4.47** 0.29 4.42** 0.29 4.59** 0.30 4.56** 0.30 3.64** 0.32 3.60** 0.32
Subsidiary age 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 −0.00 0.00 −0.00 0.00
Subsidiary size 0.05 0.04 0.05 0.04 0.04 0.04 0.04 0.04 −0.04 0.04 −0.04 0.04
R&D function −0.21 0.12 −0.24* 0.12 −0.29* 0.12 −0.31* 0.12 −0.15 0.13 −0.17 0.13
Manufacturing 0.02 0.13 0.06 0.13 0.01 0.14 0.01 0.14 −0.12 0.14 −0.06 0.14
function
Sales/marketing 0.04 0.12 0.03 0.12 −0.01 0.12 −0.01 0.12 0.11 0.12 0.09 0.12
function
Distribution/ −0.31* 0.13 −0.34** 0.13 −0.26 0.13 −0.27* 0.13 −0.03 0.14 −0.02 0.14
logistics function
Service function 0.12 0.12 0.12 0.12 0.08 0.13 0.11 0.13 −0.04 0.13 −0.04 0.13
National/regional −0.12 0.12 −0.12 0.11 −0.03 0.12 −0.01 0.12 −0.35** 0.13 −0.31* 0.12
HQ function
Freq. in face-to- 0.21** 0.04 0.18** 0.04 0.16** 0.04 0.16** 0.04 0.16** 0.04 0.15** 0.04
face interaction
Expatriate ratio −1.26 1.92 −1.41 1.86 −2.40 1.92 −2.48 1.91 3.15 2.01 2.94 1.99
Language 0.02 0.05 −0.05 0.05 −0.07 0.05 −0.07 0.05 0.09 0.05 0.04 0.05
proximity
Proximity −0.00 0.00 −0.00 0.00 −0.00 0.00 −0.00 0.00 −0.00 0.00 −0.00 0.00
in English
capabilities
Shared language 1.14** 0.24 1.19** 0.25 1.22** 0.24 0.55* 0.25
Subsidiary type 0.20 0.11 0.20 0.11
Shared language × −1.19* 0.47
subsidiary type
ΔR2 0.05** 0.01 0.02* 0.01*
R2 0.12 0.17 0.18 0.20 0.16 0.17
Standard devia- 0.12 0.10 0.10 0.10 0.40** 0.39**
tion of random
effect
χ2 52.22** 76.46** 78.33** 84.76** 65.38** 67.21**
a
Unstandardized coefficients are reported, n = 817. Controls for industry affiliation are included but not reported.
*p < 0.05; **p < 0.01.
237
decisions, bootstrap results revealed a significant first-stage moderation

of subsidiary type on the relationship between shared language and
shared HQ goals (Value = −1.19, bootstrapped s.e. = 0.49, z = −2.42,
p < 0.05), but non-significant moderation effects of subsidiary type on
the relationships between shared HQ goals and subsidiary knowledge
inflows (Value = −0.01, bootstrapped s.e. = 0.07, z = −0.07, p > 0.05),
and between shared language and subsidiary knowledge inflows (Value =
−0.16, bootstrapped s.e. = 0.46, z = −0.34, p > 0.05). Model 4 of
Table 9.5 reports the results of regressing shared HQ goals on shared lan-
guage while taking into account the interaction effect of subsidiary type
and shared language. Controlling for shared HQ goals, bootstrap results
(bootstrap sample size = 5000) demonstrated a significant second-stage
moderation of subsidiary type on the relationship between centraliza-
tion of HR decisions and subsidiary knowledge inflows (Value = −0.15,
bootstrapped s.e. = 0.07, z = −2.36, p < 0.05), but non-significant mod-
eration effects of subsidiary type on the relationships between shared
language and centralization of HR decisions (Value = 0.05, bootstrapped
s.e. = 0.50, z = 0.50, p > 0.05) and between shared language and sub-
sidiary knowledge inflows (Value = −0.03, bootstrapped s.e. = 0.45,
z = −0.07, p > 0.05). Model 4 of Table 9.4 reports the results of regress-
ing subsidiary knowledge inflows on our independent and mediator
variables while taking into account the interaction effect of subsidiary
type and centralization of HR decisions.
Controlling for first-stage moderation of subsidiary type, we then
tested the conditional indirect effect of shared language on sub-
sidiary knowledge inflows through shared HQ goals (controlling for
centralization of HR decisions). Bootstrap results (bootstrap sample
size = 5000) revealed that the indirect effect was positive and significantly
different from zero in foreign acquisitions (Value = 0.20, bootstrapped
s.e. = 0.06, z = 3.25, p < 0.01) but not in foreign greenfields (Value = 0.00,
bootstrapped s.e. = 0.09, z = 0.05, p > 0.05), supporting Hypothesis 4a.
Controlling for second-stage moderation of subsidiary type, we also
tested the conditional indirect effect of shared language on subsidiary
knowledge inflows through centralization of HR decisions (controlling
for shared HQ goals). Bootstrap results (bootstrap sample size = 5000)
revealed that the indirect effect was positive and significantly different
from zero in foreign acquisitions (Value = 0.11, bootstrapped s.e. =
0.06, z = 2.04, p < 0.05) but not in foreign greenfields (Value = 0.02,
bootstrapped s.e. = 0.05, z = 0.43, p > 0.05), supporting Hypothesis 4b.
Taken together, our data provide support for all our hypotheses.
Discussion and conclusion
In line with social identity theory (Tajfel & Turner, 1986; Turner, 1982),
we conceptualized tacit knowledge receipt as an act to construct a
shared HQ identity and found that shared language among subsidiary
and HQ managers positively related to tacit knowledge inflows at the
subsidiary level. Further, we theorized and empirically showed that the
relationship between shared language and subsidiary knowledge inflows
is mediated by two variables: shared HQ goals and vision, and centrali-
zation of HR decisions. We also considered whether the two mediated
relationships are conditional upon subsidiary type. As expected, our
results demonstrate that both shared HQ goals and vision, and centrali-
zation of HR decisions only mediated the relationship between shared
language and subsidiary knowledge inflows in foreign acquisitions but
not in foreign greenfields.
While we had hypothesized subsidiary type to moderate the indi-
rect relationship between shared language and subsidiary knowledge
inflows, we also found two direct moderation effects. Our results
showed a significant negative first-stage moderation of subsidiary type
on the relationship between shared language and shared HQ goals and
vision, such that the relationship was weaker in foreign greenfields
compared with foreign acquisitions. This may reflect the relative ease
to diffuse HQ goals and vision to foreign greenfields, as these units
allow MNEs to more carefully select the local workforce in terms of
whether they can absorb the goals and vision (see Hennart & Park,
1993). By contrast, we would expect foreign acquisitions to require
additional mechanisms for HQ goals and vision to be shared, including
a shared language. We also found a significant negative second-stage
moderation of subsidiary type on the relationship between centraliza-
tion of HR decisions and subsidiary knowledge inflows, such that the
relationship was weaker in foreign greenfields. While HR centraliza-
tion comes at the expense of local responsiveness and is, to a certain
extent, also limited by the local institutional environment (Schuler
et al., 2002), our findings suggest two specific benefits of HR centrali-
zation: (1) it motivates subsidiary managers sharing a language with
their HQ counterparts to construct a common HQ identity through
tacit knowledge receipt, and (2) it also entails additional knowledge
benefits in foreign acquisitions, for example by aligning the HR
architecture necessary for knowledge to be transferred (see Bowen &
Ostroff, 2004).
Theoretical Implications
Our findings make several contributions to research on HQ–subsidiary
knowledge flows, social identity theory and the literature on sociolin-
guistics, as well as research on international HRM. First, by theorizing
about the mechanisms through which shared language among sub-
sidiary and HQ managers affect subsidiaries’ tacit knowledge receipt,
our study sheds light on the knowledge benefits that shared language
entails in MNEs. Whereas the notion of language commonalities and
semantic fit is implicit to resource exchanges in MNEs (e.g., Brannen,
2004), it has received very little empirical attention in the IB literature,
with most work being conceptual (Harzing & Feely, 2008; Nahapiet &
Ghoshal, 1998) or inductive (Buckley, Carter, Clegg, & Tan, 2005;
Mäkelä et al., 2007) in nature. Few, if any, studies have actually drawn
on a large-scale sample to test whether and how shared language facili-
tates MNE knowledge flows. Key to the moderated mediation model
that we conceptualized is that shared language is not a sufficient condi-
tion for knowledge sharing to occur, particularly in foreign acquisitions.
Specifically, we demonstrated that the ability to exchange knowledge,
in the form of shared HQ goals and vision, and the motivation to
exchange knowledge, in the form of perceived HR-related opportunities
in the wider MNE, play an important mediating role. Whereas previ-
ous research has considered the roles of both ability and motivation
for MNE knowledge flows (e.g., Minbaeva et al., 2003), this has not yet
been sufficiently reflected in the language literature.
We also expand the theoretical bases underlying research on MNE
knowledge flows. Thus far, scholars have mainly adopted the knowl-
edge-based view of the firm (e.g., Fang et al., 2010; Yang et al., 2008),
with notable other work drawing from additional perspectives such as
social capital theory (e.g., Tsai & Ghoshal, 1998) and organizational
learning theory (e.g., Simonin, 2004). These theoretical approaches have
so far been limited by studying a subset of relevant types of determi-
nants, often focusing, for example, on characteristics of the transferred
knowledge and those of the exchange actors. However, the properties
of the relationships between actors or the relational mechanisms in the
transfer process have received less attention (Michailova & Mustaffa,
2012; Song, 2014). Social identity and sociolinguistic explanations of
MNE knowledge flows promise to more explicitly integrate these vari-
ous determinants. Specifically, although we only focused on language
as a source of shared identity, we linked the transfer of tacit knowledge,
a knowledge characteristic that is necessary for constructing a shared
social identity, with the language characteristics that exchange actors
in the subsidiary and HQ hold and share with each other. In addition,
we considered organizational mechanisms such as shared HQ goals and
centralized HR decisions through which shared language translates into
MNE knowledge flows.
Further, the limited research on social identity in IB has primarily
examined a common social identity as an antecedent to knowledge
flows (e.g., Björkman et al., 2007; Hinds & Mortensen, 2005). While
we agree in principle with the direction of this relationship, we have
theorized why common tacit knowledge also serves as an important
prerequisite for developing a shared identity and that knowledge receipt
can be conceptualized as an act to construct a common identity because
it allows for an understanding of relevant contextual conventions. This
suggests that the link between social identity and MNE knowledge flows
is more complex and multi-faceted than previously assumed. Similarly,
while IB scholars have started to caution against regarding shared lan-
guage policies as a panacea (e.g., Peltokorpi & Vaara, 2014; Vaara et al.,
2005; Volk, Köhler, & Pudelko, 2014), a more explicit integration of
sociolinguistic arguments would help to understand the specific chal-
lenges of achieving common language-related benefits, especially tacit
knowledge flows and shared identification.
In addition, we developed a new subjective measure to operation-
alize shared language among subsidiary and HQ managers, which
we believe improves on existing societal-level measures of language
distance (Dow & Karunaratna, 2006) or foreign language fluency
(Slangen, 2011). Specifically, our measure better reflects language com-
monalities between exchange parties because it taps into the specific
actors’ competence to communicate in a shared language, rather than
assessing only general characteristics of both parties’ native languages
or assuming that language competencies are homogenous in a society.
At the same time, our measure entails a broader conceptualization of
shared language that potentially comprises up to three languages: the
home country language, the host country language or the corporate
language. We believe that our measure provides a useful instrument
to assess shared language in multilingual communication contexts.
Empirically, we found that neither of the two objective measures was
significantly related to any of our endogenous variables. In fact, the
relationship between language proximity and subsidiary knowledge
inflows, although nonsignificant, was consistently negative rather than
positive. Given that the only countries with a substantial language
distance based on Dow and Karunaratna’s (2006) measure are the
Asian countries and that these countries have relatively high levels of
knowledge inflows, the Dow and Karunaratna (2006) measure might

simply capture host country effects. Our empirical results hence further
support our argument for applying subjective over existing objective
measures of shared language.
Second, we also contribute to social identity theory and the sociolin-
guistic literature by investigating how exactly shared language affects
tacit knowledge receipt as an act to construct a shared identity. Indeed,
sociolinguistic research has thus far lacked a consensus as to the specific
mechanisms that link language and social identity (e.g., Lauring, 2008)
and scholars have argued that the relation between language and social
identity is conceptually distant (Ochs, 1993), suggesting mediation by
more immediate constructs. We contribute to this debate by theoriz-
ing and empirically demonstrating that a shared language translates
into knowledge receipt as an act to construct a shared identity through
both ability- and motivation-related mediators. This notion is particu-
larly useful as it helps to integrate various sociolinguistic arguments
underlying the development of a social identity. For example, scholars
have highlighted the interactional and relational nature of identity
construction for which language is a necessary condition (Bucholtz &
Hall, 2005). Similarly, the literature has pointed to the role of speakers’
abilities for understanding language-related behaviors and attitudes
and linking them to particular social identities (Ochs, 1993), as well as
speakers’ language-related motivation and personal investment relevant
for social identification (Peirce, 1995).
Our theorizing also expands existing language research in IB that
refers to shared identity (e.g., Barner-Rasmussen & Björkman, 2007;
Peltokorpi & Vaara, 2014) by clearly disentangling the conceptual
link between language commonalities and shared identity. Further, by
examining the process through which shared language, as one of several
salient markers of social identification, can result in identity-related
benefits we respond to calls for studying in more detail how social iden-
tification occurs (Ashforth et al., 2008).
Third, we contribute to research on international HRM. Scholars have
highlighted the importance of HR design for knowledge exchange (e.g.,
Collins & Smith, 2006), yet little research has examined the type of HR
configurations that are necessary to facilitate MNE knowledge flows (for
an exception, see Yamao et al., 2009). Given the distinct cultural and
institutional contexts it is embedded in, HRM tends to be a relatively
more localized function in MNEs. At the same time, scholars have
discussed pressures for centralization, for example, to diffuse parent-
country HR policies and practices or converge to universal best practices
(Edwards & Kuruvilla, 2005; Pudelko & Harzing, 2007). Our findings
suggest an additional rationale for HR centralization because centralized
HR decision making may provide subsidiary managers with the motiva-
tion to construct a shared HQ identity through tacit knowledge receipt.
Moreover, given the direct moderation of subsidiary type on the rela-
tionship between HR centralization and subsidiary knowledge inflows,
HR centralization may also entail additional knowledge benefits in
foreign acquisitions that go beyond social identity-based explanations.
However, as centralization always involves a trade-off with local respon-
siveness it would be fruitful for future research to explicitly assess the
relative performance implications of HQ centralization for the MNE as
a whole.
Managerial implications
Our study also entails several implications for managerial practice.
Conceptualizing knowledge transfer as an act to construct a common
identity highlights important additional benefits for the organization.
Specifically, subsidiary knowledge receipt not only allows subsidiary
members to better achieve their work goals but it may also increase a
sense of belonging and solidarity with HQ. As a result, MNEs would be
well-advised not to leave the communication with HQ to a few sub-
sidiary managers, for example, expatriates. In companies in which the
HQ language is the (explicit or implicit) corporate language, which is
often the case for Japanese but also other Asian companies (Harzing &
Pudelko, 2013), existing language barriers may make it more practical
to leave HQ–subsidiary communication on both ends to HQ nationals.
However, as our results have shown, the inclusion of a wider group of
subsidiary managers, in particular locals, at the receiving end of knowl-
edge transfers from HQ would foster a greater sense of unity and cohe-
sion, attenuating the divide between subsidiary and HQ.
Widening the circle of those engaged in inter-unit knowledge sharing
however requires organizational support mechanisms that could go as
far as implementing the lingua franca of business, English, as corporate
language. Yet whatever corporate language is chosen, the inclusion of
non-native speakers might necessitate more focus on language skills at
the selection stage of (subsidiary and HQ) managers and greater efforts
in terms of language training (Marschan-Piekkari, Welch, & Welch,
1999b). Further, because much HQ knowledge is transferred to subsidi-
aries through virtual media, specific considerations have to be taken,
for example, with regard to redundant media use, the provision of a
media infrastructure and the adoption of new media (Tenzer & Pudelko,
2014). Additionally, job rotations and other face-to-face interactions

in the form of regular meetings, conferences or cross-border projects
may not only facilitate knowledge receipt but may also make individu-
als feel more at ease in cross-language communication and ultimately
help them improve their proficiency in the native language of another
MNE unit.
While language learning and shared language policies in MNEs are
important steps to foster cross-unit communication, our results also
suggest that by themselves they are unlikely to translate into sufficient
organizational benefits, especially in foreign acquisitions. The addi-
tional mechanisms that we proposed and tested can further facilitate
the transfer of local, contextual knowledge and, by extension, shared
social identification. As they are within the control of the organization,
the onus is on the MNE to ensure their implementation. One mecha-
nism that is controllable by the MNE involves setting clear goals and
a vision for the entire organization that are shared by subsidiary man-
agers. From a social identity perspective, this requires that subsidiary
managers, particularly in foreign acquisitions, are able to contribute to
the development of MNE strategies and goals, which may be achieved
through greater internationalization of an MNE’s top management
team or the strategic use of inpatriation (e.g., Reiche, 2006). A second
mechanism ensuring that shared language leads to knowledge transfer
involves centralized HR decisions. Despite the widely assumed benefits
of localized HR practices, especially for the subsidiary context, these
may be offset by advantages that centralized HR decisions bring for
inter-unit relations in the MNE. HR managers should therefore more
explicitly communicate the gains that HR centralization entails.

In addition to several strengths, including a large data set across mul-
tiple home and host countries, a few limitations have to be noted. A
first limitation refers to our use of single respondents per subsidiary
and the inherent sources of bias in respondents’ perceptions. While
this limitation is duly acknowledged, it is the result of our large-scale
multi-country research design, which made it difficult to obtain data
from multiple sources for each subsidiary. Accordingly, we had to
make a trade-off between obtaining multi-source data and maintain-
ing diversity concerning MNEs’ home and host countries to provide a
more far-reaching test of the role of shared language. The current study
shifted the balance to the latter. Our study compares favorably to extant
research in that it draws on primary data and yet has achieved a similar
sample size to studies using secondary data (n = 1171; Boeh & Beamish,
2012). By comparison, other studies that have also collected primary
data tend to have much smaller sample sizes (e.g., n = 105; Yang et al.,
2008). In general, the substantive results of our study do not suggest any
particular biases. However, where possible we would encourage future
research to collect data from various sources. Implicit to our conceptual
arguments is also a level of aggregation that occurs when the social
identification of individual knowledge senders and recipients translates
into unit-level knowledge flows. While our research design made it
unfeasible to collect data on each individual instance of tacit knowledge
transfer, we would encourage future studies to more explicitly model
these multilevel effects.
A second limitation is the potential of common method bias, which
can inflate relationships among variables. We took several measures to
minimize this risk, such as separating items for the predictor and cri-
terion variables into different survey sections and using different scale
endpoints. In addition, we performed two sets of preliminary analyses
in the results section indicating that common method bias is unlikely
to be of major concern. Despite these measures, we recognize that com-
mon method bias cannot be completely ruled out.
Third, despite the superiority of our newly developed subjective meas-
ure of shared language compared with existing country-level measures,
we note that our measure does not explicitly include the use of a second
language. In our study, second language usage was reflected by the fact
that in most cases the second language equaled the official corporate
language. However, we would encourage scholars to more explicitly
account for second language usage in the future. Similarly, individuals
in MNEs may share a common language not only due to their profi-
ciency in another’s native language or in the common corporate lan-
guage but also due to other commonalities such as common industry or
technical standards and future research would benefit from considering
these additional dimensions. Future research could also develop better
objective measures of shared language that address the limitations of
currently available country-level measures. For example, scholars could
use TOEFL scores and/or language proficiency test scores for languages
other than English of each individual manager.
Fourth, while shared language is arguably an important source of
social identification, we acknowledge that various other surface-level
determinants exist and that these may in fact interrelate. For example,
research on biculturals has shown that visual cues of the exchange
party’s cultural or ethnic origin affect linguistic performance and hence
the level of information exchange, despite language commonalities

(Zhang, Morris, Cheng, & Yap, forthcoming). Since our study is not
able to examine the interrelationships between various markers of social
identification, we would encourage future research to simultaneously
account for attributes such as language, ethnicity and gender.
Fifth, while we followed other scholars in operationalizing subsidiary
knowledge inflows, we are unable to comment on the extent to which
this knowledge is actually used by knowledge recipients. Future work
could improve on our study by adopting more direct measures of
knowledge exchange, for example, by incorporating assessments of
both knowledge senders and recipients in the study design. Similarly,
whereas we examined the functional scope of subsidiary knowledge
inflows, future studies may also want to explore the perceived func-
tional value of this knowledge. It is also possible that elements of social
identity other than language might be more or less salient for the
functional scope vs functional value of the knowledge. The importance
of shared language, shared HQ goals and vision, and centralization of
HR decisions to subsidiary knowledge inflows may also vary with char-
acteristics of knowledge such as relevance, complexity and the level
of tacitness. For example, we would assume the motivation to acquire
knowledge to increase with perceptions of its relevance. Future research
could examine whether these and other characteristics interact with our
predictors and affect knowledge receipt.
In sum, over the past few years a growing body of research has
studied how knowledge is diffused in MNEs. We contribute to this
research stream by expanding the theoretical bases of MNE knowledge
flows and conceptualizing shared social identity as an outcome rather
than only an antecedent of tacit knowledge flows, which provides an
alternative reason for why knowledge flows occur between actors in
MNEs. We further show that shared language is an insufficient condi-
tion for subsidiary knowledge receipt as it also depends on the media-
tion of organizational mechanisms, especially0 in foreign acquisitions,
thereby explaining how language commonalities translate into knowl-
edge flows.
Acknowledgements
The authors would like to thank the three anonymous JIBS reviewers
and JIBS area editor Jaeyong Song for their very constructive feed-
back. We also are grateful to Dana Minbaeva, Helene Tenzer, Sachiko
Yamao and Miguel Canela for their valuable and helpful comments
on earlier versions of the manuscript. The authors further appreciate

the financial support provided by the Spanish Ministry of Economy
and Competitiveness (Project No. MICINN-ECO2012-33544). Part of
the research on which this article is based was also supported under
Australian Research Council’s Discovery Projects funding scheme (pro-
ject DP0555977). The views expressed herein are those of the authors
and are not necessarily those of the Australian Research Council.
Note
1. An inspection of the variance inflation factors of all independent and mod-
erator variables showed that these were well below the threshold value of 10
(Hair, Black, Babin, Anderson, & Tatham, 2006).
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Appendix
Measure of shared language

1. Is there an official corporate language in the multinational company that this
subsidiary is part of?
Response format: (No; Yes, the language of the country of HQ; Yes, other language,
please list: ___)
2. How would you assess the following language capabilities?
Response format: (1 = very poor to 7 = native speaker)
(a) Subsidiary managers in the language spoken in the country of HQ.
(b) Subsidiary managers in the official corporate language (as identified
above).
(c) HQ managers in the language spoken in the country the focal subsidiary
is located in.
(d) HQ managers in the official corporate language (as identified above).
10
Fit, Misfit, and beyond Fit:
Relational Metaphors and Semantic
Fit in International Joint Ventures
Leigh Anne Liu, Wendi L. Adair and Daniel C. Bello
Introduction
“... the greatest thing by far is to be a master of metaphor by Aristotle, as

cited in Leary (1995: 268)
Metaphorical language, often in the form of relational metaphors describ-

ing organizational relationships, is pervasively used especially in the
context of international joint ventures (IJVs). For example, a man-
ager states his joint venture is “a marriage made in heaven,” suggest-
ing a smooth and cooperative relationship between the international
partners (Crooks, 2011). In contrast, another manager describes the
disputes between two IJV partners as, “The feud ... resembles a particu-
larly messy marriage breakdown,” conveying a rocky and competitive
relationship (Guthrie, 2011: 14). Metaphorical language serves a sym-
bolic role that reflects each partner’s understanding of the venture, and
partners’ metaphors together can signal a collective understanding of
their relationship (Brannen, 2004). When metaphors are shared, the
symbolic language of metaphors represents a congruent view of
the organizational processes and resources utilized by the partners dur-
ing alliance operations (Brannen & Doz, 2012; Gibson & Zellmer-Bruhn,
Reprinted from Leigh Anne Liu, Wendi L. Adair and Daniel C. Bello (2015)
“Fit, misfit, and beyond fit: Relational metaphors and semantic fit in inter-
national joint ventures” Journal of International Business Studies, Vol. 46, No. 7
(pp. 830–849). With kind permission from Palgrave Macmillan. All rights
reserved.
254
Fit, Misfit, and beyond Fit 255
2001). Brannen (2004) maintains that “semantic fit,” or the shared use
and understanding of corporate language, is critical to navigating the
foreignness among culturally distant partners and achieving performance
outcomes.
IJVs are a fragile organizational form since cross-border firms must
coordinate shared resources and activities for the joint accomplishment
of individual corporate goals (Luo, Shenkar, & Gurnani, 2008). These
international partnerships are problematic because “cooperative behav-
iors maximize joint returns from complementary resources, but com-
petitive actions maximize an individual firm’s share of returns” (Bello,
Katsikeas, & Robson, 2010: 77). To reconcile these contradictory forces,
controls are employed by the venture partners to coordinate activities
necessary for value creation while safeguarding each partner’s ability to
extract rents and dampen partner opportunism (Das & Teng, 2002; Yan &
Zeng, 1999). However, previous IJV research tends to treat control as
a singular construct, often using equity share as a proxy for partner
control while ignoring socialization and other factors (Chen, Park, &
Newburry, 2009). Although some recent IJV research acknowledges that
venture control is not a simple aggregated construct, “many prior stud-
ies do not differentiate management control from ownership control”
(Yan, 1998: 776). Our research advances the literature by conceptual-
izing the individual and joint effects of control types and by develop-
ing an innovative, metaphor-based approach to assessing managerial
control in newly formed IJVs.
Enhanced conceptualization and assessment of venture controls are
necessary to advance our understanding of how IJV’s coordinate alli-
ance resources and activities to achieve performance outcomes (Chen
et al., 2009). Ownership control, a legal construction, bestows legiti-
mate authority and formal decision rights such that “equity share is a
way of influencing strategic control over the joint venture” (Mjoen &
Tallman, 1997: 261). In contrast managerial control, a social construc-
tion, reflects informal influence and decision making over daily actions
(Yan & Gray, 1994), meaning informal managerial “control over specific
operational activities” (Mjoen & Tallman, 1997: 261). While equity
share is a viable proxy for measuring ownership control, managerial
control emerges informally as the alliance is formed and is much more
difficult to assess since the informal, socially based nature of IJV man-
agement is not generally available in public records (Yan & Gray, 2001),
even though such information is critical for a complete understanding
of these cross-border alliances (Lin & Wang, 2008).
256 Leigh Anne Liu et al.
Since IJVs are a fragile form of organizing, characterized by incom-

plete contracts (Luo et al., 2008), accomplishing strategic goals and
maintaining a high-quality relationship are serious challenges for inter-
national partners who may have culturally embedded, different orien-
tations and approaches to managing the alliance (Bello et al., 2010).
However, informal managerial control is difficult to convey directly
because it is a social construction developed by the cross-border parties
during the process of alliance formation and is only tacitly understood
by the participants (Ring & Van de Ven, 1994). Unlike explicit owner-
ship control, the social reality of managerial control is problematic
since the intercultural context of IJVs means each partner brings
unique ways of comprehending, thinking, and reasoning about alliance
operations. Since emergent managerial control is difficult to articulate
directly (Anand & Khanna, 2000), we rely on metaphor theory (Lakoff,
1993) to indirectly assess the socially construed, managerial schemas of
newly formed IJVs through each partner’s metaphorical language that
reveals its approach to alliance management.
We ask the question, “What is the role of relational metaphors in
shaping the subjective performance of IJVs?” Our research contributes
to the international business literature by providing several, specific
advances to our understanding of these complex, cross-border partner-
ships. First, by applying metaphor theory to readily available public
information about new IJVs, we reveal hidden information about the
complex, informal schemas employed by international partners to
coordinate their collective endeavor. Although ownership control is
apparent, informal managerial control of a new IJV is not since it is tacit
and emerges from informal, sense-making processes during alliance
formation (Ring & Van de Ven, 1994). Second, we link early meta-
phorical descriptions to future, subjective performance by specifying
the consequences of semantic fit, the alignment or misalignment of
partners’ metaphorical understanding of their shared alliance activities.
Performance is challenged by the potential for mismatched understand-
ings which is high in IJVs since international partners are embedded in
different national cultures and contexts. We identify performance con-
sequences of metaphorical descriptions expressed by the international
partners, drawing linkages between the managerial schemas implied by
each partner’s metaphors and the future productivity of the particular
way partners interact. Third, we combine our new insights regarding
managerial control with the established literature of ownership control
for a holistic evaluation of IJV performance outcomes. Our contribution
lies in using our novel application of metaphor theory to specify how
the outcomes of managerial controls are enhanced or inhibited by the

formal ownership control of newly formed international alliances.
Below we first review current literature on the study of metaphors,
semantic fit, and informal relationship management in international
business, then present three empirical studies investigating how relational
metaphors and equity ownership influence subjective outcomes in IJVs.
Relational metaphors and semantic fit in IJVs
A metaphor, from the Greek for “transference,” maps across conceptual

domains and is a rhetorical trope used to make sense of the abstract or
unfamiliar (e.g., informal IJV managerial schemas) by relating it to some-
thing familiar and concrete (e.g., marriage and family life) (Cornelissen &
Kafouros, 2008; Lakoff & Johnson, 1980; Morgan, 2006). Metaphors
provide a holistic view of an experience, convey meaning, and direct our
interpretation and action. For example, the metaphor that a team is a
family conveys a collaborative and supportive group setting, whereas a
sports team metaphor suggests a competitive group approach, focused on
winning (Gibson & Zellmer-Bruhn, 2001). These metaphors reflect team
members’ understanding of team goals and processes, and therefore direct
team members’ behaviors and affect team outcomes. It has been noted
that metaphorical language, when used in corporate communication,
reflects managerial thinking, enabling a firm “to make sense of its envi-
ronment and to conceive, develop, and model strategic alternatives and
scenarios effectively” (Brannen & Doz, 2012: 97). In this way, relational
metaphors in corporate rhetoric are linguistic reflections of underlying
schemas that provide guidelines for interpretation of situations and for
the appropriateness of behaviors used to relate to others (Baldwin, 1992;
Cantor, Mischel, & Schwartz, 1982; Fiske & Haslam, 1996). We propose
that in an IJV, relational metaphors, as linguistic tools that convey mean-
ing to internal and external audiences and stakeholders, reflect an implicit
understanding or mental model about the informal way IJV operations
are managed by the partners (Oswick, Keenoy, & Grant, 2002). Before
we investigate the meaning and impact of IJV relational metaphors, we
briefly discuss how such metaphors emerge in newly formed alliances.
Alliances such as IJVs are characterized by incomplete contracts, mean-
ing formal ownership stakes and decision rights are often supplemented
by informal, socially based understandings that are represented by
relational management schemas (Chen et al., 2009; Gilliland, Bello, &
Gundlach, 2010; Yan & Gray, 2001). Apart from ownership shares,
little is publicly known about the way a newly announced IJV will be
managed, yet how the partners engage in controlling and organizing

their joint work is crucial to the social and economic performance of
their IJV (Bello et al., 2010). Heide (1994) theorizes that informal man-
agement consists of complex social constructions that define relational
processes, shaping each partner’s understanding of the role of coopera-
tion and competition (Luo et al., 2008). Thus compared with ownership
control, relational management schemas are much more difficult to
understand due to their informal, tacit nature (Yan & Gray, 2001).
The emergence of informal schemas for managerial control is often a
result of “social-psychological processes of sense making, or enactment”
(Ring & Van de Ven, 1994: 97) that yield unwritten, non-verbalized sets
of assumptions and beliefs about IJV relationships that are understood
by parties as specifying each other’s responsibilities and prerogatives
(Ring & Van de Ven, 1994). Socially constructed, relational schemas for
managing an IJV define relationship interactions and social identities,
providing each international partner with an implicit mental model or
schema for controlling the alliance. Importantly, informal relationship
management schemas are theorized to reflect one of two non-market
governance forms: unilateral and bilateral schemas (Gilliland et al.,
2010; Heide, 1994). A unilateral schema reflects relationships that are
hierarchically organized by an authority structure that provides one part-
ner with the ability to develop rules, give instructions, and impose deci-
sions on the other. For Fiske (1992, 2004), a unilateral schema reflects
authority ranking, an asymmetrical social relation where people perceive
a linear ordering along some hierarchical social dimension, enabling an
authority to dominate subordinates’ actions. In contrast, bilateral rela-
tionship schemas reflect egalitarian organization, joint development of
policies, equality matching, and balanced social relations where actors
value equality and fairness (Dyer & Singh, 1998; Fiske, 1992, 2004).
Although unilateral and bilateral relational schemas are abstract,
latent concepts (Heide, 1994), such informal understandings function
as cognitive maps that direct IJV partners in their daily activities. One
way to convey meaning and understanding about these tacit unilateral
and bilateral relational schemas in IJVs is through the use of metaphor.
We propose that international partners comprehend, think, and rea-
son about their managerial schema for controlling IJV operations in
metaphorical terms, mapping latent alliance (target) domains to the
well-understood (source) domain of marriage and family relationships.
In the family context, unilateral and bilateral schemas identify funda-
mental forms of this basic human social unit (Russon, 2003).
In newly formed IJVs, viewing relational schemas as tacit and
abstract is consistent with Gibson and Zellmer-Bruhn’s (2001) notion
that “metaphors are a key mechanism through which we comprehend

abstract concepts and perform abstract reasoning” (276). Discussing
the “work-team as sport-team” metaphor, Gibson and Zellmer-Bruhn
(2001) state metaphor “involves understanding one (target) domain of
experience (work teams) in terms of a very different (source) domain
of experience (sports teams)” (276) – their analysis of “team metaphors”
is consistent with our notion that meaning about abstract informal IJV
management (unilateral or bilateral) can be understood and conveyed
in terms of concrete marriage and family experiences. We can general-
ize beyond teams to alliances such as IJVs since “Metaphors allow us to
understand abstract subject matter in terms of more concrete, familiar
terms ... and metaphor is evoked whenever a pattern of inferences
from one conceptual domain is used in another domain” (Gibson &
Zellmer-Bruhn, 2001: 276). Thus based on extant theory, we contend
that relational metaphors are a linguistic means of conveying meaning
about how IJV partners understand their informal, managerial control
of daily operations.
Beyond the meaning conveyed by a relational metaphor, we propose
that when IJV partners share the same relational metaphors, their cog-
nition regarding venture operations reflects a degree of semantic fit. In
international business partnerships, issues of language translation and
cross-cultural understanding create challenges for shared understand-
ing. For example, if teams in one IJV partner are like family and teams
in the other IJV partner are like sports teams, each partner’s under-
standing and expectations around the language of “teamwork” will
be quite different and can cause confusion and conflict across partner
communication. Likewise, when IJV partners convey abstract mean-
ing of managerial schemas through metaphors of a universally shared
phenomenon – marriage and family, we can assess the degree to which
partners’ share similar relational schemas for managing IJV operations,
demonstrating semantic fit.
Empirical design
To investigate our research question on the role of relational metaphori-

cal language in IJVs, we conduct three studies with both qualitative
and quantitative data and analyses. Study 1 presents a qualitative study
to test and establish that relational metaphors used across languages,
namely Chinese and English, are consistent in the context of IJV
relationships. We then conducted Study 2 based on interviews of key
informants from nine IJVs between Chinese and foreign partners, which
revealed different types of relational metaphors and an orthogonal
relationship between relational metaphors and equity structures. Based

on these findings we develop propositions on relational metaphors,
equity structure, and IJV outcomes. In Study 3 we test propositions
derived from the qualitative study on a sample of 168 IJVs across two
time periods (2002–2005 and 2007–2009) to assess the impact of shared
metaphors on IJV outcomes.
Media and publicly communicated information influence and shape
cognition (Chen & Meindl, 1991; Katz, 1980; Roberts & Maccoby,
1985), transmit and reinforce existing beliefs (Alper & Leidy, 1973),
and construct perceptions of social reality (Gerbner et al., 1978; Paisley,
1981). Therefore mass communication can be a critical conduit for
assessing semantic fit between culturally different IJV partners. Previous
research that used news reports (e.g., Chen & Meindl, 1991; Morris &
Peng, 1994; Morris, Sheldon, Ames, & Young, 2007) or company
reports (e.g., Chang, Most, & Brain, 1983; Meek, Roberts, & Gray, 1995)
acknowledges that public reports may reflect some degree of impres-
sion management, and therefore may not be a perfect representation
of reality. Nevertheless, prior researchers agree that imperfect as they
are, reports in the mass media or from companies can provide useful
information about organizational beliefs and perceptions, because they
are intentional communications to the general public. Public reports
reveal a conceptual system where metaphoric language manifests a
cross-domain mapping of schemas from the well-understood domain of
marriage to corresponding unilateral and bilateral schemas in the tacitly
understood domain of informal, managerial control of alliances.
Lakoff (1993) notes “Metaphor, as a phenomenon, involves both con-
ceptual mappings and individual linguistic expressions” (209). My IJV
is a modern marriage is one metaphor conceptualizing an IJV’s relational
schema as a marriage that can be realized through many different lin-
guistic expressions such as the variety of marriage- and family-related
words in a company report. Lakoff (1993: 211) explains that lexical
items in the source domain, for example, marriage, correspond, and
map to lexical items in the target domain, for example, IJV relation-
ship. For example, metaphorical words and phrases used to describe
“teamwork” convey meaning about team members’ understanding
of how teamwork is conceptualized: “They are similar to internalized
behavior routines, or scripts, and the mental models the team members
hold about team structure and process” (Gibson & Zellmer-Bruhn, 2001:
276). Therefore by extension, we use words and phrases in newspaper
and company reports, supplemented by interviews, to examine the pub-
licly communicated relational metaphors describing informal schemas
for managing IJV operations. In other words, writers of corporate and

public documents are treated as informants on the nature of the IJV
relationship, as they report their observations and attributions regard-
ing each firm’s relational approach to IJV operations, expressed through
metaphoric, linguistic expression.
The raw data for the three studies include interview transcripts (Study 2),
company press releases, and media reports (Studies 1 and 3) on vari-
ous IJVs. These qualitative data enable us to make better sense of com-
plex concepts and mechanisms that we intend to uncover (Bansal &
Corley, 2011). As a result, qualitative findings offer rich and deep
insights to answer our research question. We conducted content analy-
sis following Eisenhardt’s (1989) suggestions to compare the emergent
themes, concepts, and variable relationships, based on which we search
for theory development opportunities (Miles & Huberman, 1994).
We adopted a multi-method approach, submitting all interview transcripts,
news, and company reports in all studies to two content analysis proce-
dures and identifying consistent results across the two coding methods.
First, we used a text analysis software, Linguistic Inquiry Word Count
(LIWC) (Pennebaker, Francis, & Booth, 2001; Pennebaker, Mehl, &
Niederhoffer, 2003) to code linguistic categories reflected in the texts.
The LIWC searches for 2300 words or phrases and classifies them into
70 linguistic dimensions, including general language categories (e.g.,
article, preposition), psychological processes (e.g., emotions), cognitive
processes (e.g., causal phrases), and contexts (e.g., gender). We ana-
lyzed data from the categories directly related to our research context:
relationships (e.g., marriage, family, partners), metaphorical words
(e.g., “like a big brother,” “as cohabitant partners”), and evaluation on
relationships (e.g., “constructive partnership,” “happy,” “an exciting
relationship to grow together”).
Second, we trained two bilingual research assistants with no knowledge
of the research question (Butterfield, Trevino, & Ball, 1996; Dutton &
Dukerich, 1991; Kreiner, Hollensbe, & Sheep, 2009; Pratt, Rockmann, &
Kaufmann, 2006) to code the same texts for any metaphorical language
and any descriptions about the relationship between the IJV partners.
The research assistants were extensively trained to identify phrases that
included metaphors and/or described IJV partner relationships. Cohen’s κ,
which measures inter-rater reliability, was 0.85 overall across the three
studies and the raters discussed and resolved differences, well above the
0.70 acceptable thresholds (Cohen, 1960; Kreiner et al., 2009).
Throughout the two content analysis procedures (LIWC and human
coding), we used two-order coding (Gioia, Corley, & Hamilton, 2013).
The first-order data based on original text terms were coded and organ-
ized, according to theoretical interpretations related to the research
question, with three themes emerging: relationship, metaphors, and
evaluation of relationships. The second-order data, distilled from the
first-order emergent themes, were coded and further examined through
content analysis to determine how the data fit the emergent categories
(Butterfield et al., 1996; Kreiner et al., 2009). We used the pattern-
matching and explanation-building techniques suggested by Yin (2009)
to strengthen internal validity of the content analysis around the IJV
cases. From the second-order coding, the two themes of hierarchical
relationships (such as parent and child, big brother and little brother)
and horizontal relationships (modern marriage) emerge. Additionally,
we also conducted cross-case synthesis to analyze convergence and
similarity in patterns across different IJV cases. Finally, we checked for
match and convergence between the categories of relational phrasing
from LIWC and the relational list concluded by the human coders,
resulting in further confirmation between the two methods.
Study 1: language comparison on IJV relational metaphors

reported in public press
In order to test language discrepancies between the English language
material and another language, we investigated 22 IJV cases that were
reported in both Chinese and English business press. The Chinese lan-
guage news sources include Caixin, the Chinese Securities Journal, and
Financial News. The English language news sources were the Wall Street
Journal (WSJ), the Financial Times (FT), and Bloomberg.
Following the content analysis processes described above, two bilin-
gual research assistants analyzed the linguistic word count (LIWC)
and content coded the relational metaphors used in the articles and
found the same metaphors used across the two languages (Butterfield
et al., 1996; Kreiner et al., 2009). We found that in both languages, a
hierarchical relationship between the IJV partners was referred to as
parent–child relationship, and an equal-status relationship between
the partners was referred to as marriage. The only difference between
English and Chinese reports was that when describing relational meta-
phors (e.g., family or marriage), the Chinese business press used 27%
more verbs while the English language press used more nouns (19%).
Although linguists (e.g., Liu, 2002) have found that culture may pro-
pel different metaphors, they have also found significant similarity in
metaphors used across cultures, even though there may be different
roots for the same metaphors (Link, 2013). Link (2013) explains that
similar human experiences are the basis for the same metaphors, simi-
lar to Jakobson and Halle’s (1956) notion that there are similarities in
fundamental linguistics across cultures such as “mama” and “papa.”
In the context of our research, Study 1 suggests the metaphors about
parent–child relationships being relatively hierarchical and marriage
partners being relatively equal are similar across this twolanguage com-
parison, providing a foundation for us to further investigate relational
metaphors between IJV partners.
Study 2: interviews on relational metaphors and equity

structures in IJVs
We gained access to nine IJVs with partnerships between Chinese and
foreign companies. We conducted interviews with communication or
public relations officers of both Chinese companies and their foreign
partners through face-to-face meeting, email, and/or phone. Table 10.1
summarizes the profiles of the interviewees. The interviews were con-
ducted in Chinese or English, depending on the informant’s native
language. The face-to-face and phone interviews lasted about 20–30
min. We asked informants to describe the relationship between their
respective IJV partners. We then provided them with the definition of a
relational metaphor, and asked for their relational metaphors for the IJV
if they have one. Last, we asked their personal opinion of the metaphors
for elaboration. All 18 interviewees provided metaphorical descriptions
of the IJV relationships. We also asked their interpretation of the meta-
phor, their general perception of the relationship, future projections
of the relationship, and their estimate of the achievement of strategic
goals and quality of relationship in the IJV.
We transcribed or translated (using standard translation/back-transla-
tion methods (Brislin, 1970) the interview texts for LIWC and human
coding as described above to derive patterns of relational metaphors,
the equity structure, as well as their impacts on IJV outcomes. Below
we elaborate our findings on the patterns of relational metaphors and
how they relate to other variables in the IJV. Based on these qualitative
findings, we develop propositions about different types of relational
metaphors, how semantic fit influences IJV outcomes, as well as the
moderating role of equity structure.
Findings and propositions

Two relational metaphors
Our second-order coding of interview transcripts reveals two types of
relational metaphors used by IJV communication officers. The first type
presents a parent–child relationship to describe a hierarchical relational

structure between the IJV partners, and text examples include parent
firm, mother company, being the little one (child) in the family has no deci-
sion power, and our parent company is nurturing. We label this first type
of relational metaphor Patriarchal Family to reflect the hierarchy in the
relationship. The second type of relational metaphor reflects a more
equal relationship between the IJV partners, illustrated by phrases such
as happy marriage, our partnership started with love at first sight and has
been stronger ever since, we argue like husband and wife but that open com-
munication has been constructive, and we share household responsibilities
and mutual respect for the bond with each other. We label this second type
of relational metaphor Modern Marriage to reflect equal relationships
between IJV partners in managing the alliance operations.
We identify Patriarchal Family, primarily a unilateral relationship
schema, and Modern Marriage, primarily a bilateral relationship schema
(Heide, 1994), as fundamental forms for organizing and managing
matrimonial relationships. Forms of marriage are well understood
in a cross-cultural context by partners and are evident in whether
day-to-day activities such as decision making and planning are con-
ducted unilaterally as a Patriarchal Family or bilaterally as a Modern
Marriage (Sussman, Steinmetz, & Peterson, 1999). The metaphor of
Patriarchal Family represents the expectation in a relationship where
one party dominates in decisions while the metaphor of Modern
Marriage embodies the expectation of equal participation in decisions
between the partners. “Semantic fit” in the case of patriarchal family
necessitates both partners identifying the same partner as patriarch.
Conceptualizing organizational mergers as marriage is not entirely
new. Previous researchers have described extension, or hands-off
mergers as “open marriage,” collaborative, equal mergers as “Modern
Marriage,” and redesign, acquisition-type mergers as “traditional mar-
riage” (Cartwright & Cooper, 1993). Others have examined newspaper
reports of M&As for evidence of war and marriage metaphors, repre-
senting hostile takeovers vs friendly unions (Koller, 2002). Prior studies
echo distinctions made in classic relationship literature. For example,
some classification schemes distinguish between “complementary”
and “symmetric” relationships, representing dominant/submissive vs
equal status relationships (Hinde, 1976). A review and synthesis of the
close relationship literature propose a typology of marriage that dis-
tinguishes between “traditionals,” who emphasize customary gender
roles, where, for example, the woman should always take her husband’s
last name, from “independents” who believe in individual freedom,
Table 10.1 Interviewee profiles
ID Case ID Gender Tenure Nationality/ Passport Education Interview Media Position
1. AdPro Female 3 Chinese MBA Face-to-face Public Relations Officer

2. AdPro Male 5 American M.S. Face-to-face Corporate communication
Officer
3. BMobile Male 2 Chinese MBA Phone+email Communication Specialist
4. BMobile Male 9 American Bachelor Face-to-face VP of Communication
5. ChemInc Male 2 Chinese MBA Phone+email Public Relations Officer
6. ChemInc Female 6 American MBA Phone+email Communication Officer
7. Dlight Female 1 Chinese MBA Face-to-face Manager of
Communication
8. Dlight Female 5 German M.S. Phone+email Public Relations Manager
9. Etrac Male 2 Chinese M.S. Face-to-face Communication Officer
10. Etrac Male 3 Australian Bachelor Phone+email Senior Manager of
Communication & Public
Affairs
11. Fenergy Male 12 Chinese EMBA Face-to-face Communication Officer
12. Fenergy Male 3 Canadian M.S. Phone+email SVP of Public Affairs
13. Gturbo Female 2 Chinese M.S. Phone+email Manager of
Communication
14. Gturbo Female 7 French M.S. Face-to-face Managing Director
15. Htea Female 3 Chinese MBA Phone+email Director of Public Affairs
16. Htea Female 2 Australian MBA Phone+email Manager of
Communication
17. PharmTech Male 2 Chinese MBA Email Associate Director of
Communication
18. PharmTech Female 3 American M.S. Email Senior Director of Public
Relations
265
companionship, and equality (Fitzpatrick, 1984). We build on this

prior close relationship and M&A literature by extending the type of
relational metaphors to include not only Modern Marriage, but also
Patriarchal Family.
As noted by Koller (2002) and Hirsch and Andrews (1983), many
organizational mergers are described using language of hierarchical rela-
tionships, which conveys meaning quite different from the meaning
conveyed by language used to describe egalitarian marriage. Therefore
we propose that IJVs will use either Modern Marriage or Patriarchal
Family as metaphors for their partner relationships.
Proposition 1: Members of IJVs use two types of relational meta-

phors, either Modern Marriage or Patriarchal Family, to reflect their
managerial schema for partner relationships with each other.
Semantic fit or misfit: Shared vs mixed metaphors

Members in three out of the nine IJVs we interviewed used different
relational metaphors to describe the relationship with the other partner,
with one partner using Modern Marriage and the other using Patriarchal
Family. Six out of the nine IJVs used the same relational metaphors,
either Modern Marriage or Patriarchal Family. For example, the Chinese
partner of Etrac said the relationship with their US American partner
is an equal marriage but the American side described themselves as the
leading member of the joint venture family and Our Chinese partner is like
a child who is learning fast but sometimes stubborn. We need to take care of
them. The differences in relationship metaphors reflected differences in
relational schemas that led to conflicting expectations and frustrations,
as illustrated by the Chinese partner:
We think our status with the foreign partner should be equal and
indeed some of the colleagues from there acted respectfully and
sought our opinions quite a lot. But some members from our team
felt significant dominance from the other side – as if they are the
boss, even when dealing with issues about the local Chinese market.
We are quite confused on what to expect in the partnership –
sometimes we are equal, sometimes we feel more powerful than
them, especially when dealing with our own market and operation.
I have a sense that they are not quite experienced and confused as
well as us, in terms what to expect from the other side.
In a different case, respondents from PharmTech expressed conver-

gent metaphorical language about their relationship:
Chinese partner: We are the weaker side in this relationship, but we

are comfortable with the setup and actually learn a lot from our par-
ent company. Many of our junior researchers look forward to their
training and development opportunities in headquarters. Since it is
a highly selective program, those who are chosen are really thrilled
and proud ... like a teenager, both in terms of our company age
and our learning stage, we have so much to learn. Fortunately our
American partner is nurturing and showing us the way.
US partner: As the leader and major parent of this relationship,
we try to take care of the needs of our Chinese partner by provid-
ing opportunities for the young scientists who will help us in the
long run.
In IJVs, goal achievement and relationship quality arise from effec-

tive management of venture operations, which depends on a common
understanding of organizational processes and routines (Gilliland et al.,
2010), such as a common understanding of the nature of the partners’
relationship. For example, a lack of fit between the partners’ operational
approaches may jeopardize alliance outcomes, and a “persistent misfit
can lead to either dormancy or alliance exit” (Das & Teng, 2002: 729).
Divergent goals and approaches to an alliance reduce decision-making
quality, divert attention from pressing needs and otherwise interfere
with activities, dampening alliance outcomes (Inkpen & Currall, 2004;
Steensma & Lyles, 2000). Accomplishing strategic goals and maintain-
ing a pro-social relationship climate are key IJV outcomes, consid-
ered important facets of alliance performance (Robson, Skarmeas, &
Spyropoulou, 2006). Thus IJV partners who have a common under-
standing of their informal management schemas should outperform
those with divergent relationship schemas in terms of achievements
and relationship quality. As noted above, the convergence or divergence
of informal management schemas as manifest in the use of relational
metaphors in public reports is an indication of IJV’s semantic fit or
misfit, respectively.
When two parties in an IJV use the same metaphorical language to
describe their relationship, the shared metaphors reflect a common
schema and definition for the mode of managing IJV operations, strength-
ening the basis for cooperation. Kozlowski and Klein (2000) and Liu,
Friedman, Barry, Gelfand, and Zhang (2012) show that through emer-
gent processes, individual mental models often converge and manifest
as a shared mental model. Shared mental models facilitate joint and
collective explanations and coping processes in uncertain situations,
and lead to efficiency in communication, adaptation to environment,

and performance (Liu et al., 2012; Salas & Cannon-Bowers, 2001).
Shared relational metaphors reflect a semantic fit (Brannen, 2004)
that aligns the cognition and communication between IJV partners.
Relatedly, reduced competition (Gulati, 1995; Nooteboom, Berger, &
Noorderhaven, 1997), reduced conflict, and more commitment and satis-
faction (Demirbag & Mirza, 2000) have been shown to lead to greater value
creation and achievement of strategic goals by the partners (Lane, Salk, &
Lyles, 2001). On the other hand, when two partners use different meta-
phors to describe their relationship, the misaligned relational schemas
dampen cooperation and heighten competition due to misunderstand-
ings, miscommunications, and yield poor coordination and performance.
Therefore we expect IJVs that have semantic fit, reflected in shared rela-
tional metaphors (e.g., either Patriarchal Family or Modern Marriage), will
reach greater achievement of strategic goals and better quality of relation-
ships than will IJVs that have semantic misfit, reflected in public reports
of mixed metaphors (e.g., Patriarchal Family and Modern Marriage). This
proposition addresses whether or not partners share a relational metaphor.
Proposition 2: IJVs with shared relational metaphors will have better

IJV outcomes than will IJVs with mixed relational metaphors.
Beyond semantic fit: The interaction between relational metaphors and

equity structure
An optimum goal for IJVs is to integrate sociocultural systems between
two groups jointly invested in a common venture (Stahl, Mendenhall,
Pablo, & Javidan, 2005). Ownership has properties and consequences
that are central to our interest in investigating the performance conse-
quences of semantic fit. Following, we present data from our interviews,
indicating that the type of relational metaphors used by IJV partners
does not necessarily correspond with their equity structure. In other
words, IJV partners may use a unilateral Patriarchal Family metaphor
even when their equity structure is symmetrical or they may describe
their relationship as a bilateral Modern Marriage even when their equity
structure is asymmetrical, with one partner owning a majority share of
the venture and therefore holding the legitimate, legal power. Then, we
develop a prediction of how equity structure can moderate the effect
of relational metaphors on IJV outcomes, arguing that asymmetrical
equity structure should strengthen the positive effects of a shared
(vs unshared) relational metaphor on alliance outcomes.
Prior to developing our prediction, we found multiple examples from
our interview data where IJVs share a relational metaphor that does
not seem consistent with the ownership equity structure. For example,
ChemInc is an IJV with an equal or symmetrical ownership structure
but a hierarchical or Patriarchal Family relational metaphor used by
both partners. The Chinese Vice President of Government Relations
explains the uneven power perceived by the two partners, despite their
symmetrical ownership structure:
Our Chinese engineers are equally qualified or even more qualified

in some areas than the expats from our (North American) partner,
but they set the priorities and schedules for operation, even some-
times we want to customize some of the products for the China
market, we have to go through them. The discussions sometimes
are quite frustrating for the Chinese; our (North American) expats
sometimes can sound quite patriarchal and arrogant. We know they
have good intentions and often hold higher quality standards. These
issues wasted a lot of time and compromised efficiency.
Similarly, a North American manager in ChemInc echoed the hier-

archical or Patriarchal Family relational metaphor, explaining a similar
kind of frustration in their communication:
The Chinese have no sense of quality, because our brand and reputa-
tion are at stake, we have to persistently push on the standards. Our
operation officer and the top engineer can be rigid sometimes, but
that’s absolutely necessary. The Chinese in our plant speak accept-
able English, but they are still hard to understand, including the
professional translator who has an American degree! They don’t tell
you what the real problem is; you have to go through many, many
rounds of meetings to find out. Of course that’s frustrating.
While ChemInc provides an example of negative organizational out-

comes when the equity structure reflects equality but the parties share
a hierarchical relational metaphor, in another example, we saw positive
outcomes when members of AdPro shared a Modern Marriage relational
metaphor but had an asymmetrical ownership structure between the
two IJV partners. The minority Chinese manager explains the relation-
ship with egalitarian metaphors but asymmetrical equity structures,
emphasizing the respect that comes from equal treatment by their
North American majority owner:
Even though our (North American) managing director has full

authority over our operation, and he is extremely knowledgeable
about China, he always consults us about specific issues in our China

practice and when dealing with Chinese customers. He delegated
a lot of important responsibilities and projects to the Chinese side;
even sometimes we do not have the capacity to handle them in
a timely manner and we have to ask for help from the office in
Singapore. We feel that we are in the same family and same boat
and our partner really want us to grow together for better quality of
service and expertise. He always respected our opinions.
In the same IJV, the North American communication manager (major-

ity owner) shared the equal or Modern Marriage relational metaphor,
explaining how the minority partner is treated as an equal:
Yes the (North American) side is definitely in control, but we do not

want our Chinese partner to feel that we make all the decisions. In
fact, we cannot make all the wise decisions in our China operation
without the input from our partners. We rely heavily on our Chinese
partner to smooth government relations and secure contracts with
important customers. Regardless of the equity stake, we are truly
equal partners in the volatile Asian market …. In the long run, I
believe our Chinese partner will grow faster and maybe help us to
expand to other Asian areas, and even help us financially back home.
This case shows that ownership imbalance reduces ambiguity in deci-

sion making and clarifies task coordination. Specifically, the decision-
making clarity of unbalanced equity might strengthen the positive
effect of converged relational schemas on IJV’s strategic goal achieve-
ment. Of course, these are just two examples of multiple combinations
of relational metaphor types, metaphor sharing, and equity structure
that may be found in a given IJV. To develop predictions of how equity
structure will moderate the effect of semantic fit on IJV outcomes, we
turn to research on the unique features of IJVs as an organizational form.
Researchers (Geringer & Hebert, 1989; Mjoen & Tallman, 1997) note
that because an IJV is a fragile and unstable form of organizing, an
asymmetrical equity structure provides the decision-making authority
and clear strategic direction necessary for such a cooperative venture to
attain economic objectives. For example, in exercising property rights,
a majority owner can exert legitimate authority to appoint board mem-
bers, senior management, and otherwise set the strategic direction for
IJV assets and resources. Unbalanced equity empowers a majority owner
with the legal basis and legitimacy necessary to exercise leadership and
control over strategic decisions (Lin & Wang, 2008), avoiding inefficient
haggling and renegotiations when important strategic adaptations are
necessary (Mjoen & Tallman, 1997). Majority owners can also manage
and direct the cooperative efforts of partners toward desirable objectives
efficiently, because “if one partner has dominant control, decisions will
be less time consuming and easier to make” (Steensma & Lyles, 2000:
834). As for balanced equity, “equal division of control between partners
leads to coordination problems” (Steensma & Lyles, 2000: 834), which
is due to difficulties in integrating tasks and reaching consensus, delay-
ing timely and strategically relevant decisions (Casson & Mol, 2006).
Previously, we noted a shared relational metaphor (i.e., semantic fit)
reflects converged relational schemas regarding a venture’s day-to-day
operations, leading to common understandings and efficient commu-
nications among IJV actors (Brannen & Doz, 2012; Gibson & Zellmer-
Bruhn, 2001). However, the partners’ consistent schemas for alliance
operations largely offers a potential for outperformance; superior out-
comes can be best realized when this convergence is complemented by
the decisive, strategic decision making of a majority owner. We propose
that the positive impact of shared metaphors on IJV performance is
amplified for asymmetrical equity structures, since focused ownership
reinforces and strengthens the benefits of commonly held schemas. That
is, a majority owner’s decision-making authority and legitimate leader-
ship are expected to compliment such converged managerial schemas
by focusing the efforts and resources of the partners, better exploiting
the performance enhancements afforded by semantic fit. In contrast,
since symmetrical equity creates “ambiguity over management control”
(Casson & Mol, 2006: 18), we suggest such IJVs are less decisive and are
prone to compromise, making the partners less able to fully achieve the
potential performance benefits from their shared relational metaphors.
Proposition 3: Asymmetrical equity greatly strengthens the positive

effect shared relational metaphors have on IJV outcomes, relative to
symmetrical equity.
Figure 10.1 summarizes our propositions.
Study 3: Testing propositions with quantitative analyses

Sources of data
We used both newspaper and company reports to identify the rela-
tional metaphors associated with two-party IJVs initiated during the
Expressed Relational IJV Outcomes

Metaphors P2 • Achievement of
• Shared Strategic Goals
° Patriarchal Family • Quality of Relationship
° Mordern Marriage
• Mixed P3
Semantic Fit Equity Structure
• Fit Asymmetrical Symmetrical

° Hierarchical
° Equal
• Misfit
Time 1 (2002–2005) Time 1 (2007–2009)
Figure 10.1 Metaphorical language and semantic fit in IJVs
2002–2005 time frame. To examine the proposed effects of relational

metaphors in IJVs, we first collected IJV announcements and reports
in the WSJ, the FT, and local English language newspapers during
2002–2005 (Time 1) from three online databases, Factivia, Lexis-Nexis,
and World News Connection. We found about 1700 articles on 355
newly established and signed two-party IJVs. Then we searched for the
press release and letter to stakeholders by the IJV partners mentioned
by the articles. We used a three-source criterion to identify target IJVs,
namely each qualifying IJV had to have information from an interna-
tional media source (WSJ or FT) and either a company report or local
news report from each of the two parties in the IJV. Because companies
often do not provide separate reports for their joint ventures, we use
the companies’ overall reports to find the section where they men-
tion the relationship and outcomes with their respective joint venture
partner. Thus we first identified 168 IJVs that used metaphors in their
description of the IJV relationship from all three sources. Then we
searched for company reports on descriptions of IJV relationships dur-
ing 2007–2009 (Time 2). Among the 168 IJVs, 22 IJVs did not survive
after 3 years; therefore we used the remaining 146 IJVs employing rela-
tionship metaphors in the analyses described below.
Among the 146 IJVs, 8 were between companies in Asia, 5 were
cross national IJVs between North American firms, 12 were between
European firms (including Russia), 39 were between North American

and Asian firms, 53 were between European and Asian firms, 12 were
between European and South American firms, 15 were between North
and South American firms, 7 involved an Australian firm and an Asian
firm, and 12 involved a firm from the Mid-East partnering with a firm
from Asia, Europe, or North America. Industry profiles include auto
(33), pharmaceuticals (21), banking (32), information technology (38),
and manufacture and business services (22).
Measures
Relational metaphors We used the reports of 146 IJVs employing rela-
tionship metaphors by subjecting them to our content analysis and cod-
ing procedures. We used dummy variables to code each IJV, Relational
Metaphor: Modern Marriage = 0, Patriarchal Family = 1, Semantic Fit:
Mixed Metaphors = 0, Shared Metaphors = 1. Content analysis proce-
dures confirmed that among 91 out of 146 IJVs, there was agreement
between IJV partners on the relational metaphors. In other words, there
are compatible metaphors or metaphorical descriptions associated with
each partner. For example, within one IJV, the WSJ reported a “mar-
riage,” one local press mentioned “the recently joined family,” another
local press described that one of the partners “courted wholeheartedly”
to the other during the negotiation, and was “happy in the end,” and
their joint letter to stakeholders talked about the “new engagement.”
The other terms coded in the Modern Marriage category include “equal
partnership,” “true meeting of the hearts and minds,” “partnership
made in heaven,” “marriage of contemporary time,” and so on. Terms
coded in the Patriarchal Family category include “patriarch figure in
the board room,” “parent control,” “big brother,” “(damage control)
like running after an errant child,” among others. We explained earlier
that “semantic fit” in the case of patriarchal family necessitates both
partners identifying the same partner as patriarch. In our data set all
IJVs with the patriarchal family metaphor did, in fact, identify the same
partner as the patriarch. The 55 IJVs with mixed metaphors show lack
of agreement in the categories of the metaphors they use. For example,
one partner reported it is “a happy engagement” and the other party
mentioned “our own obligations as the parent company.”
IJV equity structure We searched the company websites and industry

databases to obtain and verify information about the economic configu-
ration of the IJVs. In our conceptualization, asymmetric equity refers to
situations with the unambiguous, legitimate authority of a dominant
majority owner, compared with less clear-cut situations where own-

ership holdings only differ slightly, lacking the strong clarity of one
unambiguous dominant owner. Following previous research (e.g.,
Dhanaraj & Beamish, 2004), we measure equity structure by the major-
ity partner’s equity contribution, in a continuum percentage, with the
larger number indicating an asymmetrical equity structure in the IJV.
IJV outcomes We employ two dependent variables to measure the out-

comes of IJVs at Time 2, which is 3 years after the formation of relational
metaphors (measured at Time 1), namely Achievement of Strategic
Goals and Quality of Relationship. We coded explicit mentioning about
achievement of strategic goals and quality of relationship from the annual
reports of the IJVs companies, during the period 2007–2009. Due to
the unavailability of unconsolidated financial reports of IJV profitabil-
ity, previous research such as Chung and Beamish (2010) argued that
managerial reports are the best alternative to measure IJV outcomes.
Further, scholarly evidence (Delios & Beamish, 2001; Dess & Robinson,
1984; Geringer & Hebert, 1991; Woodcock, Beamish, & Makino, 1994)
has shown validity and reliability of the perceptual measures in mana-
gerial reports. We believe the annual reports issued by companies to
stakeholders are one form of managerial reports, similar to those used
the previous studies. For example, in each company report, we coded
sentences and phrases mentioning directive words such as constructive,
beneficial, valuable, and “productive as positive quality of the relation-
ship. So quality of relationship is an average frequency count between
the partners about the relationship as they appear in those company
and news reports. Achievement of strategic goals regarding the IJV was
also coded and counted the frequency of such mentions, depending on
how frequent it was explicitly mentioned in the annual reports of both
parties in a particular IJV.
Control variables We checked the subsamples (IJVs with shared vs

mixed metaphors, and IJVs with Modern Marriage vs Patriarchal Family
metaphors) for significant differences in IJV industry, prior relationship,
and size (measured by number of full-time employees). We did not find
significant differences in industry patterns, measured by geographic
distance between the capital cities of the two countries where each
pair of IJV partners are located. IJVs with shared vs mixed metaphors
differed in terms of IJV prior relationship [χ2(1, 145) = 4.28 p < 0.05]
and size [χ2(1, 145) = −3.93 p = 0.05]; we controlled for the effects
of prior relationship and size in all of our analyses. Prior relationship
and size did not moderate any of the effects in the analyses related to
our proposition testing. We also controlled for cultural distance between
the IJV partners, using the composite measure proposed by Kogut and
Singh (1988) with the cultural dimensions data from the GLOBE study
(House, Hanges, Javidan, Dorfman, & Gupta, 2004).
Analysis
Because the two categories of relational metaphors – shared or mixed,
and Modern Marriage or Patriarchal Family – are dichotomous variables,
we conducted regression analysis and planned contrasts in conjunction
with Tukey’s Honestly Significant Difference (HSD) test to examine
specific differences that we proposed (Abdi & Williams, 2010).
Results
Semantic fit and IJV outcomes Based on our content analysis of 146 IJVs,
91 had semantic fit with both partners using the same type of metaphor
and 55 had mixed metaphors where one partner used an equal Modern
Marriage relational metaphor and the other partner used a hierarchi-
cal Patriarchal Family relational metaphor, supporting Proposition 1.
Table 10.2 shows correlations and Table 10.3 shows the descriptive
analysis of the sample breakdown in different metaphorical categories.
One might argue that metaphorical descriptions might be a personal
expression style by the newspaper reporters or the authors of the com-
pany reports. Yet we were able to find matching metaphors used by
the WSJ or FT, local English language newspapers in the IJV partner’s
home country, and corporate reports. The convergence of metaphori-
cal description of the IJV relationship from multiple sources shows
unambiguous consensus in the relationship patterns therefore provides
confidence in Proposition 1.
Table 10.4 shows results of regression analyses. Proposition 2 suggests
IJVs with shared metaphors (Time 1) will have better IJV outcomes at
Time 2 than will IJVs with mixed metaphors. Model 1 and Model 3 in
Table 10.4 support this proposition. For Model 1 (strategic goals), the
mixed vs shared metaphor effect is significant (β = 0.26 < 0.01); for
Model 3 (relationship quality), the metaphor effect is also significant
(β = 0.17<0.01). Contrasting IJVs with shared metaphors against those
with mixed metaphors (Table 10.3) also showed support for Proposition
2 on the two dependent variables: achievement of strategic goals [F(1,
145) =7.22, p < 0.01)]; and quality of relationship [F(1, 145) = 9.35,
p < 0.01)]. Exploring further with post hoc pairwise contrasts, we found
that a higher percentage of IJVs with shared metaphors, relative to
276
Table 10.2 Correlations
1 2 3 4 5 6 7 8
1. Prior relationship
2. IJV size 0.03
3. Cultural distance −0.05 0.02
4. Shared metaphors 0.09* −0.03 −0.12**
5. Modern marriage 0.11* −0.03 −0.15** 0.11**
6. Patriarchal family 0.07* 0.02 −0.07* 0.12** −0.23**
7. Asymmetrical structure 0.03 0.08* 0.08* 0.03 0.02 0.27**
8. Strategic goals −0.03 −0.03* 0.01 0.25** 0.23** 0.15** 0.12**
9. Quality of relationship 0.06* −0.05* 0.02 0.18** 0.22** 0.16** 0.11** 0.17**
Note: n = 146. *p < 0.05, **p < 0.01. Two-tailed.

Table 10.3 Alliance outcomes by IJV subgroups
Shared metaphors (n = 91) Mixed metaphors (n = 55)
Modern marriage (n = 53) Patriarchal family (n = 38) (One party used Modern Marriage,
One party used Patriarchal Family)
Equity structure Symmetrical Asymmetrical Symmetrical Asymmetrical Symmetrical (n = 22) Asymmetrical

(n = 23) (n = 30) (n = 11) (n = 27) (n = 33)
Quality of relationship 8.89 (5.70)a 13.01 (6.32)b 1.72 (1.95)c 6.93 (3.07)a 3.54 (3.12)d 4.16 (3.28)d
(mean count)
11.22 (6.35)a 5.97 (5.11)b
9.02 (6.39)a 3.91( 3.07)b
Achievement of Strategic 58.87 (16)a 75.00 (12)b 34.79 (9)c 49.33 (15)c 29.45 (15)c 39.15 (17)c
Goals (mean percentage) 68.02 (19)a 45.12 (15)b 35.27 (11.21)b
58.46 (19)a
P2: Mixed vs Shared: P2 post-hoc: Patriarchal
Achievement of Strategic Family vs Modern
Goals: F(1, 145) = 7.22, Marriage:
p < 0.01 Achievement of
Strategic
Goals: F(1, 90) = 4.93,
p <0.01
Quality of Relationship F Quality of Relationship:
(1,145) = 9.35, p < 0.01 F(1, 90) = 5.87, p < 0.01)
Note: Cells that do not share the same letters are significantly different (p < 0.05) by Tukey’s HSD test.
277
Table 10.4 IJV outcomes: regression analysis
Strategic goals Quality of relationship
Models 1 2 3 4
(N = 146) Step1 β Step2 β Step1 β Step2 β
Prior relationship 0.06* (0.02) 0.03* (0.01) 0.06* (0.02) 0.03* (0.01)
IJV size (log) −0.05* (0.02) −0.04*(0.02) −0.04* (0.02) −0.03* (0.01)
Cultural distance 0.00 (0.01) 0.02 (0.01) 0.01 (0.01) 0.01 (0.01)
Equity structure 0.15** (0.03) 0.17** (0.03) 0.15** (0.03) 0.19** (0.03)
Metaphors 0.26** (0.05) 0.24**(0.05) 0.17** (0.05) 0.19** (0.03)
(mixed vs shared)
Metaphors × 0.18** (0.03) 0.21** (0.05)
Equity structure
F 33.31** 12.39*** 35.03** 11.67**
Adjusted R2 0.09 0.15 0.10 0.18
ΔR2 0.06** 0.08**
df 4, 142 5, 141 4, 142 5, 141
Note: *p < 0.05, **p < 0.01, ***p < 0.001. Two-tailed.
( ) = standardized errors.
those with mixed metaphors, reported achieving strategic goals and a

better quality of relationship. Table 10.3 shows the 91 IJVs with shared
metaphors outperformed the 55 with mixed metaphors on strategic
goal achievement (58.46% vs 35.27%) and for the mean count of rela-
tionship quality terms (9.02 vs 3.91), showing consistent support for
Proposition 2.
Although we did not propose direct effects of metaphor type, we
conducted post-hoc exploratory analyses (Table 10.3) that show IJVs
with shared Modern Marriage metaphors outperformed those with
Patriarchal Family metaphors on the outcome metrics: goal achieve-
ment mentions are 68.02% vs 45.12%, and relationship quality counts
are 11.22 vs 5.97. Planned contrasts found that IJVs with Modern
Marriage metaphors at Time 1 achieved better IJV outcomes at Time 2
compared with those with Patriarchal Family metaphors: achievement
of strategic goals (F(1, 90) = 4.93, p < 0.01); and quality of relationship
(F(1, 90) = 5.87, p < 0.01). Table 10.3 also shows significant pairwise con-
trasts. Our interpretation is that the expectations of exchange associated
with Modern Marriage are more cooperative than the expectations of
exchange associated with a Patriarchal Family. Hence it is not surpris-
ing that prior literature has found a positive effect of “mutual influ-
ence” on performance, especially for international strategic alliances
asymmetrical symmetrical
a b
80
Achievement of Strategic Goals
18
70 16
Quality of Relationship
60 14
50 12
10
40
8
30
6
20
4
10 2
0 0
Mixed Shared Mixed Shared
Relational Metaphors Relational Metaphors
Figure 10.2 Interactions between relational metaphors and equity structure

of IJVs. (a) Achievement of Strategic Goals as a Function of (Mixed vs Shared)
Relational Metaphors and Equity Structure; (b) Quality of Relationship as a
Function of (Mixed vs Shared) Relational Metaphors and Equity Structure
(Muthusamy & White, 2006). When IJV partners perceive their relation-
ship to be mutual and egalitarian, as opposed to hierarchical, the subse-
quent cooperative expectations and joint adaptations may facilitate IJV
performance due to enhanced cooperation and dampened competition.
Equity structure as a moderator Proposition 3 predicts that equity

structure of the IJV will moderate the relationship between relational
metaphors and IJV outcomes. We performed a regression analysis on
each of the dependent variables (IJV outcomes) including as independ-
ent variables a metaphor dummy mixed = 0, shared = 1; asymmetrical
equity (equity structure as percentage of majority ownership), and a
metaphor×equity interaction, along with prior relationship, cultural
distance, and size as control variables. In Table 10.4, Step 1 shows
controls and main effects while Step 2 adds the proposed interaction;
the adjusted R2 is shown for each step and the change in R2 due to the
interaction is calculated.
Proposition 3 predicts that asymmetrical equity strengthens the
positive effects of shared metaphors (our operationalization of semantic
fit), relative to mixed metaphors, on IJV outcomes. Models 2 and 4 in
Table 10.4 support this proposition, showing a significant interaction
between semantic fit and equity structure (β = 0.18 < 0.01; β = 0.21 <
0.01). To further examine the nature of the interaction, we plotted the
moderating impact of asymmetrical equity in Figures 10.2a and 10.2b,
using one standard deviation above and below the mean. The plots
indicate that the positive effect of semantic fit revealed in Proposition 2
is indeed amplified when IJVs have an asymmetrical rather than a sym-
metrical equity structure. In other words, asymmetrical ownership, not
symmetrical ownership, intensifies the positive effect of semantic fit on
relationship quality and achievement of strategic goals. The interaction
demonstrates that as metaphors shift from mixed to shared, the positive
performance impact of an asymmetrical equity structure strengthens.
The graphs show that the IJV profile of shared metaphor-asymmetric
equity has the greatest likelihood of quality relationships and achieving
strategic goals during a future time period, consistent with predictions
of our conceptual framework.
Additionally, as a post-hoc effort, we checked the 22 IJVs that did not
survive after three years and therefore were not included in the main
study, 18 out 22 IJVs (82%) had mixed metaphors, further corroborat-
ing our proposed relationships. As we propose and find, the sharing
of relational metaphors signals the semantic fit proposed by Brannen
(2004). Therefore it is not surprising that the IJVs not surviving three
years mainly held mixed relational metaphors, signaling a mismatch,
suggesting they were semantically unfit to survive.
Discussion
By applying linguistic analysis to the study of international alliances,

this research improves our understanding of the operation and per-
formance of IJVs, an important organizational form for international
business. While many prior studies fail to differentiate ownership from
management control (Yan, 1998), metaphor theory enables us to isolate
the role of managerial control by exploiting information contained
in readily available public reports of newly formed IJVs and corrobo-
rated by interviews with IJV actors. Our novel approach advances IJV
research because it reveals and empirically demonstrates the complexity
of alliance management as cross-cultural partners originate from home
markets with potentially unique managerial practices. Our analysis
of informal, emergent schemas of managerial control further enables
our use of semantic fit (Brannen, 2004) to predict the performance
consequences of convergent and divergent metaphorical descriptions.
Since cross-border partners often have different ways of thinking
and reasoning about alliance operations, semantic fit and misfit are
posited and demonstrated to have differential effects on alliance out-
comes. An additional key contribution regards the joint effect of owner-
ship (a legal construction) and managerial control (a social construction)
on IJV operations and performance. Our innovative, linguistic approach
enables us to conceptualize and demonstrate the complementary nature
of both control forms whereby asymmetrical ownership is shown to
enhance the performance consequences of convergent managerial
approaches to operations. Thus by applying metaphor theory to public
documents of new IJVs, our research presents new insights into the way
cross-cultural partners manage their common international venture,
revealing performance benefits and penalties associated with corporate
language and semantic fit in a global context.
Importantly, our findings are based on both qualitative, in-depth case
analyses and quantitative linguistic evaluations of news and corporate
documents of newly formed IJVs. Through three studies, our contribu-
tion to the “language” aspect of international business literature is clear:
relational metaphors link organizational cognition with language, and
the alignment of relational metaphors used by IJV partners are impor-
tant manifestations of how the partners integrate different cultural
profiles (Brannen, 2004; Stahl et al., 2005) and overcome liabilities of
foreignness (Denk, Kaufmann, & Roesch, 2012; Luo, Shenkarb, & Nyaw,
2002; Petersen & Pedersen, 2002; Zaheer, 2002), which, as we demon-
strate, can significantly affect subjective IJV outcomes.
Our research proposes that metaphorical language conveys deep
meaning about how international partners understand their informal
schema of alliance management, and that sharing the same type of
metaphorical language signals semantic fit (Brannen, 2004), which
can be consequential. Unlike actors in domestic alliances, IJV partners
are often separated by great physical and cultural distance, making it
especially challenging to manage their affairs in a coordinated, high-
performance manner (Bello et al., 2010). Differences in IJV partners’
managerial schemas are exacerbated by cross-cultural, cross-border
contexts of international alliances, as published works have shown
that communication, consensus building, and cooperation are more
difficult in intercultural than in intracultural encounters (e.g., Adair &
Brett, 2005; Liu, Chua, & Stahl, 2010). Thus since international business
partners originate from distinct home markets, IJV performance may be
challenged by inconsistent understandings of informal alliance man-
agement, potentially threatening partners’ ability to transmit, learn,
and manage power dynamics and alliance information (Brannen, 2004).
Implications of Metaphorical Corporate Language for Semantic Fit

While much past research on IJVs relies on equity share as a proxy for
venture control (Chen et al., 2009), our research provides a fine-grained
understanding of the underlying ownership and managerial controls
that influence IJV outcomes. Majority equity alone is a simplistic notion
of venture control, ignoring complex patterns of formal and informal
control schemas that jointly impact the way international partners
coordinate their shared resources and activities. Our qualitative analysis
of nine case studies reveals that various patterns of relational meta-
phors characterize IJVs, reflecting complexity in the underlying forces
that play-out over time as international partners interact with either
aligned or misaligned management schemas. Our data indicate that
simply labeling international ventures as “IJVs” fails to reveal the range
and diversity of cognitions and behaviors employed by international
partners.
Metaphors and managerial schemas

By introducing metaphoric language to international alliance theoriz-
ing, we highlight one way in which cross-border organizations transmit
abstract meaning regarding informal management schemas. As IJVs
commence operations, the dialectic of cooperation and competition is
played out between partners through cognitions and behaviors scripted
by informal management schemas (Baldwin, 1992; Ring & Van de Ven,
1994). As our conceptualization suggests, these early formed schemas
are reflected in relational metaphorical language used by international
actors and external observers in public reports (Fiske, 2004; Lakoff,
1993). Since family metaphors are common across cultures (Jakobson &
Halle, 1956; Liu, 2002), our theorizing employs this known domain
through which to understand and convey implicit and informal rela-
tional schemas in IJVs. We apply metaphor theory and demonstrate
that corporate language expressed in business press reports and official
announcements reflects whether the emerging relational schemas of
newly formed IJVs are expressed as a hierarchical family, representing
more unilateral informal management or a modern marriage, represent-
ing more bilateral informal management.
Our results show that alliance outcomes vary substantially and sys-
tematically for IJVs based on our framework, supporting our contention
that differences across relational schemas drive key consequences for the
international partners. Our metaphor-outcome model suggests alliance
managers, investors, and other stakeholders can better understand the
cooperative and competitive dynamics playing-out between international
partners by attending to metaphorical characterizations of newly formed

IJVs in the language found in initial press reports and corporate
announcements. Our findings support the notion that metaphorical
references to patriarchal family or modern marriage are surface expres-
sions, symptomatic of unilateral or bilateral informal management sche-
mas that guide perception and behavior within cross-border organizations.
Metaphors and semantic fit

Since a metaphor reflects organizational understanding – it mirrors
the socially constructed reality of the partnership – it is the semantic
fit, expressed through similar relational metaphors across IJV partners
that have implications for interorganizational action and outcomes.
Integrating metaphorical language and relational schema theories ena-
bles us to predict complex patterns of international management oper-
ating in new IJVs, identifying when partners are semantically fit, and
enabling our predictions of alliance outcomes. Shared relational meta-
phors are also consistent with linguistic match between cross-cultural
partners, resulting in shared vision (Barner-Rasmussen & Björkman,
2007). Our study of publicly available, metaphorical descriptions of
new IJVs provides empirical evidence for the relevance of semantic fit
(Brannen, 2004) and affirms the importance of linguistic match (Barner-
Rasmussen & Björkman, 2007), thus advancing research on the role of
language in international business research.
As we predict based on Brannen’s (2004) notion of semantic fit in
global business settings, strategic and social outcomes are superior for IJVs
where partners share metaphors, suggesting a shared understanding of
informal managerial control, yielding a productive alignment of venture
behaviors. These findings demonstrate how shared relational metaphors
between cross-border partners reflect a common understanding of infor-
mal management schemas that help direct complementary cognitions
and behaviors. Managerial alignment is critical since the international
partners’ mental model of the relationship is known to direct the way
each processes information, interprets events, and formulates actions,
largely specifying how each will cooperate and compete. Through an
awareness of these processes, management can better understand alliance
complexity and engage more effectively with the foreign partner.
Ownership and managerial controls

Our findings support notions that the fragile nature of the joint
venture form of organization benefits from both a strong locus of
control stemming from asymmetrical ownership as well as converged
relational schemas for managing international partner relationships

(e.g., Beamish & Lupton, 2009; Bello et al., 2010). We show shared rela-
tional metaphors and unbalanced equity are complementary, leading to
superior subjective performance outcomes. While international alliance
research has examined ownership control, it has not done so compre-
hensively in conjunction with informal managerial control employed
by each partner due to difficulty in measuring socially based, manage-
rial schemas of cross-cultural partners. We address this research gap by
jointly analyzing the effects of equity share and informal management
schemas conveyed through metaphors, revealing the high-performance
alignment of formal and informal controls. Our findings demonstrate
that majority ownership and converged managerial schemas are a key
relationship pattern, enabling the international partners to best organize
and coordinate their combined efforts and resources.
Hence our findings suggest semantic fit is most beneficial in the con-
text of asymmetrical ownership where a majority owner may be able to
exert leadership, shepherding cooperative activity to productive results.
Research has shown cross-cultural partners may encounter difficulties
in communication, consensus building, and cooperation (e.g., Adair &
Brett, 2005; Brett & Okumura, 1998; Liu et al., 2010), hindering the
ability of collaborating partners to achieve highly productive inter-firm
routines and processes. Given its legal legitimacy and formal authority,
a majority owner is in a position to provide the guidance and direction
necessary to productively exploit potential sources of rent generation
associated with converged relational schemas (Dyer & Singh, 1998),
both enhancing the achievement of strategic goals and improving the
quality of the relationship between the cross-border partners.
Our research also raises some cautions for majority and minor-
ity equity holders because ownership controls may shape cognitions
and behaviors, potentially leading partners to overemphasize legal/
economic parameters of the alliance and ignore a more socialized
understanding of their relationship. Since international partners com-
bine resources and expertise in their IJV, a majority owner may be able
to provide the social leadership and decision-making clarity beneficial to
alliance productivity by directing its ownership privileges and preroga-
tives toward collective value creation. In turn, a minority owner in this
situation lacking the safeguard of ownership control may be motivated
to cooperate and confidently invest in the international alliance when
managerial understandings of alliance operations converge, as this
informal consensus may provide socially based safeguards, offsetting its
lack of formal, legal control.
Overall, publicly communicated metaphors provide a language-based

tool for theorists and managers to understand the underlying dynamics
in IJV partner relationships and can facilitate the discovery of future
alliance problems and successes. Our metaphor-outcome approach ena-
bles practitioners to diagnose emerging managerial schemas of newly
formed IJVs, permitting an early understanding of the future ways inter-
national partners may interact and create value. Modeling the mana-
gerial dimension and ownership dimension together in an integrated
framework offers a typology useful in understanding and anticipating
patterns of perception and behaviors that drive alliance performance.
Methodologically, we expand the repertoire of IJV research by using
publicly available press and company announcements in combina-
tion with future year corporate reports. We provide a theoretical basis
to interpret metaphorically laden journalistic and corporate reports to
identify the managerial schemas activated in newly formed IJVs. Unlike
self-reported data from surveys, this method does not suffer from
common method bias and is not cross-sectional, which provides addi-
tional insights on the causal mechanisms of the proposed relationships.

A few limitations of our conceptualization of metaphor and our
measurement should be noted. First, we employ the notion that IJV
relational metaphors used in public reports reflect or mirror how
organizational actors understand the nature of partners’ relationships,
a view supported by our interview data. Beyond this view of metaphor-
as-mirror, some theorists argue that metaphors can not only reflect but
also create reality (Gibson & Zellmer-Bruhn, 2001). In other words, it
is through the use of metaphor that organizational actors may create
a shared understanding that becomes reality. While this perspective is
not contradictory to our own theorizing, it suggests that future research
might examine the generative effect of publicly reported relational
metaphors on subsequent IJV behaviors, forms, and outcomes. Another
limitation is that given our conceptualization, relational metaphors
reflect an organization’s perceptions, which may or may not represent
an objective reality, particularly if impression management is at work.
However, as noted above, despite these limitations, the analysis of lan-
guage in public reports that are cross-validated across multiple sources is
a generally accepted method among organizational researchers.
While we measured relational metaphors at one point in time, it is
conceivable that they may continue to evolve and may even change
over long-term IJV relationships, especially when one of the partners
gradually gains more market power and potentially changes the eco-
nomic structure between the partners. Further, our time periods (2002–
2005; 2007–2009) may not generalize to other time periods, since 22
IJVs did not survive the entire time of our study, our time frame and the
presence of discontinued IJVs should be noted as potential limitations.
Thus given the fluidity of global markets, future research may take a
more dynamic analytic approach to examining the role of relational
metaphors and semantic fit on IJV outcomes over a variety of longer
time periods.
Likewise, how appropriate or successful a specific relationship
management approach could be may depend on additional modera-
tors (besides equity) such as the quality of top management, strategic
motivation for engaging in the alliance, and capabilities fit between
the partners. For example, if it turns out that a partner lacks important
capabilities, tighter management may be necessary in order to achieve
the intended benefits of the alliance. Another important factor to con-
sider is that cultural or linguistic variation in the meaning attached to
a particular metaphor may introduce further complexity. While mod-
ern marriage is a commonly used metaphor representing equal and
collaborative relationships in the management and psychology litera-
tures, we recognize that in some cultures modern marriage may con-
note a hierarchical, unequal relationship. While our study confirms
the intended meaning in English and Chinese languages, researchers
investigating other cultures and languages should confirm cross-cul-
tural meaning equivalence of relationship metaphors. For additional
insight on international alliances, future research may benefit from a
focus on fundamental linguistics, linking inferences from metaphori-
cal language in press and corporate reports to underlying, but difficult
to assess, managerial issues that are key to international business
performance.
Acknowledgements
Earlier versions of this article received helpful comments from Susanne

Tietze, three anonymous reviewers, and seminar participants at Nanyang
Business School, Peking University, Toulouse Business School, and the
People At Work (PAW) Group of Georgia State University. We appreci-
ate Wei Cai, Claudia Dale, Brigid Scar-brough, and Xiang Geng for
research assistance. Financial support for this research was provided
to Leigh Anne Liu in the form of a faculty summer research grant and
CIBER research grant from Georgia State University’s Robinson College

of Business.
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11
Conclusion
Terry Mughan and Mary Yoko Brannen
This review of the treatment of language as a concept in interna-

tional business (IB) in the Journal of International Business Studies ( JIBS)
reveals thematic and chronological patterns that are representative of
the development of an important field in IB research. The interest in
language acquisition as part of the IB curriculum in the 1980s and 90s
directly reflected the growth of IB as a distinct area of business and man-
agement and the emphasis on the nation-state as the key geographical
entity in IB theory. The over-simplified association of a single national
language with the nation-state completely overshadowing regional lan-
guages and dialects defies the reality of many markets1 and excludes
large numbers of consumers from the potential reach of the firm. The
increase in global trade and investment which has happened over the
last few decades has brought with it greater competition, complexity
and uncertainty as China, India and other newcomers have jostled for
their place in the global order, causing many practitioners to propose
that only the use of English as a corporate lingua franca could bring
order and efficiency to this diversity (Neeley, 2012). However, it is inter-
esting to note that throughout the recent period both national2 and
transnational3 bodies have continued to produce large-scale policy and
educational studies affirming the centrality of language competence
to cross-national communication, trade relations and business perfor-
mance. Most were academically grounded, well-funded and contained
data and evidence that macro-level factors such as IB growth, competi-
tiveness and/or relationships are enhanced by the possession and use
of micro-level foreign language skills and that employers are aware of
this. Yet, such comprehensive assessments of the utility and importance
of language sensitivity and use in IB did not evolve in JIBS until much
more recently.
293
294 Terry Mughan and Mary Yoko Brannen
The close linkage with the fields of cross-cultural management and

marketing from the 1970s up until the middle of the last decade saw
language used selectively as one of a range of variables in cross-national
studies. In some cases studies focusing on the concept of communica-
tion within and between organizations omitted language as a variable
altogether. The important consideration of language as a methodological
fault-line in cross-national business research that was expressed by
Green & White (1976) and reiterated by Adler & Graham (1989), our
first two showcased articles, seems to have never gained traction. The
existence of this fault-line was neither challenged, rebutted, nor taken
up again empirically in JIBS until Hinds, Neeley, & Cramton (2014). The
failure to engage with this challenge might be seen as either a result of
the unquestioned assumption that if a foreigner speaks English well
they can do anything a native speaker can or, more worryingly, as a
simple lack of rigor.
A period of relative lack of fecundity in language-oriented publishing
in the 1990s and beyond saw language research as a lens on globaliza-
tion subordinated to the massive growth of interest in the cross-cultural
management phenomenon built around the cultural values models
expounded by Hofstede (1984), Trompenaars (1993) and Schwartz &
Sagiv (1995). This trend coincided with the increasing adoption of
the lingua franca solution to corporate communication barriers and the
decline of foreign language learning globally in universities. For exam-
ple, in 1998, ninety-three UK universities offered specialist language
degrees. By 2013 that figure had fallen to fifty-six.4
Our third showcased article—Luo & Shenkar (2006)—bucked this
trend and set out a high-level strategy model for language in business
which has been partly populated by a recent new wave of researchers
and scholars in IB. Our remaining showcased articles starting with the
introduction to the JIBS Special Issue on Language (Brannen, Piekkari, &
Tietze, 2014), include important contributions which have been made
in JIBS in the areas of language policy ( Janssens & Steyaert, 2014),
human resource management and gender (Santacreu-Vasut, Shenkar, &
Shoham, 2014), knowledge transfer (Reiche, Harzing, & Pudelko, 2015)
and joint ventures (Liu, Adair, & Bello, 2015).
The new millennium has therefore seen a step-change in language-
focused research in IB that has established it as both a domain in itself
and as an important sub-set of the IB canon. Interestingly, this domain
is diverse, both conceptually and methodologically. It operates on all
levels of analysis, from individual skills to organizational capabilities to
global-level phenomena such as migration as well as gender and cultural
Conclusion 295
hegemony. In this respect, the new wave of researchers reflect broader

shifts in the social sciences and are helping pull the IB field away from
a preoccupation with the needs and aims of the multinational corpora-
tion and towards an integrated view of the business organization in its
global environment.
11.1 New challenges
In thinking about how the field might move forward from this point, we
have what might appear to be two competing forces that must be rec-
onciled. On the one hand, we have the agenda laid out by Johanson &
Vahlne (1977) to better understand the role of language in decision-
making in multinational corporations. On the other hand, we have the
broader field of the macro-environmental contexts of these organiza-
tions and the changing demographics, technologies and relationships
that have emerged in the twenty-first century and have blurred the
boundaries between traditional forms of language. Some of the articles
featured in this review belong clearly in one camp or the other, while
others span both. Let us briefly consider some of these phenomena as
they present themselves in the twenty-first century and consider their
relevance to our research agenda.
11.1.1 Language policy and the multinational company

Large multinational companies are sometimes referred to as “mini
nation-states.” They are, in actuality, especially where language is
concerned, more complex. Their presence in multiple markets, many
of which have more than one official language and many regional lan-
guages or dialects exposes them to phenomena which may be either a
source of great inefficiency or a source of great innovation, depending
on how the language challenge is approached. Of course, many of these
companies do endeavor to sculpt a form of internal communication,
sometimes referred to as “corporate language,” which is usually either
the language of headquarters or English combined with specialized,
company-specific vocabularies of strategy, marketing and public rela-
tions. There is a sound body of research and literature (Piekkari, Welch, &
Welch, 2014) describing the benefits and limitations of this practice.
Less well documented in the literature is the language mosaic of global
companies seen from the ground up. Empirical work is still needed to
map real language use (what we might call “organizational language”)
in complex organizations to enable us to bridge the gap between policy
and practice. In a recent edition of their corporate magazine especially

devoted to language, the Volvo Group declared proudly that it is “One
group, many languages” (Volvo Group Magazine, 2016). Is this just
an aggregated sum of language skills or does it engender something
of a more morphological nature? Is there such a thing as linguistic
intelligence that transcends language specific competencies? What
individual-level skillsets enable managers to act as “bicultural bridges”
(Brannen & Thomas, 2010) or “boundary spanners” mediating routines,
practices and knowledge across subsidiaries of a multinational organiza-
tion (Barner-Rasmussen et al., 2014)? In addition, the articles cited in
this review dealing with global teams (Hinds, Neeley, & Cramton, 2014;
Tenzer, Pudelko, & Harzing, 2013) clearly represent a further sound con-
tribution to our understanding of the contemporary MNC.
Other seminal contributions have ventured to go beyond the concrete
aspects of language as artefact to explore the implicit, non-articulated,
yet critical notions of meanings and assumptions associated with lan-
guage. Brannen (2004) raised awareness around the fact that knowledge
can rarely be transferred across contexts without significant evolution
in meaning—something she termed “recontextualization.” Brannen
& Doz (2012) showed how the day-to-day language used in organiza-
tions can either enhance or, in many cases, hinder strategic growth
and renewal. Welch & Welch (2015) have sought to build a key causal
link between language capital and strategic concepts such as absorptive
capacity. These works help substantiate the status of language on the
corporate strategy landscape and pave the way for more research linking
language to key constructs in the strategic management of the global
organization.
11.1.2 Migration and mobility

A world characterized by multiple languages, each spoken predomi-
nantly in discreet geographical spaces resembling a nation or region
was always an over-simplification and is now definitively is a thing
of the past. Political factors (migration and refuge) have merged with
economic factors (labor shortages and talent) to produce a map of the
globe where multilinguality is more common than ever. For example,
in 2014 the second most spoken language in the United Kingdom was
not Welsh or Gaelic but Polish. Goby & Nickerson (2015) illustrate
the business and social consequences of this fluidity in Dubai where
English, Arabic and other regional languages interact and sometimes
collide. This microcosm serves as evidence that a new landscape of
Conclusion 297
management capabilities for expatriates and global managers is emerging

as a result of new labor practices in global business. Young scholars have
the opportunity to build on a solid edifice of work here by mapping
and analyzing new patterns of behavior and need using established
literature in this area.
11.1.3 Big data

The ability to capture and access massive bodies of textual data has
grown exponentially in recent years because of cloud technology.
Much of this data is in languages other than English and translation
technology is going through a new boom period with companies like
Google entering the fray. The process by which some data makes its way
from the source language, into an array of other languages then into a
regional hub and, eventually, into English is becoming faster and more
complex with machine translation playing a growing part. A study
by Ronen et al. (2014) mapped this on a macro-level using Twitter,
Wikipedia and publishers’ online traffic; “the world’s languages exhibit
a hierarchical structure dominated by a central hub, English, and a halo
of intermediate hubs, which include other global languages” such as
Russian, Arabic, French and Spanish. This work suggests that English as
a lingua franca operates in conjunction with other lingua francas. The
implications of this phenomenon for quality of communication and
knowledge transfer across organizations and communities are enor-
mous and deserving of further research.
11.1.4 Multilinguality and language innovation

A small number of developed nation-states, such as Canada, Belgium
and Switzerland have established high-level policy governing the rela-
tionship between key languages within their territory. The European
Union has an official policy of plurilinguality which promotes the
mastery of more than one foreign language by schoolchildren. Rather
than being seen simply as “problems” or “costs” by some commentators
these examples of multilinguality may nowadays be seen as templates
for the management of languages in communities and organizations
affected by global migration and mobility.
In other cases, language practice and policy emerges from the
ground up. In places like Singapore, the increasing interaction
between languages is driving new forms of expression and mean-
ing that linguists struggle to keep track of. “Singlish” is a blend of
Singapore’s state languages, English, Malay, Mandarin and Tamil as
well as Hokkien, Cantonese, Bengali and other tongues (Sui, 2016).

Contrary to official efforts after 1979 to enforce a bilingual policy of
English and Mandarin, Singlish has since become “Singapore’s most
political language” (ibid).
How global companies, which by their essence aim to be locally
responsive, get to grips with local language and remain in tune with
policymakers and consumer preferences in markets like this, which are
numerous in the developing world, is clearly an ongoing static chal-
lenge and language research should reflect this dynamism in language
innovation in IB.
11.2 In sum
This review would suggest that linguists working in the IB field have
a wide range of possible areas in which they can research and make
further contributions based on extant work. Firstly, to build on earlier
work which has since been somewhat neglected, they can make a meth-
odological contribution to the entire IB field by helping develop more
reliable and insightful processes for the gathering and cross-lingual
transfer of data obtained in cross-cultural studies. The reservations
expressed by Green & White (1976) and Adler & Graham (1989) were
never fully addressed and are possibly even more pressing now in the
era of machine translation and big data.
Secondly, and going back to Johanson and Vahlne’s observation that
differences in language constitute “an obstacle to decision-making
connected with the development of international operations,” our
conclusion is that firm strategy indeed needs more and closer attention
by language scholars. Data, models, and frameworks that show how
specific, national languages blend with general linguistic forms and reg-
isters in organizations to create new and unique operational languages
(Brannen & Doz, 2012; Mughan, 2015) are needed as a contribution to
IB strategy.
Finally, we have argued that the field of language in IB can continue
to flourish by continuing to explore and describe new “linguascapes”
(Steyaert, Ostendorp, & Gaibrois, 2011) in the global community as
they affect organizations, communities and individuals. Given the
inter-disciplinary nature of the IB field, the best of this work will be con-
structed and articulated in such a way that other scholars (in areas such
as strategy, organizational behavior and human resource) who are not
language specialists may understand and adopt concepts and models to
inform their own work.
Conclusion 299
Notes
1. For example, the city of Novi Sad in Serbia has four official languages:
Serbian, Hungarian, Slovak and Pannonian Rusyn.
2. See, for example, the following national reports: Education for Global
Leadership: The Importance of International Studies and Foreign Language
Education for U.S. Economic and National Security, Committee for Economic
Development, Washington, D.C. (2006); The State of the Nation: Demand and
Supply of Language Skills in the UK, (2013), London, UK: British Academy.
3. And transnational reports: Companies Work Better with Languages.
Recommendations for the Business Forum for Multilingualism established by
the European Commission, 2008.
Della Chiesa, B., Scott, C., and Hinton, C., (eds.) (2012) Languages in a Global
World: Learning for Better Cultural Understanding. Paris, France: OECD Publishing.
4 Source: The Guardian, 9 October 2013.
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Index
acculturation, 39–41, 45, 50, 51 Birkinshaw, J., 59, 74, 101, 144, 214
acquisitions Black, J.S., 10, 126
foreign, 5, 7, 8, 211, 217, 221, 222, Boje, D.M., 5, 7
226, 234, 238, 239, 240, 243, Bordia, P., 7
244, 246 Bordia, S., 7
mergers, 15, 33, 146, 180 boundary-spanning, 5
acronyms, 140 bounded rationality, 65
Adair, W.L., 5, 7, 15, 254, 281, 284, Boussebaa, M., 5, 7, 145, 150, 155
294 Brandt, W.K., 4
Adler, N.J., 4, 7, 11, 14, 33, 34, 53n2, Brannen, M.Y., 1, 2, 5, 6, 7, 8, 14, 61,
59, 68, 294, 298 62, 93, 95, 98, 100, 101, 125, 130,
agency theory, 61 139, 140, 143, 144, 146, 147, 149,
alignment 151, 180, 211, 213, 216, 218, 240,
linguistic, 145 254, 255, 257, 268, 271, 280, 281,
alliances 283, 293, 294, 296, 298
joint ventures, 281 Bresman, H., 4
partnerships, 281 Brislin, R.W., 8, 263
analysis Buck, T., 4
discourse, 98 buying habits, 21
linguistic, 280
narrative, 150 Chidlow, A., 5, 7, 10, 149, 154
rhetorical, 150 choice(s)
Anglo-saxonization, 98 language-related, 154
anthropology Chomsky, N., 195
linguistic, 142 cognition
in organizations, 5, 7
background(s) cognitive consistency theory, 23
formative linguistic, 141 communication
back-translation, 8, 14, 153, 154, 263 and email, 113, 143
Ball, D.A., 4, 7, 9, 261 and texting, 143
Barner-Rasmussen, W., 95, 96, 142, and video conferencing, 143
146, 147, 152, 155, 178, 219, virtual, 143
242, 283, 296 and webex, 143
Barnes, J.W., 4 comparability, 21, 28, 141
Bartlett. C.A., 4, 63, 71, 72, 80, 81, 95, comparative
99, 104, 125, 126 literature, 34
behavior management, 4, 34
language-related, 154, 242 studies, 34, 44, 52
Bello, D.C., 5, 7, 15, 254, 255, 256, concepts, 8, 10, 12, 13, 21, 22, 23, 24,
257, 258, 281, 284, 294 39, 172, 261
bicultural, 86, 146, 245 conceptual
bilingual, 51, 53n3, 88n4, 111, 112, base, 23
123, 141, 146, 151, 185 equivalence, 22–23
301
302 Index
conflict management, 60 De Saussure, F., 13

consumer dialects, 64, 69, 182, 293, 295
behavior, 20, 21, 22, 23, 24, DiRienzo, C.E., 4
29n2 discourse
information systems, 21 analysis, 98
studies, 20, 21 frames and narratives, 142
contingency model, 94, 107, 122, professional, 143, 154
123, 126, 127, 129, 131 role of, 142
corporate communication, 61, 93, 95, disengagement
96, 257, 265, 294 communicative, 154
corporate language, 96, 98, 99, 100, distance
105, 107, 109, 112, 113, 123, geographic, 274
124, 126, 127, 128, 129, 131, linguistic, 5, 86
140, 142, 143, 145, 148, 151, documentation, 81, 93, 95, 99
165, 176–179, 180, 189, 210, Dow, D., 4, 11, 144, 145, 212, 227,
227, 241, 243, 255, 281, 282, 229, 241, 242
295 Doz, Y.L., 2, 62, 71, 74, 80, 95, 99,
correlations, 25, 47, 201, 232, 275, 104, 125, 126, 140, 143, 144,
276 146, 151, 254, 257, 271, 296,
Cosmas, S.C., 4 298
Cramton, C.D., 5, 7, 154, 196, 294,
296 Ehrnrooth, M., 5, 155
cross-cultural emic, 24, 26, 30n16, 140
communication, 4, 35, 37, 44, 51, England, G. W., 4
87 English
effectiveness, 4, 7, 11 as neutral communicative tool,
negotiation, 11, 35, 38, 39, 40, 142
41, 42, 43, 44, 45, 47, 50, Englishization, 145, 155
51, 52 environment
situation, 34, 35, 50 non-English-speaking, 76, 95, 141,
cross-national 151
difference, 8, 23 equivalence
equivalence, 4, 7, 8, 21 conceptual, 22–23, 30n13
testing, 22 cross-national, 4, 7, 8, 21
CSR, 5, 7, 8 functional, 6, 8, 21–22
cultural distance, 61, 64, 148, 275, instrument, 23–27
276, 278, 279, 281 Ertug, G., 5
culture ethnography, 182, 187
bound, 20, 22 etic, 24, 25, 30n16, 140, 144
emic, 24, 30n6 expatriation, 95
etic, 24, 30n6
and language, 1, 6, 10–12, 85, 130, Fischer, W.A., 4
131; see also, language and foreignness
culture and language comparability, 141
Cummings, J.L., 33 liability of, 59, 154
Cuypers, I.R.P., 5, 7 and relativity of meaning, 141
foreign subsidiaries, 12, 93–132
decentering, 27 Francis, J.N.P., 4
Delmestri, G., 5 Frege, G., 13
Index 303
Gabriel, Y., 5, 7, 155 Hennart, J.-F., 5, 239

Gaibrois, C., 96, 142, 187, 298 Heuer, M., 4
gender Hinds, P.J., 5, 7, 143, 154, 196, 209,
and power, 7 213, 214, 241, 294, 296
Gender Assignment Intensity Index Hofstede, G., 11, 34, 53, 59, 61, 68,
(GAII), 197, 198, 200, 201, 202 146, 194, 196, 199, 203, 294
Gender Intensity Index (GII), 197, Holden, N., 144, 145, 147, 155
198, 199, 200, 202, 203 Holden, N.J., 5, 7, 10
gender-marking Hulbert, J.M., 4
and career trajectories of women, Hult, G.T.M., 5
150 human resource management
and female board presence, 199, and language policy, 64, 98, 294
205 and language-sensitive recruitment,
and female leaders, 201 107
Ghoshal, S., 4, 60, 63, 67, 71, 72, 73, Hung, K.H., 5
74, 75, 80, 81, 95, 99, 104, 125,
126, 151, 210, 211, 213, 219, IB
228, 240 and education, 2, 4, 6, 7
Gilley, M.K., 11 and research, 2
global and scholarship, 149
business, 76, 80, 87, 139, 140, 142, impatriation, 95
283, 297 imperialism
strategy, 61, 71, 72, 73 linguistic, 147, 163, 171, 177, 179,
teams, 5, 7, 153, 154, 165, 181, 184, 181
185, 186, 296 institutional variables, 86
trust, 5, 7 instrument
Globerman, S., 4 development, 23
governance, 7, 13, 77, 78, 201, 205, equivalence, 23–27
258 translation, 26
Graham, J.L., 4, 7, 11, 14, 33, 36, 37, interactional synchrony, 38, 45, 51, 52
38, 44, 46, 50, 51, 52, 54, 86, intercultural
144, 148, 294, 298 negotiations, 46
grammatical structure, 194, 196 situations, 52
Green, R. T., 4, 7, 8, 14, 20, 85, 145, intercultural work relationship, 35
149, 294, 298 international
assignment, 4, 7, 12
Haley, U.C.V., 5, 7 internationalization, 1, 2, 5, 60, 67,
Harpaz, I., 4 205, 244
Harrison, D.A., 11, 96, 210 international management
Harzing, A.-W., 5, 7, 15, 86, 95, 96, and language, 140
147, 149, 152, 163, 178, 196, scholarship, 141
209, 210, 212, 213, 214, 221, interpersonal
224, 225, 240, 243, 294, 296 attraction, 42–43, 44, 45, 47, 48, 49,
headquarters, 12, 62, 63, 64, 65, 67, 52, 54
68, 69, 70, 71, 72, 73, 74, 75, orientation, 35–36, 50, 52
76, 77, 78, 79, 81, 85, 86, 88n5, situations, 35
94, 108, 109, 110, 111, 112, inter-unit learning, 60, 64, 65
114, 145, 181, 210, 267, 295 intra-corporate communication, 63
Heidegger, M., 13 intra-unit value creation, 60, 64, 65
304 Index
Janssens, M., 14, 96, 97, 127, 144, choice, 61, 62, 64, 65, 67, 72, 86,
147, 149, 150, 155, 163, 164, 178, 179
178, 180, 189, 294 as communicative system, 142
jargons, 64 and constitutive force of organizing,
Jeanjean, T., 5, 7 142
Johanson, J., 1, 3, 4, 12, 75, 144, 205, construct, 13, 14, 61, 145, 146
295, 298 as cultural resource, 142
Johansson, M., 5, 7, 155, 195 customer, 144, 145
Joshi, A.M., 5, 7 and cultural measures, 7
and culture, 1, 6, 10–12, 85, 131
Kale, S.H., 4 design, 83
Kang, J.-K., 5, 7, 13, 101 difference
Karunaratna, A., 11, 144, 145, 212, and comparability, 141
227, 229, 241, 242 and relativity of meaning, 141
Kim, J.-M., 5, 7, 13 diversity, 61, 75, 140, 143, 151, 178,
knowledge transfer 180, 196
and recontextualization, 93, 95 domain-specific, 140
and semantics, 15 dominant, 95, 147, 168, 172, 195,
and semiotics, 140 196, 197, 199, 203
sharing, 244 and empirical research, 93, 218
and tacit language, 226, 245 English, 41, 100, 108, 109, 110,
transfer and diffusion, 60 111, 114, 126, 141, 142, 143,
Kobrin, S.J., 9 147, 148, 224, 262, 272, 275
Kogut, B., 11, 61, 75, 81, 86, 275 and faultlines, 143
Kohler, T., 5, 7, 155, 241 fluency, 76, 154, 241
Koveos, P.E., 5 forgotten factor, 145
Koveshnikov, A., 155 functional, 63, 64, 65–67, 68, 69,
Kumar, K., 5 70, 71, 72, 73, 74, 75, 76, 77,
Kuznetsov, A., 5, 7, 143, 154 78, 79, 80, 81, 82, 83, 84, 85,
Kuznetsova, O., 5, 7, 143, 154 86, 88n4, 88n5, 88n6, 88n7
as handicap, 61, 141
Lahiri, N., 5, 7 and headquarter-subsidiary
Lane, H.W., 11, 268 relations, 60, 151, 182, 196
language(s) and hegemonic strategies, 142
asymmetries, 143, 154 hierarchy, 96, 143, 181
and backgrounds, 118 hybridization, 94, 124, 130
back translation, 14, 27, 153 in IB, 2, 6, 8, 9, 14, 140, 143, 144–
barriers, 59, 60, 95, 117, 120, 126, 150, 153, 155, 164, 165, 176,
128, 140, 153, 176, 178, 243 181–188, 298
behavior, 37 and identification, 126
and boundary-spanning, 5 and identity, 184, 188
breadth, 67–68, 76 implementation, 93, 97, 100, 117,
capability of students, 4, 7 122, 125, 129
capital, 148, 296 in-context, 143
and career capital, 129, 143 and information systems, 84
and career trajectories, 150 as instrument, 6, 7, 8–10
as central construct in IB, 6, 7, 8, intensity, 67, 74
14, 156n1 and internationalization, 140
Chinese, 262, 286 lens, 153
Index 305
and logit regression, 202 standardization, 96, 98, 145, 178,

and marketing, 6, 7 179, 180
and media, 261 strategies, 6, 12–13, 96, 142
metaphorical, 254, 256, 257, 259, subsidiary, 87, 205
261, 266, 267, 272, 281, 282, and subsidiary knowledge in-flows,
283, 286 15, 209–247
misinterpretations, 2, 143 system, 12, 60, 61, 62, 64, 65–69,
and MNC networks, 142 70, 75, 77, 84, 85, 140, 172,
multifaceted nature of, 142, 143 179
multilevel nature of, 142, 143 tacit, 226, 245; see also, silent
national, 2, 9, 10, 67, 84, 139, 140, language
142, 143, 148, 293, 298 and talking vs. thinking, 152
natural, 93 target market, 144, 145
nodes, 95, 105, 106, 107, 109, 111, and translation, 6, 149
113, 114, 116, 118, 120, 123, and trust, 86, 153
124, 128, 148 and venture management, 267
as organizational artifact, 142 Li, S.Y., 222
and organizational identification, liability of foreignness, 59, 154
111, 128 lingua franca, 1, 3, 8, 13, 15, 74, 132,
paradigm, 144 140, 144, 145, 148, 150, 151,
parent, 62, 63, 66, 69, 81, 82, 83 154, 155, 163, 165, 167, 168,
performance, 84, 179 172, 174, 176, 177, 178, 179,
policy, 5, 7, 8, 9, 117, 119, 121, 180, 181, 182, 183, 184, 186,
122, 129, 130, 132, 162, 178, 187, 188, 229, 243, 293, 294,
179, 183, 294, 295–296 297
and power, 155, 177 linguascape(s), 142, 298
processing (foreign language), 155 linguist(s)
professional, 154 generativist, 195
proficiency, 8, 9, 11, 87, 100, 109, linguistic
120, 126, 128, 129, 132, 245 capability, 40–41
protocol, 141 diversity, 69, 88n1, 175, 176, 177
and recontextualization, 94, 97, focus, 215
100, 101, 103 hazard, 143, 154
and recruitment, 99 Liu, L.A., 5, 7, 15, 209, 254, 262, 267,
and reflexivity, 141 281, 282, 284, 286, 294
and semantic fit, 240, 281, 282 Luiz, J.M., 5, 7
and shared HQ goals and vision, Luo, Y., 4, 7, 12, 13, 14, 59, 64, 78,
217, 221, 231, 239 95, 96, 99, 125, 126, 130, 143,
shared, 15, 66, 73, 74, 75, 76, 77, 147, 151, 163, 165, 178, 179,
79, 80, 88n7, 96, 111, 114, 121, 196, 210, 255, 256, 258, 281,
123, 124, 209–247 294
silent, 62; see also, tacit language Luthans, F., 4
skill, 9, 106, 108, 109, 110, 112,
114, 118, 120, 145, 155, 180, Makela, K., 146, 155, 210, 211, 216,
243, 296 218, 229, 240
social character of, 144 managerial behavior, 34, 53
specific vs. general language skills, Manrakhan, S., 4
298 Marschan, R., 1, 145
spoken, 296 Mascarenhas, B., 4, 11
306 Index
McCulloch Jr. W.H., 4, 7, 9 O’Grady, S., 11

meaning, 3, 10, 13, 93, 94, 97, 98, Ostendorp, A., 96, 142, 187, 298
107, 130, 140, 141, 147, 149,
154, 170, 181, 186, 188, 197, Peltokorpi, V., 5, 7, 12, 93, 96, 99,
209, 219, 224, 257, 259, 286, 100, 126, 128, 131, 144, 155,
296, 297 180, 209, 241, 242
metaphor(s) Piekkari, R., 2, 5, 7, 14, 95, 96,
and corporate language, 282–285 101, 139, 140, 142, 143,
and equity structure, 260 146, 147, 148, 150, 152,
and language, 254, 256, 257, 259, 163, 178, 179, 180, 196,
260, 261, 266, 267, 272, 281, 209, 210, 215, 294, 295
282, 283, 286 Plakoyiannaki, E., 5, 7, 149, 154
relational, 275 power
and semantic fit, 257 and gender, 7
shared vs. mixed, 270, 272 and language, 7; see also,
methodological issues, 14, 21, 153 hegemony; and, language and
Michailova, S., 5, 7, 10, 155, 210, 212, power
216, 240 practice, 3, 9, 10, 84, 93–133, 140,
monolingual, 148, 150, 151, 172, 179, 166, 178, 181, 242, 296
188 praxis, 12, 98, 107, 108–116, 117–118,
Mughan, T., 1, 143, 144, 145, 293, 121, 122, 123, 124, 127, 129,
298 130
Mullen, M.R., 4, 149 problem-solving approach, 42, 48,
multicultural, 60, 86, 146, 180, 181, 187 49, 54
multilingual product perceptions, 21
reality, 145 Pudelko, M., 5, 7, 15, 143, 153, 155,
situations, 141 196, 209, 210, 212, 219, 241,
system, 171, 174 243, 294, 296
teams, 5
multilingual franca, 15, 144, 150, 155, Radebaugh, L.H., 4, 7, 9
163–189 Rangan, S., 5
multinational Corporation (MNC), reciprocity, 38–39, 45, 51, 52
12, 59–88, 155, 295 recontextualization
multinational Enterprise (MNE) and semantic fit, 98
and knowledge flows, 209, 210, recruitment
211, 212, 214, 219, 240, 241, language-sensitive, 97, 105, 107,
242, 246 109, 110, 112, 114, 118, 123,
124, 144, 155
narrative(s), 142, 150 regression
Neeley, T.B., 5, 7, 143, 145, 154, 180, logit, 201, 202
196, 210, 293, 294, 296 Reiche. B.S., 5, 15, 209, 213, 216, 221,
negotiations, 33, 36, 38, 41, 42, 43, 229, 244, 294
54, 60, 271 reliability, 25, 28, 47, 52, 230, 274
Nehrt, L.C., 9 research
Newenham-Kahindi, A., 5, 7 ethnographic, 182–183
Nickerson, C., 296 language-sensitive, 141, 144,
Nobel, R., 59, 74 148
nonequivalence, 22 qualitative, 259, 282
Noordehaven, N., 5 quantitative, 144, 259
Index 307
resource dependence perspective, 60, Stolowy, H., 5, 7

62, 84 stories, 140
rhetoric, 150, 157 structure
Ronen, S., 34, 59, 297 grammatical, 194, 196
Rorty, R., 6, 13, 156n1 Su, C., 5, 11
Sui, G.L., 298
Sagiv, L., 294 Swarmidass, P.M., 4
Samiee, S., 4, 7
sample selection, 27–28 Tang, L., 5
Santacreu-Vasut, E., 5, 7, 15, 150, 155, teams
194, 195, 294 and teamwork, 259, 260
schema(s) Tenzer, H., 5, 7, 143, 153, 196, 219,
relational, 258, 259, 266, 268, 270, 243, 246, 296
271, 282, 283, 284 Tesco, plc, 143
socially constructed, 258 Thomas, D.C., 68, 93, 98, 146, 149,
Schwartz, S.H., 257, 294 195, 296
Sekaran, U., 4, 34 Tietze, S., 5, 7, 14, 93, 94, 95, 96, 129,
Selmier II, W.T., 5, 7 139, 141, 147, 150, 163, 165,
semantic fit 178, 179, 286, 294
and IJV structure, 15, 254–286 training effectiveness, 60
semiotic(s), 98, 130, 140, 147 transaction cost economics, 61,
Sengul, M., 5 205
sense-giving, 142 translation
sense-making, 98, 140, 142, 154, contextualized, 154
256 translation, 5, 6, 7, 8, 10, 14, 26, 40,
Shaffer, M.A., 4, 7, 11 147, 148, 149, 154, 155, 297
Shenkar, O., 4, 5, 7, 12, 14, 15, 59, 61, Trompenaars, F., 294
63, 78, 79, 95, 96, 99, 125, 126, trust, 5, 7, 8, 97, 153, 210, 216
130, 132, 143, 147, 150, 151,
155, 163, 165, 178, 179, 194, Ueno, S., 4
196, 210, 215, 255, 294
Sheth, J.N., 4 Vaara, E., 5, 7, 12, 93, 95, 98, 100,
Shields, J.C., 4, 7, 9 125, 127, 128, 130, 132, 142,
Shoham. A., 5, 7, 15, 150, 155, 194, 144, 146, 147, 155, 163, 180,
195, 196, 294 209, 213, 215, 221, 241, 242
silent language, 62 Vahlne, J.-E., 1, 3, 4, 12, 75, 205, 295,
Singh, H., 11, 61, 63, 86, 258, 275, 298
284 validity, 24, 25, 34, 52, 108, 230, 262,
Sinha, S., 5, 7, 155 274
Śliwa, M., 5, 7, 155 value chain
social identity theory, 210, 211, 212, creation, 79, 81
213, 215, 222, 239, 240, 242 venture management, 267
sociolinguistics, 15, 155, 164, 165, Volk, S., 5, 7, 155, 241
167, 176, 183, 188, 211, 212, Volvo Group Magazine, 296
240 von Glinow, M.A., 60, 62, 63, 78, 82,
staffing policy, 76 86
Steyaert, C., 5, 7, 14, 96, 142, 144,
147, 149, 150, 155, 163, 164, Welch, D.E., 14, 143
178, 187, 189, 294, 298 Welch, L.S., 14, 143
308 Index
Wezel, F.C., 5 Yanaprasart, P., 14

White, P.D., 4, 7, 8, 14, 20, 149, 279, Yang, Z., 210, 214, 240, 245
294, 298
Whorf, B., 195 Zaheer, S., 4, 61, 98, 125, 218, 281
Wittgenstein, L., 6, 13 Zhou, N., 5
word(s), 10, 140, 149, 268 Zhuang, G., 5

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List of Tables, Figures and Appendices vii

10 Fit, Misfit, and beyond Fit: Relational Metaphors and

1.1 Historical review of language-related articles

9.4 Results of random-intercept regression analysis for

4.1 Theoretic logic of global language design for MNCs 65

3A Payoff matrices for Kelley’s [1996] Negotiation Game 53

We believe that lack of knowledge due to differences between coun-

their own. Streams and sequences of decisions and resource commitments

Here, in our introduction to this volume, we discuss our methodology

Chronological listing of articles Language-related themes Citations Lang centrality

Brandt & Hulbert (1976) HQ-subsidiary commuication 55 0

Luiz (2015) Power & policy 2 5

Language as instrument (1970s–1990s): IB education—preparing

Table 1.2 Thematic clustering of articles with strong language centrality

Theme Authors in chronological order Sub-theme

**Inflection points of language in IB

strategy) areas of IB research, off-shoring, knowledge-sharing, corrup-

Tasked with choosing a limited number of articles to include in this

1.1 Language as instrument

Chronologically, the single theme in regard to language that has been

Several comprehensive reports addressing the importance of inter-

1.2 Language and culture

Cross-cultural management has been a critical subfield of IB research

practitioners and scholars as they realized how structurally and cultur-

culture as an important determinant of adjustment to international

1.3 Language and strategy

The antecedents in JIBs of our next selected piece to showcase are

1.4 The concept of “Linguistic Turn” and its significance

The role language plays in representing reality and mediating other

1.5 Language as a central construct in IB

The final inflection point on language in IB is therefore given to this

(2014), “Re-considering language within a cosmopolitan understanding:

The field of consumer behavior has evolved rapidly in a relatively

Reprinted from Robert T. Green and Phillip D. White (1976) “Methodological

The past five years have witnessed an increasing number of cross-

The specific issues of concern to cross-national consumer researchers

countries and in a different way—or not at all—in others. Problems of

research instrument which adequately measures the phenomena under

involved in the development of etic instruments are manifold. The

instruments will have to be somewhat individualized for each nation

To overcome many of the problems of direct translation, cross-

A commonly employed sampling technique in cross-national studies

Emphasis on cross-national consumer behavior patterns is a natural

the American Psychological Association, New Orleans, September 1974;

Life-Span Developmental Psychology: Methodological Issues, (New York: Academic

27. N. Frijda and G. Jahoda, op. cit., p. 118.

Joint ventures, mergers and acquisitions, licensing and distribution

Reprinted from Nancy J. Adler and John L. Graham (1989) “Cross-cultural

multiculture comparative studies, rather than studies investigating

In their seminal article regarding international negotiation behaviors,

behaviors and outcomes can be influenced by situational constraints,

The face-to-face conduct of negotiations may be influenced by

I am what I am. Few Americans take pride in changing their minds,

So an explanation for ethnocentricity and obstinacy at the interna-

Presumably the receiver, to the extent that he perceives the source to

Mathews, Wilson and Monoky [1972] conclude that “perceived” simi-

1. Language and language behavior;

Condon adds that these categories might be considered in order of