Shared Language in Multinationals: Practical Implications

A couple of weeks ago I introduced the main premises of my latest academic research (forthcoming) on the benefits of shared language in multinational corporations in the blog. Based on an extensive international sample, my colleagues Harzing, Pudelko and I argue that shared knowledge is related to increased knowledge inflows from HQ to multinationals’ foreign subsidiaries. Moreover, our results imply that both shared language and knowledge inflows are antecedents for creating a shared social identity between HQ and subsidiary. Therefore, we conclude that fostering a shared language in multinationals is beneficial.

Our study entails several managerial implications, which I would like to elaborate in greater depth in today’s blog entry.

To start with, focusing on the impact of shared language on fostering a shared social identity, we would strongly advise not to leave the communication with HQ to a few subsidiary managers only, which is often the case with expatriates, who serve as linking pins between HQ and subsidiary. As one of my older posts suggests, getting subsidiary nationals ‘on board’ is of great importance for any aspect of expatriate assignment success, as they have a role in supporting both knowledge transmission and expatriate adjustment. Existing research indicates that apart from increasing an expatriate’s success in HQ-subsidiary communication, greater inclusion of local employees could also further their identification with the multinational as a whole. Implementing a lingua franca can therefore be used to widen the circle of those engaged in inter-unit knowledge sharing and collaboration more broadly.

Although our research suggests that a lingua franca is beneficial for shared social identity, there is evidence for potential adverse effects as well. Specifically, as discussed in one of my blog posts, research by Hinds and colleagues (2013) reveals that adopting a dominant language in an organization can result in increased divide between different organizational units by fostering feelings of ‘us versus them’. Therefore, in order to make shared language a tool for supporting, rather than diminishing a shared identity, managers are advised to support and encourage language training. It is important to promote non-judgmental attitudes towards language learners and demonstrate empathy and patience along the process. For example, native language speakers may be given supportive or mentoring roles for those who learn the language. Additionally, organizations should provide enough opportunities for practicing the language. For example, job rotations and other face-to-face interactions in the form of regular meetings, conferences or cross-border projects may also make individuals feel more at ease in cross-language communication and ultimately help them improve their proficiency in the dominant language.

Further, our research identified additional mechanisms that help in translating a shared language into benefits of knowledge transfer, and, by extension, shared social identity. Firstly, setting clear goals and vision for the entire organization can be of help. The crucial point here is that these goals and vision should also be shared by subsidiary managers, which implies that they should be involved more actively in their development. This may be achieved through greater internationalization of a multinational’s top management team or the strategic use of inpatriation. Secondly, ensuring that shared language leads to knowledge transfer and shared identity involves centralized HR decisions. Our findings suggest various benefits of HR centralization, for example by providing subsidiary managers with more career opportunities within the wider organization, and hence motivating subsidiary managers to acquire HQ knowledge and apply it to develop a shared identity. HR centralization also helps to align the HR architecture necessary for knowledge to be transferred.

Finally, using the premise of increased knowledge exchange and smoother communication flows, managers should clearly articulate the reasons behind using a shared language, as to diminish a perception of a forced change that benefits only dominant language holders.

 

Further reading:

Hinds, P. J., Neeley, T. B., & Cramton, C. D. (2014). Language as a lightning rod: Power contests, emotion regulation, and subgroup dynamics in global teams. Journal of International Business Studies, 45, 5, 536-561.

Reiche, B.S., Harzing, A.-W., & Pudelko, M. (forthcoming). Why and how does shared language affect subsidiary knowledge inflows? A social identity perspective. Journal of International Business Studies.