Beyond English

Transnational corporations and the strategic management of language in a complex multilingual business environment

Dirk Maclean SLaM, Eltham, Australia

Abstract

Purpose – The purpose of this article is to reassert the status of language as a topic of major interest to researchers in the light of the rise of the transnational corporation.

Design/methodology/approach – This article reviews recent literature and case study evidence in order to track an important shift taking place in the status of language management.

Findings – The emergence of the transnational corporation transforms the nature and significance of language from a minor issue into one that impacts on a company’s core competencies.

Research limitations/implications – The literature remains sparse and case studies limited in number. In depth investigation into the language management practices of transnational corporations is called for in order to test the hypotheses of this paper.

Practical implications – Language will generate greater interest as a research topic as the transnational model is implemented, and more sophisticated language management practices will emerge as a result, with the promise of delivering a competitive advantage.

Originality/value – The inter-relationship between language management and the transnational model of global corporations has not been asserted in the literature up to this point.

Keywords Language, Transnational companies, Knowledge management,

Human resource management, Project management

Paper type Conceptual paper

Language has been largely overlooked as an issue in management literature up until recently, so much so that it has been described as the “orphan of international business research” (Feely and Harzing, 2002). This neglect of language as a research topic comes in spite of the far-reaching impact language issues have on all aspects of international

business. Ever since companies first began to seek overseas buyers, they have been confronted with the challenge of dealing with foreign language speakers. As businesses have become more international in scope, this problem has spread from sales and marketing to every one of the functions, and from purely external relations to the core of the operation itself. The ramifications of this process, however, are only now coming to the attention of researchers in the field.

Companies deal with language issues every day, they cope, the world continues to turn. How they do so, however, remains largely absent from the literature. A good example is this passing comment from an investigation into three Dutch-German mergers by Rene Olie, “language appeared to be a minor issue in all three combinations” (Olie, 2005, p. 331). Olie contrasts this state of affairs with the difficulties the three encountered over their new “corporate identity” as well as the location of their company headquarters, and which Olie describes at length (Olie, 2005, pp. 331-332).

The example is worth dwelling on, for it reflects a widespread opinion among both managers and researchers alike, that language is not a subject matter calling for serious attention, that language is a “minor issue”. It is this assumption we wish to challenge in this paper here.

This is not to claim that Olie’s account is false in some sense. There is no reason to dispute its description or its analysis. Our purpose is instead twofold, to show why language was indeed a “minor issue” in these particular cases, and how today this situation no longer applies with the emergence of the transnational model of global corporation.

Olie’s paper reveals how the two issues of corporate identity – the name of the merged body – and the site of the new company headquarters, took on symbolic significance as tests of the extent to which these were genuine mergers between equal partners, rather than takeovers. The paper describes how each matter in turn was resolved, and the outcome.

The conflicts over these issues revolved around three clear alternatives. The new name could combine the two old company names with one in front of the other, or else be new altogether. Likewise the company HQ could be located in Holland, Germany, or on neutral territory. It was the presence of these clear alternatives and the necessity of a choice between them that gave the decisions on these questions their symbolic status.

The question of language selection, on the other hand, took on a different form. Here the choices at corporate level involved three solutions that paralleled those over name and HQ – the adoption of Dutch, German or else a neutral language such as English as the company language. The selection of any one of these alternatives would also have given the issue a symbolic importance, as it did in the case of Nordea (Bjorkmann et al., 2005). Instead, however, no such choice was made, and language issues were resolved at an operational level with units adopting the most appropriate solution according to their specific circumstances.

In this context, it is little wonder that language issues attracted no more than a passing comment by researcher Rene Olie. Language selection took on neither strategic nor symbolic significance in the merger processes, and remained a complex operational issue with a high situational content, meaning that solutions adopted in one organisational scenario had little transferability to others, and rendering further research into the question of little value.

The suggestion, therefore, is that language has slipped under the radar as a topic of interest in management literature for three, inter-related, reasons. Firstly, language has been understood as a corporate issue only as a problem of selection. Secondly, the problem of the choice over a company language is a relatively straight forward one whose merits are largely settled on a case by case basis, and thirdly, all other aspects of language are considered to be operational or technical matters, to be dealt with by experts in their relevant fields, such as document translation for example. Language has been seen as both too simple, and at the same time too complex, an issue to be addressed by academic researchers.

This explanation stands alongside those offered by Feely and Harzing (2002), who list the cross-disciplinary nature of the field, the predominance of English-speaking researchers with a lower awareness of language, the influence of Hofstede (1980), who approaches culture without any direct reference to language, and finally, the absence of a clear definition of the problems language causes and any measure of their impact.

Over the last decade or so, however, language has begun to overcome these barriers and enter the literature as a topic of serious research. Ground-breaking studies by Marschan et al. (1997), Marschan-Piekkari et al. (1999), Holden (1998, 2004), Hagen (1999), as well as Feely and Harzing (2002, 2004) themselves among others, have reasserted the significance of language as a major issue in international management.

This increased attention to language issues has coincided with the emergence of the transnational model of the global corporation (Bartlett and Ghoshal, 1995). In our view this is no accident, for it is under the transnational model that langua