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The multinational corporation as a multilingual community: Language and organization in a global context

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Abstract

This paper develops a framework for analyzing the multinational corporation (MNC) as a multilingual community in which parent functional language and subunit functional languages are concurrently used and recursively linked through an intra-corporate communication network. The unit, breadth and intensity of an MNC's language system are designed to apply global strategies within the context of evolving environmental and organizational realities. To the extent that language design is the product of deliberate choice, we suggest that headquarters functional language is determined by the MNC's international strategy, organizational structure, and transnationality, while subunit functional language is designed in accordance with organizational form, strategic role, and expatriate deployment. Aligning language systems with organizational strategy and dynamics improves MNC communication, coordination, and knowledge-sharing.

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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 mechanisms used to manage linguistic diversity.

  2. In some culturally diverse countries, such as India and China, there are multiple different languages used by different ethnic groups within a single country. 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 multilingual, 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’ headquarters 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 language 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 strategic 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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Acknowledgements

We thank Professor Mary Ann Von Glinow and the anonymous reviewers for their insightful comments.

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Authors and Affiliations

  1. Department of Management, School of Business Administration, University of Miami, Coral Gables, Florida, USA

    Yadong Luo

  2. Fisher College of Business, Ohio State University, Columbus, Ohio, USA

    Oded Shenkar

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  1. Yadong Luo
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Correspondence to Yadong Luo.

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Accepted by Mary Ann Von Glinow, Departmental Editor, 12 August 2005. This paper has been with the author for three revisions.

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Luo, Y., Shenkar, O. The multinational corporation as a multilingual community: Language and organization in a global context. J Int Bus Stud 37, 321–339 (2006). https://doi.org/10.1057/palgrave.jibs.8400197

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