Language barriers in multinational companies

Reviews my research on the role of language in MNCs between 2003 and 2013

Anne-Wil Harzing - Sat 20 Oct 2018 08:13 (updated Sun 24 Apr 2022 14:43)

Update 15 May 2021: Really pleased to see this research covered in the CIPD report on multi cultural teams. More on CIPD's excellent and accessible research reports here.

Before embarking on a 4-year Masters degree in International Business, I completed a 3 ½ year vocational degree in Business & Languages, for Dutch readers HEAO-EL (economisch-linguïstisch). The degree didn’t quite satisfy my intellectual curiosity, but my strong interest in languages remained.

In the early 2000s I was therefore very happy to start working with Alan Feely. Alan had embarked on a PhD after a long career as an expatriate manager in an Italian multinational and – like most mature aged students with a business background – wanted to study something that had intrigued him in his business career: language barriers in multinational companies. He completed his PhD at Aston Business School, but unfortunately passed away soon afterwards. However, we did publish a conceptual article together in 2003, which became the most cited article in CCMIJ (in Crossref) since its inception.

• Feely, A.J.; Harzing, A.W. (2003) Language management in multinational companies, Cross-cultural management: an international journal, 10(2): 37-52. Available online... - Publisher’s version

Dimensions of the language barrier

In our article we defined the language barrier across three dimensions as originally proposed by Reeves & Wright in their 1996 book Linguistic Auditing: A Guide to Identifying Foreign Language Communication Needs in Corporations.

• Language diversity: the number of different languages the company has to manage.
• Language penetration: the number of functions and the number of levels within those functions that are engaged in cross-lingual communication.
• Language sophistication: the complexity and refinement of the language skills required.

Unfortunately, this book seems to be out of print, but part of the book can be read on Google Books. Nigel Reeves and Alan also designed a simpler, less costly Language Check Up. Sadly, the 2001 Aston Business School Doctoral Working Paper in which it was described was never published and ABS doesn’t provide access to their old working papers. With Nigel Reeves himself having retired in 2006 it is unlikely we’ll be able to source this material, but if anyone finds it or is able to contact Nigel Reeves please drop me an email.

Impact of the language barrier

The impact of the language barrier cannot be evaluated using simple measures such as dollars spent on interpreters or days lost in translating documents. Instead the true cost has to be seen in terms of the way it distorts and damages relationships. These in turn then impose pressures and constraints on the strategies pursued by the company and the organisations and systems they consequentially adopt. We explored this in another paper that – because of Alan’s untimely death – took a long time to get published.

Just like our first article, this paper was based on Alan’s decades of practical experience, which allowed him to come up with the following model of the effects of the failure to communicate effectively. In my view it is a brilliant heuristic to start the conversation with managers about the importance of language in MNCs. However, as a research model it was hard to publish as every step would have needed either a tightly argued conceptual argument or empirical testing.

Fortunately, after I had finally decided that publishing the paper would be an appropriate way to honour Alan’s work and had reworked the whole paper, the same journal that accepted our 2003 paper published it in 2008. It didn’t do the journal any harm, because this article become the second most cited article (in Crossref) since the journal's inception.

• Harzing, A.W.; Feely, A.J. (2008) The language barrier and its implications for HQ-subsidiary relationships, Cross Cultural Management: An International Journal, 15(1): 49-60. Available online... - Publisher’s version

After my interest for languages had thus been revitalised I have done quite a lot of work in this area. One research stream focused on the role of language in international mail survey research, the topic of another blogpost. A subsequent experimental study with Dirk Akkermans and Arjen van Witteloostuijn showed that language impacts the competitive behaviour of students. A prisoner’s dilemma game played in English lead to significantly more competitive behaviour than when the same game was played in Dutch.

• Akkermans, D.; Harzing, A.W.; Witteloostuijn, A. van (2010) Cultural accommodation and language priming. Competitive versus cooperative behavior in a prisoner’s dilemma game, Management International Review, 50(5): 559-584. Available online... - Publisher’s version

Language barrier solutions

In the early 2010’s I teamed up with long-term friend Kathrin Köster and Ulrike Magner, a very diligent German graduate who decided to join me for half a year in Australia before embarking on her own PhD. Kathrin conducted interviews in Japanese subsidiaries of German MNCs, which allowed us to do empirical research on the language barrier solutions that Alan and I had proposed in our 2003 article.

• Harzing, A.W.; Köster, K.; Magner, U. (2011) Babel in Business: The language barrier and its solutions in the HQ-subsidiary relationship, Journal of World Business, 46(3): 279-287. Available online... - Publisher’s version

We found that many of the language barrier solutions were indeed used in these companies, but also found a range of other solutions that Alan and I had not anticipated. The figure below presents a summary of these results.

MNC language policies and practices: four country clusters

I followed this up with a large scale study in 800 subsidiaries of MNCs, research conducted with Markus Pudelko, another long-term friend and collaborator; we published no less than twelve papers together as you can easily discover with Swiss Army Knife Publish or Perish. Our research allowed us to define four main home country clusters as shown below.

We revealed how the challenges that MNCs face in addressing the universal challenge of managing language across the globe differ substantially from country to country. As a consequence, the policies and practices companies have to choose as solutions to respond to these problems also have to vary. The importance of the HQ country and language, the English language skills in the home and host country and, possibly also cultural factors, such as the degree of ethnocentricity, all seem to play a role.

• Harzing, A.W.; Pudelko, M. (2013) Language competencies, policies and practices in multinational corporations: A comprehensive review and comparison of Anglophone, Asian, Continental European and Nordic MNCs, Journal of World Business, 48(1): 87-97. Available online... - Publisher’s version

More language research

Since then my interest in language issues has certainly not subsided. After 2013 I published further articles with co-authors Markus Pudelko, Helene Tenzer, Sebastian Reiche, Ling Eleanor Zhang, and  Shea Fan, which have all been the subject of their own blogposts. In 2016 I conducted my inaugural lecture at Middlesex University on the topic.

• Hablas vielleicht un peu la mia language?
• Managing expatriates’ identity: subtle desire, big impact
• How to manage multi-lingual teams?
• The many benefits of a shared language in multinationals
• Babel in Business: The Role of Language in International Business
• Why is learning the host country language important for expatriates?
• Language in International Business: A review and agenda for future research
• Managing Expatriates in China: A Language and Identity Perspective

Drop me a line

Free pre-publication versions of these papers are hyperlinked. If you’d like to have an official reprint for these papers, just drop me an email.