Intercultural Effectiveness Developmental Plan
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CCMtopic10-ManaginglanguageinMNCs.pdf
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— BUSM4688 Cross Cultural Management Topic 10: Managing language in MNCs
Dr. Shea Fan School of Management
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Pressing managerial questions
Our employees speak different languages, how can we manage the use of language within our organzation?
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Language Objectives: 1. Why MNCs need to manage their language
policy. 2. Understand the consequences of MNCs’
language policy. 3. Understand the strategies that MNCs can use to
manage language across international operations.
4. Strategies to make a lingua franca policy work.
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Case: English as the corporate language
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https://www.youtube.com/watch? v=TcMMAxmDdGw
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Rakuten Case • March 1, 2010. “Englishnization” • Meeting participants: 7,000 in Japan + 3,000
overseas – Change our language gradually from Japanese to
English. – Starting this month, my own speech will simply be in
English. – By April 1, 2012, score above 650/990 Test of
English for International Communication (TOEIC) or face the consequences.
– Demote people who do not try hard. Monitor progress & test scores. Collect reports from all the managers about employee progress.”
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Self-evaluated English proficiency (by nationality). Adopted from Terasawa 2012 / Based on Asia Europe Survey 2000
Weak English & reluctance to adopt English resulting in Japanese firms lagging behind global competition.
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High importance of local language worldwide
Anglophone countries
Nordic countries
English language skills low
English language skills high
Continental European Countries
Asian countries
Low importance of local language
worldwide Harzing &Pudelko, 2012
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Rakuten Case Mikitani was educated in the USA Family background v Farther: economics scholar, was a visiting scholar at Yale,
Stanford, and Harvard. v Mother: spent several years in NY. Industry v Online retailing Personal statement
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v “What I dislike about Japan is the mentality that, as an “island country,” information is protected and the media try to control everything. … I am not running the company for money. I want to change Japan; I want to change society. I just feel that this is my responsibility. I have a very strong global aspiration. I am really uncomfortable looking at the conservative customs and system of Japan, so I want to change it”.
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By mandating English, Rakuten joined the approximately 52% of MNCs that have adopted a language different from that of their originating country.
Rakuten Case
52%
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Why is a lingua franca necessary??
1. Grow globally: international expansion; mergers & acquisitions.
2. Translators and interpreters for everyday work relationships tend to be inadequate.
3. Global knowledge sharing and collaboration. 4. Enhance international employees’ identification
with the organization. 5. Changing language, changing perspectives.
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Functional Multilingua
lism
External language resources
Lingua Franca Training
Bilingual liaison
Approaches to Language Management in MNCs
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Is it necessary to have a lingua franca?
1. Is language important for the critical tasks? 2. Is our organization serving customers globally? 3. Is the organization expanding globally? 4. Do members of the organization need to
collaborate across borders? 5. Does the organization need to standardize
technology platforms?
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Reactions (external) • Was picked up by global news organizations: 100+
articles in CNN, the Financial Times, the Japan Times, and the Wall Street Journal.
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• Corporate Japan reacted with fascination & disdain.
Honda Motors CEO Takanobu Ito: “It’s stupid for a Japanese company to only use English in Japan when the workforce is mainly Japanese.”
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Reactions (internal) • Kenji (36): engineer • Kenji never traveled outside Japan • Studied English for six years during middle and high
school; graduated with a minimal ability to understand English
• Would my salary really be linked to his English ability?
• Felt like he was at a colossal disadvantage. • His 8 years of diligent, hard work in service to
Rakuten should speak for itself, yet now—no matter how hard he worked—it wouldn’t amount to anything without English.
• Shock and fear. 14
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Four types of employee responses
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https://www.youtube.com/watch?v=BCnFJmVC-Lg
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Consequences (general)
Anxiety 1. "How am I going to do this every day?" 2. "My colleagues speak English much better than I
do." 3. "What's going to happen to my career?" 4. "I feel stupid when I speak English."
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Neeley’s (2010) study on a French high-tech company
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Consequences (general)
Stigmatization Non-native speakers, regardless of their English
fluency level, experienced a drop in social status relative to native speakers
Those with medium-level fluency were the most
anxious compared to their low- and high-fluency coworkers
Neeley’s (2010) study on a French high-tech company
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Global expansion
Global integration
Global talent
Global knowledge sharing
Began to rapidly and aggressively acquire, enter into joint ventures, or launch greenfield entities in Brazil, Canada, Cyprus, France, Germany, Indonesia, Singapore, Spain, UK, and USA.
Rakuten Case (5 years later…)
Communicate with one another around concerns & goals; minimized misunderstandings & miscommunications; facilitated the coordination & collaboration
81% of new engineers from 45 countries in Japan
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How can we make a lingua franca policy work?
1. Promoting language adoption 1) Continual messaging 2) Internal marketing & publicity 3) Branding the company as global
2. On-the-job training 3. Manager: supporting & evaluating 4. Embedding cultural training with language
acquisition
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Take home messages
1. Why MNCs
need to manag
e their
languag e policy
.
2. Unde rstand t
he cons equenc
es of
MNCs’ languag
e policy .
3. Unde rstand t
he strat egies th
at MNC s
can use to man
age lan guage a
cross
internat ional op
erations .
4. Strat egies to
make a lingua
franca
policy w ork
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KEY LESSONS FOR GLOBAL COLLABORATORS
• Exercise the Power of Empathy • Native Speakers Must Help • Nonnative Speakers Benefit From Sticking to
English
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LESSONS FOR GLOBAL MANAGERS
• Anticipate the Challenges and Coping Strategies • Create a Safe Communication Environment • Encourage Practice • Encourage Empathy • Test Assumptions
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25 25 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.
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Language
Starting story: Freely & Harzing Fiat’s Palio, the first world car concept. Designed in South American, Brazil and Argentina, -> south Africa produces the catalytic converter, à shipped to Italy to be matched with the other components of the full exhaust system à shipped to Poland for assembly onto the vehicle. The supply chain struggled to work in a mix of Spanish, Portuguese, English, Italian and Polish. Global intranets, video-conferencing, e-mail networks, global integration of IT sys- tems and workflow technologies have all contributed to making information flows faster, easier and more secure. Pressuring question: English language as the corporate language: is it a good idea? How best to manage communication across langauge barriers?
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Language
• Language diversity: the number of 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
Finance (Global Treasury), R&D (Co-design), Production Engineering (Con- current Engineering), Logistics (Supply Chain Management), Sales (Global Account Man- agement), Purchasing (Global Sourcing), Human Resources (Global Management Develop- ment) and MIS (Global Systems Integration) are all directly tasked with coordinating activi- ties that span national and linguistic boundaries.
• Language sophistication: the complexity and refinement of the language skills required.
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Language Consequences: language barrier triggers a whole range of negative consequences. It breeds uncertainty and suspicion, accentuates group divides, undermines trust, and leads to polarization of perspec- tives, perceptions and cognitions. Buyer / Seller Relationships: companies will in general have more success selling to countries that share their language. Buyers too when working in their second language will not be as confident and assertive and will lose some of their relationship power. As a result they will be less successful in gaining advantageous deals. Aware of this, buyers are likely to demand increasingly that negotiations are conducted in the language of the customer. Foreign Market Expansion. The process school of internationalization (Johanson & Vahlne, 1977) predicts that companies at the beginning of their global development will prefer to es- tablish subsidiaries that are characterized by a low level of psychic distance to their home country. Language differences are a crucial element of psychic distance. In the absence of this possibility, parent companies will prefer to establish subsidiaries in countries where English, the dominant international language, is widely spoken. (Welch et al., 2001). Joint Ventures. Whenever the host country and the parent country do not share the same lan- guage, the parent will inevitably feel an increased sense of uncertainty and will prefer an entry method where risk can be shared. Thus joint ventures will be likely where there is language difference. Joint ventures between partners where only one of the partners has an international language will end up working in that language. Subsequently, as a consequence of power through communication, the partner with that language might start to dominate the relation- ship, which will pose increasing pressure on the JV. HQ-subsidiary Relationship. Wherever language is a barrier to the development of close personal relationships the level of suspicion, mistrust and conflict between a parent company and its international subsidiaries will be heightened. Such mistrust will cause the parent com- pany to be more formal and less subjective in its evaluation of subsidiary performance, and may also hinder collaborative processes such as knowledge and technology transfer. Staffing Policies. Companies will be more prone to employing expatriates in important posi- tions at subsidiaries where the host country has a different language to the parent operation. As a consequence of the internationality of the English language, American and British com- panies and others that have English as the corporate language rely less heavily on expatriates than those companies that have other languages. (Harzing, 1999; Yoshihara, 1999).
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Language
Issues of language in international business • Increasing needs of cross language management
The co-ordination burden of managing such geographically, culturally and linguistically diverse networks is daunting
• Worldwide spread of ‘English as a corporate language’, • often as a matter of fact • ! The language barrier – Harzing & Feely 2007
! Delay in decision making / misunderstanding ! The direct problem: everything takes more time and is more costly
• ! Issues in communication flows and power ! e.g. Marschan-Piekkari, Welch & Welch 1999
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Language
English becomes a global language • English as a business lingua franca - BELF • ! Goal oriented, pragmatic and flexible use of
English - Native English speakers’ norms less relevant
• ! Non-native English users are successful in establishing intelligibility – “bad English” can get things done
• ! Ehrenreich (2010) , Louhiala-Salminen, Charles & Kankaanranta (2005)
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Language
Widely circulated discourses in Japan • Weak English and reluctance to adopt English resulting in
Japanese firms lagging behind global competition • ! Need to increase the number of ‘global human resources’
in Japan • ! Need to shift to bilingual management or adoption of
English as a corporate language • ! Costs of Japanese language management • ! Translation and interpretation fees, expenses for hiring
Japanese speaking locals & Japanese expatriates, opportunity costs off outsourcing, using non-Japanese human resources and their expertise
• ! Okabe (2009), The Council on Promotion of Human Resource for Globalization Development (2011)
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Language
Unequal access among non-native English users • Unequal competence of English language • Perceived level of English skills • ! Japanese people have limited exposure to
English before starting business career
• Self-evaluated English proficiency (by nationality) Adopted from Terasawa 2012 / Based on Asia Europe Survey 2000
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Language
• Implications for HR • ! Support during the initial stage / ‘scaffolding’
support • ! Support for learning at work and life long
learning • ! Systematic support by linguistic experts • e.g. translator, proof reader, lawyer ! Managing
risk of making ‘mistakes’ • ! Managing the risk of too much reliance on the
person in the ‘critical point’
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Language
• Selected references ! The Council on Promotion of Human Resource for Globalization Development. (2011). An Interim Report of The Council on Promotion of
• Human Resource for Globalization Development. • ! Ehrenreich, S. (2009). English as a Lingua Franca in Multinational Corporations— Exploring Business Communities of
Practice. In A. Mauranen & E. Ranta (Eds.), English as a Lingua Franca: Studies and Findings (pp. 126–151). Newcastle upon Tyne: Cambridge Scholars Publishing.
• ! Ehrenreich, S. (2010). English as a Business Lingua Franca in a German Multinational Corporation Meeting the Challenge. Journal of Business Communication, 47(4), 408–431.
• ! Harzing, A., & Pudelko, M. (2013). Language competencies , policies and practices in multinational corporations : A comprehensive review and comparison of Anglophone , MULTINATIONAL CORPORATIONS : Journal of World Business.
• ! Harzing, A., & Pudelko, M. (2014). The bridging role of expatriates and inpatriates in knowledge transfer in multinational corporations. Human Resource Management, 1–41. doi:10.1002/hrm.21681
• ! 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. doi:10.1016/j.jwb.2010.07.005
• ! Kankaanranta, A., & Louhiala-Salminen, L. (2010). “English? – Oh, it’s just work!”: A study of BELF users’ perceptions. English for Specific Purposes, 29(3), 204–209.
• ! Kankaanranta, A., & Planken, B. (2010). BELF competence as business knowledge of internationally operating business professionals. Journal of Business Communication, 47(4), 380–405.
• ! Okabe, Y. (2009). Language Benefits and Language Costs in Japanese-style Management. Kyoto Sangyo University Library, Social Science, 26(26), 1 25.
• ! Terasawa, T. (2012). The discourse of “Japanese incompetence in English” based on “Imagined Communities”: A sociometric examination of Asia Europe survey. Asian EFL Group, 7(1).
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Language
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. Feely, A. J., & Harzing, A. W. (2003). Language management in multinational companies. Cross Cultural Management: An International Journal, 10(2), 37-52. 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. Neeley, T. B. (2013). Language matters: Status loss and achieved status distinctions in global organizations. Organization Science, 24(2), 476-497. Neeley, T. (2012). Global Business Speaks English. Harvard Business Review, 90(5), 116-124.
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