The Persistent Impact of Language on Global Operations

Abstract

In studies of firms' internationalisation, language has tended to be bundled into 'cultural and psychic distance boxes'. In this article, an attempt is made to unbundle the impact of language through (a) an examination of the way in which language influences the pattern of foreign market expansion; and (b) an analysis of how a firm may try to cope with language diversity by adopting a common corporate language. We conclude that attempts to impose a common corporate language may hinder or alter information flows, knowledge transfer, and communication.Language, Internationalisation, Common Corporate Language, Internet, Information,

Opening and closing doors: The role of language in international opportunity recognition and exploitation

“…Luo & Shenkar, 2006), and it is more than probable that language plays a role in the company's internationalisation path (cf. Welch et al, 2001).…”

“…Where managers often consider it a technical translation problem (Welch et al, 2001), researchers have preferred to use a single dummy variable for a common language (Dow & Karunaratna, 2006): either you have the competence (positive) or you do not (negative). The role of language skills is supposedly much more multifaceted.…”

International language management and diversity climate in multicultural organizations

“…Accordingly, interaction openness and shared understanding are vital elements to the success of multicultural organizations. To ensure shared understanding, internal communication and a good information flow, most multicultural organizations have introduced the use of a common corporate language (Marschan- Piekkari, Welch, & Welch, 1999b;Welch, Welch, & Marschan-Piekkari, 2001).…”

Institutional and Transaction Cost Influences on Partnership Structure of Foreign Affiliates

“…Thus, linguistic distance is an important but neglected component of psychic distance that is likely to have an impact on transaction costs. Welch et al (2001) argue that there is a tendency for foreign investors to engage in equity venture formations in host countries belonging to the same language group at the initial stage of their international expansion. We extend this argument to ownership/partnership structure choice of MNEs.…”