The language barrier and its implications for HQ‐subsidiary relationships

Abstract

Purpose: This paper intends to open up the debate on the influence of language on the way multinational companies manage their subsidiary operations. Design/methodology/approach: The authors explain the importance of the field and expose a dearth of prior research. Subsequently, they define the “language barrier” and elaborate on the causes underlying this barrier, drawing on social identity theory. Findings: The authors we propose an integrative model that consists of two coupled vicious cycles: the communications cycle – composed of the eight aspects of the language barrier – and the management cycle. Research limitations/implications: This contribution to an otherwise ignored field of business study should be considered only a first step in opening up a new research agenda. Specialists in each of the fields touched upon are invited to make a contribution to the debate. Practical implications: The management cycle suggests implications of the language barrier for various aspects of the HQ‐subsidiary relationship: strategic decision‐making, organization and personnel selection, global integration strategies, and autonomy and control procedures. Originality/value: This paper uses socio‐linguistic theory to define and elaborate on the construct of the language barrier, a construct which is believed will be helpful in furthering research on the impact of language‐difference on multinational management.