The purpose of the introductory chapter is to provide an outline of the study with following sections: background of the study, purpose of the study, research questions, significance of the study, delimitations and limitations, and the definition of terms.
Background of the Study
Common Language Becomes a New Issue in Management
With the development of technology and Internet in the past decades, the way of doing business transform to a new pattern such as multinational organizations which run business around the world. According to the statistic of the United Nations, the sales of foreign subsidiaries of multinationals were nearly twice as high as world exports in millennial era, while in 1990 both were about the same. In 2008, 810,000 foreign subsidiaries of about 82,000 parent firms amounted approximately one third to world sales, while the number of employees in foreign affiliates has increased more than doubled in the last two decades (UNCTAD, 2009). If we take a closer look at the structure of biggest economy power, we could also find that U.S. multinational corporations rank among the largest U.S. firms. These large parent firms account for 95% of the total number of people employed by U.S.
multinational corporations. Employment abroad is even more concentrated among the largest foreign affiliates of U.S. parent firms: the largest 2% of the affiliates account for 90% of affiliate employment (Jackson, 2011). The data reveals an important message that the multinational organizations become the dominant majority and a common phenomenon in today’s world economy structure that is affecting all walks of our life.
With the development of technology and Internet, multinational organizations become borderless and have more frequent interaction between global partners. Data suggests that as many as three out of four multinational companies now manage networks of twenty or more overseas operations (John, Grimwade, & Cox, 1997). With the growing trend of the
increasing numbers of organizations that run globally, the communication intensity becomes much higher than before. As Thompson (2003) states, “communication is the basic feature of social life, and language is a major component of it.” The success communication is based on the share language that has been identified as an essential part of an organization’s
effectiveness. That is the reason language is of great significance in international
communication scenario (Harzing & Feely, 2008). This inevitable trend causes a huge impact on those organizations that implement their daily practices throughout the world. Such
cross-border management involves not only issues of culture and geographical dispersion but also linguistic challenges. The common problem is language barrier when expatriates
communicate with their local business community and built up their network relationship (Adler, 1983; Brannen, 2004; Herbert, 1984; Hofstede, 2001; Ronen & Shenkar, 1985;
Triandis, 1982).
In terms of language, multinational organizations face following challenges. Firstly, most multinational parent companies are not located in countries that speak English.
Secondly, future investments are mostly targeted at rising powers in developing countries, which means a shortage of parent company language skills (John et al., 1997). The fact shows that the changing power of language induces new issues that we should turn to.
Previous research point out that 60% of 1000 German companies have no business with
enterprises in the UK. For the further question, if they want to establish the connection, 80%
prefer to speak their own language (Coleman & Cree, 2000). It suggested that language dominant power is shifting faster than we expected. This shapes new picture for our understanding and incurs the intention to look into about how different and serious the
language problem is today. Some multinational organizations have already aware of this issue such as Nokia and Phillips. They all choose English as their corporate language to facilitate global coordination, internal communication, and better transfer of information although their parent language is Finnish and Dutch (Fredriksson, Barner-Rasmussen, & Piekkari, 2006).
This strengthens the notion of the study on investigating English as a common language and how it affects the multinational organizations in the international setting.
Taiwan is an export-oriented country of a large portion of small and medium enterprises, which requires different languages in order to trade with partners all over the world (Industrial Bureau, 2012). With the coming pace of the globalization, the multinational organizations face with more local languages in adopting the transnational model (local responsiveness allied to strong global direction) as their strategy to strengthen the
coordination abilities than they used to be. Although we could infer the problems existing in the multinational companies in Taiwan, limited of the related research has been done to know the current situation as well as measures accepted to tackle the language problems in
multinational scenario. That motivates the intention of this research on knowing how multinational organizations in Taiwan manage language issues when conducting business worldwide.
English Is the Main Language Adopt in HRM
Language is the medium for us to communicate as well as a tool to interact with others in our daily life. It carries the information as well as personal feeling within their cultural and linguistic context in the communication process (Von Glinow et al., 2004). It is also an essence related to one’s national identity in many countries (Hill, 2002). The spread of most common used language, namely English, has been promoted by the following factors: the worldwide competition of the multinational organizations; the development of modern information and communication technologies; and the growth of international mergers and acquisitions (House, 2002). In response to this trend, several multinational corporations have adopted English as their corporate language to facilitate internal communication between headquarters and foreign subsidiaries as they enter new markets (Feely, 2003; Marschan, Welch, & Welch, 1999a; Nickerson, 2000). For those that require intensive communication in a global environment, language is the crucial factor that should be conquered when conducting business over different countries. Bossard and Peterson (2005) also supported this point that a lack of background knowledge and language skills to understand foreign markets was the most frequent reason for companies decide not to explore. Further, Cyr and Schneider (1996) found that senior manager had more language-related problems than frontline employees. As a result of loss of rhetorical skills, misunderstandings are therefore easily caused, resulting in uncertainty and anxiety (Gudykunst, 1995; SanAntonio, 1988). In this background, language is thought of as the key strategic factor for the future development regarding how to integrate these dots without missing core information or causing misunderstanding in the international settings. This incurs the research to know further about
how multinational organizations deal with language related issues in practice and whether the language is the key and which role it plays in multinational organizations on the perspective of improving organizational performance.
Language Capability Becomes the Critical Qualification for HRM
Shifting the focus on human resource management, the common way for multinational organizations managing local talents tend to send the expatriate to implement the policy from headquarters (Manev & Stevenson, 2001; Salter & Niswander, 1995). As multinational organizations seek to cut costs and disperse their department throughout the world to strategically response to a globally competitive marketplace, the local workforce plays an increasingly important role to implement organizational objectives (Ely & Thomas, 2001;
Hofstede, 2001). From the human resource development point of view, the language competence is critical when sending expatriate in dealing with the communication problems existing in different branches. So we could note that the importance in building HRM process for multinational organizations could select, train, and build their competence in coping with the daily task (Marschan et al , 1997). Furthermore, the importance of language that also has a huge impact on the scenario in the human resource management process such as training effectiveness (Tung, 1982), conflict management in cross-cultural teams (Von Glinow et al., 2004). In the aspect of communication across the broader, language is the facilitator regarding headquarters–subsidiary relations (Gupta, 1987; Harzing & Feely, 2008), knowledge transfer and diffusion (Ghoshal & Nohria, 1989), and the efficiency of the global value chain (Govindarajan & Gupta, 2001). The overall effects of language provide some implication for top management and HR practitioners in the changing world today. That is to
say, language is becoming a more significant and urgent issue for the multinational organizations on the effect of globalization and diversity.
What this all means for HR practitioners? How language affects the human resource management and development process? And how HR practitioners handle language issue in human resource development decision process (MARSCHAN, WELCH and WELCH, 1997)?
Such questions are aroused in this research in the hope of providing some insights for HR practitioners.
Researches on Language Management is Lacking
Mainstream of the international management literature fell on the cultural or institution context and inappropriately exclude of language differences since multinational organizations became the majority structure affecting our life (Harzing, 2004). Trace back of the language management literature, in 1987, San Antonio was touted as the first one to investigate the issue of how language skills empowered employees and language served as a group-identity marker within the multinational organization. Since the late 90’s, more researcher were interested in the related topics on language diversity management seems to be growing in the past decades, most of them were case studies. Although these finding provide us some insights on how language functions in the international management, the need of more empirical research on how language affects multinational organizations should be testing are aroused by many researchers
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(Harzing & Feely, 2008; Louhiala-Salminen &Rogerson-Revell, 2010; Tietze, 2007; Welch et al., 2001).
In recently years, language management is the field being discussed with the progress of the increasing numbers of multinational organizations (e.g. Ammon et al., 2009; Nekvapil
& Nekula, 2006; Nekvapil & Sherman, 2009a, 2009b; Vaara et al, 2005; the ELAN report, 2007). The academic development in discussing about relationships between language and organization management or HR policy is still in its early development (Piekkari et al., 2005).
However, language is rarely emphasized in recent research or in management field. As Luo and Shenkar (2006) point out, language is rarely addressed in the strategy literature for that should regard as a strategic asset. The fact induces scholars’ notions such as Marschan-Piekkari et al.’s (1997) regarding language as the “forgotten factor” (p.591) in international management environment, also thought of as ‘‘the management orphan’’
(Verrept, 2000) and ‘‘the most neglected field in management’’ (Reeves and Wright, 1996).
This situation has been changed by recent researches into human resource implications of a shared medium across the global organization (Feely & Harzing, 2003; Marschan-Piekkari et al., 1999a, 1999b; Nickerson, 2000). Brannen (2004) pointed out that language is depicted as the barriers that impair market entry, integration and coordination between headquarter and local branch; however, the relationship between language design and global strategy is not discussed (Graham, 1985; Hofstede, 2001; Triandis, 1982).
Language Issues Should Be Considered in Management Practice
Globalization brings new challenges for multinational organizations. Whether to select a corporate language or sending the expatriate gradually becomes a strategic choice in global management. Especially for HR practitioners, from recruiting to developing all involve language diversity as well as barriers when communicating and managing across the nations.
Although some pilot study has been made, how language management affect the organizational performance is still the uncharted territory lacking of focus in academic field,
especially in Taiwan. That fact incurs the intention for more into the issue of how language strategy affects multinational organizations in daily routine when running business all over the world. For the practical use, this research is trying to provide a practical definition for multinational organizations reference. In doing so, multinational organizations could improve their performance as well as international managing capacity by way of taking language management measures.
Research Purposes
According to previous discussion, the main purposes are addressed as follows. Firstly, this research is to investigate what are the communication challenges in HR function of MNCs. Secondly, exploring practices of language management in HR practitioners in MNCs is another purpose. Lastly, after knowing more about the detail of language issues in the multinational setting, the research hopes to capture the feedback form HR practitioners for managing languages in the future. In the end, providing practical insights to increase the performance of HR practitioners.
Research Questions
The main purposes of this study will explore what are the communication challenges in HR function of MNCs and exploring practices of language management in HR practices in MNCs. Attach to those purposes, the research questions are stated as follows:
1. What language challenges (barriers) do HR function encounter when doing business worldwide?
2. What are communicating elements (system) that HR function uses in MNCs?
3. How do MNCs react to tackle with the language challenges in recruiting (HRM)?
4. How do MNCs react to tackle with the language challenges in HRD?
5. How does your organization evaluate the effectiveness of HR department in managing language issues?
6. What are the strengths and weakness of your organization in managing languages?
7. What are your suggestions for your organization in managing languages?
Significance of the Study
In Taiwan, language management is the field that has not been done before in the academic area. As the increasing numbers of multinational organizations in Taiwan, this research is trying to provide actual practical insights for them as reference. For top management, language should be touted as strategic issue when operate in the global environment. By looking into the practice, the result tries to provide different ways of thinking and shape new mindset in concern with language issues strategically. To HR practitioners, the result is hoping to reinforce the importance effect of HR policy in facing of the competitive international environment. At the same time, practical measure will be proposed by analyzing the collected data, providing the alternatives for further management application with cross-discipline when multinational organizations going global. In this way, multinational organizations in Taiwan could find out a way in improving communicating problems and enhancing the management capability in the complex world today. Lastly, the result of this study can be a pioneer in the field of language management and obtain more attention on the issue of language management in Taiwan.
Delimitations and Limitations Delimitations
In this study, HR practitioners are the target samples whose daily task involves in dealing with languages. These samples are set to collect within several multinational
organizations based in Taiwan during the same period of time.The research scope is focused on HR functions and the practices related to language issues to portray the scenario of the effects that caused by languages during the daily tasks. For discussing specific language issues, English is the current focus language of the research.
Limitation
In order to portray the overall practices in MNCs, this research mainly selected two representative industries consisting twelve middle level HR executives as the interview samples. Due to the nature of qualitative approach, the result can not infer to all MNCs in technology manufacture and service industries, even for all MNCs in Taiwan in the respect of language practices. Findings are only applicable for those under similar circumstances and conditions.
Without considering the different globalization phases and different organizational structures for each MNCs, this research probably causes some bias on the discussion of language issues. Also, different understandings and perceptions during the interview process may cause bias of the collected data, which were confirmed and reviewed by interviewee for consolidation. The language issues discussed in this study are merely English. Further generalization is limited to other cultural or language settings.
Definition of Terms Business Communication
Organizational communication is the different communication practices that take place between people within an organizational setting, including internal communication practices that occur from headquarters to subsidiaries, subsidiaries to headquarters and between (O’Rourke, 2010). Not only within subsidiaries but also external communication, meaning from the organization to its external environment, such as customers or shareholders (Bovée
& Thill, 2001). Both above definitions apply to this study.
Communication System
According to Weik’s (1995) definition in "Communications Standard Dictionary".
Communication system means a system or facility capable of providing information transfer between persons and equipment, which usually consists of a collection of individual
communication, transmission systems and equipment capable of interconnection and interoperation so as to form an integrated whole. These individual components must serve a common purpose, be technically compatible, employ common procedures, respond to some form of control, and generally operate in unison.
Language Management
Language management includes whether changes are being made to the school organization, their placement processes, curriculum design and pedagogical philosophy (Spolsky, 2004). Any measures or policy adopted by the organization to tackle with language related issues are defined as language management in this research. According to Feely and Winslow, language management is defined as “the extent to which the company is able to
satisfy its language needs through prudent deployment of a variety of language management tools” (Feely and Winslow, 2005 in CILT). The above definitions are all applicable in this research.
Language Strategy
Strategy refers to a plan of action designed to achieve a particular goal, and is
concerned with how different engagements are linked (Heuser, 2010). Following this concept, language strategy refers to an overall organizational strategy dealing with language barrier or related measures in response to solving the language issues such as policies are defined in this study.
Language Worker
Language worker is defined as an employee who has an educational background in modern languages or languages for specific purposes, and whose tasks involve professional language usage (e.g. corporate communications, translation, proofreading, and technical writing) (Tange, 2009), which is applied to the sample criteria in this study.