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Difficulties Generated by English language in Multinational Companies Report

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Updated: Jul 2nd, 2019

Abstract

On company policies concerning the adoption of official languages for multinational corporations, the management teams need to make decisions after consideration of several factors depending on the situation of the firm and the environment in which it chooses to venture into as part of its market expansion strategy.

Ultimately, the decisions revolve around the reduction of expenditure, ease of operations, and consumer demands regardless of the option of choice for any multinational corporation.

However, the discussion in this paper proves that the adoption of several official languages for a company with branches in countries with varying national languages presents more advantages to multinational corporations in terms of business as compared to the adoption of a single official company language.

Introduction

For most multinational corporations, a dilemma occurs when choosing whether to adopt a single language for the company or multiple languages based on the location of their branches across the world.

The source of the dilemma is often in the differences of benefits and limitations that each choice presents for the company in terms of expenditure, revenue, and business operations.

For a company with a branch in Germany and Japan, the adoption of a multiple languages would be the best strategic decision due to various factors.

This paper is an analysis of the options available to such a company and justifications for the adoption of multiple languages coupled with recommendations concerning the implementation of noted policies.

Discussion

Benefits of English as official Company language

The most significant benefit that a company would get from adopting English as the official language is the development of a concise organizational culture that allows employees to adapt to their work environment relatively easy.

Globalization has resulted in a trend whereby most organizations take advantage of the different skill sets that individuals have during the recruitment process. One such skill is fluency of communicating in different languages in addition to adaptability with regard to different environments.

Therefore, unsurprisingly most MNCs have employees from different countries with different cultural backgrounds working towards a common goal.

For such employees, language becomes a common denominator, which allows them to interact effectively and work as a team for the overall success of the company (Deresky, 2011). Such interactions form part of a company’s organizational culture and they determine the course of business significantly.

Organizational culture is a phenomenon that develops with time within an organization and it is descriptive of the manner in which individuals in an organization conduct their activities in compliance with their duties.

Some of the obvious elements that define organizational culture include the mode of dressing, various habits that employees and the management adopt, language, and beliefs.

The culture of an organization affects the way employees interact with each other, the management, shareholders, and most importantly, clients (Caroselli, 2000). The form of organizational culture that a company adopts determines the organization’s success.

For instance, having at least one official language ensures that an organization’s workers communicate efficiently and accomplish their tasks effectively, thus leading to better output and higher revenues.

The resultant teamwork for such interactions benefits the company financially, regardless of the company’s location anywhere in the world.

Secondly, most countries in the world speak English and for those that do not, they offer courses in their education system for individuals willing to learn the language for individual or business purposes. As a result, most employees are familiar with the language, irrespective of their country of origin.

The main benefit that such access to training has for a corporation with branches in Japan and Germany occurs in the form of expenditure savings.

Due to the extensive nature of business operations around the world, most multinational corporations prefer strategic options that guarantee returns in investment in addition to low expenditure demands.

Employees’ training is one of the areas that fall under an effective company’s expenditure as a method of guaranteeing output that matches the goals and objectives specific to the organization.

This observation stems from the notion that employees are a type of investment in the form of human capital, with a high likelihood of profitable returns through low employee turnover, better quality of work, and ultimately better revenue for the company (Hendrick, 2009).

However, as with other companies, multinational corporations also prefer options that allow them to save money without compromising output thus creating a preference for multilingual staff.

Employing workers who are fluent in several languages eliminates the need to spend money on language training programs without having to forgo the benefits such skills present for the multinational company with regard to consumer relations (Duffey & Saull, 2008).

The surest way of obtaining such trained staff is through picking a language that most countries offer training at different levels of education, some of which include English, French, and German.

Choosing English as the official language is thus a good option in terms of obtaining employees who can communicate in the language without further training on the company dime.

Thirdly, the versatility of the business environments in Japan and Germany generates the need for a language with international appeal for purposes of better business interactions, thus the preference for English in most international trade interactions.

Japan and Germany are famous internationally for innovative technological companies that manufacture products suitable for markets worldwide including vehicles and machinery.

Due to the nature of business, the two countries undertake international trade and thus unsurprisingly the resident populations in both countries comprise individuals from all over the world.

As a result, both countries have chosen English as an alternative official language, especially on the business front for companies with expatriate employees.

A good example of such companies is Microsoft, which is an information technology firm, dealing primarily with software development.

Although the company is headquartered at Redmond, Washington D.C. in the United States, it has branches in Japan, Germany, France, Denmark, United Arab Emirates, and Turkey among others.

One of the ways in which the company cuts costs involves employment of personnel from the host country in order to reduce costs such as documentation expenses coupled with travelling and housing allowances.

Since the company is American, the management settled on English as the official language for ease of communication within the organization and attraction of international clientele.

Despite the fact that a majority of the company’s branches are located in regions where English is not the native language, the company’s application of English as its official language has resulted in its success over the years and fostered steady growth as globalization continues to influence the manner in which countries and organizations conduct trade.

Difficulties in application of English for MNCs

Although applying English as the official language for MNCs has numerous benefits, especially with regard to company operations and communication amongst various branches and the corporate headquarters, the practical application bears various challenges and difficulties.

One such difficulty involves the adaptation of new culture necessary for assimilation in the new environment. Unlike most domestic corporations, multinational organizations often struggle to adopt new environmental cultures without forfeiting aspects of organizational culture that make them unique (Smith, 2012; Northouse, 2012).

A good case to help explain such difficulty is the establishment of the McDonalds fast foods branch in China.

The American company was excited to venture into business expansion with China as the new target, especially in consideration of the country’s population and the busy lives that most residents subscribe to in their lives.

Although the establishment of the new branch in China was a success, assimilation into the new environment proved difficult for the company due to significant differences between the Chinese and American cultures.

For instance, in the American society, children have similar rights to those of adults in matters of food choice, despite parents making the final decision. However, in China, parents make the food choice decisions and children must comply strictly.

The introduction of the fast food branch altered this dynamic by allowing purchases from children leading to rebellion against the parents’ food choices. The new dynamic took sometime before residents got used to the idea, which in turn cost the company valuable revenue in its initial years.

Experts indicate that had the company used the local language as part of its strategy to gain local appeal by showing willingness to adapt to local culture, it would have gained millions of dollars in revenue within the first year (Park & Vanhonacker, 2007).

In the same way, the use of English in Japan and Germany presents similar limitations for the company in terms of revenue gain. It creates the impression of lack of regard for local culture, part of which includes the local language.

Secondly, use of language other than the local official language presents difficulties for employees regarding their accomplishment of company goals and objectives regarding consumer relations.

According to Morgan (2012), in order to achieve success, an organization needs to undertake a collaborative approach to management.

Morgan (2012) explains collaboration as an aspect of management that requires all key players within an organization to work together and include players outside the organization who contribute to its successful sustenance.

Consumers form the core of a company’s success as the consumer base determines the organization’s revenue. For this reason, every organization needs to do its best to ensure that it involves its consumers in its strategic plans and determination of company goals.

Morgan’s theory presumes the existence of a link between managers, employees, consumers, and players in other profession that bear the potential to increase the company’s revenue (Morgan, 2012). A similar theory is evident of John Adair’s emotional intelligence theory.

The theory insists that in order to attract consumers, an organization has to display some semblance of good faith through willingness to incorporate local culture into the organization’s culture (Adair, 2013).

The most obvious way that an organization can prove its willingness to conform to consumers is through the adoption of a language that the consumers are most familiar with, which is indigenous to their environment.

Using the local language not only makes it easier to understand consumer needs and relay the same to company management, but also it creates trust from which the company is likely to reap financial benefits.

Recommendations

The determination on whether the company should adopt a single language or multiple languages for the branches in Germany and Japan depends on the analysis of the benefits and limitations that the two options present for the company.

However, in this case, the most prudent decision would be the adoption of different languages for Germany, Japan, and the company’s headquarters, which is presumably in the United States, because the benefits of the decision outweigh the limitations in comparison to the alternative.

In order to justify this recommendation, an analysis of both options is necessary.

Most multinational corporations need to form structures that allow efficient connection and managerial synchronicity between different branches and the company’s headquarters (Kouzes & Posner, 2008).

In most cases, technology plays a big role in ensuring effective exchange of information at the right time, but language also allows players within the organization to work as a team regardless of their location.

For most organizations, a choice between the adoption of a single language as the official company language and adoption of different languages depending on the environment presents a dilemma as the options both bear advantages and limitations.

Analysis on use of multiple languages

As noted earlier, one of the benefits of using a single official language is the ease that it provides in terms of interactions between employees and the management.

It is essential for company employees to possess the capability to interact with each other and address issues concerning business operations with the management as they develop. Modaff, DeWine, and Butler (2011) posit that effective organizational communication aims at avoiding crises through teamwork.

Teamwork requires managers and the staff in any company to share relevant information and find solutions to possible problems while working towards the achievement of company goals.

For multinational corporations, the need for such effective communication goes beyond employees and managers in one country to include managers and employees in other countries working in the same company (Montana & Chernov, 2005; Parker, 2000).

A single language across the entire company definitely goes a long way to ensuring that employees have access to such opportunities.

Secondly, having a single language makes training for employees that require assistance much easier as compared to the case if the company chose different languages for different locations.

Holding consolidated training sessions at frequent intervals according to a company’s budget is cheaper than having several training sessions occurring simultaneously due to the adoption of different languages.

However, the adoption of a single language across the entire multinational corporation has serious implications with regard to the growth of the company, adaptability to new environments, and gaining acceptance from local consumers.

According to the Mintzberg’s theory, it is important for companies starting out in new environments to consider ways through which they can gain the trust of the local population that is necessary to kick start the sale s of goods and services (Mintzberg, 2008).

A single language improves the operational efficiency of the organization from within; however, it does little to foster the acceptance of the business by potential clientele in the new environment.

Morgan (2012) articulates the dire need to involve the consumers in the business for purposes of understanding their demands in the new market, obtaining feedback regarding the company’s products, and learning about the competition in the market.

All these aspects are crucial for the management when making strategic decisions regarding the way forward for the company and establishing marketing plans.

One of the challenges that multinational corporations need to overcome in new markets is economic patriotism and adoption of a language other than the local language does little to mitigate financial implications of economic patriotism in the new market.

Economic patriotism entails the coordinated behavior of companies in which particular groups of consumers or companies prefer goods and services produced in their own countries or in regions within which their countries participate in trade, as opposed to goods and services from foreign nations.

The concept justifies the need for MNCs to adopt languages that local consumers are familiar with as a way of gaining trust and convincing consumers that the goods and services produced provide a competitive alternative to what they are accustomed (Helleiner & Pickel, 2006).

In contrast, the adoption of different languages for different branches of a multinational corporation depending on the local language of the new country presents a better chance at success for the new branches.

This aspect means that the company should adopt the use of German for the branch in Germany and apply the same policy for the branch in Japan.

The greatest benefit that the move has for the two branches is that it will allow employees to communicate more effectively with the consumers and create relationships, which is an essential part of an effective collaborative organization.

Such relationships allow consumers to communicate their demands with ease while enabling the company to gather crucial information about its products and services for purposes of strategic planning.

Consumer-employee relationships also allow the company to conduct self-evaluations based on clientele feedback, expenditure, and revenue. The relationships between consumers and the company also significantly affect the reputation of the company thus contributing to the ultimate growth and progress of the business.

Apart from the consumer relations and market success viewpoints, the adoption of policies supporting multiple languages creates room for similar undertakings in other countries in case the company considers further expansion, without interfering with branches that are already operational regardless of the location.

For instance, training programs for employees working in Germany regarding the language of use will not interfere with operations in Germany because training sessions may not need to occur at the same time.

Although conducting separate training sessions for different branches may cost the company lots of money in expenditure, the company has the option of mitigating the financial impact through employment of local employees, who are fluent in the local official languages.

The strategy will afford the company’s management the opportunity to focus on consumer trends, market opportunities, and revenue generation mechanisms without wasting any time on extensive language training.

Implementation

The most efficient way of undertaking the implementation of the multiple language policy is to create a provision in the company’s rules of engagement that allows managers in different branches to establish and implement the most appropriate language of communication for their different branches.

Since the theoretical considerations of the subject often vary from the practical considerations depending on the work environment, the individual managers for the various branches stand a better chance at making a sound decision on the appropriate language applicable to the branch.

Although the company has the option of employing staff with different skills and training the staff on the appropriate language, it will be cheaper if the company employed staff members with multilingual capabilities of members of the local community where the company establishes a new branch.

The move will reduce the expenditure of the company by eliminating the need for extensive training sessions that consume time and prevent the need to synchronize training across the board.

However, the company will have to establish a communication center to facilitate interactions between various branches for purposes of synchronizing operations towards the achievement of the company’s common goals and objectives.

The application of this strategy would not require a set period for adoption because the form and extent of staff training would depend on the needs of the different branches upon assessment by their respective management teams.

The number of employees requiring training in Germany may be lower than that of employees requiring training in Germany, thus resulting in different durations of training. Additionally, the extent of training might be different for the two branches, thus requiring varying financial backing from the company’s main office.

Conclusion

Although different scholars present different opinions regarding the number of official languages a company should adopt the ultimate decisions depends on the company’s situation.

The main determinants of the appropriate decision that a multinational corporation should make regarding the issue include the company’s financial capacity to support employee training, expenditure reduction, consumer demands, and adaptability to the new environment.

However, the adoption of multiple languages depending on the location of various branches presents more advantages strategically in terms of ease of business operations as compared to the adoption of a single language.

References

Adair. J. (2013). Develop Your Leadership Skills (Creating Success). London, UK: Kogan Page.

Caroselli, M. (2000). Leadership Skills for Managers. New York, NY: McGraw Hill.

Deresky, H. (2011). International Management: Managing Across Borders and Cultures: Text and Cases. Upper Saddle River, NJ: Pearson.

Duffey, B., & Saull, W. (2008). Managing Risk. Chichester, UK: John Wiley & Sons.

Helleiner, E., & Pickel, A. (2005). Economic Nationalism in a Globalizing world. New York, NY: Cornell University Press.

Hendrick, T. (2009). Identifying and Managing Project Risk: Essential tools for failure proofing your project. New York, NY: AMACOM.

Kouzes, M. & Posner, Z. (2008). The Leadership Challenge. San Francisco, CA: Jossey Bass.

Modaff, D., DeWine, S., & Butler, J. (2011). Organizational Communication: Foundations, Challenges and Misunderstandings. Boston, MA: Pearson.

Mintzberg, H. (2008). Mintzberg on Management. New York, NY: Simon and Schuster.

Montana, P., & Chernov, B. (2005). Management. New York, NY: Barrons Educational Series.

Morgan, J. (2012). The Collaborative Organization: A Strategic Guide to Solving Your Internal Business Challenges using Emerging Social and Collaborative tools. New York, NY: McGraw Hill.

Northouse, P. (2009). Leadership: Theory and Practice. London, UK: Sage.

Park, S., & Vanhonacker, V. (2007). . Web.

Parker, M. (2000). Organizational Culture and Identity. London, UK: Sage.

Smith, D. (2012). Strategic planning for Public relations. London, UK: Routledge.

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