Most meetings that Keiko Claassen attends at ITT Motion Technologies are held in English. Even though her company is based in Italy and she’s Dutch and works near Rotterdam, every senior staffer is expected to conduct business in English.

At one meeting a few years ago, Claassen, the company’s executive director of communications, realized that communication involves much more than just speaking the same language. She was the only non-Italian in the room and at one point her colleagues stopped speaking English – the common language between them – because someone had trouble following the conversation.

“It was like watching a movie,” Claassen remembers. “As soon as they switched from English to Italian … you could see their culture come to life.”

English, Spanish, and Social Bias

English is now the global language of business. It’s spoken at a useful level by some 1.75 billion people worldwide, or one in every four of us. Increasingly multinational companies are designating English as the common corporate language – among them Microsoft, Samsung, Honda, and Daimler-Chrysler. 

Yet, new research indicates that although it is important for an expanding global business to establish a lingua franca, or common language, it does not automatically level the playing field for all individuals in the company. And even if English is its common language, a corporation based in a non-English speaking country needs to be careful that leaders do not default to the home country’s language – as in Claassen’s case, Italian.

“New research indicates that although it is important for an expanding global business to establish a lingua franca, or common language, it does not automatically level the playing field for all individuals in the company.”– Click to tweet

The fact that one group’s culture seemed to “come alive” may be advantageous for that group at that moment. But the existence of multiple languages in a multinational corporation (MNC) can create tensions in an organization that lead to problems in communicating and perceived and real imbalance of power between social groups.

The recent research paper by Dr. Robert Grosse, Professor of International Business & Director, Latin America at Thunderbird, and three international colleagues concluded that even with an official language, using the language of the home country can help to create a national bias within the company. 

For “Social identity in MNCs based on language and nationality,” which was published in the Thunderbird International Business Review in 2018, the researchers conducted a study of executives and managers working for an MNC based in Spain. The company, which has subsidiaries in 42 countries and has adopted English as its corporate language, has asked to remain anonymous.

“It turns out that as much as the company tries to be global, there still is a home country bias,” Dr. Grosse said. And much of that bias stems from issues related to languages used and the ability to communicate well within the company. 

Overcoming Bias in Order to Continue to Grow

Dr. Grosse and his fellow researchers found several language-related issues regarding bias toward the home country that they argue will continue to be a challenge to the company as it continues to grow globally. 

Issues that may limit this MNCs ability to embrace and develop managers from around the world include: 

  • The role of language in the formation of social identities has meant that the MNC has two large social groups: those who speak Spanish and those who do not. 
  • Within the Spanish-speaking social group, there exists another group, that of Spanish nationals. 
  • Managers at regional offices and at headquarters said that being a Spanish national was advantageous for getting more attention and resources from the head office.
  • Non-Spanish speakers felt disadvantaged compared to Spanish speakers, while Spanish speakers, even those who are not Spanish nationals, were mostly unaware of these perceived advantages.
  • Social identity includes more than common language – there is an actual cohesiveness within the Spanish-national group. If the social identity were due to the role of language alone, this group would be simpler to access for any manager that had mastered the Spanish language; however, this was not the case. 
  • Ethnic social identities remain and are not easily broken down despite the hope that the official language will replace other languages to overcome potential HQ/subsidiary communication problems.
  • The company’s leaders really do need to help it overcome the nationality bias in order to grow as a global organization. 

Language, Resources & Global Mindset

This does not mean that global business leaders should avoid working for companies based overseas. But it does mean that as business leaders build their Global Mindset, and increase their global perspective, they should also improve their language skills. 

“The idea of having a global perspective is really important,” Dr. Grosse said. “It helps the company expand overseas. But nationality still comes into play.”

“New research by Thunderbird Professor Robert Grosse concludes that even with an official language, defaulting to the language of the home country can help create a national bias within MNCs.” - Click to tweet

Language and nationality definitely were influential in a manager’s ability to access corporate resources, Dr. Grosse said. Spanish speakers were able to secure more resources for themselves and their subsidiaries, relative to non-Spanish speakers.

Dr. Grosse stressed that this Spanish-language bias had a lot to do with trust. “If you know the language you are more easily able to obtain trust from the home office, and this may lead to greater access to resources,” he said. 

There are 3 levels of trust as Dr. Grosse sees it:  

  1. Trust from the home office is lowest – it’s not zero, but certainly is low, if you don’t speak Spanish.  
  2. Trust is much stronger if you speak Spanish, even if you’re not from Spain. At least you can communicate well. 
  3. And top is if you are from Spain. You’re much more comfortable with jokes and references to what’s going on in Spain if you’re Spanish. This level of trust has to do with more than just speaking the language. It’s also about context. 

“In order to get the home office to pay attention to you, to help you with financing or technology or whatever support you’re looking for, you’re going to have a better response if you can communicate comfortably in Spanish,” Dr. Grosse said. 

Dr. Grosse said he didn’t think this bias was strictly one of nationality, but was instead based on the ability to communicate – the trust created by being able to communicate clearly. 

And even though it is exciting at times to speak the language of the corporation’s home base with fellow compatriots and let your “culture come to life” as it did in Claassen’s experience, the subsequent national bias will create challenges to corporate growth. 

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