Social identity in MNCs based on language and nationality

• DOI: http://doi.org/10.1002/tie.21953
• Author: Natasha Brits,Anthony Stacey,Albert Wöcke,Robert Grosse
• Published date: 01 July 2018
• Date: 01 July 2018

DIMENSIONS OF INTERNATIONAL BUSINESS

Social identity in MNCs based on language and nationality

Albert Wöcke

1

| Robert Grosse

2

| Anthony Stacey

3

| Natasha Brits

4

1

Gordon Institute of Business Science,

Johannesburg, South Africa

2

Thunderbird School of Global Management,

Arizona State University, Glendale, Arizona

3

WITS Business School, Johannesburg,

South Africa

4

SSC Group, Highveld, South Africa

Correspondence

Robert Grosse, Thunderbird School of Global

Management, Arizona State University,

1 Global Place, Glendale AZ 85306.

Email: robert.grosse@thunderbird.asu.edu

The existence of multiple languages in a multinational corporation (MNC) causes tensions in

the firm both by causing problems in communicating and by creating social groups. MNCs that

adopt a common corporate language that is not their home language will find a problem of

competing languages. Nationality is another cultural feature that leads to perceived biases that

favor home-country nationals. We explore both of these influences using social identity theory.

Our research was conducted in a Spanish MNC that has subsidiaries in 42 countries and has

adopted English as its corporate language. We used a mixed-method approach with a mailed

survey of 216 managers across 42 subsidiaries in the MNC and personal interviews of head-

quarters executives. We found that Spanish speakers enjoyed advantages in terms of access to

resources for themselves and their subsidiaries, relative to non-Spanish speakers. This access

was greater when the Spanish speakers were Spanish nationals and was moderated by geo-

graphic proximity of the subsidiary to the headquarters and age of the subsidiary.

KEYWORDS

corporate language, headquarters–subsidiary relationship, in-company resource allocation,

language and IB, social identity

1|INTRODUCTION

Recent research into the role of language in the multinational corpo-

ration (MNC) has largely focused on its effectiveness, or alternatively

its impact as a barrier, in the transfer of knowledge between the

headquarters (HQ) and subsidiaries (e.g., Harzing & Pudelko, 2014;

Peltokorpi & Vaara, 2014; Reiche, Harzing, & Pudelko, 2015; Shaw &

Luiz, 2017). International business (IB) studies on language have sug-

gested that language problems in the MNC could be resolved through

ensuring that employees have sufficient proficiency in the corporate

language (Peltokorpi & Vaara, 2014). However, the focus on language

and knowledge transfer has not shown that greater language profi-

ciency leads to a more successful knowledge transfer across the

MNC. IB scholars are concluding that other aspects of language and

culture are not sufficiently understood, and they are expanding their

research to find explanations through perspectives such as social

identity theory (e.g., Peltokorpi & Vaara, 2014; Reiche et al., 2015).

This recent shift reflects the acknowledgment by IB scholars that lan-

guage and culture in the MNC are multifaceted and should be studied

at multiple levels (Brannen, Piekkari, & Tietze, 2014).

Research in sociolinguistics has also led to insights into the role

of language in formation of social identities. Tensions between

cultural groups continue to exist in a multicultural environment even

when grammatical difficulties are overcome and regular and frequent

interaction occurs between groups (Gumperz & Cook-Gumperz,

1982). Language is not the only indicator; values, goals, beliefs, ste-

reotypical traits, knowledge, skills, and abilities also contribute to

social identity (Ashforth, Harrison, & Corley, 2008).

The interaction of people across an MNC is social behavior that

occurs within the context of social groups or structured systems of social

groups (Simon & Klandermans, 2001). Social groups exist because people

tend to classify themselves and others into categories and utilize labels in

organizational settings to structure and simplify their environment for

understanding, consensus, and control (Ashforth & Humphrey, 1997).

This study contributes to research on the role of language in

international business by exploring the role of language as well as

nationality in the formation of social identities. The MNC that is the

subject of this study originated in Spain almost a century ago and has

expanded to more than 40 countries. The MNC adopted English as

its corporate language and requires all formal communication across

the firm to be in English. However, its head office remains in Spain

and most of its executives are Spanish. This context provides the

opportunity to understand how languages influence access to power

and resources among language speakers across an MNC. In addition,

DOI: 10.1002/tie.21953

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