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IHRM implications Rebecca Marschan-Piekkari , Denice Welch & Lawrence Welch Published online: 18 Feb 2011.

To cite this article: Rebecca Marschan-Piekkari , Denice Welch & Lawrence Welch (1999) Adopting a common corporate language: IHRM implications, The International Journal of Human Resource Management, 10:3, 377-390, DOI: 10.1080/095851999340387 To link to this article: http://dx.doi.org/10.1080/095851999340387 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content.

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Terms & Conditions of access and use can be found at http:// www.tandfonline.com/page/terms-and-conditionsDownloaded by [University of Glasgow] at 08:37 12 February 2015 Adopting a common corporate language : IHRM implication s Rebecca Marschan-Piekkari, Denice W elch and Lawrence W elc h Abstract As companies internationalize and expand their operations into mor e countries, language questions inevitably come to the fore. As a response to operating in many languages and co-ordinating a multinational workforce, companies may adopt a common language for internal communication. However, the challenges associated wit h such a `language standardization ' and the broader HR considerations have receive d limited scholarly attention in the extant literature. This article addresses, therefore, th e implications of language issues for a range of international HRM activities, includin g staff selection, training and development, and international assignments. We also explor e language policies in the light of HR considerations and the strategic positioning of language-competent staff. The insights gained from various company examples demon - strate that multinationals rely on short-term and long-term HR responses to deal with th e language issue. The analysis also reveals the critical role played by expatriates as language nodes, suggesting the need for a more long-term approach to the developmen t of language competencies in multinationals . Keywords Human resource management; language standardization; language nodes ; multinational management; expatriates; international staff transfers . As a company builds operations in multiple foreign locations, it inevitably takes on a more and more diverse multinational workforce. While local employees enabl e important local market responses to be made, they also increase the demands on effective inter-unit co-ordination. From this perspective, handling a global workforc e becomes an important issue for the modern multinational (MNC). As a senior executiv e of the Swedish multinational, Electrolux, is quoted as saying, `Everything that has to do with employing people is becoming more and more strategic ' (Lester, 1994a). A ke y aspect of the role of people in achieving local responsiveness yet effective co-ordinatio n in a multinational environment is the language / s in which they operate and which the y use to communicate internally in the internationalizing company . In response to the demands of operating in multiple foreign-language environments , several MNCs, such as Siemens, Electrolux and Olivetti, have nominated one of ® cia l language as the basis of communication within the company (Lester, 1994b), be it th e parent-country language or another language. Somewhat curiously though, the broade r HR implications of language issues within the MNC, including `language standardiza - tion ' through the imposition of a common language, remain relatively unexplore d (Marschan et al ., 1997). The challenges posed by cross-language interaction are deal t with only at a general level in the area of cross-cultural communication literature ± fo r Rebecca Marschan-Piekkari, Research Associate, Shef ® eld University, Management Schoo l (e-mail r.piekkari@shef ® eld.ac.uk). Denice Welch, Associate Professor of Internationa l Management. Lawrence Welch, Professor of International Marketing, Norwegian School of Management.

The International Journal of Human Resource Management 10:3 June 1999 377 ± 39 0 Copyright € Routledge 1999 0958 ± 519 2Downloaded by [University of Glasgow] at 08:37 12 February 2015 example, negotiating and selling in foreign markets. There are not only the obviou s marketing issues connected with cross-language foreign operations, but also the interna l communication and reporting requirements of a company that includes a languag e diverse workforce. Despite the relatively large body of literature on the ® rm ' s international growth, and on the process of internationalization (see, for example , Buckley and Ghauri, 1993; Bj Èorkman and Forsgren, 1997), little is known about ho w ® rms confront the language issues and, in some cases, decide to introduce a compan y language. For companies emerging from countries with a language well used internationally ± for example, English-speaking countries such as the United States and the Unite d Kingdom ± it is clearly possible to internationalize and not confront the language issu e simply by entering other English-speaking markets. For instance, a Canadian ® rm moving into the United States, then Australia, New Zealand and the United Kingdom , can postpone language complications of international growth for some time. In fact , research on the patterns of companies ' internationalization has revealed the importanc e of so-called psychic (or cultural) distance, which includes language as one importan t component (Johanson and Vahlne, 1977; Petersen and Pedersen, 1997). There is clearl y a tendency to favour operations in countries using the same language as one ' s own . Even with a later spread into countries using a variety of languages, though, languag e may still not be regarded as an important internal communication issue at an English - speaking multinational ' s headquarters. As Fixman found in a study of the languag e needs of US-based multinationals : the less foreign language knowledge my interview partners had, the more they tended to view foreign language use as a mechanical skill . . . . Most individuals whom I inter - viewed perceived foreign languages to be of only secondary value for executives . (Fixman, 1990: 27, 33 ) It is dif ® cult, however, even impossible, for companies internationalizing from non - English speaking countries, especially those with a language little used in th e international arena, to adopt such an approach. Cross-language demands tend to be more obvious and pressing. Companies internationalizing from Finland know that ther e is virtually no scope for utilizing Finnish in their international operations. While ther e is a paucity of empirical studies on this issue, it could be expected that, for multi - nationals based in non-English-speaking countries, cross-language adaptations and th e selection of a common company language will occur at an earlier stage of international - ization compared to their counterparts from the English-speaking world (Luostarinen , 1979). Given the above, this article aims at augmenting our understanding of the HR challenges associated with the use of multiple languages by a dispersed internationa l workforce as international activities expand. We begin by examining how an inter - nationalizing company copes with the language issue through the adoption of a standardized, company-wide language. The implications for a range of internationa l HRM activities are then explored, including staff selection, training and development , and international assignments. We also consider the strategic positioning of language - competent staff, given the critical role that expatriates often play as `languag e nodes' . Methodology This article draws primarily on data from an exploratory qualitative study of a Finnis h multinational ± Kone Elevators (Marschan, 1996). Kone may be viewed as a critica l 378 The International Journal of Human Resource Managemen tDownloaded by [University of Glasgow] at 08:37 12 February 2015 case (Patton, 1990) because of its non-English-speaking base, and the maturity an d extent of its global operations. In 1997, Kone had 150 foreign subsidiaries in fort y countries, with about 22,500 employees worldwide, of whom 92 per cent worke d outside Finland, and 65 per cent were non-native speakers of English (Kone Annua l Report, 1997) . Language issues within Kone emerged from an in-depth case study involving an investigation of inter-unit communication processes consequent upon the move toward s a less hierarchical organizational form. Communication issues were examined in Kone ' s twenty- ® ve foreign units operating in Northern, Central and Southern Europe , Mexico and the Far East. One hundred and ten persons were interviewed from to p management (22 per cent), middle management (52 per cent) and operating leve l (26 per cent). The interviews, conducted during 1994 ± 5, were held in the premises of the units investigated. In line with established qualitative research protocol, th e interviews were complemented with observation and documentation to enhance dat a triangulation (Yin, 1994) . During ® eldwork, the importance of company language skills (that is, English ) emerged as an in ¯ uential theme, initially as a barrier to inter-unit communication ¯ ows . It became clear that language skills also functioned as a facilitator and a source of power in information exchanges within the case company. In order to develop th e language theme, three steps were taken following the original case study (Eisenhardt , 1989; Patton, 1990). First, the emergent theme of language was iterated with Kone dat a and extant literature. Second, in September and October 1997, six Kone key informant s were interviewed through telephone and e-mail, representing human resources , language training, management development, technical training and customer service . These interviews yielded data that enabled the language theme to be extended. In addition, this article utilizes data from an investigation of language issues and thei r effect on international operations in the Finnish industrial and mining compan y Outokumpu (Palo, 1997) . Language standardizatio n The adoption of a common company language, or so-called `langauge standardization ' , has many advantages from a management perspective : 1 It facilitates formal reporting between units in the various foreign locations, thu s minimizing the potential for miscommunication and allowing for ease of access to company documents such as technical and product manuals; operating procedures ; and record-keeping . 2 It enhances informal communication and information ¯ ow between subsidiaries . 3 It assists in fostering a sense of belonging to a global `family ' , which has bee n suggested as an important element in the multinational ' s use of soft contro l mechanisms such as corporate culture (Ferner et al ., 1995). While these advantages are somewhat obvious, as mentioned earlier little is know n about when the decision to introduce a company language is taken, or if it occur s formally at all. Because of the dominance of English as an international busines s language, it may be that English becomes the common language by default. Th e experiences of two Finnish companies, Kone and Outokumpu, provide an indication of possible processes at work within multinationals that lead to the adoption of a commo n company-wide language . Kone, the third largest elevator company in the world, started to grow internationall y through foreign acquisitions in the late 1960s and early 1970s. In 1968 Kone acquire d Marschan-Piekkari et al. : Adopting a common corporate languag e 379Downloaded by [University of Glasgow] at 08:37 12 February 2015 a large elevator company in Sweden, and in 1970 and 1973 it expanded to Austria an d Germany. Consequently, it became necessary in Kone to use a common language in internal communication with foreign subsidiaries. In fact, already by the end of th e 1960s, English was used in ® nancial reporting which represented an important means to integrate acquired units with the rest of Kone. In Kone, the introduction of the of ® cia l company language followed a rather emergent strategy. As a Finnish manager with a tenure of more than thirty years recalled : As far as I know, in Kone no language has ever been declared the of ® cial compan y language. English has simply evolved by itself and it has become the natural language fo r internal communications: a practical solution with the increasing internationalization of the company . The Finnish metals group, Outokumpu, while having a long history of internationa l operations, rapidly increased its activities in the late 1980s through the establishment of foreign sales and production subsidiaries (Palo, 1997). As a result, an increasing amoun t of communication was conducted in English, which became the semi-of ® cial languag e within the company. Outokumpu adopted English as its of ® cial language for interna l communication in the early 1990s. As with Kone, the formal recognition of th e language issue did not occur overnight, but appears to have been triggered by th e increased number of foreign customers and non-Finnish employees, as two interviewee s in Finland explained : Our customers were in English, German and Swedish speaking areas. [Therefore], som e reports were circulated in English which were previously done in Finnish . (Palo, 1997: 76 ) We had realized [the importance of English] earlier because we had operations in th e USA. Everything was done automatically in English . (Palo, 1997: 76 ) Although Outokumpu had been involved in exporting activities since 1915 an d licensing agreements since the 1950s, it would appear that the establishment of foreig n subsidiaries, via acquisition, forced the need for a common language, due to the growt h of the non-Finnish workforce . For some multinationals, rather than strict emphasis on language standardization, th e way to cope with their multiple language environment has been to accommodate a degree of ¯ exibility in language use: using more than one of ® cial language and / or permitting exceptions in certain circumstances in some subsidiaries. For example , Lester (1994b) reports that, while Nestle has designated both French and English as th e of ® cial languages, it allows some inter-subsidiary communication in a wider range of languages. Kone ' s Northern European units (Nordic countries) often use `skandina - viska ' in inter-subsidiary communication. Despite the willingness to accommodat e multiple languages, especially at the informal, interpersonal level (Steyaert an d Janssens, 1997), the danger from the headquarters ' perspective is that this will creat e confusion. In a Swedish-Swiss multinational, where English is the common language , the former Chief Executive Of ® cer Percy Barnevik explained : Every manager with a global role must be ¯ uent in English, and anyone with regiona l general management responsibilities must be competent in English . . . . We are adaman t about the language requirement ± and it creates problems. Only 30% of our manager s speak English as their ® rst language . (Taylor, 1991: 94 ± 5) 380 The International Journal of Human Resource Managemen tDownloaded by [University of Glasgow] at 08:37 12 February 2015 Thus, co-ordination and control imperatives tend to push multinationals toward s language standardization, even if this is not fully accomplished. As a Kone top manage r commented, `In the late 1960s [the] ambitious goal was set that personnel should be able to communicate internally in English. Still today it has not been achieved even though we have a good common language. ' In Outokumpu, despite its designation of English as th e of ® cial language, board minutes were still written in Finnish in 1997 . (Palo, 1997 ) As the above company examples indicate, adoption of a common, company-wid e language may alleviate some of the internal communication and co-ordination problem s caused by multiple languages within the multinational, but it can also create a range of different challenges that may emerge as critical HR issues . Language issues and human resource managemen t Whether of ® cial or not, once the company utilizes a common language, certain force s will be set in train which affect the behaviour of individuals. Language standardizatio n sends a de ® nite message to employees at various levels. In the case of Kone, in 1972 , the company decided that all top management meetings would be held in English . Simultaneous translation facilities were provided initially, but thereafter it was mad e clear to top managers throughout Kone that internal company matters would be handle d in English. The onus was clearly placed upon managers to become competent in th e selected common language. One could argue that there was also an implicit message: `i f you are interested in career progression in this company, it is essential that you lear n the common language ' . By publishing company documents such as appointments , promotions and organizational charts in English, Kone placed additional pressure on staff in top positions to learn the company language . In Outokumpu, there was a degree of resistance to learning the company languag e among staff in acquired units who had worked for the local company before th e acquisition (Palo, 1997: 76); and some confusion about how far the of ® cial languag e actually extended in the acquisition. For example, a Spanish manager related : I do not know if it [English] is supposed to be the of ® cial language for everyone of us . I mean there are people that started working before . . . . Outokumpu started owning thi s company. So, I do not know if it is an obligation for everyone of us to speak English an d to communicate in English, maybe just for a certain type of people . While the post-acquisition literature recognizes that human resource managemen t processes are a critical part of successful integration, the implications of languag e standardization are seldom discussed (see, for example, Buono and Bowditch, 1989 ; Lohrum, 1996; Nahavandi and Malekzadeh, 1988; Shrivastava, 1986) . Over time, in the more mature sections of the multinational, the use of the commo n language within the company tends to become more established and accepted as part of the basic routines and behaviour, particularly at subsidiary top level and at head - quarters. In Kone, at the top management level, operating in English has become suc h an accepted part of normal operations, even its administrative heritage, that it seems th e issue of language is no longer a key management concern. It would appear that th e company top executive team at headquarters, key expatriates and longer-servin g employees have become comfortable with the requirement to operate in the workplac e predominantly in English. This very comfort, though, may mask the continuin g importance of language as a factor in international operations, in a way not dissimila r Marschan-Piekkari et al. : Adopting a common corporate languag e 381Downloaded by [University of Glasgow] at 08:37 12 February 2015 to the attitude of some multinationals from English-speaking countries who ar e dismissive of the signi ® cance of language (Fixman, 1990) . At a base level, language is an issue concerning individuals and their competence ; companies do not have languages, people do. Thus, IHRM activities related to staf f selection, performance appraisal, training and development and international assign - ments are critically important in the ability of the multinational to function effectivel y in a multiple-language environment. The remainder of this paper identi ® es some of th e HR challenges posed by the language issue and suggests policy responses to deal wit h these.

Staff selectio n In some respects the language issue would seem to be a simple one for multinationa l companies: to adjust staff selection policies to take account of language competence in the hiring (and ® ring) of staff so that the required mix of languages at the variou s subsidiaries is obtained. As Lester notes on the basis of Nestle ' s experience, `the easies t and cheapest way to approach the language problem is to hire people already possessin g the required skills ' (1994b: 43). Clearly, though, the balance of language and othe r skills (e.g. technical) does not always come as neatly packaged as required. In addition , many companies exhibit a strong bias towards technical expertise in the selectio n process. In her study of US-based companies, Fixman (1990) found that foreign - language skills played only a secondary role in both hiring and career advancement ± technical skills were the critical factor. Her interviewees expressed con ® dence `tha t when foreign language skills were needed, they could be found in their company ' (Fixman, 1990: 42) . At the subsidiary level, as mentioned previously, the adoption of a common compan y language, or the insertion of a newly acquired foreign operation into such a regime , inevitably creates pressure for some of the staff to have the relevant languag e competence. In the short term, this may be handled by transferring expatriates to th e subsidiary to facilitate co-ordination and control; but over time there is an inevitabl e drift towards hiring staff with the required language skills. In Kone ' s case, this wa s evident in their Spanish subsidiary where English-language skills were lacking amon g staff who needed to communicate with other parts of the Kone network. The obviou s response was deliberately to include English competence as a required component in the selection process (Marschan et al ., 1997). P erformance appraisa l Pressure may be applied regarding the need for common company-wide languag e competence during performance appraisal interviews. However, this may depend on th e attitude held regarding language skills within the company. For example, Fixma n reports that none of the US companies she interviewed `directly included informatio n on foreign language skills in performance reviews of their employees ' (1990: 43). Sh e adds: `foreign language is not assessed as a separate skill, but if it is necessary for th e job, it will make a difference in a performance review ' . This could equally apply to competence in the common company-wide language. In fact, the impact may be particularly felt at the subsidiary level where the language interface may be mor e dramatic. An individual ' s ability to perform to required standards may be restricted by limited company language competence, which might constrain access to important job - related information from headquarters. It would also emerge in cases where th e individual ' s appraisal interview is conducted in the company language by an expatriat e 382 The International Journal of Human Resource Managemen tDownloaded by [University of Glasgow] at 08:37 12 February 2015 manager. Of course, there are individuals who, despite being motivated to acquire th e desired language, are unable to achieve an adequate level of pro ® ciency, and this barrie r may affect the career progressions of otherwise highly capable and useful employees . Even for those who have the ability to acquire languages, the imposition of a compan y language may create tension between the technical and language demands of jo b performance. Acquiring language pro ® ciency is a demanding exercise in terms of tim e and effort and has to be set against all the other demands on employees ' time . Training and developmen t Rather than solely `buying in ' language skills through hiring people with the require d competence in the common company language, the provision of language training can , and does, play an important role in ensuring that the multinational has access to neede d language skills. The German company, Siemens, for example, undertakes a heav y investment in company-sponsored language training, providing opportunities for staf f globally to acquire or improve skills in German (parent-company language), Englis h (common language), French and Spanish (Lester, 1994b). Kone likewise offers trainin g courses in various languages both at the corporate level and in individual subsidiaries . For example, a Kone language training of ® cer stressed the importance of interna l information exchanges : Unlike many of our Finnish competitors who train their staff to communicate with th e ® nal customer, our objective is to improve staff ' s ability to communicate in Englis h internally with other subsidiaries. Local subsidiary personnel in turn communicate wit h the ® nal customer in the local language . Already, in the early 1970s, corporate language courses in English were provided, as the company expanded internationally through acquisitions, and the increased need fo r using English in communication between headquarters and the acquired units becam e evident. During the last few years, the demands on personnel to become pro ® cient in the company language have been pushed further down the hierarchy to lower level s within Kone as internal customer ± supplier relationships have been formed acros s subsidiaries ± for instance, sales staff in Hong Kong may need to communicate directl y with technical engineers in Austrian factories . However, in Kone, language training at the subsidiary level varied considerably , from no course offerings to comprehensive programmes. From a subsidiary perspective , participation in company-sponsored language courses was even seen as a reward, as a top manager involved in management training mentioned : These corporate language courses can be seen as a reward to participants an d subsidiaries. As participants need to have a certain level of English before they ca n attend, this is a way of rewarding personnel for their language studies and encouragin g subsidiaries to continue investing locally in language training . Once a common company language has been established, it becomes an importan t entry path to corporate training and management development programmes, potentia l international assignments and promotion ± as illustrated in Figure 1. An importan t incentive to learn the company language is thereby created. As Pearson points out, `i n the absence of compulsion, there will still be a drift to the use of [the commo n company-wide language] . . . people know which side their bread is buttered ' (1989 : 147). For those who do not acquire competence in the common language, the reality is that there will be virtually no opportunities to participate in company-wide activitie s and they will remain con ® ned to their local operation . Marschan-Piekkari et al. : Adopting a common corporate languag e 383Downloaded by [University of Glasgow] at 08:37 12 February 2015 Training programmes are not only avenues for career advancement, but also forum s for making broader company contacts. Participation in corporate training courses offer s an opportunity to gain `know who ' information, including knowledge about people in other parts of the company with matching language skills. It was evident in Kone tha t some subsidiary managers deliberately sent staff to training courses in order to expan d non-common language-based networks. For example, a Spanish manager took part in a corporate training course in Finland with the secondary purpose of identifying Spanish - speaking staff in other subsidiaries. Paradoxically, this was particularly important fo r those coming from subsidiaries that lacked depth in English-language skills, and was a strategy to ensure informal communication lines beyond those available through thei r limited English skills . At the same time, language competence can be a major inhibitor on the developmen t of staff. For example, managers in the Spanish and Mexican Kone subsidiarie s commented that they did not have staff with suf ® cient skills in English to send to corporate technical training and management courses. Such a barrier not only has caree r advancement consequences for the individuals concerned, but obviously affects th e overall skills level of the various subsidiaries. As the Finnish manager responsible fo r Kone ' s global training and management development programmes admitted, `It is an unknown area for us [Kone management] how much of the need for technical trainin g is in fact hidden behind the language problems ' . For a company of Kone ' s maturity in international operations, this is perhaps an indication of the fact that, even with its lon g experience in coping with language-related issues, language standardization is no simple panacea for dealing with the problems created by a multinational ' s multiple - language environment . Figure 1 HR implications of language standardizatio n 384 The International Journal of Human Resource Managemen tDownloaded by [University of Glasgow] at 08:37 12 February 2015 Knowledge transfe r Competence in the common company language is clearly critical for effectiv e knowledge transfer and sharing within a multinational. Kone makes use of internationa l projects to transfer knowledge residing in various parts of its large and geographicall y dispersed organization. In this context, the use of teams with members from variou s functional areas has accentuated the need for increased horizontal communication an d associated language skills. The technical personnel and troubleshooters on such short - term, speci ® c foreign assignments also need to have appropriate language skills. As a training of ® cer at Kone ' s corporate headquarters explained : These persons [technical personnel and troubleshooters] are technically very competent , but their language skills have been poor. . . . The dif ® culty in sending such person s abroad is that technical knowledge is not necessarily transferred in an ef ® cient way. If th e technical person concentrates too much on the project itself, stays for a fairly short tim e and does not interact enough with local staff, the competence level of local personne l does not increase. We have not been very satis ® ed with the present arrangement. We have to require suf ® cient language skills . Indeed, one could argue that the transfer of language skills should be a prelude to th e movement of knowledge and information. While it is possible for the process to be facilitated through the outsourcing of some document translation, it can be time - consuming, and may compromise sensitive technical and commercial informatio n (Fixman, 1990). Similarly, there are constraints on the use of translators / interpreters in meetings and training sessions, and computer-aided instruction. Of course, wit h improvements in information technology, it is likely that more effective electroni c translation facilities will be developed. However, these are still unlikely to remov e the barriers created by language difference ± particularly with regard to informal , person-to-person communication and tacit knowledge transfer (Nonaka and Takeuchi , 1995).

Expatriates and international assignment s The contribution of expatriates to internal information exchanges as they move betwee n headquarters and subsidiaries, or from subsidiary to subsidiary, has long bee n acknowledged in the international management and IHRM literature (Edst r Èom and Galbraith, 1977; Ondrack, 1985). The place of language in this process, however, ha s received little attention. Where language skills have been recognized, they are regarde d in the expatriate management literature as a selection criterion in terms of the languag e requirement of the receiving subsidiary (see, for example, Dowling et al ., 1998). In much of this literature, it tends to be assumed that expatriates automatically have th e required ¯ uency in the common company language, which is not surprising given th e predominance of American research in the ® eld. Expatriates in companies such as AB B and Kone are required to be ¯ uent in English (the common company language) as a prerequisite for foreign assignments, even though, for most expatriates in such multi - nationals, this is not their mother tongue. Table 1 shows that, in Kone in 1997, 74 pe r cent of expatriates were non-native speakers of English (i.e. 104 out of 140). Further , host-country language pro ® ciency, if required, is normally developed during pre - departure training. Little is known, though, about the extent to which the languag e requirement constrains the recruitment and selection of potential high-calibr e expatriates. The examination of Kone Elevators suggests that, where expatriates possess critica l language skills from a headquarters and a subsidiary perspective, they may play an Marschan-Piekkari et al. : Adopting a common corporate languag e 385Downloaded by [University of Glasgow] at 08:37 12 February 2015 enhanced, even pivotal role, in internal communication exchanges. As the number of expatriates increases, such a role may be considerable. In Kone, the number of expatriate s has almost doubled from the early 1980s to 140 persons in 1997. Simultaneously, th e spread of nationalities among the expatriate group has increased: in 1997, the pro - portion of Finns had reduced from 63 per cent in 1995 to 50 per cent; and the majorit y of the other half were native speakers of English, namely Australians, British , Americans and Canadians (TCNs) . The expatriates ' language skills may sometimes become so important that the y develop into language node s , though this is often an unseen side of the expatriate ' s role . In the host country, the expatriate becomes the interface, through language, betwee n headquarters and the local subsidiary, and also between subsidiaries (see Figure 2) . The language node role might be far broader than that which ¯ ows from th e expatriate ' s competence in the common company-wide language. In Kone, not only wa s this role found to cross subsidiary and functional boundaries, but the content of th e exchanges covered a wide range, going beyond the expatriate ' s normal job descriptio n and responsibility, including in some cases negative performance feedback (Marscha n et al ., 1997). As Figure 2 demonstrates, an expatriate (Mr X) who becomes competen t in the host-country language may develop into an important language node after th e completion of the foreign assignment, based on this acquired language skill. That is, th e nodal role may continue and even extend after repatriation. For example, current staf f in Kone ' s Spanish and Mexican subsidiaries rely on a Spanish-speaking Finn wh o learnt Spanish while on a foreign assignment in Venezuela in 1978 ± 80. During inter - views conducted in these locations in 1995, reference was made to the Finnis h expatriate ' s nodal role, as the following comments reveal : We enter [the unit in Finland] through a person . . . who speaks Spanish. Since thi s person speaks Spanish the communication is very direct with him. He is the start of T able 1 Expatriates by nationality in Kone, 199 7 Native speaker s of English No. of expatriate s Non-native speaker s of English No. of expatriate s Australia Canada UK USA 11 3 18 4 Austria Belgium China Chile Czech Republi c Germany Egypt Finland France Hong Kong Italy Malaysia Netherlands New Zealan d Singapore Sweden Taiwan 2 2 1 1 1 5 1 70 6 1 1 1 3 1 1 3 4 Total 140 36 (26%) 104 (74%) Source : Kone company documents . 386 The International Journal of Human Resource Managemen tDownloaded by [University of Glasgow] at 08:37 12 February 2015 everything and we are able to communicate well with him, he passes us on to othe r persons. (Spanish manager ) Basically, I communicate with Finland directly with Mr X. He is a person who speak s perfect Spanish, which has facilitated enormously the communication. . . . The perso n before him . . . was excellent but he did not speak Spanish. . . . Being able to spea k Spanish has helped tremendously. I think it is an advantage for Kone to have people lik e him. (Mexican manager ) The Finn was subsequently interviewed about this role. He explained that his curren t position in Finland is as a member of a team responsible for marketing activities in Latin America. During almost twenty years since his repatriation, word-of-mouth abou t this Finnish person ' s language capabilities and lift competence had spread from th e subsidiary in Venezuela to Mexico and other subsidiaries, and `new colleagues hav e been informed about [his] Spanish skills ' . His `fame ' spread to the Spanish subsidiar y after he acted as an interpreter when a delegation from that subsidiary visited Finland . Figure 2 shows the potential long-term effects of the expatriate acting as a languag e node, outside the common company language. It also demonstrates how vulnerable suc h language-based communication ¯ ows are because they are so person-bound, and ye t their power and positive in ¯ uence may be considerable . C onclusion and implication s The above discussion highlights the important role played by language within the globa l networks of multinational companies ± an aspect of international business operations , Figure 2 Expatriates as language node s Marschan-Piekkari et al. : Adopting a common corporate languag e 387Downloaded by [University of Glasgow] at 08:37 12 February 2015 and IHRM, that has tended to be somewhat overlooked both in the academic literatur e and at the company level. Our examination of two Finnish multinationals suggests that , even though many multinational companies have adopted a common corporat e language as a way of dealing with the challenges of co-ordination and control in thei r multiple-language environment, this may mask a wide range of continuing languag e problems, some a consequence of the common language itself . The experience of Kone also demonstrates that, despite all its experience in international business operations, language continues to pose a signi ® cant managemen t challenge. Kone ' s recent expansion into China, for example, has raised a whole raft of new demands regarding Chinese-language competence for the large number of expatriates (PCNs and TCNs) required in China, accompanied by a need for resource s to allow Chinese subsidiary staff to acquire the necessary competence in the commo n company language. In total, Kone has expatriates in twenty- ® ve different countries. In terms of location, China is the fourth largest recipient of Kone expatriates (see Table 2) . One could argue that anticipating language demands should have preceded marke t entry, given the length of time it takes to reach the required level of languag e competence. It may even prove dif ® cult to maintain in the Chinese operations th e common company language approach used elsewhere, at least in the short term . As internationalization takes companies, like Kone, into more diverse markets, th e language issue is likely to become even more demanding. In response, it could be T able 2 Expatriates by host country in Kone, 199 7 English-speaking countries No. of expatriate s Non-English speakin g countries No. of expatriate s UK USA 1 5 Belgium China Czech Republi c Finland Germany Hong Kong Indonesia Italy Japan Malaysia Mexico Netherlands Philippines Poland Russia Saudi Arabi a Singapore Sweden Thailand Turkey Ukraine United Arab Emirate s Venezuela 33 12 3 9 4 20 2 17 2 1 1 2 4 1 4 1 3 2 2 1 1 8 1 Total 140 6 (4%) 134 (96%) Source : Kone company documents . 388 The International Journal of Human Resource Managemen tDownloaded by [University of Glasgow] at 08:37 12 February 2015 argued that an important ® rst step is recognition at the highest levels of th e multinational that the language challenge goes beyond the decision to accept a commo n company language, requiring a more strategic approach to language management. Th e limited research in this area indicates that language issues are too important to be delegated to language training centres, particularly given the current tendency to outsource language programmes. They are also too important to be decentralized at th e subsidiary level, without adequate monitoring and control. To illustrate: the manager of training and management development at Kone ' s headquarters commented : There are subsidiaries, particularly in southern Europe, where local management tries to restrict international communication at organizational levels below them and in a wa y monopolize the contacts with the rest of Kone. In such units little is invested in loca l [common company] language training . Kone subsidiaries ' HR budgets include an allocation for language training, but th e controls have been rather `soft ' ; that is, there were no sanctions if targets were no t met. It has been suggested that one way to ensure language is given a more strategi c position, at all levels within the global organization, is to appoint a language of ® cer: to co-ordinate and develop language policies; oversee their implementation; and assist in the auditing of current and future language needs (Marschan et al ., 1997). The languag e of ® cer could report to the corporate HR manager. This would have the added advantag e of allowing HR policies to be developed that incorporate language abilities into aspect s such as recruitment, selection, training, management development, performance manage - ment and staff transfers. For instance, a specially designated language of ® cer ma y encourage investigation of related issues, such as: should the expatriate ' s ability to function as a language node be formalized, and made part of expatriate selection an d their role? And, should performance appraisal and promotion decisions take close r account of language pro ® ciency (for example, recognition of acquisition of languag e skills)? The appointment of a Language Of ® cer may also help to overcome a prevailin g attitude among many corporate representatives that foreign-language skills can be buil t easily, whereas international experience and professional competence are seen to involve far more time and effort (Fixman, 1990). As a Kone manager said, `I think that , with rather small investments, language skills can be acquired and improved, but tha t does not apply for professional competence ' . The language of ® cer could also assist in the development of language-base d communication channels within the global network, through the building of a languag e pro ® le of staff that could then be distributed, thus enhancing the ability of staff to contact those with the relevant language competence. 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