9 Language and careers in multinational

corporations
Rebecca Piekkari

Introduction
The requirements for foreign-language skills are on the rise in the corporate
world. For example, a recent report commissioned by the City of London sug-
gests that investments banks are looking further a field for staff, particularly for
graduates from abroad. According to the report ‘these foreign graduates are
more suited to a career in the city as they have superior language skills and tend
to be more mature’ (International Financial Review 2006: 6). Competitive
pressures force investment banks and companies alike to improve their services
by attending customers in their native tongue. International mergers and
acquisitions constantly restructure businesses and increase the demand for
high-level personnel equipped with the requisite language skills as well as a
university degree in business or engineering. Multinational corporations
also continue to send expatriates to foreign offices in order to ensure con-
tinued business succeed in the global environment. Thus, despite the rise of
English as the lingua franca for international business, the demands for mul-
tilingual employees has not declined. Therefore, both in terms of external
and internal organizational communication, knowing a foreign language is
an individual asset and part of a person’s career capital (Terjesen 2005).
Research on careers in general and global careers in particular shows that
foreign-language competence is one of the key capabilities individuals
should possess when striving for an international career (e.g. Suutari and
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Brewster 2000). Language skills of expatriates are often assessed and eval-
uated prior to sending them on foreign assignments (Dowling and Welch
2004). However, the requirement to effectively operate in a multilingual
workplace is not only limited to a small group of employees who physically
relocate from one country to another. On the contrary, an increasing
number of personnel who work on teams spanning many different countries
and cultures use foreign languages in the daily work. This applies not only
to the top echelons of the organization but also further down the hierarchy
(Charles and Marschan-Piekkari 2002). Therefore, many managers and
employees, who are based nationally, experience the psychological aspects of
working and adjusting to foreign colleagues, customers and partners

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 Language and careers in multinational corporations 129
(Baruch 2006). The requirements for being able and willing to operate in
foreign languages have thus deeply penetrated the multinational corporation.
It takes substantial time for a person to reach operational fluency in
another language. For some individuals, learning a foreign language may be
instrumental in becoming employable and pursuing an international career
(Bloch 1995; Kordsmeier et al. 2000). For others, it may be a vehicle of self-
development and studying a related culture. Companies face the question of
whether to invest in language training of existing staff or whether to hire
new staff with the appropriate language skills, assuming that such employ-
ees are readily available. Either way, the company faces additional costs as
well as the time constraint in achieving the necessary skills base (Marschan-
Piekkari et al. 1999a).
Until recently, the effect of foreign-language competence on careers in
multinational corporations has received limited scholarly attention; in part
this may be due to the relative lack of rigorous research into career paths
per se within multinationals as well as the effect of global assignments on
individual careers. In addition, the issue of language competence within the
multinational has only recently come to the fore of international business
research. In their suggestions for future research, Luo and Shenkar (2006:
336) propose that ‘language proficiency is not only a key organizational
capability but also a strategic career asset’. While it is sometimes acknowl-
edged in previous research that foreign-language competence may open up
career opportunities that would not otherwise exist (e.g. Bloch 1995), the
view of language tends to be rather narrow in that it is seen as instrumental
in the initial securing of a job. From this perspective, language is regarded
as a technical skill which can easily be learned through appropriate training
or acquired when needed. However, the present chapter explores the effect
of foreign-language skills on careers that are pursued in multinational cor-
porations. Particularly, attention is paid to changes in the corporate lan-
guage environment due to an international merger or acquisition, for
example when a new common corporate language is imposed on staff.
Based on a review of the literature and insights from empirical research I
argue that foreign-language competence may have broader career implica-
tions by shaping, steering or even diverting individual career paths. Many of
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these effects tend to remain invisible to top management who is likely to be

competent in the key foreign languages commonly used within the firm.
The remainder of this chapter is organized as follows. First, language
competence in the context of the multinational corporation is pro-
blematized. The multinational corporation is defined as a multilingual
organization in which the necessary language competence needs to be
broadly assessed. The discussion aims to show that competence in Eng-
lish only is not likely to be sufficient for making an international career.
Second, the potential language effects on careers, both positive and negative,
are discussed by referring to empirical evidence from my own and others’
research. The concluding section draws the discussion together. It should be

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 130 Language and careers in multinational corporations
noted that isolating the language effect on careers is very difficult as final career
outcomes are intertwined with a number of other personal and contextual
issues. Yet, for analytical purposes this chapter discusses separately the poten-
tial effects of language on careers.

Language competence in the corporate-language environment

Recently, the multinational corporation has been conceptualized as a mul-
tilingual organization (Barner-Rasmussen and Björkman 2007) or a multi-
lingual community (Luo and Shenkar 2006). Staff in these firms often
operate at the interface between several languages including those of the
parent country, the common corporate language and the various subsidiary
languages (Marschan-Piekkari et al. 1999a). Therefore, the answer to the
question which language matters is not straightforward.
Several multinational corporations such as ABB, Electrolux, General Electric,
Nokia and Phillips have adopted a common corporate language to facilitate
in-house communication. While this decision often falls on English, it does
not necessarily become an overruling language within the firm. First, the
level of proficiency in the common corporate language is likely to vary
resulting in different kinds of ‘Englishes’ and causing comprehension pro-
blems (Charles and Marschan-Piekkari 2002). Second, lower-level employ-
ees in foreign subsidiaries are inclined to speak only their local language.
Consequently, English is used more generally as an intermediary language
between various parallel subsidiary or parent-country languages (Sørensen
2005). For example, once documents in English arrive at subsidiaries, they
are likely to be translated into the respective local languages. In particular,
much of the informal communication often occurs in native languages, as
will be discussed later in the chapter.
Multinational corporations are likely to follow different language strate-
gies. While some multinational corporations may choose one common cor-
porate language and prioritize it in their internal communication, other
companies may consciously or unconsciously avoid making this decision.
Consider the following two examples. Scandinavian Airlines (SAS), which is
a pan-Scandinavian organization originating from Sweden, Denmark and
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Norway, did not formally select a common corporate language partly due to
an attempt to maintain the power balance between the three nations
(Bruntse 2003). Therefore English as well as Scandinavian languages were
extensively used within SAS for purposes of its internal communication.
The German-based Siemens Corporation is another example of a company
which does not follow an English-only approach. Siemens is a globally
operating electronics and electrical-engineering company with some 434,000
employees and a presence in over 190 countries. Most of the employees are
located in Germany (almost 40 per cent) with 26 per cent in the rest of
Europe. Siemens uses predominantly English and German – the parent-
country language – in its internal communication. However, the case

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 Language and careers in multinational corporations 131
study of Siemens shows that neither English nor German held unambiguously
the position of a common corporate language although there was a strong
trend of convergence toward English in many parts of the organization. One
may speculate that, in order to avoid provoking emotional reactions from
either the ‘German’ or the ‘non-German’ parts of Siemens, the issue of a
common corporate language was intentionally left ambiguous and allowed to
solve itself in an emergent manner, inviting different parties to make their own
interpretations (Fredriksson et al. 2006).
Furthermore, language competence in the organizational context needs to
be defined broadly to include also ‘company speak’ and professional jargon
(Welch et al. 2005). ‘Company speak’ refers to acronyms, special terms and
abbreviations that are specific to the company. For example, General Elec-
tric uses abbreviations such as N-1 and N-2 to indicate the person’s status in
the organizational hierarchy. Newly recruited staff may easily find themselves
excluded from communication exchanges and social interaction because they
do not master this form of language. On the other hand, once a person becomes
competent in the professional jargon associated with the job communication
is facilitated. For example, engineers, who have a fairly similar professional
training worldwide and who therefore share a common terminology, belong
to the same professional community. They all speak ‘the same language’ when
it comes to their jobs. Although these engineers may be located in different
foreign subsidiaries of the multinational corporations and speak different
mother tongues, they are still likely to communicate with relative ease.
Thus, despite the use of a common corporate language such as English,
communicating within the multinational corporation is rarely a mono-
lingual event. In reality, internal communication frequently crosses language
boundaries and is carried out in a mixture of languages. Therefore, the appro-
priate type and level of language competence in the context of the multi-
national corporation needs to be broadly assessed by considering the
requirements to use the common corporate language, parent-country language,
‘company speak’, professional jargon and various host-country languages.

Language effects on careers

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In the following, language effects on careers are discussed. It shows that

depending on the person and situation in question, language may advance
or hamper a person’s career, create a glass ceiling, divert career paths and
influence the overall image of the firm as a potential employer. The analysis
aims to be broad in order to cover career implications of both expatriates
and domestic-based employees.

Expatriate selection
One of the main reasons for expatriates to accept a foreign assignment is
career advancement (Dowling and Welch 2004). Foreign work experience

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 132 Language and careers in multinational corporations
may be regarded as a ‘must’ within the firm in order to climb up the cor-
porate ladder. Multinational corporations frequently use foreign assign-
ments as a vehicle of developing management talent for cadre positions.
Therefore, being sent on a foreign assignment tends to raise career expectations.
Some multinational corporations value foreign-language competence to
the extent that it is used as an explicit criterion in expatriate selection,
recruitment and performance appraisal. More specifically, Dowling and
Welch (2004) refer to the expatriate’s skills in the local language of the host
country as well as in the common corporate language of the multinational
corporation. In a study of the Finnish multinational corporation Kone, the
expatriates were primarily selected among Finnish staff, who represented
parent-country nationals, and staff from English-speaking subsidiaries in
the UK, Australia, Canada and the USA who were fluent in the common
corporate language (Marschan-Piekkari et al. 1999a). In many recruitment
and selection decisions, however, more emphasis tends to be placed on
professional competence rather than language competence per se. Foreign-
language skills tend to work best in tandem with business or engineering
skills (Bloch 1995).
International projects are a good example of foreign operations that
require highly specialised skills and competences (Welch et al. forthcoming).
Many project workers have a solid base of technological or commercial
expertise but may not possess the necessary language skills to transfer this
expertise across language boundaries. Yet, in the face of scarce human
resources these troubleshooters are sent on the spot despite their often less
than adequate fluency in the local language.
Foreign-language competence may initially contribute to selecting a
person for a foreign assignment or providing a person with opportunities to
travel internationally. On the other hand, the motivation to learn a foreign
language may be triggered by experiences of working in a foreign location.
Either way, language competence is likely to facilitate the process of gaining
foreign work experience but is not a necessary requirement.

Expatriate job performance

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Expatriates are sent on foreign assignments for various reasons such as to

fill a skills gap locally, gain valuable training overseas or assist in the
development of common corporate values (Dowling and Welch 2004). In
order to perform their work roles, expatriates need to communicate effec-
tively with the local subsidiary personnel and business environment and this
often requires proficiency in the local language.
Communication between expatriates and local employees has received
some attention in previous research. Japanese multinationals are a case in
point as they are largely managed in Japanese by staffing key subsidiary
positions with Japanese expatriates (e.g. Lincoln et al. 1995; Yoshihara
2001). Previous research reveals the magnitude of communication problems

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 Language and careers in multinational corporations 133
between Japanese expatriates and local subsidiary staff. For example, in an
interview study of 31 Japanese-owned subsidiaries in Germany, Lincoln
et al. (1995) observed that English was used as a common language
although it was not the native language of neither the locals nor the
expatriates. The English spoken by the Japanese was often mediocre at best
and the Western staff spoke no Japanese at all. In another study, workforce
interviewed in seven Japanese-owned subsidiaries in Scotland, ‘broken
English’ or ‘pidgin English’ was used in the communication between the
Japanese and local Scottish management (Wright et al. 2001). Since Japa-
nese expatriates tend to spend three–five years on foreign assignments
before they return to the Japanese-speaking headquarters there are few
incentives for them to learn the local subsidiary language.
Similarly, in a survey of US-owned subsidiaries in South Korea Park,
Park et al. (1996) investigated the communication between American
expatriates and local Korean managers. English was mostly used as the
common language since the American managers were not able to fully
understand the Korean language. To the surprise of the researchers, the US
managers reported greater frustration, feelings of alienation, hostility, per-
ipherality and mistrust compared with their Korean counterparts. Korean
managers, on the other hand, had a greater likelihood of understanding and
penetrating the corporate communication network due to their skills in
English. The communication problems negatively influenced the personal
adjustment, interpersonal relationships and job performance of the Amer-
ican managers at the workplace.
Thus, previous research demonstrates that failing to speak the native
language of the local subsidiary staff may undermine the expatriate’s job
performance during foreign assignment. However, the extent to which lim-
ited language skills actually hampers managers’ career advancement is open
to speculation, given the lack of evidence of the impact of language on
career paths. Earlier work on the effects of foreign assignments on careers is
inconclusive as many expatriates leave their companies and change jobs
upon return (Stahl et al. 2002). We shall now broaden the discussion and
explore the effect of language on careers of other groups of personnel
beyond expatriates.
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Local subsidiary staff

Turning the attention to local subsidiary staff, the ones who are able to
speak the native language of the parent company (and the common cor-
porate language) are likely to have better career opportunities than those
who lack this proficiency. For example, in her ethnographic research of an
American company in Japan, SanAntonio (1987) singles out the English
fluent Japanese as a special group of local employees. Since the American
company was following an English-only policy these Japanese employees were
positively evaluated by the American managers and judged as intelligent,

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 134 Language and careers in multinational corporations
ambitious and interested. SanAntonio describes a situation in which an Eng-
lish-fluent Japanese was promoted on the recommendation of the American
manager based on the successful interaction between the two.
Furthermore, SanAntonio (1987) observes that only selected Japanese
employees were able to communicate easily in English and they were the
ones who interacted with the Americans. The English policy of the firm
circumvented the indigenous Japanese hierarchy and created its own Amer-
ican communication-based hierarchy. The study shows how the status and
roles of Japanese employees in the American company evolved from lan-
guage ability in interaction. While the language-based roles such as inter-
preter and mediator were not formally designated they were used as
stepping stones to higher positions in the company.
In the above example, language sets the boundaries between the various
groups at the workplace and marks the limits of social inclusion and exclu-
sion. Building on Wright et al. (2001), the workplace hierarchy in foreign
subsidiaries can be expressed in terms of language competence: Expatriates
tend to be native speakers of the parent-country language and competent in
the common corporate language, local managers speak the local language
and the common corporate language, the workforce speaks the local lan-
guage and may at best comprehend the common corporate language. Such
an informal language-based hierarchy mirrors the unequal career opportu-
nities between various groups of employees within the multinational cor-
poration.

Glass-ceiling effect
In earlier research on careers there is seldom mention of a common corpo-
rate language as an imposed factor influencing career paths. The introduc-
tion of a common corporate language may operate as a glass ceiling
preventing promising individuals with management talent from advancing
in their careers and reaching the top echelons of the organization. The term
‘glass ceiling’ is used here to denote that promotion above a certain level in
the multinational corporation depends on proficiency in a particular lan-
guage. While the term was originally applied to female managers it is a valid
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concept for any disadvantaged group of personnel.

My own research with some Finnish colleagues was an ethnographic case
study of MeritaNordbanken – a Finnish–Swedish merger of a financial
institution which was later renamed to Nordea. After the merger, Swedish
was introduced as the common corporate language (Piekkari et al. 2005).
Imposing Swedish as the common corporate language meant that many
Finns had to operate professionally without adequate skills in the common
corporate language. These otherwise capable employees felt that speaking
Swedish affected the way they were perceived as less intelligent and able.
Consequently, they often remained silent although professionalism would have
required active participation. It seemed that their professional competence

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 Language and careers in multinational corporations 135
was hidden behind the language barrier causing sentiments of under-
performance. The case study shows how limited skills in the common cor-
porate language negatively affected perceptions of professional competence
and identity ((Piekkari et al. 2005).
From a career perspective, the new common corporate language in Mer-
itaNordbanken introduced a situation in which language skills of those
applying for promotion attracted considerable attention. It was not
uncommon to hear Finnish-speaking staff blaming their Swedish-speaking
colleagues for unearned career advancement. These comments revealed
concerns about whether colleagues with the requisite language skills were
promoted ‘just’ because of their language proficiency. The case study of
MeritaNordbanken shows that the Swedish language operated as a ‘glass
ceiling’ effectively excluding non-Swedish-speaking individuals from career
advancement (Piekkari et al. 2005).
Consider another example of Siemens, the German-based multinational,
in which both English and German are used in internal communication.
Fredriksson’s (2005) study of language diversity in Siemens shows that skills
in both languages are needed for top-level positions. However, while the
interviewees’ described the proficiency in German in a more subtle way, the
importance of English skills for career advancement was made very explicit.
As one interviewee put it (Fredriksson 2005: 102): ‘You have to know Eng-
lish in order to be promoted . . . so you can’t seriously get very far in Sie-
mens if you don’t speak English.’
Research on Japanese-owned subsidiaries also shows that Japanese as the
language of top management creates a ‘glass ceiling’ restricting the upward
mobility of non-Japanese staff and making them pursue different career
paths (e.g. Wright et al. 2001). Obviously, the preference for Japanese
nationals over others in key staffing decisions is likely to result in selective
recruitment and promotion practices. However, this may be problematic due
to recent calls for diversity management and equal opportunity policies in
multinational corporations.

Diversion of career paths

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Alongside the glass-ceiling effect which limits upward mobility of staff,

empirical evidence suggests that the imposed corporate language may also
influence staff mobility and rotation horizontally within the firm. Our case
study of MeritaNordbanken shows that the career paths of some Finnish-
speaking employees were diverted as they sought to escape the Swedish
language through internal mobility. Such ‘Finnish-speaking havens’, as the
interviewees described them, could be found, for example, within the
domestic Finnish branch network where Finnish was the main medium of
communication. In this way, they could avoid the use of the newly imposed
corporate language, Swedish, by staying local and avoiding direct contacts
with their counterparts in Sweden (Piekkari et al. 2005).

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 136 Language and careers in multinational corporations
During the turmoil of the MeritaNordbanken merger, some employees
left the bank. We interviewed nine of them in order to ask whether the
choice of Swedish as a common corporate language had directly affected
their decision to leave the organization or altered their career in some way.
This was not confirmed in the interview data. Many of them had worked in
international positions within the bank and primarily used English in their
everyday communication. In addition, most of them regarded themselves as
competent speakers of Swedish and were eager to use their skills. Yet, the
common corporate language decision did matter, as one interviewee com-
mented (Piekkari et al. 2005: 339–40): ‘Indirectly, language might have
influenced [my decision to change jobs], because [the bank] seemed to lose
some of its international appeal when becoming more Swedish-speaking.’
From this perspective, the common corporate language may affect the
organization’s ability to retain professionals and provide them with mean-
ingful career opportunities (Piekkari et al. 2005). As Bloch (1995: 25)
argues, ‘foreign language skills offer a variety of direct and indirect benefits
including cultural awareness and sophistication, general intellectual growth
and for the company itself, an improved overseas image’.

Career capital
Language competence is part of a person’s career capital (Terjesen 2005),
which complements general human capital. DeFillippi and Arhur (1994)
divide career competences into know-why competences such as career
motivation, personal meaning and identity; know-how competences includ-
ing various job-related skills, abilities and knowledge; and know-whom
competencies reflecting relevant networks for career purposes. Language
skills fall into the categories of know-how and know-whom and can be
regarded as an important element in building an international career.
In the case study of MeritaNordbanken, many Swedish-speaking Finns
benefited considerably from the new Swedish-language policy, finding
themselves in influential positions within the merged organization (Piekkari
et al. 2005). Given their language skills, they became important gatekeepers
and liaisons between various groups of individuals. In addition, their access
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to corporate information was far better than that of those who only spoke
Finnish. Moreover, they tended to act as translators and intermediaries for
their colleagues. The Swedish-speaking employees became ‘language nodes’
(Marschan-Piekkari et al. 1999a: 386) because they operated as interfaces,
through language, between various groups of the merged organization.
Overall, proficiency in Swedish extended personal-ommunication relationships
and enhanced career opportunities within the bank (Piekkari et al. 2005).
The positive effect of foreign-language competence on the breadth and
depth of personal-communication networks is likely to influence a person’s
career opportunities both within the firm as well as outside it. This is in line
with recent conceptualizations of the boundaryless career (DeFillippi and

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 Language and careers in multinational corporations 137
Arthur 1994) according to which people have a variety of career options and
paths and they navigate their careers beyond the constraints of a single
organization.

Conclusion
This chapter has discussed the effect of language competence – primarily in
the common corporate language, parent-country language, or local sub-
sidiary language – on careers in multinational corporations. Some employ-
ees will master the key languages of the firm while others will have to decide
whether to invest the time and energy in order to learn a new language. For
outsiders, the choice of the common corporate language may also shape the
company image among potential recruits in terms of its attractiveness as a
potential employer. Once a common corporate language is in place, it
becomes a requirement for being admitted to corporate training and man-
agement development programmes, potential international assignments and
promotion thus affecting individual career opportunities (Marschan-Piek-
kari et al. 1999a).
Depending on the particular situation, language competence may
advance career development and allow a person to climb up the corporate
ladder or even penetrate the glass ceiling created by the common corporate
language in use. Conversely, lack of language competence may limit career
opportunities, hamper career advancement or divert career paths from
international to more local. Career paths are influenced and transformed
through self-selection. They are also shaped by explicit top-management
measures to move staff with the purpose of developing a better fit between
job requirements and foreign-language competence of staff. In the light of
the empirical examples, it is clear that language training should be a high
priority in multinational corporations.
Thus, it is concluded that the effect of foreign-language competence on
career paths goes far beyond mere technical considerations which is worthy
of greater attention by scholars in the field.
Copyright © 2008. Taylor & Francis Group. All rights reserved.

Tietze, S. (2008). International management and language. Taylor & Francis Group.
Created from rmit on 2024-03-28 08:48:43.