PBW3163: Multinational Corporations and Global Communication Lecture Notes PDF

PBW3163: Multinational Corporations and Global Communication Lecture 11 – Organisational Communication and Corporate Language in MNC Professor Dr Ting Su Hie Learning Outcomes At the end of this lecture, you should be able to: 1. Describe the types and purposes of organisational...

PBW3163: Multinational Corporations and Global Communication Lecture 11 – Organisational Communication and Corporate Language in MNC Professor Dr Ting Su Hie Learning Outcomes At the end of this lecture, you should be able to: 1. Describe the types and purposes of organisational communication 2. Discuss issues in choosing the corporate Language 3. Discuss issues in power brokering Organisational Communication Internal External  Work Interaction versus Social Interaction Tange, H., & Lauring, J. (2009). Language management and social interaction within the multilingual workplace. Journal of Communication Management, 13(3), 218-232.  Work Interaction versus Social Work Interaction Interaction Social Interaction Task-oriented Small talk and gossip to functions to get work build rapport and done network Those not proficient in Info travels faster commonly used in gossip than languages in the official channels of company end up with communication!!! only task-oriented communication and are isolated socially!  Quiz 1. What kind of communication happens in office corridors? A. Sales talk B. Social interactions C. Business negotiations D. Task-based communication Next … Organisational Communication Internal and External Communication A) Internal B) External Communication Communication Within the organisation With suppliers and among HQ and customers outside subsidiaries, and among company, e.g., sales employees. negotiation, distributor meetings Fredriksson, R., Barner-Rasmussen, W., & Piekkari, R. (2006). The multinational corporation as a multilingual organization. Corporate Communications: An International Journal, 11(4), 406- 423. Organisational Communication - Internal Communication  A) Internal Communication Informal firms, e.g., tech start- Established ups and traditional firms Communicate across business units or functional areas in the organization  structural differences A) Internal Communication – 3 types Horizontal Vertical Vertical Diagonal communication communication communication communication (Downwards) (Upwards) Definiti Exchange of info Manager share info Lower level Employees at different on across departments with lower level employees report to levels and at same level employees supervisor/ manager departments communicate Purpose To request support To update on To report progress To reduce msg To coordinate organisational To present proposals distortion activities changes for projects, budget To reduce workload To share info on To coordinate new estimates managers issues initiatives To channel complaints To have informal info To improve worker and suggestions for flow morale improvement Exampl Production Manager Whistleblower A sales rep emails VP e manager – announces merger hotlines for of marketing. Common Purchasing with a former anonymous reports in flat & product-based manager to speed competitor on dangerous, structure. Bakery, up or delay unethical activities clothing have own shipment of sales, marketing, https://courses.lumenlearning.com/suny-principlesmanagement/chapter/reading-barriers-to-effecti materials communication/ manuf.  Quiz Which type of communication is this? Vice president of sales sends an e- mail to the vice president of manufacturing asking when a product will be available for shipping.  Subsidiary-HQ and Intersubsidiary Communication in MNCs (also called Inter-Unit  Interunit Communication Interunit Communication is influenced by: 1. Formal organisation structure, i.e. determines whether an MNC has centralization where HQ does direction setting, coordination tasks, and mediate intersubsidiary meeting OR subsidiary managers have autonomy to make key decisions. 2. Informal relationships among managers – formed through networking in teams, task forces, conferences, etc. after spending time together. WhichGhoshal, one has greater S., Korine, impact H., & Szulanski, onInterunit G. (1994). interunit communication in multinational communication? corporations. Management Science, 40(1), 96-110.  Interunit Communication Ghoshal, Korine, and Szulanski (1994) studied 248 managers in 31 subsidiaries of the MNCs in 2 consumer electronics business: Matsushita – leading competitor in the world (17 subsidiaries, 164 managers) Philips – 2nd (14 subsidiaries, 84 managers) 1 – daily 2 – weekly 3 – monthly 4 – annually 5 – less than annually (Ghoshal, Korine, & Szulanski, 1994)  Interunit Communication Results show that: 1. Formal organisational structure has almost no effect on subsidiary-HQ and intersubsidiary communication. 2. Interpersonal networking has significant positive effects on the ongoing communication of subsidiary managers in both HQ and other subsidiaries [informal relations] (Ghoshal, Korine, & Szulanski, 1994)  Interunit Communication Conclusion: To improve info flow, MNCs should invest in interunit networking. To increase info processing capability, MNC managers must be aware that info is transformed whenever it is transferred, and this leads to different interpretations of the same info. In an MNC, shared understanding is important. The formal organisational structure for transfer of info can work properly only when the informal networking is there. (Ghoshal, Korine, & Szulanski, 1994)  Interunit Communication How to reduce problems in interunit Slack resources communication? 1. Reduce info processing needs – But opposite of most MNCs cannot afford this limited a) By creating slack (extra) resources resources b) By getting rid of interdependencies Under-utilised i.e. by creating self-contained tasks and hidden spare energies 2. Increase info processing capacity So within a MNCs try this company that a) By investing in vertical info may be recaptured and systems i.e. subsidiary and HQ employed for a b) Through creating lateral relations variety of tasks (Ghoshal, Korine, & Szulanski, 1994) i.e. among subsidiaries Organisational Communication - External Communication  B) External Communication Senior management—with the help of specialised departments such as public relations or legal—almost always controls communications that relate to the public image or may affect its financial situation. First-level and middle-level management generally handle operational business communications such as purchasing, hiring, and marketing. Important for employees to behave professionally and NOT to make commitments outside of their scope of authority. Means for External Communication https://icplan.com/blog/internal-communications/how-to-differentiate- messaging-between-internal-and-external-communication/  Quiz 1. Which kind of communication uses news releases? A. Internal communication B. External communication 2. Who gives instructions on day-to-day operations? A. Supervisor B. Manager C. General manager 3. Which type of communication is motivational talks for employees? A. Vertical communication B. Diagonal communication C. Horizontal communication Issues in choosing the Corporate Language  Corporate Language Minutes of board of directors meetings Manuals Major and events Company reports Meetin Announcem gs ents of policies and new practices  Corporate Language “The official language” of the company Corporate language is defined as “an all-pervading language used throughout a corporation on all organisational levels” (Sorenson, 2005, p. 6). The corporate language is often spiced with Company Speak, which refers to abbreviations and expressions reflecting the culture of the company in question and its way of operating (Welch et al., 2005). Fredriksson, R., Barner-Rasmussen, W., & Piekkari, R. (2006). The multinational corporation as a multilingual organization. Corporate Communications: An International Journal, 11(4), 406- 423.  Choosing a corporate language 3 Possibilities in choosing a corporate language: 1. Use the HQ language – e.g., Japan-based Panasonic subsidiaries all use Japanese, even the one in the US 2. Use the local language – e.g., German (HQ)-based Siemens use English in the UK 3. Use a third language – e.g., a Mexican subsidiary of Airbus, HQ in France, uses English. Usually when the MNC is based in a small country. When there Van den Born, is a corporate F., & Peltokorpi, language, V. (2010). Language it policies and communication in multinational companies. Journal of Business means that the Communication, MNC 47(2), 97-118.expects a large  Benefits of Having A Corporate 1. Language Efficiency in communication across national boundaries in geocentric MNCs - managers can coordinate domestic and international activities for better strategic positioning. Better global integration. [Downward] 2. Efficiency in formal reporting. [Upward] 3. Employees can have easy access to official info channels such as company reports or employee magazines. [Downward] 4. Employees can participate in decision-making processes and other formal info networks. [Upward] 5. Development of corporate culture - Employees can engage in informal communication channels, enabling them to engage in social bonding across the organisation. Creates sense of belonging. [Horizontal-Vertical-Diagonal] 6. Reduction of cost and delays – They do not need to spend Tange, H., & Lauring, J. (2009). Language management and social interaction within the money and multilingual time workplace. on translation Journal ofManagement, of Communication documents. 13(3),Translation 218-232. may  Problems of Having A Corporate 1. Employees may not haveLanguage to function well in it. good mastery of corporate language 2. They are perceived by upper management as not competent. But sometimes it is just the language; they are good at their job! 3. They ask for help from colleagues who speak their language (maybe same ethnic group) instead of the functional unit. That person may not be competent in solving the problem. Disorganised use of human resources because that person end up not doing his/her own job. 4. It weakens trans-organisational knowledge-sharing and networks. A lot of valuable informal info sharing just disappears. Employees ignore formal office comn. 5. ItH.,prevents Tange, & Lauring, J. employees (2009). Languagefrom engaging management in interaction and social informal exchanges within the multilingual workplace. Journal of Communication Management, 13(3), 218-232. and makes them feel excluded. Affects their sense of belonging  What if there is No Corporate Language? Luo and Shenkar (2005) stated that 60% of Citigroup employees worldwide do not speak English, and the following problems occur: 1. HQ policy cannot be disseminated efficiently through training sessions, manuals and other official modes of communication. 2. Subsidiaries cannot effectively communicate local concerns. 3. Negotiations cannot take place effectively. 4. Conflicts arise in cross-cultural teams. BUT polycentric MNCs may be good – each subsidiary has its own Luo, Y., & Shenkar, O. (2005). The multinational corporation as a multilingual community: language. Language andIt allows local organization adaptation in a global to suit context. Journal the subsidiary of International Business Studies, 37, environment. 321-339. But they have to use the corporate language to Issues in Power brokering  Language is a Power Asset Employees who are not good in the corporate language lose out – left out of social interactions, and left only with functional (task-based) communication. But employees who are competent in the corporate language may have colleagues asking them for help about matters that is outside of their functional scope. This is because employees like to seek the help of those who speak their language rather than the persons who are in charge. This gives these employees an informal source of power. Language abilities becomes a power asset.  Language is a Power Asset Language is a resource. Having certain language skills enables employees to control other resources like information and social networks. Language has been referred to as a “cultural capital” (Wright et al., 2000, p. 242). Language yields power. Employees who have language skills have power beyond what is accorded based on their formal position in the MNC. Wright, C., Kumagai, F., & Bonney, N. (2001). Language and power in Japanese transplants in Scotland. The Sociological Review, 49(2), 236-253.  Decouple Language and Cultural Differences Harzing and Pudelko’s (2013) study of corporate language and English in MNCs located in four distinct home country clusters. Their own operational definition. Not using Hofstede’s (1980) national culture differences. Nordic Anglophone countries countries e.g. Iceland (UK, US, OZ) Continental European countries Asian countries e.g. France  Studied Language Skills and Corporate Language Harzing and Pudelko (2013) researched language competencies, policies and practices in MNCs [aim of study]. Objectives of the study: (1) languages used between managers of MNC units, (2) language skills of the managers in the corporate language and in the HQ/subsidiary country language, (3) choice of corporate language, and (4) power authority distortion. Questionnaire (and phone in Korea) data from > 800 subsidiaries, located in 13 countries with HQs in more than 25 countries. Only 14% response rate.  Obj 3: Is English chosen as a corporate language? Sweden, Norway, UK, US, OZ, NZ, Denmark, Finland, Iceland, Nordic Anglophone Canada, Ireland. countries countries Good English & Netherlands. Yes. English as Excellent English lingua franca. and Yes, English is used for business. Continental Asian Asia, Japan, Korea. Germany, European Poor English countries France, Italy, countries except HK and Spain, Austria, Spore. No, Local Switzerland, Yes/No. Local languages are Belgium languages also important in MNC. Good English. important outside of own country.  Obj 2: Language skills of managers in subsidiaries Sweden, Norway, NO PROBLEM NO PROBLEM UK, US, OZ, NZ, Denmark, Finland, Iceland, Nordic Anglophone Canada, Ireland. countries countries Good English & Netherlands. Yes. English as Excellent English lingua franca. and Yes, English is used for business. Continental Asian Asia, Japan, Korea. Germany, European Poor English countries France, Italy, countries except HK and Spain, Austria, Spore. No, Local Switzerland, Yes/No. Local languages are Belgium languages also important in MNC. Good English. important outside of NO PROBLEM if corporate own country. language is home country PROBLEM IS THE WORST for MNCs language and not English. that use English as corporate  Obj 4: Power/authority distortion 1. HQ managers who have the formal authority but don’t have good language skills in the corporate language (usually English) – they have to give up part of their power to subsidiary managers have better language skills in the corporate language. 2. However, subsidiary managers with poor skills in corporate language find that they don’t have much power. Power stays with the HQ managers or expatriates sent by HQ. This leads to problem of local adaptation of the MNC. 3. HQ & subsidiary managers with poor skills in corporate language may be seen as less capable and not promoted in line with their managerial skills. Those with better language win debates and negotiations! Finally, Work Value Today: Versatility The environment changes too quickly. You need knowledge that you are not taught. So you need to be versatile and be able to learn on your own (lifelong learning skills). VUCA, short for volatility, uncertainty, complexity, and ambiguity, and a catchall for “Hey, it's crazy out there! (Times Higher Education talk I attended on 17 Nov 2021)  To be versatile, you need to know the situation and then you can adjust yourself and fit in, and make the best of it. Situati Situati YOU on YOU on YO Situatio Un This is This is How do you (a being being square) fit into a versatile versatile circle? E.g., you do things your own way